EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 8. Compensation and Benefit Plans (EME and Midwest Generation, except as noted) (Continued)
Supplemental Data on Stock-Based Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
(in millions, except per award amounts)
|
|
2013
|
|
2012
|
|
2011
|
|
Stock-based compensation expense(1)
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
$
|
2
|
|
$
|
3
|
|
$
|
2
|
|
Performance shares
|
|
|
|
|
|
1
|
|
|
1
|
|
Restricted stock units
|
|
|
1
|
|
|
1
|
|
|
2
|
|
Other
|
|
|
|
|
|
2
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation expense
|
|
$
|
3
|
|
$
|
7
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefits related to stock compensation expense
|
|
$
|
1
|
|
$
|
3
|
|
$
|
3
|
|
Excess tax benefits(2)
|
|
|
3
|
|
|
5
|
|
|
2
|
|
Stock options
|
|
|
|
|
|
|
|
|
|
|
Weighted average grant date fair value per option granted
|
|
$
|
|
|
$
|
5.22
|
|
$
|
5.61
|
|
Fair value of options vested
|
|
|
3
|
|
|
3
|
|
|
3
|
|
Cash used to purchase shares to settle options
|
|
|
45
|
|
|
44
|
|
|
18
|
|
Cash from participants to exercise stock options
|
|
|
32
|
|
|
26
|
|
|
12
|
|
Value of options exercised
|
|
|
13
|
|
|
18
|
|
|
6
|
|
Tax benefits from options exercised
|
|
|
5
|
|
|
6
|
|
|
2
|
|
Performance shares(3) classified as equity awards
|
|
|
|
|
|
|
|
|
|
|
Weighted average grant date fair value per share granted
|
|
$
|
|
|
$
|
51.41
|
|
$
|
31.14
|
|
Fair value of shares vested
|
|
|
0.8
|
|
|
1.4
|
|
|
0.8
|
|
Value of shares settled
|
|
|
|
|
|
0.7
|
|
|
|
|
Tax benefits realized from settlement of awards
|
|
|
|
|
|
0.3
|
|
|
|
|
Performance shares(3) classified as liability awards
|
|
|
|
|
|
|
|
|
|
|
Value of shares settled
|
|
$
|
|
|
$
|
0.7
|
|
$
|
|
|
Tax benefits realized from settlement of awards
|
|
|
|
|
|
0.3
|
|
|
|
|
Restricted stock units
|
|
|
|
|
|
|
|
|
|
|
Weighted average grant date fair value per unit granted
|
|
$
|
|
|
$
|
43.16
|
|
$
|
38.03
|
|
Value of shares settled
|
|
|
1.3
|
|
|
1
|
|
|
2
|
|
Tax benefits realized from settlement of awards
|
|
|
0.5
|
|
|
|
|
|
1
|
|
-
(1)
-
Reflected
in administration and general on the consolidated statements of operations.
-
(2)
-
Reflected
in excess tax benefits related to stock-based awards in cash flows from financing activities on the consolidated statements of cash flows.
-
(3)
-
The
performance shares awarded in 2011 will be paid during 2014 as performance targets were met.
F-77
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Commitments and Contingencies (EME and Midwest Generation, except as noted)
Lease Commitments
EME
EME leases office space, property and equipment under lease agreements that expire in various years through 2039. Amounts classified as
LSTC, related to Midwest Generation's rejected railcars and river barge contracts, are discussed below.
Future
minimum payments for operating leases at December 31, 2013 for EME are:
|
|
|
|
|
|
|
|
|
|
|
Years Ending December 31,
(in millions)
|
|
Powerton and
Joliet
Stations(1)
|
|
Other Operating
Leases
|
|
LSTC
|
|
2014
|
|
$
|
272
|
|
$
|
15
|
|
$
|
32
|
|
2015
|
|
|
67
|
|
|
12
|
|
|
|
|
2016
|
|
|
26
|
|
|
10
|
|
|
|
|
2017
|
|
|
1
|
|
|
10
|
|
|
|
|
2018
|
|
|
1
|
|
|
8
|
|
|
|
|
Thereafter
|
|
|
239
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total future commitments
|
|
$
|
606
|
|
$
|
170
|
|
$
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Reflects
principal and interest payments related to the Powerton and Joliet Sale Leaseback.
The
minimum commitments do not include contingent rentals with respect to the wind projects which may be paid under certain leases on the basis of a percentage of sales calculation if
this is in excess of the stipulated minimum amount.
Operating
lease expense amounted to $102 million, $108 million and $110 million in 2013, 2012 and 2011, respectively.
Midwest Generation
Midwest Generation has operating leases in place primarily for railcars and operating equipment with termination dates in various years
through 2017. In connection with the Chapter 11 Cases, Midwest Generation rejected executory contracts related to 2,282 railcars and 11 river barges. Rejected contracts are recorded as LSTC. In
addition, the principal payments associated with the Powerton and Joliet Sale Leaseback are also recorded in LSTC. For further discussion of LSTC, see Note 16Restructuring
Activities.
F-78
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Commitments and Contingencies (EME and Midwest Generation, except as noted) (Continued)
Future
minimum operating lease payments at December 31, 2013 for Midwest Generation are:
|
|
|
|
|
|
|
|
Years Ending December 31,
(in millions)
|
|
Operating
Leases
|
|
LSTC
|
|
2014
|
|
$
|
2
|
|
$
|
283
|
|
2015
|
|
|
1
|
|
|
59
|
|
2016
|
|
|
1
|
|
|
23
|
|
2017
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
Thereafter
|
|
|
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total future commitments
|
|
$
|
4
|
|
$
|
466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
lease expense amounted to $7 million, $14 million and $16 million in 2013, 2012 and 2011, respectively.
Powerton and Joliet Sale Leaseback
Covenants in the Powerton and Joliet Sale Leaseback documents include restrictions on the ability of EME and Midwest Generation to,
among other things, incur debt, create liens on its property, merge or consolidate, sell assets, make investments, engage in transactions with affiliates, make distributions, make capital
expenditures, enter into agreements restricting its ability to make distributions, engage in other lines of business, enter into swap agreements, or engage in transactions for any speculative purpose.
The
filing of the Chapter 11 Cases constitutes an event of default under the Powerton and Joliet Sale Leaseback and under instruments governing the Senior Lease Obligation Bonds
issued to finance these leases. During the pendency of the Chapter 11 Cases, Midwest Generation did not make any of the three scheduled lease payments of $76 million due on
January 2, 2013, July 2, 2013 and January 2, 2014. Prior to the filing of the Chapter 11 Cases, EME and Midwest Generation had entered into a forbearance agreement with the
owner-lessors, the owner-lessors' equity owners, and the Certificate Holders under which Midwest Generation paid the ratable portion of the rent due under the leases attributable to the period between
December 17, 2012 and January 2, 2013 of $7 million. After the expiration of the forbearance agreement, beginning in July 2013, EME and Midwest Generation agreed, among other
things, to make monthly rental payments of $3.75 million. In addition, the Bankruptcy Court approved the extension of the statutory deadline by which the Debtor Entities must assume or reject
the Powerton and Joliet leases until March 31, 2014. Upon consummation of the NRG Sale, Midwest Generation will assume the Powerton and Joliet leases and EME will retain all liabilities
with respect to the payment of the cure amount as set forth in the Asset Purchase Agreement (the Powerton and Joliet Cure Amount). The cure amount would have been approximately $147 million at
December 31, 2013. For additional information, see Note 16Restructuring ActivitiesNRG Sale.
Each
lease sets forth a termination value payable upon certain circumstances, which generally declines over time. A default under the terms of the Powerton and Joliet leases could result
in foreclosure and a loss by Midwest Generation of its lease interest in the plant. In addition, under certain circumstances, a default would trigger obligations under EME's guarantee of such leases.
These
F-79
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Commitments and Contingencies (EME and Midwest Generation, except as noted) (Continued)
events
could have an adverse effect on EME's and Midwest Generation's results of operations and financial position. At December 31, 2013 and 2012, the remaining lessor debt held by pass-through
trustees of the Senior Lease Obligation Bonds was $345 million with a fixed interest rate of 8.56%. In 2013, Midwest Generation made a total of $30 million in principal and interest
payments to the trustees thereby reducing its obligations under the Powerton and Joliet Sale Leaseback. In December 2013, $10 million was distributed to the holders of the Senior Lease
Obligation Bonds as a partial interest payment and the remainder of the funds remained with the trustees.
Capital Lease Commitments
At December 31, 2012, EME and Midwest Generation had capital leased assets reflected in property, plant and equipment on their
consolidated balance sheets of $4 million and accumulated amortization of $1 million. At December 31, 2012, EME had $1 million and $2 million included in accrued
liabilities and other and other long-term liabilities, respectively, and Midwest Generation had $1 million and $2 million included in current portion of lease financings and benefit
plans and other long-term liabilities, respectively, on their consolidated balance sheets representing the present value of the minimum lease payments due under these leases. During 2013, the leases
were renegotiated and no longer qualify as capital leases.
Other Commitments
Certain other minimum commitments are estimated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Midwest Generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel supply contracts
|
|
$
|
194
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Coal transportation agreements(1)
|
|
|
259
|
|
|
257
|
|
|
257
|
|
|
213
|
|
|
212
|
|
Capital expenditures
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other contractual obligations
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other EME subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas transportation agreements
|
|
|
7
|
|
|
7
|
|
|
8
|
|
|
7
|
|
|
3
|
|
Other contractual obligations
|
|
|
33
|
|
|
30
|
|
|
20
|
|
|
7
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
517
|
|
$
|
294
|
|
$
|
285
|
|
$
|
227
|
|
$
|
217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Years
2014 through 2018 reflect a reduction in minimum volumes for the voluntarily cessation of coal-fired operations at the Fisk and Crawford Stations.
Fuel Supply Contracts
At December 31, 2013, Midwest Generation had commitments to purchase coal from a third-party supplier at fixed prices, subject
to adjustment clauses. In 2013, Midwest Generation did not take delivery of 9.8 million tons of coal under a long-term coal supply agreement. In order to meet coal demand, Midwest Generation
entered into short-term requirements contracts more reflective of market prices with the same counterparty. Negotiations regarding the settlement of the long-term coal supply
F-80
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Commitments and Contingencies (EME and Midwest Generation, except as noted) (Continued)
agreement
have yet to occur. Midwest Generation has the right to reject this fuel supply contract in connection with Chapter 11 Cases. Midwest Generation continues to enter into short-term
requirements contracts with the counterparty to meet its coal demand.
Coal Transportation Agreements
At December 31, 2013, Midwest Generation had contractual agreements for the transportation of coal. The commitments under these
contracts are based on either actual coal purchases derived from committed coal volumes set forth in fuel supply contracts or minimum quantities as set forth in the transportation agreements as
adjusted for provisions that mitigate the financial exposure of Midwest Generation related to a plant closure under certain circumstances as specified in the agreements. The commitment for the
transportation of coal at December 31, 2013 was estimated to aggregate $1.8 billion.
Capital Commitments
At December 31, 2013, Midwest Generation had firm commitments for capital expenditures related to both environmental and
non-environmental improvements.
Other Contractual Obligations
At December 31, 2013, Midwest Generation had contractual commitments for the purchase of materials used in the operation of
environmental controls equipment and EME's other subsidiaries were party to operations and maintenance agreements. The commitments for EME's other subsidiaries are estimated to aggregate
$107 million.
Gas Transportation Agreements (EME only)
At December 31, 2013, EME had contractual commitments to purchase and re-sell natural gas transportation. Under the terms of
these agreements, which expire in April 2018, EME will purchase the gas transportation for $32 million and re-sell it for $39 million. Earnings under these agreements will be earned
ratably over the course of the agreements.
Employees
At December 31, 2013, EME employed 1,047 people, including 586 employees of Midwest Generation. At December 31, 2013,
approximately 42% and 75% of the employees of EME and Midwest Generation, respectively, were covered by a collective bargaining agreement governing wages, certain benefits and working conditions. This
collective bargaining agreement expires on December 31, 2014. Midwest Generation also has a separate collective bargaining agreement governing retirement, health care, disability and insurance
benefits that expires on March 31, 2015.
