NRG Yield Announces New Sponsorship with Global Infrastructure Partners and Agreements on Next Drop Down Transactions

February 7, 2018

Global Infrastructure Partners (GIP) to Become NRG Yield’s
Controlling Stockholder
GIP Acquires NRG’s Renewables Platform, Including 6.4 GW of Backlog
and Development Pipeline
NRG Yield Announces Binding Agreements with NRG Energy to Acquire
Both the 154 MW Buckthorn Solar Project and the 527 MW Carlsbad Energy
Center
NRG Yield to Hold Conference Call and Webcast at 9:00 a.m. Eastern
Standard Time Today

PRINCETON, N.J.–(BUSINESS WIRE)–NRG Yield, Inc. (NYSE: NYLD, NYLD.A) today announces that Global
Infrastructure Partners (“GIP”), a leading global independent
infrastructure investor, has entered into a binding agreement (the
“Transaction”) to acquire NRG Energy Inc.’s (NYSE: NRG) full ownership
interest in NRG Yield and NRG’s renewable development and operations
platform. With over $45 billion in assets under management and
approximately $9 billion of equity invested or committed in the
renewable energy sector, GIP provides NRG Yield with a leading sponsor
with substantial financial resources to accelerate development of the
next generation of drop down projects. GIP has deep experience as a
sponsor of publicly traded vehicles in the energy and power sectors and
has the unique ability to enhance NRG Yield’s long-term growth
opportunities and access to capital. Furthermore, GIP’s demonstrated
commitment to the expansion of renewables globally aligns its economic
interests with those of NRG Yield’s public shareholders.

NRG Yield is also announcing today the next set of drop down
transactions with NRG through the execution of definitive agreements to
acquire both the 154 MW Buckthorn Solar Project and the 527 MW1
Carlsbad Energy Center for a combined $407 million in total
consideration with annual expected cash available for distribution
(“CAFD”) of $44 million beginning in 20192.

“Under NRG Energy’s sponsorship, since its IPO in July 2013, NRG Yield
has experienced tremendous success with an increase of 186% in cash
available for distribution from $91 million to $260 million and an
expansion of NRG Yield’s quarterly dividend per share by 150% to $1.15
per share annualized at the end of 2017,” said Christopher Sotos,
President and Chief Executive Officer of NRG Yield. “With today’s
announcement, NRG Yield can now look forward to its next phase of
growth, including solidifying near-term objectives through the most
recent drop down transactions and, most importantly, aligning with GIP,
whose strategy and breadth of global investment capabilities are well
suited to our business model and long-term objectives.”

Adebayo Ogunlesi, Chairman and Managing Partner of GIP, said, “We are
excited to announce the acquisition of NRG’s world-class renewables
business. We view each of the three acquired businesses – the NYLD
stake, the O&M business, and the development business – as highly
complementary and well positioned to capitalize on the increasing market
demand for low cost, clean energy. We look forward to working with
management to develop new renewable generation assets and to supporting
the company with our deep operating and financial expertise in the
sector. We are also excited about the opportunity to grow the value of
NYLD, which allows public market investors to access attractive
investments in renewable energy.”

Strategic Sponsorship with Global Infrastructure Partners (GIP)

On February 6, GIP entered into a purchase and sale agreement with NRG
for the acquisition of NRG’s full ownership interest in NRG Yield and
NRG’s renewable energy development and operations platform consisting of
a robust pipeline of over 6.4 GW3 of backlog and development
projects, as well as operational oversight of 2.4 GW across 17 states.
The Transaction is subject to certain closing conditions, including
customary legal and regulatory approvals. NRG Yield expects the
Transaction to close in the second half of 2018.

In connection with the Transaction, NRG Yield entered into a Consent and
Indemnity Agreement (the “C&I Agreement”) with NRG and GIP setting forth
the key terms and conditions of NRG Yield’s Corporate Governance,
Conflicts and Nominating Committee’s consent to the Transaction. Key
provisions of the C&I Agreement include:

Minimized Impact to CAFD from Potential Change in Control Costs

To mitigate the impact of potential change of control costs on annual
CAFD, NRG Yield’s consent to the transaction is conditioned upon:

There being no more than $10 million in reduced annual CAFD on a
recurring basis that would result from changes in NRG Yield’s cost
structure or any impact from various consents (but excluding the
impact of certain non-recurring costs);
NRG having agreed to indemnify NRG Yield and its project companies for
any increase in property taxes at NRG Yield’s California-based solar
projects resulting from the Transaction.

