Document and Company Informatio
Document and Company Information (USD $) | |||
6 Months Ended
Jun. 30, 2009 | Jul. 28, 2009
| Jun. 30, 2008
| |
Document and Company Information [Abstract] | |||
Entity Registrant Name | NRG Energy, Inc. | ||
Entity Central Index Key | 0001013871 | ||
Document Type | 10-Q | ||
Document Period End Date | 2009-06-30 | ||
Amendment Flag | true | ||
Amendment Description | Amended 10Q to include initial XBRL exhibits | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $10,001,849,139 | ||
Entity Common Stock, Shares Outstanding | 265,276,841 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (USD $) | ||||
In Millions, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Operating Revenues | ||||
Total operating revenues | $2,237 | $1,316 | $3,895 | $2,618 |
Operating Costs and Expenses | ||||
Cost of operations | 1,242 | 1,011 | 2,008 | 1,815 |
Depreciation and amortization | 213 | 161 | 382 | 322 |
Selling, general and administrative | 131 | 83 | 214 | 158 |
Acquisition- related transaction and integration costs | 23 | 0 | 35 | 0 |
Development costs | 9 | 4 | 22 | 16 |
Total operating costs and expenses | 1,618 | 1,259 | 2,661 | 2,311 |
Operating Income | 619 | 57 | 1,234 | 307 |
Other Income/(Expense) | ||||
Equity in earnings/(losses) of unconsolidated affiliates | 5 | (19) | 27 | (23) |
Gain on sale of equity method investment | 128 | 0 | 128 | 0 |
Other (loss)/income, net | (11) | 12 | (14) | 21 |
Interest expense | (159) | (144) | (297) | (300) |
Total other expense | (37) | (151) | (156) | (302) |
Income/(Losses) From Continuing Operations Before Income Taxes | 582 | (94) | 1,078 | 5 |
Income tax expense/(benefit) | 150 | (53) | 448 | 1 |
Income/(Losses) From Continuing Operations | 432 | (41) | 630 | 4 |
Income from discontinued operations, net of income taxes | 0 | 168 | 0 | 172 |
Net Income | 432 | 127 | 630 | 176 |
Less: Net loss attributable to noncontrolling interest | (1) | 0 | (1) | 0 |
Net income attributable to NRG Energy, Inc. | 433 | 127 | 631 | 176 |
Dividends for preferred shares | 7 | 14 | 21 | 28 |
Income Available for NRG Energy, Inc. Common Stockholders | 426 | 113 | 610 | 148 |
Earnings per share attributable to NRG Energy, Inc. Common Stockholders | ||||
Weighted average number of common shares outstanding - basic | 253 | 236 | 245 | 236 |
Income/(losses) from continuing operations per weighted average common share - basic | 1.68 | -0.23 | 2.49 | -0.1 |
Income from discontinued operations per weighted average common share - basic | $0 | 0.71 | $0 | 0.73 |
Net Income per Weighted Average Common Share - Basic | 1.68 | 0.48 | 2.49 | 0.63 |
Weighted average number of common shares outstanding - diluted | 275 | 236 | 275 | 236 |
Income/(losses) from continuing operations per weighted average common share - diluted | 1.56 | -0.23 | 2.27 | -0.1 |
Income from discontinued operations per weighted average common share - diluted | $0 | 0.71 | $0 | 0.73 |
Net Income per Weighted Average Common Share - Diluted | 1.56 | 0.48 | 2.27 | 0.63 |
Amounts attributable to NRG Energy, Inc.: | ||||
Income/(losses) from continuing operations, net of income taxes | 433 | (41) | 631 | 4 |
Income from discontinued operations, net of income taxes | 0 | 168 | 0 | 172 |
Net Income | $433 | $127 | $631 | $176 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (USD $) | ||
In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
Current Assets | ||
Cash and cash equivalents | $2,282 | $1,494 |
Funds deposited by counterparties | 468 | 754 |
Restricted cash | 19 | 16 |
Accounts receivable, less allowance for doubtful accounts of $12 and $3, respectively | 1,186 | 464 |
Inventory | 530 | 455 |
Derivative instruments valuation | 4,394 | 4,600 |
Cash collateral paid in support of energy risk management activities | 243 | 494 |
Prepayments and other current assets | 210 | 215 |
Total current assets | 9,332 | 8,492 |
Property, plant and equipment, net of accumulated depreciation of $2,689 and $2,343, respectively | 11,609 | 11,545 |
Other Assets | ||
Equity investments in affiliates | 363 | 490 |
Capital leases and note receivable, less current portion | 483 | 435 |
Goodwill | 1,718 | 1,718 |
Intangible assets, net of accumulated amortization of $327 and $335, respectively | 2,111 | 815 |
Nuclear decommissioning trust fund | 316 | 303 |
Derivative instruments valuation | 1,188 | 885 |
Other non-current assets | 185 | 125 |
Total other assets | 6,364 | 4,771 |
Total Assets | 27,305 | 24,808 |
Current Liabilities | ||
Current portion of long-term debt and capital leases | 453 | 464 |
Accounts payable | 857 | 451 |
Derivative instruments valuation | 4,196 | 3,981 |
Deferred income taxes | 46 | 201 |
Cash collateral received in support of energy risk management activities | 468 | 760 |
Accrued expenses and other current liabilities | 618 | 724 |
Total current liabilities | 6,638 | 6,581 |
Other Liabilities | ||
Long-term debt and capital leases | 8,294 | 7,697 |
Nuclear decommissioning reserve | 292 | 284 |
Nuclear decommissioning trust liability | 217 | 218 |
Deferred income taxes | 1,564 | 1,190 |
Derivative instruments valuation | 906 | 508 |
Out-of-market contracts | 378 | 291 |
Other non-current liabilities | 914 | 669 |
Total non-current liabilities | 12,565 | 10,857 |
Total Liabilities | 19,203 | 17,438 |
3.625% convertible perpetual preferred stock (at liquidation value, net of issuance costs) | 247 | 247 |
Stockholders' Equity | ||
Preferred stock (at liquidation value, net of issuance costs) | 406 | 853 |
Common stock | 3 | 3 |
Additional paid-in capital | 4,561 | 4,350 |
Retained earnings | 3,033 | 2,423 |
Less treasury stock, at cost - 17,200,777 and 29,242,483 shares, respectively (actual amount) | (532) | (823) |
Accumulated other comprehensive income | 372 | 310 |
Noncontrolling interest | 12 | 7 |
Total Stockholders' Equity | 7,855 | 7,123 |
Total Liabilities and Stockholders' Equity | $27,305 | $24,808 |
1_Condensed Consolidated Balanc
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | ||
In Millions, except Share data | Jun. 30, 2009
| Dec. 31, 2008
|
Allowance for doubtful accounts | $12 | $3 |
Accumulated depreciation on Property, plant and equipment | 2,689 | 2,343 |
Accumulated amortization on intangible assets | $327 | $335 |
Treasury stock, shares | 17,200,777 | 29,242,483 |
2_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (USD $) | ||
In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Cash Flows from Operating Activities | ||
Net Income | $631 | $176 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions and equity in (earnings)/losses of unconsolidated affiliates | (27) | 32 |
Depreciation and amortization | 382 | 322 |
Provision for bad debts | 9 | 0 |
Amortization of nuclear fuel | 19 | 30 |
Amortization of financing costs and debt discount/premiums | 21 | 19 |
Amortization of intangibles and out-of-market contracts | 15 | (147) |
Changes in deferred income taxes and liability for unrecognized tax benefits | 445 | 96 |
Changes in nuclear decommissioning trust liability | 15 | 17 |
Changes in derivatives | (368) | 669 |
Changes in collateral deposits supporting energy risk management activities | 245 | (328) |
(Gain)/loss on sale of assets | (1) | 2 |