Interconnection Agreement (Midwest Generation only)
Midwest Generation has entered into interconnection agreements with Commonwealth Edison to provide interconnection services necessary
to connect the Midwest Generation plants with its transmission systems. Unless terminated earlier in accordance with their terms, the interconnection
F-81
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Commitments and Contingencies (EME and Midwest Generation, except as noted) (Continued)
agreements
will terminate on a date mutually agreed to by both parties. Midwest Generation is required to compensate Commonwealth Edison for all reasonable costs associated with any modifications,
additions or replacements made to the interconnection facilities or transmission systems in connection with any modification, addition or upgrade to the Midwest Generation plants.
Guarantees and Indemnities
EME and certain of its subsidiaries have various financial and performance guarantees and indemnity agreements which are issued in the
normal course of business. The contracts discussed below included performance guarantees.
Environmental Indemnities Related to the Midwest Generation Plants
In connection with the acquisition of the Midwest Generation plants, EME and Midwest Generation agreed to indemnify Commonwealth Edison
with respect to specified environmental liabilities before and after December 15, 1999, the date of sale. The indemnification obligations are reduced by any insurance proceeds and tax benefits
related to such indemnified claims and are subject to a requirement that Commonwealth Edison takes all reasonable steps to mitigate losses related to any such indemnification claim. Also, in
connection with the Powerton and Joliet Sale Leaseback, EME agreed to indemnify the owner-lessors for specified environmental liabilities. These indemnities are not limited in term or amount. Due to
the nature of the obligations under these indemnities, a maximum potential liability cannot be determined. Commonwealth Edison has advised EME that Commonwealth Edison believes it is entitled to
indemnification for all liabilities, costs, and expenses that it may be required to bear as a result of the litigation discussed below under "ContingenciesMidwest Generation
New Source Review and Other Litigation," and one of the Powerton-Joliet owner-lessors has made a similar request for indemnification. Except as discussed below, EME and Midwest Generation have not
recorded a liability related to these environmental indemnities.
Midwest
Generation entered into a supplemental agreement with Commonwealth Edison and Exelon Generation Company LLC on February 20, 2003 to resolve a dispute regarding
interpretation of Midwest Generation's reimbursement obligation for asbestos claims under the environmental indemnities set forth in the Asset Sale Agreement. Under this supplemental agreement,
Midwest Generation agreed to reimburse Commonwealth Edison and Exelon Generation for 50% of specific asbestos claims pending as of February 2003 and related expenses less recovery of insurance costs,
and agreed to a sharing arrangement for liabilities and expenses associated with future asbestos-related claims as specified in the agreement. The obligations under this agreement are not subject to a
maximum liability. The supplemental agreement had an initial five-year term with an automatic renewal provision for subsequent one-year terms (subject to the right of either party to terminate). There
were approximately 290 cases for which Midwest Generation was potentially liable that had not been settled and dismissed at December 31, 2013. Midwest Generation had $53 million recorded
in LSTC at December 31, 2013 and 2012 related to this contractual indemnity. For discussion of LSTC, see Note 16Restructuring Activities.
F-82
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Commitments and Contingencies (EME and Midwest Generation, except as noted) (Continued)
Indemnities Related to the Homer City Plant (EME only)
In connection with the 1999 acquisition of the Homer City plant from NYSEG and Penelec (sellers), Homer City agreed to indemnify the
sellers with respect to specified environmental liabilities before and after the date of sale. EME guaranteed this indemnity obligation of Homer City. In connection with Homer City's divestiture of
assets to an affiliate of GECC on December 14, 2012, EME re-affirmed its guaranty to NYSEG and Penelec. Also in connection with the recent asset transfer to the GECC affiliate, all operative
documents with respect to Homer City's sale leaseback (including all EME indemnities in favor of the former owner-lessors) were terminated. In connection with the transfer, the GECC affiliate did not
assume (and Homer City retained) liabilities for monetary fines and penalties for violations of environmental laws or environmental permits prior to the closing date. EME has not recorded a liability
related to this indemnity. For discussion of the New Source Review lawsuit filed against Homer City, see "ContingenciesHomer City New Source Review and Other Litigation."
Indemnities Provided under Asset Sale and Sale Leaseback Agreements
The asset sale agreements for the sale of EME's international assets contain indemnities from EME to the purchasers, including
indemnification for taxes imposed with respect to operations of the assets prior to the sale and for pre-closing environmental liabilities. Not all indemnities under the asset sale agreements have
specific expiration dates. At December 31, 2013 and 2012, EME had $20 million recorded in LSTC related to these matters. For discussion of LSTC, see
Note 16Restructuring Activities.
In
connection with the Powerton and Joliet Sale Leaseback and, previously, a sale leaseback transaction related to the Collins Station in Illinois, EME, Midwest Generation and another
wholly owned subsidiary of EME entered into tax indemnity agreements. Under certain of these tax indemnity agreements, Midwest Generation, as the lessee in the Powerton and Joliet Sale Leaseback
agreed to indemnify the respective owner-lessors for specified adverse tax consequences that could result from certain situations set forth in each tax indemnity agreement, including specified
defaults under the respective leases. Although the Collins Station lease terminated in April 2004, Midwest Generation's indemnities in favor of its former lease equity investors are still in effect.
EME provided similar indemnities in the Powerton and Joliet Sale Leaseback. The potential indemnity obligations under these tax indemnity agreements could be significant. Due to the nature of these
potential obligations, EME
and Midwest Generation cannot determine a range of estimated obligations which would be triggered by a valid claim from the owner-lessors. EME and Midwest Generation have not recorded a liability for
these matters.
Other Indemnities
EME and Midwest Generation provide other indemnifications through contracts entered into in the normal course of business. These
include, among other things, indemnities for specified environmental liabilities and for income taxes with respect to assets sold. EME's and Midwest Generation's obligations under these agreements may
or may not be limited in terms of time and/or amount, and in some instances EME and Midwest Generation may have recourse against third parties.
F-83
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Commitments and Contingencies (EME and Midwest Generation, except as noted) (Continued)
EME
and Midwest Generation cannot determine a range of estimates and have not recorded a liability related to these indemnities.
Contingencies
In addition to the matters disclosed in these notes, EME and Midwest Generation are involved in other legal, tax and regulatory
proceedings before various courts and governmental agencies regarding matters arising in the ordinary course of business. EME and Midwest Generation believe the outcome of these other proceedings,
individually and in the aggregate, will not materially affect their results of operations or liquidity.
Midwest Generation New Source Review and Other Litigation
In August 2009, the US EPA and the State of Illinois filed a complaint in the United States District Court for the Northern District of
Illinois alleging that Midwest Generation
or Commonwealth Edison performed repair or replacement projects at six Illinois coal-fired electric generating stations in violation of the Prevention of Significant Deterioration (PSD) requirements
and of the New Source Performance Standards of the Clean Air Act (CAA), including alleged requirements to obtain a construction permit and to install controls sufficient to meet best available control
technology (BACT) emission rates. The US EPA also alleged that Midwest Generation and Commonwealth Edison violated certain operating permit requirements under Title V of the CAA. Finally, the US EPA
alleged violations of certain opacity and particulate matter standards at the Midwest Generation plants. In addition to seeking penalties ranging from $25,000 to $37,500 per violation, per day, the
complaint called for an injunction ordering Midwest Generation to install controls sufficient to meet BACT emission rates at all units subject to the complaint and other remedies. The remedies sought
by the plaintiffs in the lawsuit could go well beyond the requirements of the Combined Pollutant Standard (CPS). Several Chicago-based environmental action groups intervened in the case.
Nine
of the ten PSD claims raised in the complaint have been dismissed, along with claims related to alleged violations of Title V of the CAA, to the extent based on the dismissed PSD
claims, and all claims asserted against Commonwealth Edison and EME. The dismissals were affirmed by the Seventh Circuit Court of Appeals in July 2013. The court denied a motion to dismiss a claim by
the Chicago-based environmental action groups for civil penalties in the remaining PSD claim, but noted that the plaintiffs will be required to convince the court that the statute of limitations
should be equitably tolled. The court did not address other counts in the complaint that allege violations of opacity and particulate matter limitations under the Illinois State Implementation Plan
and Title V of the CAA. In February 2012, certain of the environmental action groups that had intervened in the case entered into an agreement with Midwest Generation to dismiss without prejudice all
of their opacity claims as to all defendants. The agreed upon motion to dismiss was approved by the court on March 26, 2012.
In
January 2012, two complaints were filed against Midwest Generation in Illinois state court by residents living near the Crawford and Fisk Stations on behalf of themselves and all
others similarly situated, each asserting claims of nuisance, negligence, trespass, and strict liability. The plaintiffs seek to have their suits certified as a class action and request injunctive
relief, as well as compensatory and punitive damages. The complaints are similar to two complaints previously filed in the United States District Court for the Northern District of Illinois, which
were dismissed in October 2011 for lack of
F-84
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Commitments and Contingencies (EME and Midwest Generation, except as noted) (Continued)
federal
jurisdiction. Midwest Generation's motions to dismiss the cases were denied in August 2012, following which the plaintiffs filed amended complaints alleging substantially similar claims and
requesting similar relief. Midwest Generation has filed motions to dismiss the amended complaints, and these complaints are stayed as a result of the Chapter 11 Cases.
In
October 2012, Midwest Generation and the Illinois Environmental Protection Agency entered into Compliance Commitment Agreements outlining specified environmental remediation measures
and groundwater monitoring activities to be undertaken at its Powerton, Joliet, Crawford, Will County and Waukegan generating stations. Midwest Generation has submitted certification to the Illinois
Environmental Protection Agency that all compliance measures have been successfully completed. Also in October 2012, several environmental groups filed a complaint before the Illinois Pollution
Control Board against Midwest Generation, alleging violations of the Illinois groundwater standards through the operation of coal ash disposal ponds at its Powerton, Joliet, Waukegan and Will County
generating stations. The complaint requests the imposition of civil penalties, injunctive relief and remediation. The matter was stayed as a result of the Chapter 11 Cases, although that stay
was lifted in part in April 2013 so that the proceedings could continue for the sole purpose of adjudicating Midwest Generation's motion to dismiss the complaint. In October 2013, the Pollution
Control Board denied Midwest Generation's motion to dismiss the complaint, and in December 2013 the Bankruptcy Court granted the environmental groups' motion to lift the stay as to the remainder of
the case.
In
December 2012, the Sierra Club filed a complaint before the Illinois Pollution Control Board against Midwest Generation, alleging violations of sulfur dioxide (SO
2
)
emissions standards at its Powerton, Joliet, Waukegan and Will County generating stations. The complaint is based on alleged violations of the US EPA National Ambient Air Quality Standards (NAAQS)
regulations for 1-hour SO
2
, which have not yet been incorporated into any specific state implementation plan in Illinois. The complaint requests the imposition of civil penalties,
injunctive relief, and the imposition of further reductions on SO
2
emissions to offset past emissions. The complaint was stayed as a result of the Chapter 11 Cases. In November
2013, the Bankruptcy Court granted the plaintiffs' motion to lift the stay.
Adverse
decisions in these cases could involve penalties, remedial actions and damages that could have a material impact on the financial condition and results of operations of Midwest
Generation and EME. EME cannot predict the outcome of these matters or estimate the impact on the Midwest Generation plants, or its and Midwest Generation's results of operations, financial position
or cash flows. EME and Midwest Generation have not recorded a liability for these matters.
Homer City New Source Review and Other Litigation (EME only)
In January 2011, the US EPA filed a complaint in the United States District Court for the Western District of Pennsylvania against
Homer City, the sale leaseback owner participants of the Homer City plant, and two prior owners of the Homer City plant. The complaint alleged violations of the PSD and Title V provisions of the CAA,
as a result of projects in the 1990s performed by prior owners without PSD permits and the subsequent failure to incorporate emissions limitations that meet BACT into the station's Title V operating
permit. In addition to seeking penalties ranging from $32,500 to $37,500 per violation, per day, the complaint called for an injunction ordering Homer City to install controls sufficient to meet BACT
emission rates at all units subject to the complaint and for other remedies.