Enhanced ROFO Pipeline

In addition to the accelerated drop down transactions with NRG Energy
described below, upon the closing of the Transaction:

NRG Yield will enter into a new Right of First Offer (ROFO) Agreement
with GIP that immediately adds 550 MW to the current pipeline through
the operational 150 MW Langford Wind project and the under-development
400 MW Mesquite Star Wind project4;
The ROFO Agreement with NRG will be modified with the removal of the
Ivanpah solar facility. The remaining interest in Agua Caliente
remains a ROFO asset;
In addition, GIP’s acquisition of NRG’s Renewable development platform
includes 6.4 GW of backlog and pipeline development projects5
and as part of the Transaction, GIP has invested in safe harbor
equipment to support up to 280 MW of repowering opportunities at the
NRG Yield portfolio.

Financial Cooperation and Support

GIP has arranged a $1.5 billion backstop credit facility to manage any
change-of-control costs associated with NRG Yield’s corporate debt;
GIP has committed to provide up to $400 million in financing support
for the Carlsbad Energy Center drop down transaction (as more fully
described below). This commitment would be exercised if NRG Yield were
unable to efficiently raise third party capital by the closing of the
Carlsbad transaction and would entail GIP acquiring the project
directly from NRG to be dropped down to NRG Yield in the future
subject to similar terms and conditions.

Maintenance of Independence Governance Structure

No change in charter of the Independent Conflicts Committee;
No incentive distribution rights (IDRs); and
Management team of NRG Yield to continue to be independent.

GIP as a Sponsor

Founded in 2006, GIP is an independent infrastructure fund with over $45
billion in assets under management that invests in infrastructure assets
and businesses in both OECD and select emerging market countries. GIP
targets investments in single assets and portfolios of assets and
companies in power and utilities, natural resources infrastructure, air
transport infrastructure, seaports, freight railroad, water distribution
and treatment and waste management.

GIP has a strong track record of investment and value creation in the
renewable energy sector with a portfolio that now includes approximately
$9 billion in equity committed or invested, 8 GW of operating renewable
assets, and over 14 GW of renewable assets under construction or in
development. Additionally, GIP has extensive experience with publicly
traded yield vehicles and development platforms, ranging from Europe’s
first application of a YieldCo/DevCo model to the largest renewable
platform in Asia-Pacific.

GIP has offices in New York and London, with an affiliate in Sydney and
portfolio company operations headquarters in Stamford, Connecticut. For
more information on GIP and today’s announced transaction, visit www.global-infra.com
and www.global-infra.com/news1.php,
respectively.

Drop Down Transactions with NRG Energy

Binding Agreement to Purchase Buckthorn Solar Project

On January 24, NRG Yield signed a binding agreement to purchase the 154
MW Buckthorn Solar Project for cash consideration of $42.3 million plus
assumed non-recourse project debt of $131 million. The purchase price
for the Buckthorn Solar Project will be funded with cash on hand and
revolver borrowings, and is expected to increase CAFD on an average
annual basis by approximately $4 million beginning in 20196.
The transaction is expected to close in the first quarter of 2018.

Binding Agreement to Purchase the Carlsbad Energy Center

On February 6, NRG Yield signed a binding agreement to purchase the 527
MW7 Carlsbad Energy Center for cash consideration of $365
million8, excluding working capital and other adjustments,
plus assumed non-recourse project debt of $601 million at completion.
The agreement to acquire Carlsbad is subject to the closing of the
Transaction between NRG and GIP. If the Transaction does not close,
Carlsbad would revert back to the NRG ROFO pipeline. The project is
expected to increase CAFD on an average annual basis by approximately
$40 million beginning in 20199.

Because the project is not expected to close until the fourth quarter of
2018, the Carlsbad transaction includes a number of other terms and
conditions, including:

Adjustments to the purchase price subject to (a) final tested
capacity, (b) final tested heat rate, and (c) insurance costs;
NRG Yield’s stock price prior to funding.

As described above, in the event NRG Yield is not able to efficiently
raise capital by closing of the Carlsbad transaction, NRG Yield has the
option to exercise the backstop commitment with GIP.

Advisors

Barclays and J.P. Morgan Securities LLC acted as financial advisors to
the Independent Directors and Management of NRG Yield while Sullivan &
Cromwell LLP acted as legal counsel.

Investor Call

NRG Yield management will hold an investor conference call and webcast
at 9:00 a.m. Eastern Standard Time today, February 7, 2018 to discuss
this announcement. A live webcast of the conference call, including
presentation materials, can be accessed through NRG Yield’s website at http://www.nrgyield.com
and clicking on “Presentations & Webcasts.” The webcast will be archived
on the website for those unable to listen in real time.

About NRG Yield

NRG Yield owns a diversified portfolio of contracted renewable and
conventional generation and thermal infrastructure assets in the United
States, including fossil fuel, solar and wind power generation
facilities that have the capacity to support more than two million
American homes and businesses. Our thermal infrastructure assets provide
steam, hot and/or chilled water, and in some instances electricity, to
commercial businesses, universities, hospitals and governmental units in
multiple locations. NRG Yield’s Class C and Class A common stock are
traded on the New York Stock Exchange under the symbols NYLD and NYLD.A,
respectively.

