EX-99.(C) 11 efhcorp-2012930xexhibit99c.htm ADJUSTED EBITDA RECONCILIATION TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY EFHCorp-2012.9.30-Exhibit 99(c)


Exhibit 99(c)

Texas Competitive Electric Holdings Company LLC Consolidated
Adjusted EBITDA Reconciliation
(millions of dollars)

 
Nine Months Ended
September 30, 2012
 
Nine Months Ended
September 30, 2011
 
Twelve Months Ended
September 30, 2012
 
Twelve Months Ended
September 30, 2011
Net loss
$
(1,252
)
 
$
(1,660
)
 
$
(1,332
)
 
$
(1,397
)
Income tax benefit
(670
)
 
(874
)
 
(713
)
 
(732
)
Interest expense and related charges
2,200

 
3,020

 
2,879

 
3,344

Depreciation and amortization
992

 
1,097

 
1,365

 
1,450

EBITDA
$
1,270

 
$
1,583

 
$
2,199

 
$
2,665

Interest income
(36
)
 
(66
)
 
(57
)
 
(92
)
Amortization of nuclear fuel
124

 
104

 
162

 
142

Purchase accounting adjustments (a)
54

 
147

 
64

 
186

Impairment and write-down of assets (b)
1

 
427

 
4

 
439

Debt extinguishment gains
—

 
—

 
—

 
(687
)
Unrealized net loss resulting from hedging and trading transactions
1,290

 
247

 
985

 
641

Net loss attributable to noncontrolling interests
1

 
—

 
1

 
—

EBITDA amount attributable to consolidated unrestricted subsidiaries
(6
)
 
(5
)
 
(8
)
 
(5
)
Amortization of "day one" net loss on Sandow 5 power purchase agreement
—

 
—

 
—

 
(2
)
Corporate depreciation, interest and income tax expenses included in SG&A expense
13

 
11

 
18

 
11

Noncash compensation expense (c)
8

 
8

 
12

 
11

Severance expense
1

 
52

 
(46
)
 
52

Transition and business optimization costs (d)
30

 
33

 
39

 
40

Transaction and merger expenses (e)
29

 
28

 
38

 
37

Restructuring and other (f)
6

 
70

 
3

 
(51
)
Expenses incurred to upgrade or expand a generation station (g)
69

 
100

 
100

 
100

Adjusted EBITDA per Incurrence Covenant
$
2,854

 
$
2,739

 
$
3,514

 
$
3,487

Expenses related to unplanned generation station outages
64

 
162

 
83

 
172

Pro forma adjustment for Oak Grove 2 reaching 70% capacity in Q2 2011 (h)
—

 
32

 
—

 
64

Other adjustments allowed to determine Adjusted EBITDA per Maintenance Covenant (i)
—

 
8

 
—

 
18

Adjusted EBITDA per Maintenance Covenant
$
2,918

 
$
2,941

 
$
3,597

 
$
3,741

___________
(a)
Purchase accounting adjustments include amortization of the intangible net asset value of retail and wholesale power sales agreements, environmental credits, coal purchase contracts, nuclear fuel contracts and power purchase agreements and the stepped up value of nuclear fuel. Also include certain credits and gains on asset sales not recognized in net income due to purchase accounting. Nine and twelve months ended 2011 includes $46 million related to an asset sale.
(b)
Impairment of assets in the nine and twelve months ended 2011 includes impairment of emission allowances and certain mining assets due to EPA rule issued in July 2011.
(c)
Noncash compensation expenses represent amounts recorded under stock-based compensation accounting standards and exclude capitalized amounts.
(d)
Transition and business optimization costs include certain incentive compensation expenses, as well as professional fees and other costs related to generation plant reliability and supply chain efficiency initiatives.
(e)
Transaction and merger expenses primarily represent Sponsor Group management fees.
(f)
Restructuring and other includes gains on termination of a long-term power sales contract and settlement of amounts due from hedging/trading counterparty, fees related to the April 2011 amendment and extension of the TCEH Senior Secured Facilities, and reversal of certain liabilities accrued in purchase accounting.
(g)
Expenses incurred to upgrade or expand a generation station reflect noncapital outage costs.
(h)
Pro forma adjustment for the nine and twelve months ended September 30, 2011 represents the annualization of the actual six months ended September 30, 2011 EBITDA results for Oak Grove 2, which achieved the requisite 70% average capacity factor in the second quarter 2011.
(i)
Primarily pre-operating expenses relating to Oak Grove and Sandow 5.