Gain on sale of equity method investment | (128) | 0 |
Gain on sale of discontinued operations | 0 | (270) |
Gain on sale of emission allowances | (9) | (42) |
Gain recognized on settlement of pre-existing relationship | (31) | 0 |
Amortization of unearned equity compensation | 13 | 14 |
Changes in option premiums collected, net of acquisition | (270) | 99 |
Cash used by changes in other working capital, net of acquisition | (239) | (253) |
Net Cash Provided by Operating Activities | 722 | 436 |
Cash Flows from Investing Activities | ||
Acquisition of Reliant Energy, net of cash acquired | (345) | 0 |
Capital expenditures | (374) | (409) |
Increase in restricted cash, net | (3) | (1) |
(Increase)/decrease in notes receivable | (11) | 21 |
Purchases of emission allowances | (52) | (4) |
Proceeds from sale of emission allowances | 15 | 61 |
Investments in nuclear decommissioning trust fund securities | (172) | (285) |
Proceeds from sales of nuclear decommissioning trust fund securities | 157 | 269 |
Proceeds from sale of discontinued operations and assets, net of cash divested | 0 | 229 |
Proceeds from sale of assets, net | 6 | 14 |
Proceeds from sale of equity method investment | 284 | 0 |
Other investment | (5) | 0 |
Equity investment in unconsolidated affiliates | 0 | (17) |
Net Cash Used by Investing Activities | (500) | (122) |
Cash Flows from Financing Activities | ||
Payment of dividends to preferred stockholders | (21) | (28) |
Payment of financing element of acquired derivatives | (22) | (28) |
Payment for treasury stock | 0 | (55) |
Proceeds from issuance of common stock, net of issuance costs | 0 | 8 |
Proceeds from sale of noncontrolling interest in subsidiary | 50 | 50 |
Proceeds from issuance of long-term debt | 820 | 10 |
Payment of deferred debt issuance costs | (29) | (2) |
Payments for short and long-term debt | (233) | (188) |
Net Cash Provided by/(Used by) Financing Activities | 565 | (233) |
Change in cash from discontinued operations | 0 | 43 |
Effect of exchange rate changes on cash and cash equivalents | 1 | 7 |
Net Increase in Cash and Cash Equivalents | 788 | 131 |
Cash and Cash Equivalents at Beginning of Period | 1,494 | 1,132 |
Cash and Cash Equivalents at End of Period | $2,282 | $1,263 |
Basis of Presentation
Basis of Presentation | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1 Basis of Presentation NRG Energy, Inc., or NRG or the Company, is primarily a wholesale power generation company with a significant presence in major competitive power markets in the United States, as well as a major retail electricity franchise in the ERCOT (Texas) market. NRG is engaged in the ownership, development, construction and operation of power generation facilities, the transacting in and trading of fuel and transportation services, the trading of energy, capacity and related products in the United States and select international markets, and supply of electricity and energy services to retail electricity customers in the Texas market. The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with the SECs regulations for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to the Companys financial statements in its Annual Report on Form 10-K for the year ended December31, 2008. Interim results are not necessarily indicative of results for a full year. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all material adjustments consisting of normal and recurring accruals necessary to present fairly the Companys consolidated financial position as of June30, 2009, the results of operations for the three and six months ended June30, 2009 and 2008, and cash flows for the six months ended June30, 2009 and 2008. These financial statements and notes reflect the Companys evaluation of events occurring subsequent to the balance sheet date through July30, 2009, the date the financial statements were issued. Certain prior-year amounts have been reclassified for comparative purposes. Use of Estimates The preparation of consolidated financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during the reporting period. Actual results could be different from these estimates. Cash and Cash Equivalents Cash and cash equivalents at June30, 2009, are predominantly held in money market funds invested in treasury securities, treasury repurchase agreements or government agency debt. Other Cash Flow Information NRGs non-cash investing activities for the six months ended June30, 2009 included capital expenditures of $46million for which the associated liability is reflected within accrued expenses. Recent Accounting Developments SFAS 141R The Company adopted SFAS No.141 (revised 2007), Business Combinations, or SFAS 141R, on January1, 2009. The provisions of SFAS 141R are appli |
Comprehensive Income
Comprehensive Income (Loss) | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Comprehensive Income (Loss) [Abstract] | |
Comprehensive Income ( Loss) | Note 2 Comprehensive Income/(Loss) The following table summarizes the components of the Companys comprehensive income/(loss), net of tax: Three months ended Six months ended June 30, June 30, (In millions) 2009 2008 2009 2008 Net income $ 433 $ 127 $ 631 $ 176 Changes in derivative activity, net of tax (109 ) (698 ) 64 (1,000 ) Foreign currency translation adjustment, net of tax 36 (7 ) 18 35 Reclassification adjustment for translation (gain)/loss realized upon sale of foreign investments (22 ) 15 (22 ) 15 Unrealized gain on available-for-sale securities, net of tax 1 1 2 3 Other comprehensive (loss)/income, net of tax (94 ) (689 ) 62 (947 ) Comprehensive income/(loss) attributable to NRG Energy, Inc. $ 339 $ (562 ) $ 693 $ (771 ) The following table summarizes the changes in the Companys accumulated other comprehensive income, net of tax: (In millions) Accumulated other comprehensive income as of December31, 2008 $ 310 Changes in derivative activity 64 Foreign currency translation adjustment 18 Reclassification adjustment for translation gain realized upon sale of foreign investment (22 ) Unrealized gain on available-for-sale securities 2 Accumulated other comprehensive income as of June30, 2009 $ 372 |
Business Acquisition
Business Acquisition | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Business Acquisition [Abstract] | |