F-85
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Commitments and Contingencies (EME and Midwest Generation, except as noted) (Continued)
The
PADEP, the State of New York, and the State of New Jersey intervened in the lawsuit. In October 2011, all of the claims in the US EPA's lawsuit were dismissed with prejudice. The dismissal was
affirmed by the United States Court of Appeals for the Third Circuit in August 2013, and in December 2013 the plaintiffs' request for rehearing was denied.
Adverse
decisions in this case could involve penalties, remedial actions and damages. EME cannot predict the outcome of these matters or estimate the impact on its results of operations,
financial position or cash flows. EME has not recorded a liability for these matters.
Environmental Remediation
Legislative and regulatory activities by federal, state, and local authorities in the United States relating to energy and the
environment impose numerous restrictions and requirements with respect to the operation of EME's existing facilities, including the Midwest Generation plants, and affect the timing, cost, location,
design, construction, and operation of new facilities by EME's subsidiaries, as well as the cost of mitigating the environmental impacts of past operations.
With
respect to potential liabilities arising under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) or similar laws for the investigation and
remediation of contaminated property, EME and Midwest Generation accrue a liability to the extent the costs are probable and can be reasonably estimated. Midwest Generation had accrued a probable
amount of approximately $8 million at December 31, 2013 for estimated environmental investigation and remediation costs for two stations at the Midwest Generation plants. This estimate
is based upon the number of sites, the scope of work and the estimated costs for investigation and/or remediation where such expenditures could be reasonably estimated. EME and Midwest Generation also
have identified sites for which a reasonable estimate cannot be made. Future estimated costs may vary based on changes in regulations or requirements of federal, state or local governmental agencies,
changes in technology, and actual costs of disposal. In addition, future remediation costs will be affected by the nature and extent of contamination discovered at the sites that require remediation.
Given the prior history of the operations at its facilities, EME and Midwest Generation cannot be certain that the existence or extent of all contamination at its sites has been fully identified.
Chevron Adversary Proceeding (EME only)
In December 2012, Chevron Kern River Company and Chevron Sycamore Cogeneration Company filed a complaint against Southern Sierra Energy
Company and Western Sierra Energy in the Chapter 11 Cases. The plaintiffs and defendants are partners in the Kern River and Sycamore projects. The complaint alleged that the filing of the
Chapter 11 Cases constituted a default under the partnership agreements related to those projects, entitling the defendants to expel the plaintiffs from the partnerships and pay for their
interests at a price based on the net book value of the partnerships, and sought a declaratory judgment, injunctive relief, and relief from the automatic stay in support of those alleged remedies. In
January 2013, the Bankruptcy Court denied the plaintiffs' request for relief from the automatic stay and a preliminary injunction. The plaintiffs filed a notice of appeal, and the defendants moved to
stay proceedings until the plaintiffs' appeal was decided. In September 2013, the U.S. District Court issued an order denying the plaintiffs' request for leave to appeal the denial of the
F-86
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Commitments and Contingencies (EME and Midwest Generation, except as noted) (Continued)
preliminary
injunction, and permitting their appeal from denial of the motion for relief from the automatic stay.
In
November 2013, Chevron Kern River Company and Chevron Sycamore Cogeneration Company filed an amended complaint that reiterated the allegations and requests of the initial complaint
and added (i) allegations regarding the NRG sale and (ii) a request for damages for breach based on a reduction in value in their interests in the Kern River and Sycamore partnerships.
In January 2014, the Bankruptcy Court dismissed the amended complaint with prejudice.
Insurance
At December 31, 2013 and 2012, EME had receivables of $1 million and $3 million, respectively. During 2013 and
2011, $1 million and $5 million, respectively, related to business interruption insurance coverage was recorded and has been reflected in other income, net on EME's consolidated
statements of operations, of which $2 million has been reflected in interest and other income on Midwest Generation's consolidated statements of operations. EME received $6 million and
$2 million during 2013 and 2012, respectively, of which $2 million in 2012 was received by Midwest Generation, in cash payments related to insurance claims.
Note 10. Environmental Developments (EME, Midwest Generation)
Midwest Generation Environmental Compliance Plans and Costs
On April 4, 2013, Midwest Generation was granted a variance, subject to various conditions, by the Illinois Pollution Control
Board from the CPS system-wide annual SO
2
emission rate in 2015 and 2016 and an extension of the Waukegan Unit 8 unit specific retrofit requirements from December 31, 2014 until
May 31, 2015. Among the conditions of the variance, the Illinois Pollution Control Board accelerated the unit specific retrofit requirements of Powerton Unit 6 to December 31, 2014 and
required the retrofitting of Waukegan Unit 7 by December 31, 2014. Midwest Generation has accepted the variance.
As
a result of the variance, it is more likely that Midwest Generation will install environmental controls at Waukegan Unit 7, which had been impaired from an accounting perspective
during the fourth quarter of 2011. If Midwest Generation ultimately decides to install environmental controls at Waukegan Unit 7, less of Midwest Generation's available liquidity will be available to
install environmental controls at other units. Based on work to date through December 31, 2013, the estimated costs of retrofitting the Midwest Generation plants for full CPS compliance, as
well as compliance with the federal Mercury and Air Toxics Standards (MATS), are as follows:
|
|
|
|
|
|
|
|
|
|
Unit
|
|
Remaining Cost
(in millions)
|
|
Unit
|
|
Remaining Cost
(in millions)
|
|
Joliet 6
|
|
$
|
75
|
|
Waukegan 7
|
|
$
|
55
|
|
Joliet 7
|
|
|
114
|
|
Waukegan 8
|
|
|
64
|
|
Joliet 8
|
|
|
129
|
|
Will County 3
|
|
|
104
|
|
Powerton 5
|
|
|
133
|
|
Will County 4
|
|
|
93
|
|
Powerton 6
|
|
|
66
|
|
|
|
|
|
|
F-87
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10. Environmental Developments (EME, Midwest Generation) (Continued)
Greenhouse Gas Regulation
There have been a number of federal and state legislative and regulatory initiatives to reduce greenhouse gas (GHG) emissions. Any
climate change regulation or other legal obligation that would require substantial reductions in GHG emissions or that would impose additional costs or charges for the GHG emissions could
significantly increase the cost of generating electricity from fossil fuels, and especially from coal-fired plants, which could adversely affect EME's and Midwest Generation's businesses.
In
September 2013, the US EPA proposed new regulations governing carbon dioxide emissions from new electric generating stations. These regulations replace its original proposal. The US
EPA intends to issue proposed GHG emission standards for reconstructed and existing electric generating stations in June 2014 and to promulgate such standards in June 2015. States would be required to
submit their implementation plans responding to such guidelines to the US EPA one year after the regulations are promulgated.
Cross-State Air Pollution Rule
In August 2012, the United States Court of Appeals for the District of Columbia Circuit vacated the US EPA's Cross-State Air Pollution
Rule (CSAPR) and directed the US EPA to continue administering the Clean Air Interstate Rule (CAIR) pending the promulgation of a
valid replacement. The U.S. Supreme Court agreed to review the United States Court of Appeals for the District of Columbia Circuit's August 2012 decision and heard oral arguments on the matter in
December 2013.
Hazardous Air Pollutant Regulations
In December 2011, the US EPA announced the Mercury and Air Toxics Standards (MATS) rule, limiting emissions of hazardous air pollutants
(HAPs) from coal- and oil-fired electrical generating units. The rule became effective on April 16, 2012 with a compliance deadline of April 16, 2015 for existing units. In November
2012, the US EPA issued proposed revisions to aspects of the regulation relating to new units. A number of parties have filed notices of appeal challenging the rule, although the only appeals that are
currently moving forward relate to the standards applicable to existing units. EME and Midwest Generation do not expect that these standards will require material changes to the approach for
compliance with state and federal environmental regulations already contemplated for CPS compliance.
Water Quality
Regulations under the federal Clean Water Act govern critical operating parameters at generating facilities, such as the temperature of
effluent discharges and the location, design, and construction of cooling water intake structures at generating facilities. In March 2011, the US EPA proposed standards under the federal Clean Water
Act that would affect cooling water intake structures at generating facilities. The standards are intended to protect aquatic organisms by reducing capture in screens attached to cooling water intake
structures (impingement) and in the water volume brought into the facilities (entrainment). The regulations are expected to be finalized in 2014. The required measures to comply with the proposed
standards regarding entrainment are subject to the discretion of the
F-88
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10. Environmental Developments (EME, Midwest Generation) (Continued)
permitting
authority, and EME is unable at this time to assess potential costs of compliance, which could be significant for the Midwest Generation plants.
In
June 2013, the US EPA proposed changes to the Steam Electric Guideline Regulation which sets discharge limits for various operations which discharge to waters of the United States.
EME is reviewing the proposed rule and intends to provide comments. The rule is scheduled for issuance by May 2014.
Coal Combustion Wastes
US EPA regulations currently classify coal ash and other coal combustion residuals as solid wastes that are exempt from hazardous waste
requirements. This classification enables beneficial uses of coal combustion residuals, such as for cement production and fill materials. Midwest Generation currently provides a portion of its coal
combustion residuals for beneficial uses. In June 2010, the US EPA published proposed regulations relating to coal combustion residuals that could result in more stringent requirements for the
management and disposal of such materials. Two different proposed approaches are under consideration.
The
first approach, under which the US EPA would list these residuals as special wastes subject to regulation as hazardous wastes, could require EME and Midwest Generation to incur
additional capital and operating costs. The second approach, under which the US EPA would regulate these residuals as nonhazardous wastes, would establish minimum technical standards for units that
are used for the disposal of coal combustion residuals, but would allow procedural and enforcement mechanisms (such as permit requirements) to be exclusively a matter of state law. Many of the
proposed technical standards are similar under both proposed options (for example, surface impoundments may need to be retrofitted, depending on which standard is finally adopted), but the second
approach is not expected to require the retrofitting of landfills used for the disposal of coal combustion residuals.
Note 11. Accumulated Other Comprehensive Loss (EME, Midwest Generation)
EME
EME's AOCI, net of tax and including discontinued operations, consisted of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Unrealized Gains
and Losses on Cash
Flow Hedges
|
|
Unrecognized Losses
and Prior Service
Adjustments, Net(1)
|
|
Valuation Allowance
on Deferred Tax
Asset
|
|
AOCI
|
|
Balance at December 31, 2011
|
|
$
|
(34
|
)
|
$
|
(60
|
)
|
$
|
|
|
$
|
(94
|
)
|
OCI before reclassifications
|
|
|
(17
|
)
|
|
|
|
|
(6
|
)
|
|
(23
|
)
|
Amount reclassified from AOCI
|
|
|
(25
|
)
|
|
4
|
|
|
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012
|
|
|
(76
|
)
|
|
(56
|
)
|
|
(6
|
)
|
|
(138
|
)
|
OCI before reclassifications
|
|
|
34
|
|
|
33
|
|
|
|
|
|
67
|
|
Amount reclassified from AOCI
|
|
|
5
|
|
|
5
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2013
|
|
$
|
(37
|
)
|
$
|
(18
|
)
|
$
|
(6
|
)
|
$
|
(61
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
For
further detail, see Note 8Compensation and Benefit Plans.
F-89
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 11. Accumulated Other Comprehensive Loss (EME, Midwest Generation) (Continued)
-
(2)
-
EME
and Midwest Generation do not expect to reclassify unrealized losses on cash flow hedges into earnings in the next 12 months. For further
explanation, see "Unrealized Losses on Cash Flow Hedges."
