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Acquisitions, Discontinued Operations and Dispositions Acquisitions, Discontinued Operations and Dispositions | 12 Months Ended
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Dec. 31, 2018
Discontinued Operations and Disposal Groups [Abstract] |
Acquisitions, Discontinued Operations and Dispositions | Acquisitions, Discontinued Operations and Dispositions Acquisitions XOOM Energy Acquisition — On June 1, 2018, the Company completed the acquisition of XOOM Energy, LLC, an electricity and natural gas retailer operating in 19 states, Washington, D.C. and Canada, for approximately $213 million in cash. The acquisition increased NRG's retail portfolio by approximately 300,000 customers. The purchase price was allocated as follows:
| (In millions)
Net current and non-current working capital | $ | 46 |
Other intangible assets | 133 |
Goodwill | 34 |
XOOM Purchase Price | $ | 213 |
Small Book Acquisitions — Through the end of December 2018, the Company has agreed to acquire several books of customers totaling approximately 115,000 customers, along with brand names, for $44 million, the majority of which was allocated to acquired intangibles. Discontinued Operations Sale of South Central Portfolio On February 4, 2019, the Company completed the sale of its South Central Portfolio to Cleco. The Company concluded that the divested business met the criteria for discontinued operations, as the disposition represents a strategic shift in the business in which NRG operates and held-for-sale criteria as of December 31, 2018. As such, all prior period results for the operations of the South Central Portfolio have been reclassified as discontinued operations. In connection with the transaction, NRG also entered into a transition services agreement to provide certain corporate services to the divested business. The South Central Portfolio includes the 1,263 MW Cottonwood natural gas generating facility. Upon the closing of the sale of the South Central Portfolio, NRG entered into a lease agreement with Cleco to leaseback the Cottonwood facility through 2025. Due to its continuing involvement with the Cottonwood facility, NRG will not use held-for-sale or discontinued operations treatment in accounting for historical and ongoing activity with Cottonwood. Summarized results of South Central discontinued operations were as follows:
|  | Year Ended December 31,
(In millions) |  | 2018 |  | 2017 |  | 2016
Operating revenues |  | $ | 410 |  |  | $ | 422 |  |  | $ | 467 |
Operating costs and expenses |  | (346 | ) |  | (335 | ) |  | (395 | )
Other income |  | 2 |  |  | — |  |  | — |
Gain from discontinued operations, net of tax |  | $ | 66 |  |  | $ | 87 |  |  | $ | 72 |
The following table summarizes the major classes of assets and liabilities classified as discontinued operations of South Central as follows:
(In millions) | December 31, 2018 |  | December 31, 2017
Cash and cash equivalents | $ | 89 |  |  | $ | (3 | )
Accounts receivable, net | 49 |  |  | 61 |
Inventory | 35 |  |  | 33 |
Other current assets | 5 |  |  | — |
Current assets - discontinued operations | 178 |  |  | 91 |
Property, plant and equipment, net | 408 |  |  | 461 |
Other non-current assets | 1 |  |  | 1 |
Non-current assets - discontinued operations | 409 |  |  | 462 |
Accounts payable | 19 |  |  | 28 |
Other current liabilities | 5 |  |  | 6 |
Current liabilities - discontinued operations | 24 |  |  | 34 |
Out-of-market contracts, net | 50 |  |  | 66 |
Other non-current liabilities | 11 |  |  | 10 |
Non-current liabilities - discontinued operations | $ | 61 |  |  | $ | 76 |
Sale of Ownership in NRG Yield, Inc. and its Renewables Platform On August 31, 2018, the Company completed the sale of its ownership interests in NRG Yield, Inc. and its Renewables Platform to GIP for total cash consideration of $1.348 billion. The Company concluded that the divested businesses met the criteria for discontinued operations, as the dispositions represented a strategic shift in the business in which NRG operates. As such, all prior period results for the transaction have been reclassified as discontinued operations. In connection with the transaction, NRG entered into a transition services agreement to provide certain corporate services to the divested businesses. As a result of the sale of NRG Yield, Inc., the Company's indirect ownership interest in the Agua Caliente solar project was reduced from 51% to 35%. As such, the Company no longer controls the project; and accordingly, no longer consolidates the project for financial reporting purposes. The Company recorded its ownership interest as an equity method investment upon deconsolidation resulting in a gain of $8 million. As part of the agreement to sell NRG Yield and the Renewables Platform, the Company agreed to indemnify NRG Yield for any increase in property taxes for certain solar properties. The indemnity term will expire at various dates between 2029 and 2039. NRG has determined that the payment of this indemnity is probable and has recorded the estimated present value of the obligation as of the closing date of the transaction