Business Acquisition | Note 3 Business Acquisition General On May1, 2009, NRG, through its wholly owned subsidiary NRG Retail LLC, acquired Reliant Energy, which consisted of all of the Texas electric retail business operations of RRI, including the exclusive use of the trade name Reliant. Reliant Energy arranges for the transmission and delivery of electricity to customers, bills customers, collects payments for electricity sold and maintains call centers to provide customer service. Reliant Energy is the second largest electricity provider to residential and small business, or mass, customers in Texas, with approximately 1.6million mass customers as of June30, 2009. Reliant Energy also sells electricity and energy services to commercial, industrial and governmental/institutional customers, or CI customers, in Texas with 0.1 million CI customers based on metered locations as of June30, 2009. These customers include refineries, chemical plants, manufacturing facilities, hospitals, universities, government agencies, restaurants, and other facilities. With its complementary generation portfolio, the Texas region will be a supplier of power to Reliant Energy, thereby creating the potential for a more stable, reliable and competitive business that benefits Texas consumers. By backing Reliant Energys load-serving requirements with NRGs generation and risk management practices, the need to sell and buy power from other financial institutions and intermediaries that trade in the ERCOT market may be reduced, resulting in reduced transaction costs and credit exposures, which will provide for an efficient credit structure. This will also allow for a reduction in actual and contingent collateral, which will be achieved initially through offsetting transactions and over time by reducing the need to hedge the retail power supply through third parties, thus reducing collateral postings. In addition, with Reliant Energys base of retail customers, NRG now has a platform to build on the entire class of distributed generation and retail alternative energy technologies. Credit Support On May1, 2009, NRG arranged with Merrill Lynch Commodities, Inc. and certain of its affiliates, or Merrill Lynch, the former credit provider of RRI, to provide continuing credit support to Reliant Energy after closing the acquisition. In connection with entering into a transitional credit sleeve facility, or CSRA, NRG contributed $200million of cash to Reliant Energy. In conjunction with the CSRA, NRG, Reliant Energy, counterparties, and Merrill Lynch novated some of NRGs in-the-money trades to move collateral from NRG to Merrill Lynch, thereby reducing Merrill Lynchs actual and contingent collateral supporting Reliant Energy out-of-money positions. As a result, $522million of cash collateral held by NRG was moved to Merrill Lynch on the novation dates. NRG continues to record unrealized and realized gains/losses for these novated trades in its Texas and Northeast segments. The CSRA is scheduled to provide collateral support for Reliant Energy until November1, 2010. NRG will also have two potential additional cash contribution obligations: (i)in October2009 of $250million if the |
Investments Accounted for by th
Investments Accounted for by the Equity Method | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Investments Accounted for by the Equity Method [Abstract] | |
Investments Accounted for by the Equity Method | Note 4 Investments Accounted for by the Equity Method MIBRAG On June10, 2009, NRG completed the sale of its 50% ownership interest in Mibrag B.V. to a consortium of Severoesk doly Chomutov, a member of the CEZ Group, and JT Group. Mibrag B.V.s principal holding is MIBRAG, which is jointly owned by NRG and URS Corporation. As part of the transaction, URS Corporation also entered into an agreement to sell its 50% stake in MIBRAG. For its share, NRG received EUR 203million ($284million at an exchange rate of 1.40 US$/EUR), net of transaction costs. During the three and six months ended June30, 2009, NRG recognized an after-tax gain of $128million. Prior to completion of the sale, NRG continued to record its share of MIBRAGs operations to Equity in earnings of unconsolidated affiliates. In connection with the transaction, NRG entered into a foreign currency forward contract to hedge the impact of exchange rate fluctuations on the sale proceeds. The foreign currency forward contract had a fixed exchange rate of 1.277 and required NRG to deliver EUR 200million in exchange for $255million on June15, 2009. For the three and six months ended June30, 2009, NRG recorded an exchange loss of $15million and $24million, respectively, on the contract within Other (loss)/income, net. NRG provided certain indemnities in connection with its share of the transaction. See Note 17, Guarantees, to this Form 10-Q for further discussion. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 5 Fair Value of Financial Instruments The estimated carrying values and fair values of NRGs recorded financial instruments are as follows: Carrying Amount Fair Value December 31, December 31, June 30, 2009 2008 June 30, 2009 2008 (In millions) Cash and cash equivalents $ 2,282 $ 1,494 $ 2,282 $ 1,494 Funds deposited by counterparties 468 754 468 754 Restricted cash 19 16 19 16 Cash collateral paid in support of energy risk management activities 243 494 243 494 Investment in available-for-sale securities (classified within other non-current assets): Debt securities 7 7 7 7 Marketable equity securities 4 2 4 2 Trust fund investments 318 305 318 305 Notes receivable 190 156 204 166 Derivative assets 5,582 5,485 5,582 5,485 Long-term debt, including current portion 8,619 8,019 8,267 7,475 Cash collateral received in support of energy risk management activities 468 760 468 760 Derivative liabilities 5,102 4,489 5,102 4,489 Recurring Fair Value Measurements The following table presents assets and liabilities measured and recorded at fair value on the Companys condensed consolidated balance sheet on a recurring basis and their level within the fair value hierarchy: (In millions) Fair Value As of June 30, 2009 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 2,282 $ $ $ 2,282 Funds deposited by counterparties 468 468 Restricted cash 19 19 Cash collateral paid in support of energy risk management activities 243 243 Investment in available-for-sale securities (classified within other non-current assets): Debt securities 7 7 Marketable equity securities 4 4 Trust fund investments 183 101 34 318 Derivative assets 1,063 4,394 125 5,582 Total assets $ 4,262 $ 4,495 $ 166 $ 8,923 Cash collateral received in support of energy risk management activities $ 468 $ $ $ 468 Derivative liabilities 1,043 3,984 75 5,102 Total liabilities $ 1,511 $ 3,984 $ 75 $ 5,570 The following table reconciles, for the six months ended June30, 2009, the beginning and ending balances for financial instruments that are recognized at fair value in the consolidated financial statements using significant unobservable inputs: Fair Value Measurement Using Significant Unobservable Inputs (Level 3) (In millions) Trust Fund Six months ended June 30, 2009 Debt Securities Investments Derivatives Total Beginnin |
Accounting for Derivative Instr
Accounting for Derivative Instruments and Hedging Activities | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Accounting for Derivative Instruments and Hedging Activities [Abstract] | |