The
after-tax amounts recorded in AOCI at December 31, 2013 and 2012 for commodity contracts were losses of none and $1 million, respectively, and for interest rate
contracts was losses of $37 million and $75 million, respectively. EME's significant items reclassified out of AOCI and the effect on the statement of operations consisted of:
|
|
|
|
|
|
(in millions)
|
|
Year Ended
December 31, 2013
|
|
Affected Line Item in the Statement of
Operations
|
Unrealized gains and losses on cash flow hedges
|
|
|
|
|
|
Electricity commodity hedges
|
|
$
|
(3
|
)
|
Operating revenues
|
Interest rate contracts
|
|
|
(5
|
)
|
Interest expense
|
Tax benefit
|
|
|
3
|
|
Benefit for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
Total, net
|
|
$
|
(5
|
)
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of retirement benefit items
|
|
|
|
|
|
Unamortized prior service cost on terminated plan
|
|
$
|
(3
|
)
|
Plant operations and administrative and general(1)
|
Actuarial losses
|
|
|
(5
|
)
|
Plant operations and administrative and general(1)
|
Tax benefit
|
|
|
3
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
Total, net
|
|
$
|
(5
|
)
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
For
the year ended December 31, 2013, $5 million and $3 million were reclassified from AOCI to plant operations, and administrative and
general expenses, respectively
F-90
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 11. Accumulated Other Comprehensive Loss (EME, Midwest Generation) (Continued)
Midwest Generation
Midwest Generation's AOCI, net of tax, consisted of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Unrealized Gains
and Losses on Cash
Flow Hedges
|
|
Unrecognized Losses
and Prior Service
Adjustments, Net(1)
|
|
Valuation Allowance
on Deferred Tax
Asset
|
|
AOCI
|
|
Balance at December 31, 2011
|
|
$
|
21
|
|
$
|
(38
|
)
|
$
|
|
|
$
|
(17
|
)
|
OCI before reclassifications
|
|
|
4
|
|
|
(1
|
)
|
|
(12
|
)
|
|
(9
|
)
|
Amount reclassified from AOCI
|
|
|
(26
|
)
|
|
2
|
|
|
|
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012
|
|
|
(1
|
)
|
|
(37
|
)
|
|
(12
|
)
|
|
(50
|
)
|
OCI before reclassifications
|
|
|
(1
|
)
|
|
25
|
|
|
|
|
|
24
|
|
Amount reclassified from AOCI
|
|
|
2
|
|
|
3
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2013
|
|
$
|
|
|
$
|
(9
|
)
|
$
|
(12
|
)
|
$
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
For
further detail, see Note 8Compensation and Benefit Plans.
Midwest
Generation's significant items reclassified out of AOCI and the effect on the statement of operations consisted of:
|
|
|
|
|
|
(in millions)
|
|
Year Ended
December 31, 2013
|
|
Affected Line Item in the Statement of
Operations
|
Unrealized gains and losses on cash flow hedges
|
|
|
|
|
|
Electricity commodity hedges
|
|
$
|
(4
|
)
|
Operating revenues
|
Tax benefit
|
|
|
2
|
|
Benefit for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
Total, net
|
|
$
|
(2
|
)
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of retirement benefit items
|
|
|
|
|
|
Prior services costs
|
|
$
|
(1
|
)
|
Plant operations
|
Actuarial losses
|
|
|
(3
|
)
|
Plant operations
|
Tax benefit
|
|
|
1
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
Total, net
|
|
$
|
(3
|
)
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Losses on Cash Flow Hedges (EME, Midwest Generation)
At December 31, 2013, unrealized losses on cash flow hedges, net of tax, consisted of interest rate swap contracts that qualify
for hedge accounting. These losses arise because current forecasts of future interest rates are lower than the contract rates. No unrealized losses on
commodity cash flow hedges are expected to be reclassified into earnings during the next 12 months as no commodity cash flow hedges are designated beyond December 31, 2013.
F-91
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 12. Supplemental Cash Flows Information (EME, Midwest Generation)
EME
Supplemental cash flows information for EME, including discontinued operations, consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
2011
|
|
Cash paid (received)
|
|
|
|
|
|
|
|
|
|
|
Interest (net of amount capitalized)(1)
|
|
$
|
62
|
|
$
|
168
|
|
$
|
290
|
|
Income taxes
|
|
|
(17
|
)
|
|
59
|
|
|
(216
|
)
|
Cash payments under plant operating leases
|
|
|
30
|
|
|
199
|
|
|
311
|
|
Details of assets acquired
|
|
|
|
|
|
|
|
|
|
|
Fair value of assets acquired
|
|
$
|
|
|
$
|
|
|
$
|
1
|
|
Liabilities assumed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets acquired
|
|
$
|
|
|
$
|
|
|
$
|
1
|
|
Non-cash contribution from EIX(2)
|
|
$
|
25
|
|
$
|
|
|
$
|
|
|
Non-cash distribution to EIX(2)
|
|
$
|
|
|
$
|
222
|
|
$
|
|
|
Non-cash activities from vendor financing
|
|
$
|
9
|
|
$
|
11
|
|
$
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Interest
paid by EME for December 31, 2013, 2012 and 2011 was $69 million, $199 million and $317 million, respectively. Interest
capitalized by EME for December 31, 2013, 2012 and 2011 was $7 million, $31 million and $27 million, respectively.
-
(2)
-
During
2013, EME received a non-cash contribution from EIX related to the tax-allocation agreements. During 2012, EME recorded a non-cash distribution to EIX related to the
tax-allocation agreements. See Note 7Income TaxesEMEDeferred Tax Assets and Liabilities.
EME's
accrued capital expenditures at December 31, 2013, 2012 and 2011 were $9 million, $31 million and $29 million, respectively. Accrued capital
expenditures will be included as an investing activity in the consolidated statements of cash flows in the period paid.
F-92
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 12. Supplemental Cash Flows Information (EME, Midwest Generation) (Continued)
Midwest Generation
Supplemental cash flows information for Midwest Generation consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
2011
|
|
Cash paid
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
24
|
|
$
|
36
|
|
$
|
43
|
|
Income taxes
|
|
|
|
|
|
|
|
|
8
|
|
Non-cash distribution to parent(1)
|
|
$
|
|
|
$
|
106
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
During
2012, Midwest Generation recorded a non-cash distribution to its parent related to the tax-allocation agreements. See
Note 7Income TaxesMidwest GenerationDeferred Tax Assets and Liabilities.
Midwest
Generation's accrued capital expenditures at December 31, 2013, 2012 and 2011 were $9 million, $9 million and $4 million, respectively. Accrued
capital expenditures will be included as an investing activity in the consolidated statements of cash flows in the period paid.
Note 13. Asset Impairments and Other Charges (EME, Midwest Generation)
EME
Asset impairments and other charges for EME consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
2011
|
|
Midwest Generation plants impairments
|
|
$
|
466
|
|
$
|
|
|
$
|
640
|
|
Ambit impairment
|
|
|
|
|
|
15
|
|
|
|
|
Wind projects impairment and other charges
|
|
|
(2
|
)
|
|
13
|
|
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EME asset impairments and other charges(1)
|
|
$
|
464
|
|
$
|
28
|
|
$
|
714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
fair value of long-lived assets as determined using the discounted cash flow models discussed below qualify as Level 3 in the fair value
hierarchy.
2013 Impairments
Will County Station
In connection with the preparation of its financial statements in the third quarter of 2013, Midwest Generation concluded, based on
continued low realized energy and capacity prices, high fuel costs and low generation and further analysis of its capital allocation strategy, that indicators of potential impairment existed for its
Will County Station and an impairment evaluation was performed.
The
long-lived asset group that was subject to the impairment evaluation was determined to include the property, plant and equipment of the station. Management utilized the probability
weighted
F-93
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 13. Asset Impairments and Other Charges (EME, Midwest Generation) (Continued)
estimates
of future undiscounted cash flows to be received at the Will County Station and concluded that such amounts did not recover its carrying amount. Forecasted commodity prices and plant
dispatch levels are the most significant input into the cash flow estimates. However, as part of these alternative cash flow scenarios, management considered a shortened estimated useful life of the
station if environmental improvements were not made.
To
measure the amount of the impairment loss, management used the market approach, which considers sales of similar facilities and numerous recent decisions by other power generators to
shut down similar coal plants rather than install additional equipment, corroborated by the income approach, which considers discounted cash flows. This resulted in an impairment charge related to the
Will County Station of $464 million. The estimated fair value of zero for the Will County Station was determined using both observable inputs and unobservable inputs, which are Level 3
inputs as defined by accounting guidance for fair value measurements. These inputs included a range of zero to $169 per kilowatt hour of recent transactions for scrubbed coal plants in similar
markets. For additional information on the impairment policy of long-lived assets, see Note 1Summary of Significant Accounting PoliciesImpairment of Long-Lived Assets.
2012 Impairments
Ambit
The Ambit project has operated under constrained liquidity conditions for a number of years. In 2012, the avoided energy costs, which
form the basis for the project's energy revenues under its power purchase agreement, declined significantly. As a result, in 2013 Ambit did not make all of its scheduled land lease payments; the land
lease is subordinated to debt service. In February 2013, the EME operations and maintenance subsidiary that operated the plant provided a 180-day notice of its intent to terminate its operations and
maintenance contract.
These
factors were considered indicators of potential impairment and in connection with the preparation of its year-end financial statements in the fourth quarter of 2012, EME reviewed
the Ambit project for impairment. The results of the impairment analysis indicated that the probability weighted future undiscounted cash flows are not expected to be sufficient to recover the
respective carrying value of the long-lived assets of $49 million. The asset group at the project consisted of property, plant and equipment and deferred revenue. The fair value of the asset
group was determined to be $34 million, resulting in an impairment charge of $15 million. For additional information on the impairment policy of long-lived assets, see
Note 1Summary of Significant Accounting PoliciesImpairment of Long-Lived Assets.
2011 Impairments
Wind Projects
In connection with the preparation of its year-end financial statements in the fourth quarter of 2011, EME reviewed the Storm Lake wind
project and four small wind projects in Minnesota for impairment, based on an expected future increase in operating costs and declines in long-term power prices that the projects could potentially
realize following the term of the power purchase agreements. The probability weighted future undiscounted cash flows of each project were not expected to be sufficient to recover the respective
carrying value of each of these long-lived assets ($53 million in
F-94
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 13. Asset Impairments and Other Charges (EME, Midwest Generation) (Continued)
aggregate).
The income approach was utilized to determine fair value for these asset groups. The most significant assumptions used in determining fair value were discount rates, future wind
generation, the future availability of the project to generate energy and future plant operations expense. The asset groups at each project consisted of property, plant and equipment and, where
appropriate, deferred revenue. In aggregate, the fair value of these five asset groups was determined to be $23 million, resulting in an impairment charge of $30 million. For additional
information on the impairment policy of long-lived assets, see Note 1Summary of Significant Accounting PoliciesImpairment of Long-Lived Assets.
During
the fourth quarter of 2011, EME significantly reduced development of renewable energy projects to conserve cash and in light of more limited market opportunities. As a result, EME
reduced staffing and undertook efforts to reduce funding joint development projects, thereby reducing the development pipeline of potential wind projects to a projected installed capacity of
approximately 1,300 megawatts at the end of 2011. These changes triggered charges of $34 million.
Fisk, Crawford and Waukegan Stations
In connection with the preparation of its year-end financial statements in the fourth quarter of 2011, Midwest Generation concluded,
based on the current energy price environment, it was less likely that Midwest Generation would install environmental controls required by the CPS at its Fisk, Crawford and Waukegan Stations; and such
assessment was an indicator that these stations were impaired. The long-lived asset groups that were subject to the impairment evaluation were determined to include the property, plant and equipment
of each station. Management updated the probability weighted future undiscounted cash flows expected to be received at these stations and concluded that such amounts did not recover the respective
station's carrying amounts. As part of these alternative cash flow scenarios, management considered a shortened estimated useful life of each station if environmental improvements were not made and a
forecasted reduction in generation from lower forward power prices.
