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Acquisitions, Discontinued Operations and Dispositions | 9 Months Ended
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Sep. 30, 2019
Discontinued Operations and Disposal Groups [Abstract] |
Acquisitions, Discontinued Operations and Dispositions | Acquisitions, Discontinued Operations and Dispositions Acquisitions Stream Energy Acquisition — On August 1, 2019, the Company completed the acquisition of Stream Energy's retail electricity and natural gas business operating in 9 states and Washington, D.C. for $329 million, including working capital and other adjustments of approximately $29 million. The acquisition increased NRG's retail portfolio by approximately 600,000 RCEs or 450,000 customers. The purchase price was provisionally allocated as follows:
| (In millions)
Net current and non-current working capital | $ | 28 |
Other intangible assets | 283 |
Goodwill (a) | 18 |
Stream Purchase Price | $ | 329 |
(a) Goodwill arising from the acquisition is attributed to the value of the platform acquired and the synergies expected from combining the operations of Stream Energy with NRG's existing businesses. Goodwill is assigned to the Retail segment and is not deductible for tax purposes. 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 $213 million, including working capital and other adjustments of $48 million. The acquisition increased NRG's retail portfolio by approximately 395,000 RCEs or 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 |
Discontinued Operations Sale of South Central Portfolio On February 4, 2019, the Company completed the sale of the South Central Portfolio to Cleco for cash consideration of $1 billion excluding working capital and other adjustments. The Company concluded that the divested business met the criteria for discontinued operations as of December 31, 2018, as the disposition represented a strategic shift in the business in which NRG operates and the criteria for held-for-sale were met. As such, all current and prior period results for the operations of the South Central Portfolio, except for the Cottonwood facility as discussed below, were 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 1,153 MW Cottonwood natural gas generating facility. Upon the closing of the sale of the South Central Portfolio, NRG entered into an agreement with Cleco to leaseback the Cottonwood facility through May 2025. Due to its continuing involvement with the Cottonwood facility, NRG did not use discontinued operations treatment in accounting for historical and ongoing activity with Cottonwood. Summarized results of the South Central Portfolio discontinued operations were as follows:
| Three months ended |  |  |  | Nine months ended |  |
(In millions) | September 30, 2019 |  | September 30, 2018 |  | September 30, 2019 |  | September 30, 2018
Operating revenues | $ | — |  |  | $ | 101 |  |  | $ | 31 |  |  | $ | 310 |
Operating costs and expenses | — |  |  | (85) |  |  | (23) |  |  | (262) |
Gain from discontinued operations, net of tax | — |  |  | 16 |  |  | 8 |  |  | 48 |
(Loss)/gain on disposal of discontinued operations, net of tax | (1) |  |  | — |  |  | 27 |  |  | — |
(Loss)/gain from discontinued operations, including disposal, net of tax | $ | (1) |  |  | $ | 16 |  |  | $ | 35 |  |  | $ | 48 |
The following table summarizes the major classes of assets and liabilities classified as discontinued operations of the South Central Portfolio:
(In millions) |  |  | December 31, 2018
Cash and cash equivalents |  |  | $ | 89 |
Accounts receivable - trade, net |  |  | 49 |
Inventory |  |  | 35 |
Other current assets |  |  | 5 |
Current assets - discontinued operations |  |  | 178 |
Property, plant and equipment, net |  |  | 408 |
Other non-current assets |  |  | 1 |
Non-current assets - discontinued operations |  |  | 409 |
Accounts payable |  |  | 19 |
Other current liabilities |  |  | 5 |
Current liabilities - discontinued operations |  |  | 24 |
Out-of-market contracts, net |  |  | 50 |
Other non-current liabilities |  |  | 11 |
Non-current liabilities - discontinued operations |  |  | $ | 61 |
Sale of Ownership in NRG Yield, Inc. and the Renewables Platform On August 31, 2018, the Company completed the sale of its ownership interests in NRG Yield, Inc. and the 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 represent a strategic shift in the markets in which NRG operates. As such, all prior period results for NRG Yield, Inc. and the Renewables Platform were 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. During the nine months ended September 30, 2019, the Company recorded an adjustment to reduce the purchase price by $16 million in connection with the completion of the Patriot Wind project. The Company expects to recover a portion of this adjustment in the future. During the nine months ended September 30, 2019, the Company reduced the liability related to the indemnification of NRG Yield for any increase in property taxes for certain solar properties by $22 million due to updated estimates. Carlsbad On February 6, 2018, NRG