Accounting for Derivative Instruments and Hedging Activities | Note 6 Accounting for Derivative Instruments and Hedging Activities SFAS 133 requires NRG to recognize all derivative instruments on the balance sheet as either assets or liabilities and to measure them at fair value each reporting period unless they qualify for a Normal Purchase Normal Sale, or NPNS, exception. If certain conditions are met, NRG may be able to designate certain derivatives as cash flow hedges and defer the effective portion of the change in fair value of the derivatives to other comprehensive income, or OCI, until the hedged transactions occur and are recognized in earnings. The ineffective portion of a cash flow hedge is immediately recognized in earnings. For derivatives designated as hedges of the fair value of assets or liabilities, the changes in fair value of both the derivative and the hedged transaction are recorded in current earnings. The ineffective portion of a hedging derivative instruments change in fair value is immediately recognized into earnings. For derivatives that are not designated as cash flow hedges or do not qualify for hedge accounting treatment, the changes in the fair value will be immediately recognized in earnings. Under the guidelines established per SFAS 133, certain derivative instruments may qualify for the NPNS exception and are therefore exempt from fair value accounting treatment. SFAS 133 applies to NRGs energy related commodity contracts, interest rate swaps, and foreign exchange contracts. As the Company engages principally in the trading and marketing of its generation assets and retail business, some of NRGs commercial activities qualify for hedge accounting under the requirements of SFAS 133. In order for the generation assets to qualify, the physical generation and sale of electricity should be highly probable at inception of the trade and throughout the period it is held, as is the case with the Companys baseload plants. For this reason, many trades in support of NRGs baseload units normally qualify for NPNS or cash flow hedge accounting treatment, and trades in support of NRGs peaking units will generally not qualify for hedge accounting treatment, with any changes in fair value likely to be reflected on a mark-to-market basis in the statement of operations. Most of the retail load contracts either qualify for the NPNS exception or fail to meet the criteria for a derivative and the majority of the supply contracts are recorded under mark-to-market accounting. All of NRGs hedging and trading activities are in accordance with the Companys Risk Management Policy. Energy-Related Commodities To manage the commodity price risk associated with the Companys competitive supply activities and the price risk associated with wholesale and retail power sales from the Companys electric generation facilities, NRG may enter into a variety of derivative and non-derivative hedging instruments, utilizing the following: Forward contracts, which commit NRG to sell or purchase energy commodities or purchase fuels in the future. Futures contracts, which are exchange-traded standardized commitments to purchase or sell a commodity or financial instrument. |
Long Term Debt
Long Term Debt | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Long Term Debt Disclosure [Abstract] | |
Long-Term Debt | Note 7 Long-Term Debt 2019 Senior Notes On June5, 2009, NRG issued $700million aggregate principal amount of 8.5% Senior Notes due 2019, or 2019 Senior Notes, at a discount resulting in a yield of 8.75%. The 2019 Senior Notes were issued under an Indenture, dated February2, 2006, between NRG and Law Debenture Trust Company of New York, as trustee, as amended through Supplemental Indentures, which is discussed in Note 11 Debt and Capital Leases, in the Companys Annual Report on Form 10-K for the fiscal year ended December31, 2008. The Indentures and the form of the notes provide, among other things, that the 2019 Senior Notes will be senior unsecured obligations of NRG. The net proceeds of $678million are intended to be used to facilitate the early termination of NRGs obligations pursuant to the CSRA, anticipated in the late third or early fourth quarter 2009. Prior to the termination, or in the event NRG does not reach agreement on acceptable terms with either Merrill Lynch or its counterparties, the net proceeds will be available for general corporate purposes. Interest is payable semi-annually on the 2019 Senior Notes beginning on December15, 2009 until their maturity date of June15, 2019. As of June30, 2009, $700million in principal was outstanding under the 2019 Senior Notes. Prior to June15, 2012, NRG may redeem up to 35% of the aggregate principal amount of the 2019 Senior Notes with the net proceeds of certain equity offerings, at a redemption price of 108.5% of the principal amount. Prior to June15, 2014, NRG may redeem all or a portion of the 2019 Senior Notes at a price equal to 100% of the principal amount plus a premium and accrued and unpaid interest. The premium is the greater of (i)1% of the principal amount of the note; or (ii)the excess of the principal amount of the note over the following: the present value of 104.25% of the note, plus interest payments due on the note from the date of redemption through June15, 2014, discounted at a Treasury rate plus 0.50%. In addition, on or after June15, 2014, NRG may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date: Redemption Redemption Period Percentage June15, 2014 to June14, 2015 104.25% June15, 2015 to June14, 2016 102.83% June15, 2016 to June14, 2017 101.42% June15, 2017 and thereafter 100.00% Interest Rate Swaps In May2009, NRG entered into a series of forward-starting interest rate swaps. These interest rate swaps become effective on April1, 2011 and are intended to hedge the risks associated with floating interest rates. For each of the interest rate swaps, the Company will pay its counterparty the equivalent of a fixed interest payment on a predetermined notional value, and NRG receives the monthly equivalent of a floating interest payment based on a 1-month LIBOR calculated on the same notional value. All interest rate swap payments by NRG and its counterparties are made monthly and the LIBOR is determined in |
Changes in Capital Structure
Changes in Capital Structure | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Changes in Capital Structure [Abstract] | |
Changes in Capital Structure | Note 8 Changes in Capital Structure The following table reflects the changes in NRGs common stock issued and outstanding during the six months ended June30, 2009: Authorized Issued Treasury Outstanding Balance as of December31, 2008 500,000,000 263,599,200 (29,242,483 ) 234,356,717 Shares issued from LTIP 216,741 216,741 Shares issued under NRG Employee Stock Purchase Plan, or ESPP 41,706 41,706 Shares borrowed by affiliates of CS 12,000,000 12,000,000 4.00% Preferred Stock conversion 20,650 20,650 5.75% Preferred Stock conversion 18,601,201 18,601,201 Balance as of June30, 2009 500,000,000 282,437,792 (17,200,777 ) 265,237,015 Employee Stock Purchase Plan As of June30, 2009, there were 458,294 shares of treasury stock reserved for issuance under the ESPP. In July2009, 39,826 shares of common stock were issued to employee accounts from treasury stock. 5.75% Preferred Stock Certain holders of the Companys 5.75% convertible perpetual preferred stock, or 5.75% Preferred Stock, elected to convert their preferred shares into NRG common shares prior to the mandatory conversion date of March16, 2009 at the minimum conversion rate of 8.2712. As of March 16, 2009, each remaining outstanding share of the 5.75% Preferred Stock automatically converted into shares of common stock at a rate of 10.2564, based upon the applicable market value of NRGs common stock. These conversions resulted in a decrease in preferred stock of $447million, and a corresponding increase in Additional Paid-in Capital. The following table summarizes the conversion of the 5.75% Preferred Stock into NRG Common Stock: Preferred Stock Conversion Rate Common Stock Shares (per share) Shares Balance as of December31, 2008 1,841,680 Preferred shares converted by the holders prior to March16, 2009 144,975 8.2712 1,199,116 Preferred shares automatically converted as of March16, 2009 1,696,705 10.2564 17,402,085 Balance at June30, 2009 18,601,201 4% Preferred Stock As of June30, 2009, 413 shares of the 4% Preferred Stock were converted into 20,650 shares of common stock in 2009. |