To
measure the amount of the impairment loss, the income approach was considered the most relevant, but market data obtained prior to the significant decline in power prices was used to
corroborate the income approach. The discounted cash flow analysis assumptions that have the most significant impact on fair value are forecasted energy and capacity prices. The discounted cash flow
analysis indicated a fair value of zero. Midwest Generation also concluded it was unlikely that a third party would consummate the purchase of the Fisk, Crawford or Waukegan Stations in the current
economic and regulatory environment resulting in a determination that the fair value of each of these stations was zero. This resulted in impairment charges of $115 million, $186 million
and $339 million for the Fisk, Crawford and Waukegan Stations, respectively. Environmental and other remediation or ongoing maintenance costs are expected to be offset by the salvage value of
the asset groups. Midwest Generation voluntarily ceased coal-fired operations at the Fisk and Crawford Stations in August 2012. For additional information on the impairment policy of long-lived
assets, see Note 1Summary of Significant Accounting PoliciesImpairment of Long-Lived Assets.
Midwest Generation
Midwest Generation's asset impairments and other charges were $465 million, $14 million and $653 million for the
years ended December 31, 2013, 2012 and 2011, respectively. Of the 2013 charges,
F-95
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 13. Asset Impairments and Other Charges (EME, Midwest Generation) (Continued)
$464 million
related to the Will County Station. Of the 2011 charges, $640 million related to the Fisk, Crawford and Waukegan Stations. See above for further discussion of impairment
charges on the Midwest Generation plants.
Note 14. Discontinued Operations (EME only)
In September 2012, Homer City, a wholly owned indirect subsidiary of EME, and Homer City Generation, L.P., an affiliate of GECC, entered into the Homer City Master Transaction
Agreement (MTA) for the divestiture by Homer City of substantially all of its remaining assets and certain specified liabilities. Accordingly, in the third quarter of 2012, Homer City met the
definition of a discontinued operation and was classified separately on EME's consolidated financial statements. In December 2012, the transaction closed and Homer City Generation, L.P. assumed
control of Homer City. On May 2, 2013, the Homer City Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code.
The
2013 results from discontinued operations reflects the withdrawal from the benefit plan that provided postretirement medical, dental, vision, and life insurance coverage to certain
Homer City retirees and the subsequent cost, reflected in reorganization items, for a Bankruptcy Court approved settlement between the Homer City Debtors and the union for the affected Homer City
retirees. EME recorded an impairment charge of $1,032 million ($623 million after tax) in 2011 related to Homer City's long-lived assets, and an asset write-down of $89 million
($53 million after tax) in 2012 to reflect the ultimate carrying value of assets and liabilities transferred to Homer City Generation, L.P.
Summarized
results of discontinued operations for EME are:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
2011
|
|
Total operating revenues
|
|
$
|
|
|
$
|
395
|
|
$
|
527
|
|
Total operating expenses
|
|
|
29
|
|
|
(496
|
)
|
|
(538
|
)
|
Asset impairments and other charges
|
|
|
|
|
|
(89
|
)
|
|
(1,032
|
)
|
Other income
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before reorganization items and income taxes
|
|
|
29
|
|
|
(185
|
)
|
|
(1,043
|
)
|
Reorganization items, net
|
|
|
22
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes
|
|
|
6
|
|
|
(73
|
)
|
|
(411
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations of discontinued subsidiaries
|
|
$
|
1
|
|
$
|
(112
|
)
|
$
|
(632
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-96
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 14. Discontinued Operations (EME only) (Continued)
The
assets and liabilities associated with the discontinued operations are segregated on the consolidated balance sheets as follows:
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
Cash and cash equivalents
|
|
$
|
|
|
$
|
2
|
|
Other current assets
|
|
|
|
|
|
7
|
|
Carrying value adjustment
|
|
|
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets of discontinued operations
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 15. Related Party Transactions (EME, Midwest Generation)
In November 2013, the Bankruptcy Court entered an order approving the Debtor Entities' continued performance under various agreements and arrangements that govern shared services between
EIX and EME and its subsidiaries. The shared services agreement with EIX is expected to terminate at the earlier of the consummation of the NRG Sale or, under certain circumstances, by July 31,
2014.
EME
Historically, specified administrative services such as payroll, employee benefit programs, insurance, and information technology have
been shared among all affiliates of EIX, and the costs of these corporate support services have been allocated to all affiliates, including EME. As a result of the Chapter 11 Cases, certain of
these services have been reduced or canceled. Costs are allocated based on one of the following formulas: percentage of time worked, equity in investment and advances, number of employees, or
multi-factor (operating revenues, operating expenses, total assets and number of employees). In addition, EME is billed for any services directly requested for its benefit. Labor and expenses of these
directly requested services are specifically identified and billed at cost, subject to a reasonable markup. EME believes the allocation methodologies utilized are reasonable. EME made reimbursements
for the cost of these programs and other services totaling $12 million, $60 million and $60 million in 2013, 2012 and 2011, respectively. The amount due to (from) EIX was
$1 million and $(1) million at December 31, 2013 and 2012, respectively.
Edison
Mission Operation & Maintenance, Inc., a direct, wholly owned affiliate of EME, has entered into operation and maintenance agreements with partnerships in which EME
has a 50% or less ownership interest. Pursuant to the negotiated agreements, Edison Mission Operation & Maintenance is to perform all operation and maintenance activities necessary for the
production of power by these partnerships' facilities. The agreements continue until terminated by either party. Edison Mission Operation & Maintenance is paid for all costs incurred with
operating and maintaining such facilities and may also earn incentive compensation as set forth in the agreements. EME also has investments in wind projects that are accounted for under the equity
method for which Edison Mission Operation & Maintenance has entered into operation and maintenance agreements with these wind projects. EME recorded revenues under the operation and maintenance
agreements of $25 million for 2013, $24 million for 2012 and $23 million for 2011, reflected in operating revenues on EME's consolidated
F-97
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 15. Related Party Transactions (EME, Midwest Generation) (Continued)
statements
of operations. Receivables from affiliates for Edison Mission Operation & Maintenance totaled $3 million and $4 million at December 31, 2013 and 2012,
respectively.
EME
owns interests in partnerships that sell electricity generated by their project facilities to Southern California Edison Company (SCE) and others under the terms of power purchase
agreements. Sales by these partnerships to SCE under these agreements amounted to $297 million, $233 million and $277 million in 2013, 2012 and 2011, respectively.
The
Walnut Creek Project began selling power under its 10-year power purchase agreement with SCE in June 2013. EME recorded operating revenues on its consolidated statements of
operations of $84 million for 2013. The amount due from SCE was $8 million at December 31, 2013. For further information on Walnut Creek related party transactions, see
Note 5Debt and Credit AgreementsCredit Facilities and Letters of Credit.
Midwest Generation
EMMT Agreement
Midwest Generation has entered into a master purchase, sale and services agreement with EMMT, pursuant to which EMMT arranges for
purchases and sales of the following products, including related services: (i) energy and capacity; (ii) natural gas; (iii) fuel oil; and (iv) emission allowances. Midwest
Generation compensates EMMT with respect to these transactions, and reimburses EMMT for brokers' fees, taxes, and other reasonably incurred direct out-of-pocket expenses. Payment for these services is
due within 30 days of billing. The net fees earned by EMMT were $1 million during each of 2013, 2012 and 2011. The amount due from EMMT was $47 million and $39 million at
December 31, 2013 and 2012, respectively.
Notes Receivable from EME
Proceeds of $1.367 billion were received by Midwest Generation from the Powerton and Joliet Sale Leaseback and were loaned to
EME through four intercompany notes. EME is obligated to repay the principal on the notes in a series of installments on the dates and in the amounts set forth on a schedule to each note and interest
is due semi-annually on January 2 and July 2 at an 8.30% fixed interest rate. The notes are due to be repaid in full by January 2, 2016. At December 31, 2012, Midwest
Generation determined that it was probable a loss would be realized in connection with this intercompany loan and recorded a $1.4 billion charge, equal to the full carrying amount of the loan
and accrued interest, and ceased accruing interest income. In addition, during the pendency of the Chapter 11 Cases, EME did not make any of the three scheduled $61 million principal and
interest
F-98
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 15. Related Party Transactions (EME, Midwest Generation) (Continued)
payments
due to Midwest Generation. Notes receivable from EME on Midwest Generation's consolidated balance sheet consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
December 31, 2012
|
|
(in millions)
|
|
Carrying
Value
|
|
Valuation
Allowance
|
|
Net
|
|
Carrying
Value
|
|
Valuation
Allowance
|
|
Net
|
|
Current portion of notes receivable from affiliate
|
|
$
|
19
|
|
$
|
(19
|
)
|
$
|
|
|
$
|
12
|
|
$
|
(12
|
)
|
$
|
|
|
Interest receivable from affiliate
|
|
|
55
|
|
|
(55
|
)
|
|
|
|
|
55
|
|
|
(55
|
)
|
|
|
|
Notes receivable from affiliate
|
|
|
1,304
|
|
|
(1,304
|
)
|
|
|
|
|
1,311
|
|
|
(1,311
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,378
|
|
$
|
(1,378
|
)
|
$
|
|
|
$
|
1,378
|
|
$
|
(1,378
|
)
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income from affiliate included in interest and other income on Midwest Generation's consolidated statement of operations was none, $110 million and $111 million
for the years ended December 31, 2013, 2012 and 2011, respectively. The fair value of the note receivable from EME was zero at December 31, 2013 and December 31, 2012. Upon
consummation of the Plan and the NRG Sale, this loan and accrued interest will be canceled. For additional information, see Note 16Restructuring ActivitiesNRG Sale.
Services Agreements with EME and EIX
Historically, specified administrative services such as payroll, employee benefit programs, insurance, and information technology have
been shared among all affiliates of EIX, and the costs of these corporate support services have been allocated to all affiliates, including Midwest Generation. As a result of the Chapter 11
Cases, certain of these services have been reduced or canceled. Costs are allocated based on one of the following formulas: percentage of time worked, equity in investment and advances, number of
employees, or multi-factor (operating revenues, operating expenses, total assets and number of employees). In addition, Midwest Generation is billed for any services directly requested for its
benefit. Labor and expenses of these directly requested services are specifically identified and billed at cost, subject to a reasonable markup. Midwest Generation believes the allocation
methodologies utilized are reasonable. Midwest Generation made reimbursements for the cost of these programs and other services totaling $17 million, $27 million and $30 million
for the years ended December 31, 2013, 2012 and 2011, respectively. The amount due to EIX and EME was none and $1 million at December 31, 2013 and 2012, respectively, related to
these agreements.
Management and Support Agreements with Midwest Generation EME, LLC
Midwest Generation has entered into agreements with Midwest Generation EME for management and administrative services and support
services, including construction and construction management, operations and maintenance management, technical services and training, environmental, health and safety services, administrative and IT
support, and other managerial and technical services needed to operate and maintain electric power facilities. Under the terms of the agreements, Midwest Generation reimburses Midwest Generation EME
for actual costs incurred by functional area in providing support services, or in the case of specific tasks requested by Midwest Generation, the amount negotiated for the task. Actual costs billable
under these agreements for the years ended December 31, 2013, 2012 and 2011 were $29 million, $23 million and $24 million, respectively. The amount due to Midwest
Generation EME was $6 million and $2 million at December 31, 2013 and 2012, respectively, related to these agreements.
F-99
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 16. Restructuring Activities (EME, Midwest Generation)
The Plan implements a reorganization of the Debtor Entities through a sale of substantially all of EME's assets under the NRG Sale and through the terms of the Settlement Agreement,
which establishes a path for EME to emerge from bankruptcy free of liabilities as a wholly-owned subsidiary of EIX.
NRG Sale
On October 18, 2013, EME, Midwest Generation, and certain other Debtor Entities entered into a Plan Sponsor Agreement (the PSA)
with NRG Energy, Inc. (NRG), the Purchaser, the Official Committee of Unsecured Creditors appointed in the Chapter 11 Cases, the counterparties to the Powerton and Joliet Sale Leaseback
and certain of EME's noteholders that are signatories to the PSA, that provides for the parties to support and pursue confirmation by the Bankruptcy Court of the Plan, that will implement a
reorganization of the Debtor Entities through a sale of substantially all of the assets of EME to NRG pursuant to the Acquisition Agreement. The PSA contains representations, warranties and covenants
of the parties to support and pursue confirmation of the Plan.