Safe Harbor

This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. Forward-looking statements are
subject to certain risks, uncertainties and assumptions and typically
can be identified by the use of words such as “expect,” “estimate,”
“should,” “anticipate,” “forecast,” “plan,” “guidance,” “believe” and
similar terms. Such forward-looking statements include, but are not
limited to, statements regarding the satisfaction of the conditions to
the Company’s consent to the sale by NRG Energy, Inc. of its interests
in the Company, the Company’s future revenues, income, indebtedness,
capital structure, strategy, plans, expectations, objectives, projected
financial performance and/or business results and other future events,
and views of economic and market conditions.

Although NRG Yield, Inc. believes that the expectations are reasonable,
it can give no assurance that these expectations will prove to be
correct, and actual results may vary materially. Factors that could
cause actual results to differ materially from those contemplated above
include, among others, general economic conditions, hazards customary in
the power industry, weather conditions, including wind and solar
performance, competition in wholesale power markets, the volatility of
energy and fuel prices, failure of customers to perform under contracts,
changes in the wholesale power markets, changes in government
regulations, the condition of capital markets generally, our ability to
access capital markets, cyber terrorism and inadequate cybersecurity,
the ability to engage in successful mergers and acquisitions activity,
potential risks to the company as a result of NRG’s sale of its
ownership interest in the Company, including the inability to meet
certain deadlines, failure of the conditions to be met, unanticipated
liabilities in connection with the sale or the reaction of customer,
partners or lenders to the transaction, unanticipated outages at our
generation facilities, adverse results in current and future litigation,
failure to identify, execute or successfully implement acquisitions
(including receipt of third party consents and regulatory approvals),
our ability to enter into new contracts as existing contracts expire,
our ability to acquire assets from NRG Energy, Inc. or third parties,
our ability to close drop down transactions, and our ability to maintain
and grow our quarterly dividends.

NRG Yield, Inc. undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. The adjusted
EBITDA and cash available for distribution guidance are estimates as of
February 7, 2018. These estimates are based on assumptions believed to
be reasonable as of that date. NRG Yield, Inc. disclaims any current
intention to update such guidance, except as required by law. The
foregoing review of factors that could cause NRG Yield, Inc.’s actual
results to differ materially from those contemplated in the
forward-looking statements included in this press release should be
considered in connection with information regarding risks and
uncertainties that may affect NRG Yield, Inc.'s future results included
in NRG Yield, Inc.'s filings with the Securities and Exchange Commission
at www.sec.gov.

Appendix Table A-1: Adjusted EBITDA and Cash Available for Distribution
($ in millions)	Buckthorn Solar Drop Down – 5 Year Average from 2019-2023	Carlsbad Drop Down – 5 Year Average from 2019-2023
Net Income	1	38
Interest Expense, net	6	24
Depreciation, Amortization, and ARO Accretion	8	28
Adjusted EBITDA	15	90
Cash interest paid	(6)	(24)
Changes in prepaid and accrued liabilities for tolling agreements	—	(6)
Cash from Operating Activities	9	60
Distributions to non-controlling interest	(2)	—
Principal amortization of indebtedness	(3)	(20)
Estimated Cash Available for Distribution	4	40

EBITDA and Adjusted EBITDA are non-GAAP financial measures. These
measurements are not recognized in accordance with GAAP and should not
be viewed as an alternative to GAAP measures of performance. The
presentation of Adjusted EBITDA should not be construed as an inference
that NRG Yield’s future results will be unaffected by unusual or
non-recurring items.

EBITDA represents net income before interest (including loss on debt
extinguishment), taxes, depreciation and amortization. EBITDA is
presented because NRG Yield considers it an important supplemental
measure of its performance and believes debt and equity holders
frequently use EBITDA to analyze operating performance and debt service
capacity. EBITDA has limitations as an analytical tool, and you should
not consider it in isolation, or as a substitute for analysis of our
operating results as reported under GAAP. Some of these limitations are:

EBITDA does not reflect cash expenditures, or future requirements for
capital expenditures, or contractual commitments;
EBITDA does not reflect changes in, or cash requirements for, working
capital needs;
EBITDA does not reflect the significant interest expense, or the cash
requirements necessary to service interest or principal payments, on
debt or cash income tax payments;
Although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized will often have to be replaced
in the future, and EBITDA does not reflect any cash requirements for
such replacements; and
Other companies in this industry may calculate EBITDA differently than
NRG Yield does, limiting its usefulness as a comparative measure.