Equity Compensation
Equity Compensation | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Equity Compensation [Abstract] | |
Equity Compensation | Note 9 Equity Compensation Non-Qualified Stock Options, or NQSOs The following table summarizes the Companys NQSO activity as of June30, 2009, and changes during the six months then ended: Weighted Aggregate Intrinsic Average Value Shares Exercise Price (In millions) Outstanding as of December31, 2008 4,008,188 $ 25.84 Granted 1,297,300 23.37 Forfeited (103,768 ) 27.18 Outstanding at June30, 2009 5,201,720 25.20 $ 22 Exercisable at June30, 2009 2,862,448 $ 21.87 18 The weighted average grant date fair value of NQSOs granted for the six months ended June30, 2009, was $8.48. Restricted Stock Units, or RSUs The following table summarizes the Companys non-vested RSU awards as of June30, 2009, and changes during the six months then ended: Weighted Average Grant-Date Units Fair Value Per Unit Non-vested as of December31, 2008 1,061,996 $ 32.97 Granted 160,100 23.35 Vested (293,312 ) 23.76 Forfeited (36,040 ) 33.00 Non-vested as of June30, 2009 892,744 $ 34.27 Performance Units, or PUs The following table summarizes the Companys non-vested PU awards as of June30, 2009, and changes during the six months then ended: Weighted Average Grant- Date Units Fair Value Per Unit Non-vested as of December31, 2008 659,564 $ 22.81 Granted 310,800 22.52 Forfeited (262,864 ) 19.33 Non-vested as of June30, 2009 707,500 $ 24.15 In the first half of 2009, there were no performance unit payouts in accordance with the terms of the performance units. Deferral Stock Units, or DSUs The following table summarizes the Companys outstanding DSU awards as of June30, 2009, and changes during the six months then ended: Weighted Average Grant- Date Units Fair Value Per Unit Outstanding as of December31, 2008 260,768 $ 18.50 Granted 65,437 22.77 Conversions (22,156 ) 23.69 Outstanding as of June30, 2009 304,049 $ 19.34 |
Earnings Per Share
Earnings Per Share | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Earnings Per Share Disclosure [Abstract] | |
Earnings Per Share | Note 10 Earnings Per Share Basic earnings per share attributable to NRG common stockholders is computed by dividing net income attributable to NRG adjusted for accumulated preferred stock dividends by the weighted average number of common shares outstanding. Shares issued and treasury shares repurchased during the year are weighted for the portion of the year that they were outstanding. The 12,000,000 shares outstanding under the Share Lending Agreements with CS affiliates are not treated as outstanding for earnings per share purposes because the CS affiliates must return all borrowed shares (or identical shares) upon termination of the Agreements. See Note 7 Long-Term Debt, for more information on the Share Lending Agreements. Diluted earnings per share attributable to NRG common stockholders is computed in a manner consistent with that of basic earnings per share while giving effect to all potentially dilutive common shares that were outstanding during the period. The reconciliation of basic earnings per common share to diluted earnings per share attributable to NRG is as follows: Three Months ended June 30, Six months ended June 30, (In millions, except per share data) 2009 2008 2009 2008 Basic earnings per share attributable to NRG common stockholders Numerator: Income/(loss) from continuing operations, net of income taxes $ 433 $ (41 ) $ 631 $ 4 Dividends for preferred shares (7 ) (14 ) (21 ) (28 ) Net income/(loss) available to common stockholders from continuing operations 426 (55 ) 610 (24 ) Income from discontinued operations, net of income taxes 168 172 Net income attributable to NRG Energy, Inc. available to common stockholders $ 426 $ 113 $ 610 $ 148 Denominator: Weighted average number of common shares outstanding 253.2 235.9 245.2 236.1 Basic earnings per share: Income/(loss) from continuing operations $ 1.68 $ (0.23 ) $ 2.49 $ (0.10 ) Income from discontinued operations, net of income taxes 0.71 0.73 Net income attributable to NRG Energy, Inc. $ 1.68 $ 0.48 $ 2.49 $ 0.63 Diluted earnings per share attributable to NRG common stockholders Numerator: Net income/(loss) available to common stockholders from continuing operations $ 426 $ (55 ) $ 610 $ (24 ) Add preferred stock dividends for dilutive preferred stock 4 14 Adjusted income/(loss) from continuing operations 430 (55 ) 624 (24 ) Income from discontinued operations, net of income taxes 168 172 Net income attributable to NRG Energy, Inc. available to common stockholders $ 430 $ 113 $ 624 $ 148 Denominator: Weighted average number of common shares outstanding 253.2 235.9 24 |
Segment Reporting
Segment Reporting | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 11 Segment Reporting NRGs segment structure has changed to reflect the Companys acquisition of Reliant Energy along with the previously reported core areas of operation which are primarily the geographic regions of the Companys wholesale power generation, thermal and chilled water business, and corporate activities. Within NRGs wholesale power generation operations, there are distinct components with separate operating results and management structures for the following regions: Texas, Northeast, South Central, West and International. In the second quarter 2009, management changed its method for allocating Corporate general and administrative expenses to the segments. Corporate general and administrative expenses had been allocated based on budgeted segment revenues. Beginning in the second quarter 2009, Corporate general and administrative expenses are allocated based on forecasted earnings/(losses) before interest expense, income taxes, depreciation and amortization expense. Wholesale Power Generation (In millions) South Three months ended June 30, 2009 Reliant Energy (a) Texas (b) Northeast Central West International Thermal Corporate Elimination Total Operating revenues $ 1,175 $ 619 $ 237 $ 139 $ 42 $ 34 $ 28 $ 32 $ (69 ) $ 2,237 Depreciation and amortization 43 117 30 17 2 3 1 213 Equity in earnings/(loss) of unconsolidated affiliates (7 ) 3 9 5 Income/(loss) from continuing operations before income taxes 414 107 42 (9 ) 19 128 (119 ) 582 Net income/(loss) 233 98 42 (9 ) 19 125 (76 ) 432 Net loss attributable to non-controlling interest (1 ) (1 ) Net income/(loss) attributable to NRG Energy, Inc. $ 233 $ 99 $ 42 $ (9 ) $ 19 $ 125 $ $ (76 ) $ $ 433 Total assets $ 4,405 $ 13,680 $ 1,788 $ 929 $ 268 $ 766 $ 197 $ 22,809 $ (17,537 ) $ 27,305 (a) Reliant Energy balances are for the two months ended June30, 2009. (b) Includes inter-segment sales of $66million to Reliant Energy. If the Company continued using the 2008 allocation method for corporate general and administrative expenses, the effect to net income/(loss) of each segment for the three months ended June30, 2009 would have been as follows: Net income/(loss) attributable to NRG Energy, Inc. as reported $ 233 $ 99 $ 42 $ (9 ) $ 19 $ 125 $ $ (76 ) $ $ 433 Increase/(decrease) in net income/(loss) attributable to NRG Energy, Inc. (11 ) 8 4 (1 ) Adjusted net income/(loss) a |
