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Summary of Significant Accounting Policies | 9 Months Ended
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Sep. 30, 2024
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Capitalized Contract Costs Capitalized contract costs represent the costs directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related subscriber contracts. These costs include installed products, commissions, other compensation and the cost of installation of new or upgraded customer contracts. The Company calculates amortization by accumulating all deferred contract costs into separate portfolios based on the initial month of service and amortizes those deferred contract costs on a straight-line basis over the expected period of benefit, consistent with the pattern in which the Company provides services to its customers. The expected period of benefit for customers is approximately five years. The Company updates its estimate of the expected period of benefit periodically and whenever events or circumstances indicate that the expected period of benefit could change significantly. Such changes, if any, are accounted for prospectively as a change in estimate. Amortization of capitalized contract costs are included in depreciation and amortization in the condensed consolidated statements of operations. Contract costs not directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related subscriber contracts are expensed as incurred. Depreciation and Amortization The Company's depreciation and amortization included in the condensed consolidated statement of operations consisted of the following:
| Three months ended September 30, |  | Nine months ended September 30,
(In millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Amortization of capitalized contract costs related to fulfillment | $ | 34 |  |  | $ | 14 |  |  | $ | 82 |  |  | $ | 20 |
Amortization of capitalized contract costs related to customer acquisition | 57 |  |  | 37 |  |  | 149 |  |  | 88 |
Amortization of customer relationships and other intangible assets | 192 |  |  | 244 |  |  | 610 |  |  | 623 |
Depreciation of property, plant and equipment | 69 |  |  | 64 |  |  | 204 |  |  | 190 |
Total depreciation and amortization | $ | 352 |  |  | $ | 359 |  |  | $ | 1,045 |  |  | $ | 921 |
Credit Losses Retail trade receivables are reported on the consolidated balance sheet net of the allowance for credit losses within accounts receivables, net. Long-term receivables are recorded net of allowance for credit losses in other non-current assets on the consolidated balance sheet. The Company accrues a provision for current expected credit losses based on (i) estimates of uncollectible revenues by analyzing accounts receivable aging and current and reasonable forecasts of expected economic factors including, but not limited to, unemployment rates and weather-related events, (ii) historical collections and delinquencies, and (iii) counterparty credit ratings for commercial and industrial customers. The following table represents the activity in the allowance for credit losses for the three and nine months ended September 30, 2024 and 2023:
| Three months ended September 30, |  | Nine months ended September 30,
(In millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Beginning balance | $ | 127 |  |  | $ | 120 |  |  | $ | 145 |  |  | $ | 133 |
Acquired balance from Vivint Smart Home | — |  |  | — |  |  | — |  |  | 22 |
Provision for credit losses | 95 |  |  | 85 |  |  | 228 |  |  | 165 |
Write-offs | (74) |  |  | (59) |  |  | (252) |  |  | (203) |
Recoveries collected | 9 |  |  | 9 |  |  | 28 |  |  | 30 |
Other | 7 |  |  | 3 |  |  | 15 |  |  | 11 |
Ending balance | $ | 164 |  |  | $ | 158 |  |  | $ | 164 |  |  | $ | 158 |
Other Balance Sheet Information The following table presents the accumulated depreciation included in property, plant and equipment, net and accumulated amortization included in customer relationships, net and other intangible assets, net:
(In millions) | September 30, 2024 |  | December 31, 2023
Property, plant and equipment accumulated depreciation | $ | 1,470 |  |  | $ | 1,295 |
Customer relationships and other intangible assets accumulated amortization | 3,435 |  |  | 2,994 |
Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash The following table provides a reconciliation of cash and cash equivalents, restricted cash and funds deposited by counterparties reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statements of cash flows:
(In millions) | September 30, 2024 |  | December 31, 2023
Cash and cash equivalents | $ | 1,104 |  |  | $ | 541 |
Funds deposited by counterparties | 12 |  |  | 84 |
Restricted cash | 10 |  |  | 24 |
Cash and cash equivalents, funds deposited by counterparties and restricted cash shown in the statement of cash flows | $ | 1,126 |  |  | $ | 649 |
Funds deposited by counterparties consist of cash held by the Company as a result of collateral posting obligations from its counterparties related to NRG's hedging program. Though some amounts are segregated into separate accounts, not all funds are contractually restricted. Based on the Company's intention, these funds are not available for the payment of general corporate obligations; however, they are available for liquidity management. Depending on market fluctuations and the settlement of the underlying contracts, the Company will refund this collateral to the counterparties pursuant to the terms and conditions of the underlying trades. Since collateral requirements fluctuate daily and the Company cannot predict if any collateral will be held for more than twelve months, the funds deposited by counterparties are classified as a current asset on the Company's balance sheet, with an offsetting liability for this cash collateral received within current liabilities. Restricted cash consists primarily of funds held to satisfy the requirements of certain agreements and funds held within the Company's projects that are restricted in their uses. Goodwill The following table represents the changes in goodwill during the nine months ended September 30, 2024:
(In millions) | Texas |  | East |  | West/Services/Other |  | Vivint Smart Home |  | Total
Balance as of December 31, 2023 | $ | 643 |  |  | $ | 721 |  |  | $ | 221 |  |  | $ | 3,494 |  |  | $ | 5,079 |
Impairment | — |  |  | — |  |  | (15) |  |  | — |  |  | (15) |
Sale of Airtron | — |  |  | — |  |  | (44) |  |  | — |  |  | (44) |
Foreign currency translation adjustments | — |  |  | — |  |  | (2) |  |  | — |  |  | (2) |
Balance as of September 30, 2024 | $ | 643 |  |  | $ | 721 |  |  | $ | 160 |  |  | $ | 3,494 |  |  | $ | 5,018 |
Recent Accounting Developments — Guidance Not Yet Adopted ASU 2023-07 – In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, or ASU 2023-07. The guidance in ASU 2023-07 enhances reportable segment disclosure requirements by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit and loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The Company plans to adopt the new guidance for the annual period ending December 31, 2024 and subsequent interim periods thereafter. The guidance will be applied retrospectively for all prior periods presented in the financial statements. ASU 2023-09 – In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, or ASU 2023-09. The guidance in ASU 2023-09 enhances income tax disclosures by requiring disclosure of specific categories in the effective tax rate reconciliation and additional information for reconciling items that meet a quantitative threshold. Further the amendments of ASU 2023-09 require certain disclosures on income tax expense and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments of ASU 2023-09 may be applied on a prospective or retrospective basis. The Company is currently evaluating the impact of adopting ASU 2023-09 on its disclosures. ASU 2024-03 – In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) – Disaggregation of Income Statement Expenses, or ASU 2024-03. The guidance in ASU 2024-03 requires more detailed information about specified categories of expenses included in certain captions presented on the face of the income statement. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2024-03 on its disclosures.

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