HOUSTON, TX – GenOn Energy, Inc. (NYSE: GEN) today reported adjusted EBITDA of $622 million for 2011 compared to $638 million for 2010. For 2011, GenOn reported an adjusted loss from continuing operations of $132 million compared to adjusted income from continuing operations of $163 million for 2010. GenOn reported a net loss of $189 million for 2011 compared to a net loss of $233 million for 2010.
GenOn was formed on Dec. 3, 2010 through the merger of Mirant Corporation and RRI Energy, Inc. The merger was accounted for as a reverse acquisition, and Mirant was deemed to be the acquirer for accounting purposes. The consolidated financial statements therefore reflect Mirant’s historical financial information through December 2, 2010 and GenOn’s results thereafter, in accordance with the acquisition method of accounting for business combinations. On a pro forma basis, adjusted EBITDA for 2010 was $919 million, adjusted income from continuing operations was $103 million and the net loss was $740 million. The pro forma information gives effect to the merger as if it had occurred on January 1, 2010.
“GenOn’s strategy of hedging and maintaining adequate liquidity positions us to manage comfortably through the significant decline in commodity prices facing the industry today,” said Edward R. Muller, chairman and chief executive officer of GenOn.
Generation Deactivations GenOn expects to deactivate 3,140 MWs of generating capacity in PJM between June 2012 and May 2015 because forecasted returns on investments necessary to comply with environmental regulations are insufficient. The affected power plants are the following:
Expected
Deactivation
Plant / Location MWs Date
----------------------------------------------------------------------------
Elrama / PA 460 June 2012
Niles / OH 217 June 2012
Portland / PA 401 January 2015
Avon Lake / OH 732 April 2015
New Castle / PA 330 April 2015
Shawville / PA 597 April 2015
Titus / PA 243 April 2015
Glen Gardner / NJ 160 May 2015
--------------------
Total 3,140
====================
The units expected to be deactivated and timeframes are subject to further review based on market conditions. In particular, while the initial analysis for additional environmental controls at Avon Lake indicated that forecasted returns on those investments were insufficient, the evaluation of the returns on those environmental controls is continuing.
The coal-fired units at Shawville, which is leased, will be placed in long-term protective layup. The required lease payments will continue to be made and the assets will be maintained in accordance with the lease.