Income Taxes
Income Taxes | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | Note 12 Income Taxes Effective Tax Rate Income taxes included in continuing operations were as follows: Three months ended June 30, (In millions except otherwise noted) 2009 2008 Income tax expense (benefit) $ 150 $ (53 ) Effective tax rate 25.8 % 56.4 % For the three months ended June30, 2009, NRGs overall effective tax rate on continuing operations was different than the statutory rate of 35% primarily due to a reduction in the state and local income tax rate as a result of the Reliant Energy acquisition and the sale of the MIBRAG facility. For the three months ended June30, 2008, NRGs effective tax rate was increased primarily due to the movement of the valuation allowance established as result of capital losses generated in the period for which there is no projected capital gain or available tax planning strategies. Income taxes included in continuing operations were as follows: Six months ended June 30, (In millions except otherwise noted) 2009 2008 Income tax expense $ 448 $ 1 Effective tax rate 41.5 % 20.0 % For the six months ended June30, 2009, NRGs overall effective tax rate on continuing operations was different than the statutory rate of 35% primarily due to an increase in valuation allowance as a result of capital losses generated in the six month period for which there are no projected capital gains or available tax planning strategies. Furthermore, the effective tax rate is decreased by the sale of the MIBRAG facility as well as a reduction of the state and local income tax rate as a result of the Reliant Energy acquisition. For the six months ended June30, 2008, NRGs overall effective tax rate was reduced primarily by foreign earnings that are taxed at rates in foreign jurisdictions lower than the U.S. statutory rate. Deferred tax assets, liabilities and valuation allowance On a provisional basis, NRG established deferred tax assets of $1,205million and deferred tax liabilities of $1,194million as a result of NRGs acquisition of Reliant Energy. Valuation Allowance As of June30, 2009, the Companys valuation allowance was increased by approximately $80 million primarily due to losses generated in the period from derivative trading activity which require capital treatment for tax purposes. The Company increased its foreign valuation allowance by approximately $10million. Uncertain tax benefits As of June30, 2009, NRG has recorded a $463million non-current tax liability for unrecognized tax benefits, resulting from taxable earnings for the period for which there are no NOLs available to offset for financial statement purposes. NRG has accrued interest and penalties related to these unrecognized tax benefits of approximately $9million for the six months ended June30, 2009, and has accrued approximately $17million since adoption. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. NRG is subject to examination by taxing authorities for income tax returns filed in the U.S. federal jurisdiction and various state a |
Benefit Plans and Other Postret
Benefit Plans and Other Postretirement Benefits | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Benefit Plans and Other Postretirement Benefits [Abstract] | |
Benefit Plans and Other Postretirement Benefits | Note 13 Benefit Plans and Other Postretirement Benefits NRG Defined Benefit Plans NRG sponsors and operates three defined benefit pension and other postretirement plans. The NRG Plan for Bargained Employees and the NRG Plan for Non-Bargained Employees are maintained solely for eligible legacy NRG participants. A third plan, the Texas Genco Retirement Plan, is maintained for participation solely by eligible employees. The total amount of employer contributions paid for the six months ended June30, 2009 was $14million. NRG expects to make $16million in further contributions for the remainder of 2009. The total 2009 planned contribution of $30million was a decrease of $30million from the expected contributions as disclosed in Note 12 Benefit Plans and Other Postretirement Benefits, in the Companys Annual Report on Form 10-K for the fiscal year ended December31, 2008. This decrease in the 2009 expected contributions is due to the adoption by the Company in March2009 of the new funding method options now available. The new methods were made allowable under new IRS guidance on the application of recent Congressional legislation on funding requirements. The net periodic pension cost related to all of the Companys defined benefit pension plans include the following components: Defined Benefit Pension Plans Three months ended June 30, Six months ended June 30, (In millions) 2009 2008 2009 2008 Service cost benefits earned $ 3 $ 3 $ 7 $ 7 Interest cost on benefit obligation 5 4 10 9 Prior service cost 1 1 Net gain (1 ) (1 ) Expected return on plan assets (4 ) (3 ) (8 ) (7 ) Net periodic benefit cost $ 5 $ 3 $ 10 $ 8 The net periodic cost related to all of the Companys other postretirement benefits plans includes the following components: Other Postretirement Benefits Plans Three months ended June 30, Six months ended June 30, (In millions) 2009 2008 2009 2008 Service cost benefits earned $ 1 $ $ 2 $ 1 Interest cost on benefit obligation 1 2 3 3 Net periodic benefit cost $ 2 $ 2 $ 5 $ 4 STP Defined Benefit Plans NRG has a 44% undivided ownership interest in South Texas Project, or STP. South Texas Project Nuclear Operating Company, or STPNOC, which operates and maintains STP, provides its employees a defined benefit pension plan as well as postretirement health and welfare benefits. Although NRG does not sponsor the STP plan, it reimburses STPNOC for 44% of the contributions made towards its retirement plan obligations. The total amount of employer contributions reimbursed to STPNOC for the six months ended June30, 2009 was $2million. The Company recognized net periodic costs related to its 44% interest in STP defined benefits plans of $2million for both the three months ended June30, 2009 and 2008, respectively. The Company recognized net periodic costs related to its 44% interest in STP defined benefits plans of $5million and $4 |
Commitments and Contingencies