of $153 million to other non-current liabilities with a corresponding loss from discontinued operations. In addition to the California property tax indemnity, there were additional commitments and advisory fees totaling approximately $50 million. The Company will also retain all costs associated with the development and ownership of the Patriot Wind project until its sale to a third party pursuant to a sale agreement. Carlsbad On February 6, 2018, NRG entered into an agreement with NRG Yield and GIP to sell 100% of the membership interests in Carlsbad Energy Holdings LLC, which owned the Carlsbad project, for $387 million of cash consideration, excluding working capital adjustments. The primary condition to close the Carlsbad transaction was the completion of the sale of NRG Yield and the Renewables Platform. As the sale of NRG Yield and the Renewables Platform has closed, the Company concluded that the Carlsbad project met the criteria for discontinued operations and accordingly, the financial information for all current and historical periods has been recast to reflect Carlsbad as a discontinued operation. The Company continued to consolidate Carlsbad for financial reporting purposes until the transaction closed on February 27, 2019. Carlsbad will continue to have a ground lease and easement agreement with NRG. The agreement has an initial term ending in 2039 with two ten year extensions. As a result of the transaction, additional commitments related to the project totaled $23 million. Summarized results of NRG Yield, Inc. and Renewables Platform and Carlsbad discontinued operations were as follows:
|  | Year Ended December 31,
(In millions) |  | 2018 |  | 2017 |  | 2016
Operating revenues |  | $ | 909 |  |  | $ | 1,164 |  |  | $ | 1,165 |
Operating costs and expenses |  | (661 | ) |  | (1,114 | ) |  | (1,023 | )
Other expenses |  | (174 | ) |  | (288 | ) |  | (261 | )
Gain/(loss) from operations of discontinued components, before tax |  | 74 |  |  | (238 | ) |  | (119 | )
Income tax expense/(benefit) |  | 4 |  |  | 52 |  |  | (20 | )
Gain/(loss) from discontinued operations, net of tax |  | 70 |  |  | (290 | ) |  | (99 | )
Loss on deconsolidation, net of tax |  | (134 | ) |  | — |  |  | — |
California property tax indemnification |  | (153 | ) |  | — |  |  | — |
Other Commitments, Indemnification and Fees |  | (75 | ) |  | — |  |  | — |
Loss on disposal of discontinued operations, net of tax |  | (362 | ) |  | — |  |  | — |
Loss from discontinued operations, net of tax |  | $ | (292 | ) |  | $ | (290 | ) |  | $ | (99 | )
The following table summarizes the major classes of assets and liabilities classified as discontinued operations as follows:
(In millions) | December 31, 2018 (a) |  | December 31, 2017 (b)
Cash and cash equivalents | $ | — |  |  | $ | 224 |
Restricted Cash | 4 |  |  | 229 |
Accounts receivable, net | 10 |  |  | 119 |
Other current assets | 5 |  |  | 81 |
Current assets - discontinued operations | 19 |  |  | 653 |
Property, plant and equipment, net | 590 |  |  | 7,473 |
Equity investments in affiliates | — |  |  | 856 |
Intangible assets, net | 9 |  |  | 1,240 |
Other non-current assets | 4 |  |  | 475 |
Non-current assets - discontinued operations | 603 |  |  | 10,044 |
Current portion of long term debt and capital leases | 20 |  |  | 484 |
Accounts payable | 27 |  |  | 169 |
Other current liabilities | 1 |  |  | 159 |
Current liabilities - discontinued operations | 48 |  |  | 812 |
Long-term debt and capital leases | 572 |  |  | 6,536 |
Other non-current liabilities | 2 |  |  | 186 |
Non-current liabilities - discontinued operations | $ | 574 |  |  | $ | 6,722 |
(a) Represents the Carlsbad project (b) Represents the discontinued operations of NRG Yield, NRG's Renewable Platform and the Carlsbad project Sale of Assets to NRG Yield, Inc. Prior to Discontinued Operations On June 19, 2018, the Company completed the UPMC Thermal Project and received cash consideration from NRG Yield of $84 million plus an additional $3 million received at final completion in January 2019. On March 30, 2018, as part of the Transformation Plan, the Company sold to NRG Yield, Inc. 100% of NRG's interests in Buckthorn Renewables, LLC, which owns a 154 MW construction-stage utility-scale solar generation project, located in Texas. NRG Yield, Inc. paid cash consideration of approximately $42 million, excluding working capital adjustments, and assumed non-recourse debt of approximately $183 million. On March 27, 2017, the Company sold to NRG Yield, Inc.: (i) a 16% interest in the Agua Caliente solar project, representing ownership of approximately 46 net MW of capacity and (ii) NRG's interests in seven utility-scale solar projects located in Utah representing 265 net MW of capacity, which have reached commercial operations. NRG Yield, Inc. paid cash consideration of $130 million, plus $1 million in working capital adjustments, and assumed non-recourse debt of approximately $328 million. On September 1, 2016, the Company completed the sale of its remaining 51.05% interest in the CVSR project to NRG Yield, Inc. for total cash consideration of $78.5 million, plus an immaterial working