Discontinued Operations and Dispositions

3 Months Ended

Mar. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Dispositions

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 prior period results for the operations of the South Central Portfolio, except for the Cottonwood facility as discussed below, were reclassified as discontinued operations at

December 31, 2018. 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 2025. Due to its continuing involvement with the Cottonwood facility, NRG did not use held-for-sale or discontinued operations treatment in accounting for the Cottonwood facility.

Summarized results of the South Central Portfolio discontinued operations were as follows:


	Three months ended
(In millions)		March 31, 2019
Operating revenues		$	31
Operating costs and expenses		(23)




Gain from operations of discontinued components		8
Gain on disposal of discontinued operations, net of tax		27
Gain from discontinued operations, including disposal, net of tax		$	35

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 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 March 31, 2020 and December 31, 2019.

Summarized results of Carlsbad discontinued operations were as follows:


	Three months ended
(In millions)		March 31, 2019
Operating revenues		$	19
Operating costs and expenses		(9)
Other expenses		(5)
Gain from operations of discontinued components		5


Gain on disposal of discontinued operations, net of tax		348



Gain from discontinued operations, including disposal, net of tax		$	353

Dispositions

The Company completed other asset sales for cash proceeds of $7 million and $10 million during the three months ended March 31, 2020 and 2019, respectively.