Commitments and Contingencies | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 14 Commitments and Contingencies Operating Lease Commitments As a result of the acquisition of Reliant Energy, the Companys operating lease commitments have increased primarily due to additional lease agreements for office space through 2021. As of June30, 2009, eight additional office space locations were under lease for future commitments of approximately $89million. Fuel Commitments NRG enters into long-term contractual arrangements to procure fuel and transportation services for the Companys generation assets. NRGs total net coal commitments, which span from 2009 through 2012, decreased by approximately $266million during the six months ended June30, 2009 as the 2009 monthly commitments were settled. In addition, NRGs natural gas purchase commitments decreased by approximately $162million during the six months ended June30, 2009, as the 2009monthly commitments were settled and average natural gas prices decreased. Purchased Power Commitments As a result of the acquisition of Reliant Energy, NRG is party to purchased power contracts of various quantities and durations that are not classified as derivative assets and liabilities. These contracts are not included in the consolidated balance sheet as of June30, 2009. Minimum purchase commitment obligations under these agreements are as follows as of June30, 2009: (In millions) Fixed Pricing(a) Variable Pricing(b) Remainder of 2009 $ 46 $ 85 2010 42 8 2011 24 2012 20 2013 10 Total $ 142 $ 93 (a) As of June30, 2009, the maximum remaining term under any individual purchased power contract is four years. (b) For contracts with variable pricing components, estimated prices are based on forward commodity curves as of June30, 2009. Other As a result of the acquisition of Reliant Energy, the Company acquired the naming rights, including advertising and other benefits, for a football stadium and other convention and entertainment facilities included in the stadium complex in Houston, Texas. Pursuant to this agreement, the Company is required to pay $10million per year through 2031. See discussion in Note 3, Business Acquisition, regarding the CSRA as a result of the acquisition of Reliant Energy on May1, 2009. First and Second Lien Structure NRG has granted first and second liens to certain counterparties on substantially all of the Companys assets to reduce the amount of cash collateral and letters of credit that it would otherwise be required to post from time to time to support its obligations under out-of-the-money hedge agreements for forward sales of power or MWh equivalents. The Companys lien counterparties may have a claim on NRGs assets to the extent market prices exceed the hedged price. As of June 30, 2009 and July23, 2009, all hedges under the first and second liens were in-the-money on a counterparty aggregate basis. RepoweringNRG Initiatives NRG has capitalized $32million through June30, 2009, for the repowering of its El Segundo generating facility in California. As a result of permitting delays related to on-going Na |
Regulatory Matters
Regulatory Matters | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Regulatory Matters [Abstract] | |
Regulatory Matters | Note 15 Regulatory Matters NRG operates in a highly regulated industry and is subject to regulation by various federal and state agencies. As such, NRG is affected by regulatory developments at both the federal and state levels and in the regions in which NRG operates. In addition, NRG is subject to the market rules, procedures and protocols of the various ISO markets in which NRG participates. These power markets are subject to ongoing legislative and regulatory changes that may impact NRGs wholesale and retail businesses. In addition to the regulatory proceedings noted below, NRG and its subsidiaries are a party to other regulatory proceedings arising in the ordinary course of business or have other regulatory exposure. In managements opinion, the disposition of these ordinary course matters will not materially adversely affect NRGs consolidated financial position, results of operations, or cash flows. PJM By Order dated March17, 2009, the U.S. Court of Appeals for the DC Circuit denied the remaining appeals of the FERC orders establishing the RPM capacity market. In February of 2009, the entities representing load interests, including the New Jersey Board of Public Utilities, the District of Columbia Office of the Peoples Counsel, and the Maryland Office of Peoples Counsel, agreed to withdraw their appeals regarding the establishment of the RPM market design. On June18, 2009, FERC denied rehearing of its order dated September19, 2008 dismissing a complaint filed by the Maryland Public Service Commission, together with other load interests, against PJM challenging the results of the RPM transition Base Residual Auctions for installed capacity, held between April2007 and January2008. The complaint had sought to replace the auction-determined results for installed capacity for the 2008/2009, 2009/2010, and 2010/2011 delivery years with administratively-determined prices, and thus the auction prices are expected to be realized. Retail (Replacement Reserve) On November14, 2006, Constellation Energy Commodities Group, or Constellation, filed a complaint with the PUCT alleging that ERCOT misapplied the Replacement Reserve Settlement, or RPRS, Formula contained in the ERCOT protocols from April10, 2006, through September27, 2006. Specifically, Constellation disputed approximately $4million in under-scheduling charges for capacity insufficiency asserting that ERCOT applied the wrong protocol. Reliant Energy Power Supply, or REPS, other market participants, ERCOT, and PUCT Staff opposed Constellations complaint. On January25, 2008, the PUCT entered an order finding that ERCOT correctly settled the capacity insufficiency charges for the disputed dates in accordance with ERCOT protocols and denied Constellations complaint. On April9, 2008, Constellation appealed the PUCT order to the Civil District Court of Travis County, Texas and on June19, 2009, the court issued a judgment reversing the PUCT order, finding that the ERCOT protocols were in irreconcilable conflict with each other. On July20, 2009, REPS filed an appeal to the Third Court of Appeals in Travis County, Texas, thereby staying the effect of the trial courts dec |
Environmental Matters
Environmental Matters | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Environmental Matters [Abstract] | |
Environmental Matters | Note 16 Environmental Matters The construction and operation of power projects are subject to stringent environmental and safety protection and land use laws and regulation in the U.S. If such laws and regulations become more stringent, or new laws, interpretations or compliance policies apply and NRGs facilities are not exempt from coverage, the Company could be required to make modifications to further reduce potential environmental impacts. New legislation and regulations to mitigate the effects of greenhouse gases, or GHGs, including CO2 from power plants, are under consideration at the federal and state levels. In general, the effect of such future laws or regulations is expected to require the addition of pollution control equipment or the imposition of restrictions or additional costs on the Companys operations. Environmental Capital Expenditures Based on current rules, technology and plans, NRG has estimated that environmental capital expenditures to be incurred during the remainder of 2009 through 2013 to meet NRGs environmental commitments will be approximately $1.1billion and are primarily associated with controls on the Companys Big Cajun and Indian River facilities. These capital expenditures, in general, are related to installation of particulate, SO2, NOx, and mercury controls to comply with federal and