entered into an agreement with NRG Yield and GIP to sell 100% of its membership interests in Carlsbad Energy Holdings LLC, which owns the Carlsbad project, for $385 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. At the time of the sale of NRG Yield and the Renewables Platform in August 2018, the Company concluded that the Carlsbad project met the criteria for discontinued operations and accordingly, all current and prior period results for Carlsbad were reclassified as discontinued operations. The transaction closed on February 27, 2019. Carlsbad continues to have a ground lease and easement agreement with NRG with an initial term ending in 2039 and two ten year extensions. As a result of the transaction, additional commitments related to the project totaled approximately $23 million as of December 31, 2018 and September 30, 2019. Summarized results of NRG Yield, Inc. and the Renewables Platform and Carlsbad discontinued operations were as follows:
| Three months ended |  |  |  | Nine months ended |  |
(In millions) | September 30, 2019 |  | September 30, 2018 |  | September 30, 2019 |  | September 30, 2018
Operating revenues | $ | — |  |  | $ | 297 |  |  | $ | 19 |  |  | $ | 925 |
Operating costs and expenses | — |  |  | (229) |  |  | (9) |  |  | (682) |
Other expenses | — |  |  | (42) |  |  | (5) |  |  | (165) |
Gain from operations of discontinued components, before tax | — |  |  | 26 |  |  | 5 |  |  | 78 |
Income tax expense | — |  |  | 9 |  |  | — |  |  | 4 |
Gain from discontinued operations, net of tax | — |  |  | 17 |  |  | 5 |  |  | 74 |
(Loss)/gain on disposal of discontinued operations, net of tax | (1) |  |  | (139) |  |  | 330 |  |  | (139) |
(Expense)/income from California property tax indemnification | — |  |  | (153) |  |  | 22 |  |  | (153) |
(Expense)/income from other commitments, indemnification and fees | — |  |  | (77) |  |  | 5 |  |  | (77) |
(Loss)/gain on disposal of discontinued operations, net of tax | (1) |  |  | (369) |  |  | 357 |  |  | (369) |
(Loss)/gain from discontinued operations, including disposal, net of tax | $ | (1) |  |  | $ | (352) |  |  | $ | 362 |  |  | $ | (295) |
The following table summarizes the major classes of assets and liabilities classified as discontinued operations of Carlsbad:
(In millions) |  |  | December 31, 2018
Restricted cash |  |  | $ | 4 |
Accounts receivable - trade, net |  |  | 10 |
Other current assets |  |  | 5 |
Current assets - discontinued operations |  |  | 19 |
Property, plant and equipment, net |  |  | 590 |
Intangible assets, net |  |  | 9 |
Other non-current assets |  |  | 4 |
Non-current assets - discontinued operations |  |  | 603 |
Current portion of long-term debt and capital leases |  |  | 20 |
Accounts payable |  |  | 27 |
Other current liabilities |  |  | 1 |
Current liabilities - discontinued operations |  |  | 48 |
Long-term debt and capital leases |  |  | 572 |
Other non-current liabilities |  |  | 2 |
Non-current liabilities - discontinued operations |  |  | $ | 574 |
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, 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 $42 million, excluding working capital adjustments, and assumed non-recourse debt of $183 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 for financial reporting purposes as of June 14, 2017. 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 operates. As such, all prior period results for GenOn were reclassified as discontinued operations. GenOn's plan of reorganization was confirmed on December 14, 2018. Summarized results of GenOn discontinued operations were as follows:
|  |  |  |  | Nine months ended |  |
(In millions) |  |  |  |  | September 30, 2019 |  | September 30, 2018
Interest income - affiliate |  |  |  |  | $ | — |  |  | $ | 3 |
Pension and post-retirement liability assumption |  |  |  |  | — |  |  | (2) |
Other |  |  |  |  | 2 |  |  | (26) |
Gain/(loss) from discontinued operations, net of tax |  |  |  |  | $ | 2 |  |  | $ | (25) |
GenOn Settlement 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. GenMA Settlement The Bankruptcy Court approved 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 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 $37.5 million in letters of credit as new qualifying credit support to GenOn Mid-Atlantic; and •NRG paid $6 million as reimbursement of professional fees incurred by certain of GenOn Mid- Atlantic's stakeholders in connection with the GenMA Settlement. 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 $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. The Company entered into a project management agreement in 2018 to manage construction of Canal 3, and substantial completion was reached in June 2019. The Company completed other asset sales for cash proceeds of $22 million and $21 million during the nine months ended September 30, 2019 and 2018, respectively.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: 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 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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