The
Acquisition Agreement between EME, NRG and the Purchaser, a wholly owned subsidiary of NRG, provides for the sale of substantially all of EME's assets, including the outstanding
equity interests in certain of EME's direct subsidiaries (and thereby such subsidiaries' assets and liabilities), EME's cash and cash equivalents and EME's interest in substantially all of the other
assets used in the operation of EME's and its subsidiaries' businesses (the Acquired Assets) to the Purchaser upon Bankruptcy Court confirmation and consummation of the Plan. Upon closing, the
Purchaser will assume substantially all of the liabilities related to assets to be acquired, including, among other things, (i) all liabilities of EME under the Powerton and Joliet leases,
other than the cure amount as set forth in the Acquisition Agreement (the Powerton and Joliet Cure Amount); (ii) all trade and vendor accounts payable and accrued liabilities arising from the
operation of the Debtor Entities' businesses
prior to the date of the closing of the transaction; and (iii) all cure amounts and other liabilities of the Debtor Entities other than the Homer City Debtors and certain agreed-upon excluded
liabilities.
In
particular, with respect to the Powerton and Joliet leases, at the closing of the transaction, NRG will (i) replace the existing EME guarantees with NRG guarantees;
(ii) replace EME as a party to the tax indemnity agreements relating to the Powerton and Joliet leases; and (iii) covenant to make a capital investment in the Powerton and Joliet
Stations, provided that NRG will not be obligated to make capital investments in excess of $350 million.
In
consideration of the foregoing, at the closing of the transaction, EME will retain all liabilities with respect to the payment of the Powerton and Joliet Cure Amount and would be
responsible for bearing the costs of such cure payment for all amounts due under the lease before January 2, 2014. In addition, the intercompany note issued by EME for the benefit of Midwest
Generation, will be canceled. Midwest Generation will assume the Powerton and Joliet leases and the other operative documents related thereto, as modified by mutual agreement of the parties, and all
monetary defaults under each lease would be cured at closing. The Acquired Assets do not include (i) the Homer City Debtors, (ii) potential litigation claims of EME against its parent,
EIX and (iii) various tax attributes of EME, including tax losses, tax loss carryforwards, tax credits, and tax refunds.
The
total purchase price to be paid by the Purchaser for the Acquired Assets is $2.635 billion, subject to certain adjustments provided in the Acquisition Agreement. The
Acquisition Agreement
F-100
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 16. Restructuring Activities (EME, Midwest Generation) (Continued)
provides
for $350 million of the total purchase price to be paid in the form of 12,671,977 newly issued shares of NRG's common stock which trades on the New York Stock Exchange under the ticker
symbol NRG.
The
Acquisition Agreement provides specific termination rights to each party, which include a right to terminate if certain milestone dates are not met, for material breaches of the
Acquisition Agreement not cured within a specified period or if EME enters into or seeks approval of a superior proposal. Under specified circumstances, NRG will be entitled to receive a cash fee of
$65 million, and expense reimbursement of all reasonable and documented out-of-pocket expenses, if the Acquisition Agreement is terminated.
Before
the NRG Sale may be completed, the parties must satisfy all conditions set forth in the Acquisition Agreement, including, among other things, governmental and regulatory
approvals. Certain conditions, such as the confirmation of the Plan and the entry of a Confirmation Order by the
Bankruptcy Court, have already been met. Certain other closing conditions have already been satisfied, including the receipt of various government and regulatory approvals and the declaration of
effectiveness of the Registration Statement for the common stock to be issued by NRG as a portion of the purchase price. The Acquisition Agreement contains certain representations and warranties made
by EME, NRG and the Purchaser. There are also various pre-closing and post-closing covenants binding on the parties. If the remaining conditions or requirements are not satisfied or waived the NRG
Sale will not be consummated.
Plan of Reorganization
The Plan generally provides for each of EME's general unsecured creditors to receive a pro rata portion of the NRG stock and cash
consideration to be paid by the Purchaser to EME under the Acquisition Agreement (less certain distributions to be paid to other creditors of EME) and a pro rata share of any new securities issued by
the reorganized successor entity.
Under
the Settlement Agreement, a Reorganization Trust will be formed, which will make distributions pursuant to the Plan for the benefit of EME's existing creditors. All assets and
liabilities of EME that are not otherwise discharged in the bankruptcy or transferred to NRG as part of the NRG Sale will be transferred to the Reorganization Trust, with the exception of
(i) the EME Tax Attributes, estimated at $1.19 billion, which will be retained by the EIX consolidated tax group, (ii) liabilities totaling $241 million associated with the
qualified pension plan, the executive retirement plan, the executive deferred compensation plan and uncertain federal and state tax positions, which are being assumed by EIX and (iii) EME's
indirect interest in Capistrano Wind Partners. EIX has disclosed that they have estimated their exposure to the qualified pension plan, executive retirement plan, executive deferred compensation plan
and uncertain federal and state tax positions to be approximately $350 million. EIX will pay the Reorganization Trust amounts equal to 50% of the EME Tax Attributes as follows:
$225 million payable on the Effective Date in cash, with one half of the balance payable on each of September 30, 2015 and September 30, 2016, together with interest at 5% per
annum from the Effective Date.
F-101
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 16. Restructuring Activities (EME, Midwest Generation) (Continued)
The estimated value of the EME Tax Attributes will be updated within approximately six months of the Effective Date. When the updated estimate is finalized, the amounts of the two
installment payments remaining to be made by EIX will be fixed and EIX will deliver to the Reorganization Trust two zero coupon promissory notes evidencing its obligation to make those payments.
EME
and the Reorganization Trust will release EIX and its subsidiaries, officers, directors, and representatives from all claims, except for those deriving from commercial arrangements
between SCE and certain of EME's subsidiaries and obligations under the Settlement Agreement. EIX and its subsidiaries that directly and indirectly own EME will provide a similar release to EME and
the Reorganization Trust. Under the Plan, EIX and its subsidiaries, officers, directors and representatives will also be beneficiaries of orders of the Bankruptcy Court releasing them from claims of
third parties in EME's bankruptcy proceedings and the Reorganization Trust will be obligated to set aside $50 million in escrow to secure its obligations to EIX under the Settlement Agreement,
including its obligation to protect against liabilities, if any, not discharged in the Chapter 11 Cases for which the Reorganization Trust remains responsible. Such escrowed amount will decline
over time to zero on the later of September 30, 2016 and the date on which certain third-party claims pending on September 30, 2016 are resolved.
The
Bankruptcy Court issued a Confirmation Order in March 2014, which confirmed the Plan. The completion of the NRG Sale is expected in April 2014. The following conditions, and others,
shall have been satisfied or waived for the Plan to become effective:
-
-
Consummation of the NRG Sale, which is expected in April 2014;
-
-
Payment of the Powerton and Joliet Cure Amount; and
-
-
Establishment of the Reorganization Trust and funding of escrow accounts therein.
LSTC
EME's LSTC are summarized below:
|
|
|
|
|
|
|
|
(in millions)
|
|
December 31,
2013
|
|
December 31,
2012
|
|
Senior notes, net
|
|
$
|
3,700
|
|
$
|
3,700
|
|
Accounts payable and accrued liabilities
|
|
|
53
|
|
|
32
|
|
Interest payable
|
|
|
154
|
|
|
154
|
|
Other
|
|
|
108
|
|
|
73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities subject to compromise
|
|
$
|
4,015
|
|
$
|
3,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In
connection with the filing of the Chapter 11 Cases, EME classified both its $3.7 billion unsecured senior notes and $154 million of accrued interest related to
the unsecured senior notes as LSTC and ceased accruing interest expense. The accrued interest reclassified to LSTC primarily relates to $97 million and $38 million of interest payments
that were due on November 15 and December 17, 2012, respectively, that EME did not make. Unpaid contractual interest for the years ended December 31, 2013 and 2012 was
$281 million and $11 million, respectively.
F-102
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 16. Restructuring Activities (EME, Midwest Generation) (Continued)
Midwest
Generation's LSTC are summarized below:
|
|
|
|
|
|
|
|
(in millions)
|
|
December 31,
2013
|
|
December 31,
2012
|
|
Lease financing
|
|
$
|
434
|
|
$
|
434
|
|
Accounts payable and accrued liabilities
|
|
|
42
|
|
|
29
|
|
Interest payable
|
|
|
11
|
|
|
13
|
|
Other
|
|
|
53
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities subject to compromise
|
|
$
|
540
|
|
$
|
529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In
connection with the filing of the Chapter 11 Cases, Midwest Generation classified $13 million of accrued interest due on the Powerton and Joliet Sale Leaseback as LSTC
but did not cease accruing interest expense. Upon closing of the NRG Sale, approximately $32 million of LSTC will be transferred from Midwest Generation to EME. For further discussion, see
Note 9Commitments and ContingenciesLease Commitments.
Claims
The Bankruptcy Court established June 17, 2013 and October 29, 2013 as the bar date for filing proofs of claim against
the Initial Debtors and Homer City Debtors estates, respectively.
As
of the date of this filing, EME and Midwest Generation have received 766 and 303 proofs of claim, respectively. New and amended claims may be filed in the future, including claims
amended to assign value to claims originally filed with no value. EME and Midwest Generation are in the process of reconciling such claims to the amounts listed in LSTC. LSTC have been recorded based
on the expected probable claim, which is subject to judgment and could change as new information develops during the reconciliation process. Differences in liability amounts estimated and claims filed
by creditors will be investigated and resolved, including through the filing of objections with the Bankruptcy Court as appropriate. Through this process, EME and Midwest Generation may identify
additional liabilities that need to be recorded as LSTC and the Bankruptcy Court may determine liabilities currently estimated as part of LSTC are without merit. The claims resolution process may take
considerable time to complete. The resolution of such claims could result in material adjustments to EME or Midwest Generation's financial statements. Determination of how liabilities will ultimately
be treated cannot be made until the Bankruptcy Court approves a plan of reorganization. Accordingly, the ultimate amount or treatment of such liabilities is not determinable at this time.
Reorganization Items
Reorganization items represent the direct and incremental costs of bankruptcy, such as professional fees, LSTC claim adjustments and
losses related to terminated contracts that are probable and can be estimated. Write off of unamortized deferred financing costs and debt discounts relate to EME's unsecured pre-petition debt, which
has been reclassified to LSTC on the consolidated balance sheet following the Chapter 11 filing on December 17, 2012. Professional fees primarily relate to legal advisors and consultants
working directly on the bankruptcy filing.
F-103
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 16. Restructuring Activities (EME, Midwest Generation) (Continued)
EME's
and Midwest Generation's significant items in reorganization charges, excluding discontinued operations, consisted of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2013
|
|
2012
|
|
(in millions)
|
|
Midwest
Generation
|
|
Other EME
Subsidiaries
|
|
EME
|
|
Midwest
Generation
|
|
Other EME
Subsidiaries
|
|
EME
|
|
Provision for allowable claims
|
|
$
|
19
|
|
$
|
|
|
$
|
19
|
|
$
|
6
|
|
$
|
|
|
$
|
6
|
|
Write off of unamortized deferred financing costs and debt discounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
15
|
|
Professional fees
|
|
|
22
|
|
|
79
|
|
|
101
|
|
|
|
|
|
22
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total reorganization items, net
|
|
$
|
41
|
|
$
|
79
|
|
$
|
120
|
|
$
|
6
|
|
$
|
37
|
|
$
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost Reduction Activities
EME eliminated approximately 150 positions in its regional and corporate offices and generating stations in April 2013, including 120
positions at Midwest Generation. EME recorded charges of approximately $7 million, and Midwest Generation recorded its share of these charges, a total of $5 million, in administrative
and general expense on their respective consolidated statements of operations in the second quarter of 2013.