Because of these limitations, EBITDA should not be considered as a
measure of discretionary cash available to use to invest in the growth
of NRG Yield’s business. NRG Yield compensates for these limitations by
relying primarily on our GAAP results and using EBITDA and Adjusted
EBITDA only supplementally. See the statements of cash flow included in
the financial statements that are a part of this news release.

Adjusted EBITDA is presented as a further supplemental measure of
operating performance. Adjusted EBITDA represents EBITDA adjusted for
mark-to-market gains or losses, asset write offs and impairments; and
factors which we do not consider indicative of future operating
performance. The reader is encouraged to evaluate each adjustment and
the reasons NRG Yield considers it appropriate for supplemental
analysis. As an analytical tool, Adjusted EBITDA is subject to all of
the limitations applicable to EBITDA. In addition, in evaluating
Adjusted EBITDA, the reader should be aware that in the future NRG Yield
may incur expenses similar to the adjustments in this news release.

Management believes Adjusted EBITDA is useful to investors and other
users of our financial statements in evaluating our operating
performance because it provides them with an additional tool to compare
business performance across companies and across periods. This measure
is widely used by investors to measure a company’s operating performance
without regard to items such as interest expense, taxes, depreciation
and amortization, which can vary substantially from company to company
depending upon accounting methods and book value of assets, capital
structure and the method by which assets were acquired.

Additionally, Management believes that investors commonly adjust EBITDA
information to eliminate the effect of restructuring and other expenses,
which vary widely from company to company and impair comparability. As
we define it, Adjusted EBITDA represents EBITDA adjusted for the effects
of impairment losses, gains or losses on sales, dispositions or
retirements of assets, any mark-to-market gains or losses from
accounting for derivatives, adjustments to exclude the Adjusted EBITDA
related to the non-controlling interest, gains or losses on the
repurchase, modification or extinguishment of debt, and any
extraordinary, unusual or non-recurring items plus adjustments to
reflect the Adjusted EBITDA from our unconsolidated investments. We
adjust for these items in our Adjusted EBITDA as our management believes
that these items would distort their ability to efficiently view and
assess our core operating trends.

In summary, our management uses Adjusted EBITDA as a measure of
operating performance to assist in comparing performance from period to
period on a consistent basis and to readily view operating trends, as a
measure for planning and forecasting overall expectations and for
evaluating actual results against such expectations, and in
communications with our Board of Directors, shareholders, creditors,
analysts and investors concerning our financial performance.

Cash Available for Distribution (CAFD) is adjusted EBITDA plus cash
distributions from unconsolidated affiliates, cash receipts from notes
receivable, less cash distributions to noncontrolling interests,
maintenance capital expenditures, pro-rata adjusted EBITDA from
unconsolidated affiliates, cash interest paid, income taxes paid,
principal amortization of indebtedness, and changes in prepaid and
accrued capacity payments. Management believes cash available for
distribution is a relevant supplemental measure of the Company’s ability
to earn and distribute cash returns to investors.

We believe cash available for distribution is useful to investors in
evaluating our operating performance because securities analysts and
other interested parties use such calculations as a measure of our
ability to make quarterly distributions. In addition, cash available for
distribution is used by our management team for determining future
acquisitions and managing our growth. The GAAP measure most directly
comparable to cash available for distribution is cash from operating
activities.

However, cash available for distribution has limitations as an
analytical tool because it does not include changes in operating assets
and liabilities and excludes the effect of certain other cash flow
items, all of which could have a material effect on our financial
condition and results from operations. Cash available for distribution
is a non GAAP measure and should not be considered an alternative to
cash from operating activities or any other performance or liquidity
measure determined in accordance with GAAP, nor is it indicative of
funds available to fund our cash needs. In addition, our calculations of
cash available for distribution are not necessarily comparable to cash
available for distribution as calculated by other companies. Investors
should not rely on these measures as a substitute for any GAAP measure,
including cash from operating activities.

1 Reflects capacity per the Power Purchase & Tolling
Agreement with San Diego Gas and Electric; actual tested capacity is
expected to be 530 MW
2 CAFD is averaged over the 5-year
period from 2019-2023. The drop down transactions are subject to terms
and conditions that may result in modifications to total consideration
and expected annual CAFD at closing. The Carlsbad drop down transaction
is subject to the closing of the Transaction.
3 Refer to
slide 25 of NRG Energy’s 3rd Quarter 2017 Earnings
Presentation on November 2, 2017
4 Capacity may change
subject to final project development
5 Refer to slide 25
of NRG Energy’s 3rd Quarter 2017 Earnings Presentation on
November 2, 2017
6 CAFD is averaged over the 5-year
period from 2019-2023
7 Reflects capacity per the Power
Purchase & Tolling Agreement with the San Diego Gas and Electric; actual
tested capacity is expected to be 530 MW
8 Subject to
terms and conditions at the closing of the Carlsbad transaction
9
CAFD is averaged over the 5-year period from 2019-2023