capital adjustment. In addition, NRG Yield, Inc. assumed non-recourse project level debt of $496 million. GenOn On June 14, 2017, the GenOn Entities filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. As a result of the bankruptcy filings, NRG concluded that it no longer controlled GenOn as it was subject to the control of the Bankruptcy Court; and, accordingly, NRG deconsolidated GenOn and its subsidiaries for financial reporting purposes as of such date. By eliminating a large portion of its operations in the PJM market with the deconsolidation of GenOn, NRG concluded that GenOn met the criteria for discontinued operations, as this represented a strategic shift in the business in which NRG operated. As such, all prior period results for GenOn have been reclassified as discontinued operations. Summarized results of discontinued operations were as follows:
|  | Year Ended December 31,
(In millions) |  | 2018 |  | 2017 |  | 2016
Operating revenues |  | $ | — |  |  | $ | 646 |  |  | $ | 1,862 |
Operating costs and expenses |  | — |  |  | (702 | ) |  | (1,896 | )
Gain on sale of assets |  | — |  |  | — |  |  | 294 |
Other expenses |  | — |  |  | (98 | ) |  | (168 | )
(Loss)/gain from operations of discontinued components, before tax |  | — |  |  | (154 | ) |  | 92 |
Income tax expense |  | — |  |  | 9 |  |  | 11 |
(Loss)/gain from discontinued operations |  | — |  |  | (163 | ) |  | 81 |
Interest income - affiliate |  | 3 |  |  | 8 |  |  | 11 |
Income/(loss) from discontinued operations, net of tax |  | 3 |  |  | (155 | ) |  | 92 |
Pre-tax loss on deconsolidation |  | — |  |  | (208 | ) |  | — |
Settlement consideration, insurance and services credit |  | 63 |  |  | (289 | ) |  | — |
Pension and post-retirement liability assumption |  | 21 |  |  | (131 | ) |  | — |
Other |  | (53 | ) |  | (6 | ) |  | — |
Income/(loss) on disposal of discontinued operations, net of tax |  | 31 |  |  | (634 | ) |  | — |
Income/(loss) from discontinued operations, net of tax |  | $ | 34 |  |  | $ | (789 | ) |  | $ | 92 |
GenOn Settlement and Plan Confirmation Effective July 16, 2018, NRG and GenOn consummated the GenOn Settlement whereby the Company paid GenOn approximately $125 million, which included (i) the settlement consideration of $261 million, (ii) the transition services credit of $28 million and (iii) the return of $15 million of collateral posted to NRG; offset by the (i) $151 million in borrowings under the intercompany secured revolving credit facility, (ii) related accrued interest and fees of $12 million, (iii) remaining payments due under the transition services agreement of $10 million, (iv) $4 million reduction of the settlement payment related to NRG assigning to GenOn approximately $8 million of historical claims against REMA and (v) certain other balances due to NRG totaling $2 million. GenOn's plan of reorganization was confirmed on December 14, 2018. Pursuant to the confirmed plan, NRG retained the pension liability for GenOn employees for service provided prior to the completion of the reorganization. NRG also retained the liability for GenOn's post-employment and retiree health and welfare benefits. These liabilities were recorded within other non-current liabilities as of December 31, 2018 and 2017. As a result of GenOn's emergence from bankruptcy, NRG is taking a deduction for GenOn tax losses of $9.5 billion, including a worthless stock deduction. Other than those obligations which survive or are independent of the releases described herein, the GenOn Settlement and the GenOn Chapter 11 plan provide NRG releases from GenOn and each of its debtor and non-debtor subsidiaries. REMA Plan of Reorganization On October 16, 2018, REMA and its subsidiaries filed voluntary petitions for chapter 11 relief and a prepackaged plan of reorganization in the United States Bankruptcy Court for the Southern District of Texas. The REMA debtors' plan of reorganization has been formally accepted by REMA's voting creditors and is consistent with the releases NRG received under the GenOn Settlement and the GenOn plan. GenMA Settlement The Bankruptcy Court order confirming the plan of reorganization also approved the settlement terms agreed to among the GenOn Entities, NRG, the Consenting Holders, GenOn Mid-Atlantic, and certain of GenOn Mid-Atlantic’s stakeholders, or the GenMA Settlement, and directed the settlement parties to cooperate in good faith to negotiate definitive documentation consistent with the GenMA Settlement term sheet in order to pursue consummation of the GenMA Settlement. The definitive documentation effectuating the GenMA Settlement was finalized and effective as of April 27, 2018. Certain terms of the compromise with respect to NRG and GenOn Mid-Atlantic are as follows:
• | Settlement of all pending litigation and objections to the Plan (including with respect to releases and feasibility);
• | NRG provided $38 million in letters of credit as new qualifying credit support to GenOn Mid-Atlantic; and
• | NRG paid approximately $6 million as reimbursement of professional fees incurred by certain of GenOn Mid-Atlantic's stakeholders in connection with the GenMA Settlement.