state air quality rules and consent orders, as well as installation of Best Technology Available under the Phase II 316(b) Rule. NRG continues to explore cost effective alternatives that can achieve desired results. This estimate reflects anticipated schedules and controls related to the Clean Air Interstate Rule, or CAIR, Maximum Achievable Control Technology, or MACT, for mercury, and the Phase II 316(b) Rule which are under remand to the U.S. EPA, and, as such, the full impact on the scope and timing of environmental retrofits from any new or revised regulations cannot be determined at this time. Northeast Region NRG operates electric generating units located in Connecticut, Delaware, Maryland, Massachusetts and New York which are subject to RGGI. These units must surrender one allowance for every U.S. ton of CO2 emitted with true up for 2009-2011 occurring in 2012. Allowances are partially allocated only in the state of Delaware. In 2008, NRG emitted approximately 12 million tonnes of CO2 in RGGI states, although 2009 is tracking lower than 2008year to date. NRG believes that to the extent CO2 will not be fully reflected in wholesale electricity prices, the direct financial impact on the Company is likely to be negative as costs will be incurred in the course of securing the necessary RGGI allowances and offsets at auction and in the market. In January2006, NRGs Indian River Operations, Inc. received a letter of informal notification from the DNREC stating that the Company may be a potentially responsible party with respect to a historic captive landfill. On October1, 2007, NRG signed an agreement with DNREC to investigate the site through the Voluntary Clean-up Program. On February4, 2008, the DNREC issued findings that no further action is required in relation to surface water and that a previous |
Guarantees
Guarantees | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Guarantees [Abstract] | |
Guarantees | Note 17 Guarantees NRG and its subsidiaries enter into various contracts that include indemnification and guarantee provisions as a routine part of the Companys business activities. Examples of these contracts include asset purchases and sale agreements, commodity sale and purchase agreements, retail contracts, joint venture agreements, EPC agreements, operation and maintenance agreements, service agreements, settlement agreements, and other types of contractual agreements with vendors and other third parties, as well as affiliates. These contracts generally indemnify the counterparty for tax, environmental liability, litigation and other matters, as well as breaches of representations, warranties and covenants set forth in these agreements. In some cases, NRGs maximum potential liability cannot be estimated, since the underlying agreements contain no limits on potential liability. The Company is also obligated with respect to customer deposits associated with Reliant Energy. This Note 17 should be read in conjunction with the complete description under Note 25, Guarantees, to the Companys financial statements in its Annual Report on Form 10-K for the year ended December31, 2008. In connection with the agreement to sell its 50% ownership interest in Mibrag B.V., NRG executed an agreement guaranteeing the performance of its subsidiary Lambique Beheer under the purchase and sale agreement. This agreement indemnifies the buyer for tax, environmental liability and other matters, as well as breaches of representations and warranties and is limited to EUR 206 million. NRG signed a guarantee agreement on behalf of its subsidiary NRG Retail, LLC guaranteeing the payment and performance of its obligations under the LLC Membership Interest Purchase Agreement and related agreements with RRI in connection with the purchase of its retail business, including purchase price and acquired net working capital. In accordance with the LLC Membership Interest Purchase Agreement, on May1, 2009, NRG signed an agreement guaranteeing payments up to $85million related to the Restated Power Purchase Agreement with FPL Energy Upton Wind II, LLC. NRG has no reason to believe that the Company currently has any material liability relating to such routine indemnification obligations. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Condensed Consolidating Financial Information [Abstract] | |
Condensed Consolidating Financial Information | Note 18 Condensed Consolidating Financial Information As of June30, 2009, the Company had outstanding $1.2billion of 7.25% Senior Notes due 2014, $2.4billion of 7.375% Senior Notes due 2016, $1.1billion of 7.375% Senior Notes due 2017, and $700million of 8.50% Senior Notes due 2019. These notes are guaranteed by certain of NRGs current and future wholly-owned domestic subsidiaries, or guarantor subsidiaries. Unless otherwise noted below, each of the following guarantor subsidiaries fully and unconditionally guaranteed the Senior Notes as of June30, 2009: Arthur Kill Power LLC NRG Devon Operations Inc. Astoria Gas Turbine Power LLC NRG Dunkirk Operations, Inc. Berrians I Gas Turbine Power LLC NRG El Segundo Operations Inc. Big Cajun II Unit 4 LLC NRG Generation Holdings, Inc. Cabrillo Power I LLC NRG Huntley Operations Inc. Cabrillo Power II LLC NRG International LLC Chickahominy River Energy Corp. NRG Kaufman LLC Commonwealth Atlantic Power LLC NRG Mesquite LLC Conemaugh Power LLC NRG MidAtlantic Affiliate Services Inc. Connecticut Jet Power LLC NRG Middletown Operations Inc. Devon Power LLC NRG Montville Operations Inc. Dunkirk Power LLC NRG New Jersey Energy Sales LLC Eastern Sierra Energy Company NRG New Roads Holdings LLC El Segundo Power, LLC NRG North Central Operations, Inc. El Segundo Power II LLC NRG Northeast Affiliate Services Inc. GCP Funding Company LLC NRG Norwalk Harbor Operations Inc. Hanover Energy Company NRG Operating Services Inc. Hoffman Summit Wind Project LLC NRG Oswego Harbor Power Operations Inc. Huntley IGCC LLC NRG Power Marketing LLC Huntley Power LLC NRG Rocky Road LLC Indian River IGCC LLC NRG Saguaro Operations Inc. Indian River Operations Inc. NRG South Central Affiliate Services Inc. Indian River Power LLC NRG South Central Generating LLC James River Power LLC NRG South Central Operations Inc. Kaufman Cogen LP NRG South Texas LP Keystone Power LLC NRG Texas LLC Lake Erie Properties Inc. NRG Texas C I Supply LLC (a) Langford Wind Power, LLC (a) NRG Texas Holding Inc. (a) Louisiana Generating LLC NRG Texas Power LLC Middletown Power LLC NRG West Coast LLC Montville IGCC LLC NRG Western Affiliate Services Inc. Montville Power LLC Oswego Harbor Power LLC NEO Chester-Gen LLC Padoma Wind Power, LLC NEO Corporation Reliant Energy Services Texas LLC (a) NEO Freehold-Gen LLC Reliant Energy Texas Retail LLC (a) NEO Power Services Inc. Saguaro Power LLC New Genco GP LLC San Juan Mesa Wind Project II, LLC Norwalk Power LLC Somerset Operations Inc. NRG Affiliate Services Inc. Somerset Power LLC NRG Arthur Kill Operations Inc. Texas Genco Financing Corp. NRG Asia-Pacific Ltd. Texas Genco GP, LLC NRG Astoria Gas Turbine Operations Inc. Texas Genco Holdings, Inc. NRG Bayou Cove LLC Texas Genco LP, LLC NRG Cabrillo Power Operations Inc. Texas Genco Operating Services, LLC NRG Cadillac Operations Inc |