Both RRI and DYN reported less than expected and both down a bit!$4.33!
RRI Energy Reports Fourth Quarter and 2009 Results
HOUSTON, TX -- (Marketwire) -- 02/25/10 --
RRI Energy, Inc. (NYSE: RRI)
-- Implemented actions to mitigate near-term risk from current market environment -- Sold retail business eliminating nearly $3 billion of collateral obligations and contingent capital -- Implemented modest hedging for 2010 and 2011 for free cash flow break-even or better if market conditions worsen -- Reduced gross debt by $540 million and maintained $1.6 billion of liquidity -- Improved the current performance and value of the business and positioned for longer-term market recovery -- Captured over $415 million in future forward capacity and PPA revenue -- Realigned corporate support costs saving $40 million -- Implemented revised plans for profitability at marginal power plants -- Completed Keystone scrubber, which significantly reduces SO2 emissions -- Fourth quarter and 2009 financial results reflect depressed commodity prices and weak economic conditions -- Indian River and New Castle power plant non-cash impairments totaling $211 million charged in fourth quarter -- 2010 and 2011 outlooks reflect challenging market conditions
RRI Energy, Inc. (NYSE: RRI) today is reporting open EBITDA of $185 million for 2009, compared to $545 million for 2008. The decline was primarily due to lower energy unit margins resulting from lower commodity prices and lower power demand. Adjusted EBITDA was $55 million in 2009, compared to $871 million in 2008. Out-of-the-money coal hedges in 2009 compared to in-the-money coal hedges in 2008 form the primary difference between open and adjusted EBITDA. Free cash flow used in continuing operations during 2009 was $327 million, compared to free cash flow provided by continuing operations of $241 million for 2008. These results exclude the performance of the Texas retail business, which was sold on May 1, 2009 and is included in discontinued operations.
"We are managing the challenges of the difficult economic environment and are well positioned to deliver long-term shareholder value," said Mark Jacobs, president and chief executive officer of RRI Energy. "We are squarely focused on what we can control. In terms of managing risk, we continue to maintain strong liquidity levels which totaled $1.6 billion at year end with approximately $1 billion of cash and implemented a modest hedging program to provide a high probability of achieving free cash flow break-even or better in 2010 and 2011, even if market conditions deteriorate. In addition, we are taking actions to improve the performance and value of the business in the current environment and position it for longer-term market recovery."
Open EBITDA was $56 million for the fourth quarter of 2009, compared to $40 million for the same period of 2008. Adjusted EBITDA was $13 million for the fourth quarter of 2009, compared to $162 million for the fourth quarter of 2008. The declines were due to the same factors described above.
The loss from continuing operations before income taxes for 2009 was $604 million, compared to income of $26 million for 2008. The 2009 reported results include impairments of long-lived assets totaling $211 million, net unrealized gains from energy derivatives of $22 million, $9 million in severance costs and charges for debt extinguishments totaling $8 million.
The reported numbers for 2008 include a goodwill impairment totaling $305 million, a $37 million charge for western states litigation and similar settlements, net unrealized losses from energy derivatives of $9 million and charges for debt extinguishments totaling $2 million. Operating cash flow from continuing operations was ($392) million for 2009, compared to $704 million for 2008. The $540 million reduction in gross debt consists primarily of $268 million of GAAP debt and $261 million from debt recorded in discontinued operations.
The loss from continuing operations before income taxes for the fourth quarter of 2009 was $270 million, compared to a loss of $325 million for the fourth quarter of 2008. The reported results include impairments of long-lived assets totaling $211 million and net unrealized gains from energy derivatives of $52 million in 2009. The reported results for 2008 include a goodwill impairment totaling $305 million and net unrealized losses from energy derivatives of $67 million.
Outlook
RRI Energy's outlook is based on forward commodity prices as of February 5, 2010. The outlook for open EBITDA is $367 million and $366 million for the years ending December 31, 2010 and 2011, respectively. The outlook for adjusted EBITDA, which includes the impact of hedges and other items, is $360 million and $309 million for the same periods. The outlook for free cash flow provided by continuing operations is $92 million and $110 million for the years ending December 31, 2010 and 2011, respectively.
AI