Planned Dispositions On November 1, 2018, the Company offered to Clearway Energy, Inc. its ownership interest in Agua Caliente Borrower 1, LLC, for approximately $120 million, which owns a 35% interest in Agua Caliente, a 290 MW utility-scale solar project located in Dateland, Arizona. The offer expired on January 31, 2019, with no action taken by Clearway Energy, Inc. As a result, the right of first offer agreement with Clearway Energy, Inc. has expired and NRG's interest in Agua Caliente is no longer subject to a right of first offer thereunder. Dispositions On August 1, 2018, the Company completed the sale of 100% of its ownership interests in BETM to Diamond Energy Trading and Marketing, LLC for $71 million, net of working capital adjustments, which resulted in a gain of $15 million on the sale. The sale also resulted in the release and return of approximately $119 million of letters of credit, $32 million of parent guarantees, and $4 million of net cash collateral to NRG. On June 29, 2018, the Company completed the sale of Canal 3 to Stonepeak Kestrel for cash proceeds of approximately $16 million and recorded a gain of $17 million. Prior to the sale, Canal 3 entered into a financing arrangement and received cash proceeds of $167 million, of which $151 million was distributed to the Company. The related debt was non-recourse to NRG and was transferred to Stonepeak Kestrel in connection with the sale of Canal 3. In addition, the Company completed other asset sales for $28 million of cash proceeds during the year ended December 31, 2018. 2016 Dispositions Disposition of Majority Interest in EVgo On June 17, 2016, the Company completed the sale of a majority interest in its EVgo business to Vision Ridge Partners for total consideration of approximately $39 million, including $17 million in cash received, which is net of $3 million in working capital adjustments, $15 million contributed as capital to the EVgo business and $7 million of future contributions by Vision Ridge Partners, all of which were determined based on forecasted cash requirements to operate the business in future periods. In addition, the Company has future earnout potential of up to $70 million based on future profitability targets. NRG retained its original financial obligation of $103 million under its agreement with the CPUC whereby EVgo will build at least 200 public fast charging Freedom Station sites and perform the associated work to prepare 10,000 commercial and multi-family parking spaces for electric vehicle charging in California. As part of the sale, NRG has contracted with EVgo to continue to build the remaining required Freedom Stations and commercial and multi-family parking spaces for electric vehicle charging required under this obligation and EVgo will be directly reimbursed by NRG for the costs. As a result of the sale, the Company recorded a loss on sale of $78 million during the second quarter of 2016, which reflects the loss on the sale of the equity interest of $27 million and the accrual of NRG's remaining obligation under its agreement with the CPUC of $56 million, of which $6 million remains as of December 31, 2018. On February 22, 2017, the Company and CPUC entered into a second amendment to the agreement which extended the operating period commitment for the Freedom Stations to December 5, 2020. The Company's remaining 23.7% interest in EVgo is accounted for as an equity method investment. Rockford Disposition On May 12, 2016, the Company entered into an agreement with RA Generation, LLC to sell 100% of its interests in the Rockford I and Rockford II generating stations, or Rockford, for cash consideration of $55 million, subject to adjustments for working capital and the results of the PJM 2019/2020 base residual auction. Rockford is a 450 MW natural gas facility located in Rockford, Illinois. The transaction triggered an indicator of impairment as the sales price was less than the carrying amount of the assets and, as a result, the assets were considered to be impaired. The Company measured the impairment loss as the difference between the carrying amount of the assets and the agreed-upon sales price. The Company recorded an impairment loss of $17 million during the quarter ended June 30, 2016 to reduce the carrying amount of the assets held for sale to the fair market value. On July 12, 2016, the Company completed the sale of Rockford for cash proceeds of $56 million, including $1 million in adjustments for the PJM base residual auction results. For further discussion on this impairment, refer to Note 9, Asset Impairments.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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