Shutdown of Fisk and Crawford
Midwest Generation voluntarily ceased coal-fired operations at the Fisk and Crawford Stations in August 2012. Midwest Generation
decommissioned and retired the units during the fourth quarter of 2012. During the second quarter of 2012, EME recorded a charge of $9 million (pre-tax) related to severance and other employee
benefits due to the approximately 200 employees affected by the planned shutdowns; and Midwest Generation recorded a charge of $6 million (pre-tax) related to severance and other employee
benefits due to the approximately 175 employees affected by the planned shutdowns. These charges were included in administrative and general expense on each of EME's and Midwest Generation's
consolidated statements of operations.
Note 17. Condensed Combined Debtors' Financial Information (EME only)
The financial statements below represent the condensed combined financial statement of the Debtor Entities. Non-debtor EME subsidiaries are accounted for as non-consolidated subsidiaries
in these financial statements, as such, their net loss is included as "Equity in loss of non-debtor entities, net of
tax" in the Debtors' Statements of Operations and its net assets are included as "Investment in non-debtor entities" in the Debtors' Statements of Financial Position.
Intercompany
transactions among the Debtor Entities have been eliminated in the condensed combined financial statements of the Debtor Entities contained here.
F-104
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 17. Condensed Combined Debtors' Financial Information (EME only) (Continued)
Debtor Entities' Condensed Combined Statements of Operations
|
|
|
|
|
|
|
|
|
|
Years Ended
December 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
Operating revenues
|
|
$
|
826
|
|
$
|
901
|
|
Operating expenses
|
|
|
(1,517
|
)
|
|
(1,262
|
)
|
Other income (expense)
|
|
|
45
|
|
|
(226
|
)
|
Reorganization items
|
|
|
(120
|
)
|
|
(43
|
)
|
Provision for income taxes
|
|
|
(41
|
)
|
|
(153
|
)
|
Income from Operations of Discontinued Subsidiaries
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to debtor entities
|
|
|
(803
|
)
|
|
(783
|
)
|
Equity in loss of non-debtor entities, net of tax
|
|
|
133
|
|
|
(142
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Debtors
|
|
$
|
(670
|
)
|
$
|
(925
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debtors Entities' Condensed Combined Statements of Comprehensive Loss
|
|
|
|
|
|
|
|
|
|
Years Ended
December 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
Net Loss
|
|
$
|
(670
|
)
|
$
|
(925
|
)
|
Other comprehensive loss, net of tax
|
|
|
77
|
|
|
(44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Loss
|
|
|
(593
|
)
|
$
|
(969
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debtor Entities' Condensed Combined Statements of Financial Position
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
Total current assets
|
|
|
838
|
|
$
|
638
|
|
Investments in unconsolidated affiliates
|
|
|
146
|
|
|
152
|
|
Property, plant and equipment, less accumulated depreciation of $555 and $845 at respective dates
|
|
|
898
|
|
|
1,428
|
|
Investment in non-debtor entities
|
|
|
2,042
|
|
|
2,019
|
|
Total other assets
|
|
|
873
|
|
|
974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
4,797
|
|
$
|
5,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-105
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 17. Condensed Combined Debtors' Financial Information (EME only) (Continued)
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
Total current liabilities
|
|
|
250
|
|
$
|
94
|
|
Liabilities subject to compromise
|
|
|
4,014
|
|
|
3,959
|
|
Deferred taxes
|
|
|
117
|
|
|
131
|
|
Other long-term liabilities
|
|
|
155
|
|
|
295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
4,536
|
|
$
|
4,479
|
|
Total equity
|
|
|
261
|
|
|
732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
4,797
|
|
$
|
5,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debtors' Condensed Combined Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
Years Ended
December 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
Operating cash flows from continuing operations
|
|
$
|
(3
|
)
|
$
|
(598
|
)
|
Operating cash flows from discontinued operations, net
|
|
|
(2
|
)
|
|
(46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(5
|
)
|
|
(644
|
)
|
Net cash provided by financing activities
|
|
|
223
|
|
|
173
|
|
Investing cash flows from continuing operations
|
|
|
40
|
|
|
(109
|
)
|
Investing cash flows from discontinued operations, net
|
|
|
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
40
|
|
|
(140
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents from continuing operations
|
|
|
260
|
|
|
(534
|
)
|
Cash and cash equivalents at beginning of period from continuing operations
|
|
|
425
|
|
|
959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period from continuing operations
|
|
|
685
|
|
|
425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents from discontinued operations
|
|
|
(2
|
)
|
|
(77
|
)
|
Cash and cash equivalents at beginning of period from discontinued operations
|
|
|
2
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period from discontinued operations
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for reorganization items, net
|
|
$
|
72
|
|
$
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-106
EDISON MISSION ENERGY AND SUBSIDIARIES
MIDWEST GENERATION, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 18. Quarterly Financial Data (unaudited) (EME, Midwest Generation)
The following table summarizes the unaudited quarterly statements of operations for EME.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
307
|
|
$
|
315
|
|
$
|
385
|
|
$
|
324
|
|
Operating loss
|
|
|
(47
|
)
|
|
(63
|
)
|
|
(431)
|
(1)
|
|
(38
|
)
|
Loss from continuing operations
|
|
|
(81
|
)
|
|
(102
|
)
|
|
(447
|
)
|
|
(12
|
)
|
Income (loss) from operations of discontinued subsidiaries, net of tax
|
|
|
(1
|
)
|
|
18
|
|
|
(1
|
)
|
|
(15
|
)
|
Net loss
|
|
$
|
(82
|
)
|
$
|
(84
|
)
|
$
|
(448
|
)
|
$
|
(27
|
)
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
343
|
|
$
|
324
|
|
$
|
340
|
|
$
|
280
|
|
Operating loss
|
|
|
(48
|
)
|
|
(98
|
)
|
|
(71
|
)
|
|
(111
|
)
|
Loss from continuing operations
|
|
|
(58
|
)
|
|
(75
|
)
|
|
(86
|
)
|
|
(578
|
)
|
Income (loss) from operations of discontinued subsidiaries, net of tax
|
|
|
(24
|
)
|
|
(29
|
)
|
|
(76
|
)
|
|
17
|
|
Net loss
|
|
$
|
(82
|
)
|
$
|
(104
|
)
|
$
|
(162
|
)
|
$
|
(561
|
)
|
-
(1)
-
Reflects
a $464 million pre-tax ($297 million, after tax) impairment charge related to Will County. For more information, see
Note 13Asset Impairments and Other Charges.
The
following table summarizes the unaudited quarterly statements of operations for Midwest Generation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
179
|
|
$
|
203
|
|
$
|
232
|
|
$
|
203
|
|
Operating loss
|
|
|
(60
|
)
|
|
(40
|
)
|
|
(463)
|
(1)
|
|
(23
|
)
|
Provision (benefit) for income taxes
|
|
|
|
|
|
1
|
|
|
(1
|
)
|
|
(17
|
)
|
Net loss
|
|
$
|
(74
|
)
|
$
|
(74
|
)
|
$
|
(471
|
)
|
$
|
(14
|
)
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
233
|
|
$
|
213
|
|
$
|
253
|
|
$
|
193
|
|
Operating loss
|
|
|
(33
|
)
|
|
(88
|
)
|
|
(39
|
)
|
|
(1,437)
|
(2)
|
Benefit for income taxes
|
|
|
(5
|
)
|
|
(27
|
)
|
|
(7
|
)
|
|
(23
|
)
|
Net loss
|
|
$
|
(9
|
)
|
$
|
(42
|
)
|
$
|
(12
|
)
|
$
|
(1,401
|
)
|
-
(1)
-
Reflects
a $464 million pre-tax ($297 million, after tax) impairment charge related to Will County. For more information, see
Note 13Asset Impairments and Other Charges.
-
(2)
-
Reflects
a $1.4 billion pre-tax charge for a valuation allowance recorded by Midwest Generation on its note receivable from EME. For more
information, see Note 15Related Party Transactions.
F-107
NRG Energy, Inc.
12,671,977 Shares of Common Stock
PROSPECTUS
March , 2014
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses payable by the Registrant in connection with the sale of Common Stock being
registered. All amounts are estimates except for the SEC registration fee and The New York Stock Exchange fee.
|
|
|
|
|
Item
|
|
Amount to
be paid
|
|
SEC registration fee
|
|
$
|
45,080
|
|
The New York Stock Exchange fee
|
|
|
24,077
|
|
Legal fees and expenses
|
|
|
300,000
|
|
Accounting fees and expenses
|
|
|
35,000
|
|
Transfer Agent fees and expenses
|
|
|
25,000
|
|
Miscellaneous expenses
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
579,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 14. Indemnification of Directors and Officers.
Section 145(a) of the Delaware General Corporation Law provides that a corporation shall have the power to indemnify any person
who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an
action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption
that such person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that such person's conduct was unlawful.
Section 145(b)
of the Delaware General Corporation Law provides that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such
person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the
II-1
case,
such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.
Section 145(c)
of the Delaware General Corporation Law provides that to the extent that a present or former director or officer of a corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in Section 145(a) and (b), or in defense of any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.
Section 145(d)
of the Delaware General Corporation Law provides that any indemnification under Section 145(a) and (b) (unless ordered by a court) shall be made by
the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because
such person has met the applicable standard of conduct set forth in Section 145(a) and (b). Such determination shall be made with respect to a person who is a director or officer at the time of
such determination (1) by a majority vote of the directors who were not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such
directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (4) by the stockholders.
Section 145(e)
of the Delaware General Corporation Law provides that expenses (including attorneys' fees) incurred by an officer or director of the corporation in defending any
civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in
Section 145. Such expenses (including attorneys' fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request of the
corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the
corporation deems appropriate.
Section 145(f)
of the Delaware General Corporation Law provides that the indemnification and advancement of expenses provided by, or granted pursuant to, Section 145 shall
not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses
arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or the bylaws after the occurrence of
the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the
provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
Section 145(g)
of the Delaware General Corporation Law provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such
capacity, or arising out of such person's capacity as such, whether or not the corporation would have the power to indemnify such person against such liability under Section 145.
II-2
NRG Energy, Inc. Amended and Restated Certificate of Incorporation and By-laws
The Amended and Restated Certificate of Incorporation of the Registrant provides, to the fullest extent permitted by Delaware law and
except as otherwise provided in its by-laws, no director of the Registrant shall be liable to it or its stockholders for monetary damages for breach of fiduciary duty. Furthermore, the Second Amended
and Restated By-laws of the Registrant provide that each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement as a witness) in any
action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer of the Registrant or a wholly owned
subsidiary of the Registrant or, while a director or officer of the Registrant or a wholly owned subsidiary of the Registrant, is or was serving at the request of the Registrant or a wholly owned
subsidiary of the Registrant as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of another corporation or of a partnership, joint venture, limited liability
company, trust or other entity or enterprise, including service with respect to an employee benefit plan (an "indemnitee"), shall be indemnified and held harmless by the Registrant to the fullest
extent authorized by Delaware Law, against all expense, liability and loss (including attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid in settlement) reasonably incurred
or suffered by such indemnitee in connection therewith, and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee, partner, member, manager,
trustee, fiduciary or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators. This right of indemnification includes the Registrant's obligation to provide an
advance of expenses, although the indemnitee may be required to repay such an advance if there is a judicial determination that the indemnitee was not entitled to the indemnification.
The
Second Amended and Restated By-laws of the Registrant also permits the Registrant to purchase and maintain insurance on its own behalf and on behalf of any other person who is or was
a director, officer, employee or agent of the Registrant or a subsidiary of the Registrant or was serving at request of the Registrant or a subsidiary of the Registrant.
Item 15. Recent Sales of Unregistered Securities.
Not applicable.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
See the Exhibit Index attached to this registration statement, which is incorporated by reference
herein.
(b) Financial Statement Schedules.
Schedules not listed above have been omitted because the information required
to be set forth therein is not applicable or is shown in the financial statements or notes thereto.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed
in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid
by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
II-3
question
of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The
undersigned Registrant hereby undertakes that:
-
1.
-
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:
-
(i)
-
include
any prospectus required by section 10(a)(3) of the Securities Act;
-
(ii)
-
reflect
in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
-
(iii)
-
include
any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to
such information in the registration statement.
-
2.
-
For
the purpose of determining any liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
-
3.
-
To
remove from registration by means of post-effective amendment any of the securities being registered which remain unsold at the termination of the
offering.
-
4.
-
For
the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the Registrant is subject to Rule 430C, each prospectus
filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in
a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
-
5.
-
For
the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the
undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the
II-4
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Post-Effective Amendment
No. 1 to Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Princeton, New Jersey, on March 21, 2014.
|
|
|
|
|
|
|
|
|
NRG Energy, Inc.
|
|
|
By:
|
|
/s/ BRIAN E. CURCI
|
|
|
|
|
Name:
|
|
Brian E. Curci
|
|
|
|
|
Title:
|
|
Secretary
|
Pursuant
to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
*
David W. Crane
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
March 21, 2014
|
*
Kirkland B. Andrews
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
March 21, 2014
|
*
Ronald B. Stark
|
|
Chief Accounting Officer (Principal Accounting Officer)
|
|
March 21, 2014
|
*
Howard E. Cosgrove
|
|
Chairman of the Board
|
|
March 21, 2014
|
*
Edward R. Muller
|
|
Vice Chairman of the Board
|
|
March 21, 2014
|
*
E. Spencer Abraham
|
|
Director
|
|
March 21, 2014
|
Kirbyjon H. Caldwell
|
|
Director
|
|
|
*
Lawrence S. Coben
|
|
Director
|
|
March 21, 2014
|
*
Terry G. Dallas
|
|
Director
|
|
March 21, 2014
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
*
William E. Hantke
|
|
Director
|
|
March 21, 2014
|
*
Paul W. Hobby
|
|
Director
|
|
March 21, 2014
|
*
Gerald Luterman
|
|
Director
|
|
March 21, 2014
|
Kathleen A. McGinty
|
|
Director
|
|
|
*
Anne C. Schaumburg
|
|
Director
|
|
March 21, 2014
|
*
Evan J. Silverstein
|
|
Director
|
|
March 21, 2014
|
*
Thomas H. Weidemeyer
|
|
Director
|
|
March 21, 2014
|
*
Walter R. Young
|
|
Director
|
|
March 21, 2014
|
-
*
-
The
undersigned by signing his name hereto, signs and executes this Post-Effective Amendment No. 1 to Registration Statement on Form S-1
pursuant to the Power of Attorney executed by the above named signatories and previously filed with the Securities and Exchange Commission on October 18, 2013.
|
|
|
|
|
|
|
By:
|
|
/s/ BRIAN E. CURCI
Brian E. Curci
Attorney-in-fact
|
|
|
|
|
EXHIBIT INDEX
|
|
|
|
Exhibit Number
|
|
Description
|
|
2.1
|
|
Restructuring Support Agreement, dated October 2, 2013, by and among NRG Energy, Inc. and the undersigned noteholders thereto (previously filed).
|
|
|
|
|
|
2.2
|
|
Summary Term Sheet, dated September 9, 2013, by and among NRG Energy, Inc. and the holders of senior unsecured notes of Edison Mission Energy that are signatories thereto (see Exhibit A to Exhibit 2.1
to this Registration Statement on Form S-1) (previously filed).
|
|
|
|
|
|
2.3
|
|
Plan Sponsor Agreement, dated October 18, 2013, by and among NRG Energy, Inc., NRG Energy Holdings Inc., Edison Mission Energy, certain of Edison Mission Energy's debtor subsidiaries, the Official Committee of
Unsecured Creditors of Edison Mission Energy and its debtor subsidiaries, the PoJo Parties (as defined therein) and the proponent noteholders thereto (previously filed).
|
|
|
|
|
|
2.4
|
|
Asset Purchase Agreement, dated October 18, 2013, by and among NRG Energy, Inc., Edison Mission Energy and NRG Energy Holdings Inc. (see Exhibit A to Exhibit 2.3 to this Registration Statement on
Form S-1) (previously filed).
|
|
|
|
|
|
2.5
|
|
Debtors' Third Amended Joint Chapter 11 Plan of Reorganization (filed herewith).
|
|
|
|
|
|
3.1
|
(a)
|
Amended and Restated Certificate of Incorporation of NRG Energy, Inc. (incorporated herein by reference to NRG Energy, Inc.'s Quarterly Report on Form 10-Q filed on May 3, 2012).
|
|
|
|
|
|
3.1
|
(b)
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of NRG Energy, Inc. (incorporated by reference to NRG Energy, Inc.'s Current Report on Form 8-K filed on December 14,
2012).
|
|
|
|
|
|
3.2
|
|
Second Amended and Restated By-Laws of NRG Energy, Inc. (incorporated herein by reference to NRG Energy, Inc.'s Current Report on Form 8-K filed on December 14, 2012).
|
|
|
|
|
|
4.1
|
|
Specimen of Certificate representing common stock of NRG Energy, Inc. (incorporated herein by reference to NRG Energy, Inc.'s Quarterly Report on Form 10-Q filed on August 4, 2006).
|
|
|
|
|
|
5.1
|
|
Form of Opinion of David R. Hill, Executive Vice President and General Counsel of NRG Energy, Inc. (previously filed).
|
|
|
|
|
|
10.1
|
|
Note Agreement, dated August 20, 1993, between NRG Energy, Inc., Energy Center, Inc. and each of the purchasers named therein (incorporated herein by reference to NRG Energy, Inc.'s Registration
Statement on Form S-1, as amended, Registration No. 333-33397).
|
|
|
|
|
|
10.2
|
|
Master Shelf and Revolving Credit Agreement, dated August 20, 1993, between NRG Energy, Inc., Energy Center, Inc., The Prudential Insurance Registrants of America and each Prudential Affiliate, which
becomes party thereto (incorporated herein by reference to NRG Energy, Inc.'s Registration Statement on Form S-1, as amended, Registration No. 333-33397).
|
|
|
|
|
|
10.3
|
|
Form of NRG Energy Inc. Long-Term Incentive Plan Deferred Stock Unit Agreement for Officers and Key Management (incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on
March 30, 2005).
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10.4
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Form of NRG Energy, Inc. Long-Term Incentive Plan Deferred Stock Unit Agreement for Directors (incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on March 30,
2005).
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10.5
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Form of NRG Energy, Inc. Long-Term Incentive Plan Non-Qualified Stock Option Agreement (incorporated herein by reference to NRG Energy, Inc.'s quarterly report on Form 10-Q filed on November 9,
2004).
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Exhibit Number
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Description
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10.6
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Form of NRG Energy, Inc. Long-Term Incentive Plan Restricted Stock Unit Agreement (incorporated herein by reference to NRG Energy, Inc.'s quarterly report on Form 10-Q filed on November 9,
2004).
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10.7
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Form of NRG Energy, Inc. Long Term Incentive Plan Performance Unit Agreement (incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 23, 2010.)
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10.8
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Amended and Restated Annual Incentive Plan for Designated Corporate Officers (incorporated herein by reference to NRG Energy, Inc.'s 2009 proxy statement on Schedule 14A filed on June 16, 2009).
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10.9
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Railroad Car Full Service Master Leasing Agreement, dated as of February 18, 2005, between General Electric Railcar Services Corporation and NRG Power Marketing Inc. (incorporated herein by reference to NRG
Energy, Inc.'s annual report on Form 10-K for the quarter ended March 30, 2005).
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10.10
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Purchase Agreement (West Coast Power) dated as of December 27, 2005, by and among NRG Energy, Inc., NRG West Coast LLC (Buyer), DPC II Inc. (Seller) and Dynegy, Inc. (incorporated herein by
reference to NRG Energy, Inc.'s current report on Form 8-K filed on December 28, 2005).
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10.11
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Purchase Agreement (Rocky Road Power), dated as of December 27, 2005, by and among Termo Santander Holding, L.L.C. (Buyer), Dynegy, Inc., NRG Rocky Road LLC (Seller) and NRG Energy, Inc.
(incorporated herein by reference to NRG Energy, Inc.'s current report on Form 8-K filed on December 28, 2005).
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10.12
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Stock Purchase Agreement, dated as of August 10, 2005, by and between NRG Energy, Inc. and Credit Suisse First Boston Capital LLC (incorporated herein by reference to NRG Energy, Inc.'s current report
on Form 8-K filed on August 11, 2005).
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10.13
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Agreement with respect to the Stock Purchase Agreement, dated December 19, 2008, by and between NRG Energy, Inc. and Credit Suisse First Boston Capital LLC (incorporated herein by reference to NRG Energy,
Inc.'s annual report on Form 10-K filed on February 12, 2009).
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10.14
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Investor Rights Agreement, dated as of February 2, 2006, by and among NRG Energy, Inc. and Certain Stockholders of NRG Energy, Inc. set forth therein (incorporated herein by reference to NRG Energy,
Inc.'s current report on Form 8-K filed on February 8, 2006).
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10.15
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Terms and Conditions of Sale, dated as of October 5, 2005, between Texas Genco II LP and Freight Car America, Inc., (including the Proposal Letter and Amendment thereto (incorporated herein by
reference to NRG Energy, Inc.'s annual report on Form 10-K filed on March 7, 2006).
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10.16
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Amended and Restated Employment Agreement, dated December 4, 2008, between NRG Energy, Inc. and David Crane (incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on
February 12, 2009).
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10.17
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CEO Compensation Table (incorporated herein by reference to NRG Energy, Inc.'s current report on Form 8-K filed on December 9, 2009).
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10.18
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Limited Liability Company Agreement of NRG Common Stock Finance I LLC (incorporated herein by reference to NRG Energy, Inc.'s current report on Form 8-K filed on August 10, 2006).
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10.19
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Note Purchase Agreement, dated August 4, 2006, between NRG Common Stock Finance I LLC, Credit Suisse International and Credit Suisse Securities (USA) LLC (incorporated herein by reference to NRG Energy,
Inc.'s current report on Form 8-K filed on August 10, 2006).
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Exhibit Number
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Description
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10.20
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Amendment Agreement, dated February 27, 2008, to the Note Purchase Agreement by and among NRG Common Stock Finance I LLC, Credit Suisse International, and Credit Suisse Securities (USA) LLC
(incorporated herein by reference to NRG Energy, Inc.'s quarterly report on Form 10-Q filed on May 1, 2008).
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10.21
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Amendment Agreement, dated December 19, 2008, to the Note Purchase Agreement by and among NRG Common Stock Finance I LLC, Credit Suisse International, and Credit Suisse Securities (USA) LLC
(incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 12, 2009).
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10.22
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Amendment Agreement, dated December 19, 2008, to the Note Purchase Agreement by and among NRG Common Stock Finance I LLC, Credit Suisse International, and Credit Suisse Securities (USA) LLC
(incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 12, 2009).
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10.23
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Agreement with respect to Note Purchase Agreement, dated December 19, 2008, by and among NRG Common Stock Finance I LLC, Credit Suisse International, and Credit Suisse Securities (USA) LLC
(incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 12, 2009).
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10.24
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Preferred Interest Purchase Agreement, dated August 4, 2006, between NRG Common Stock Finance I LLC, Credit Suisse Capital LLC and Credit Suisse Securities (USA) LLC, as agent (incorporated herein by
reference to NRG Energy, Inc.'s current report on Form 8-K filed on August 10, 2006).
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10.25
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Preferred Interest Amendment Agreement, dated February 27, 2008, by and among NRG Common Stock Finance I LLC, Credit Suisse International, and Credit Suisse Securities (USA) LLC (incorporated herein by
reference to NRG Energy, Inc.'s quarterly report on Form 10-Q filed on May 1, 2008).
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10.26
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Preferred Interest Amendment Agreement, dated December 19, 2008, by and among NRG Common Stock Finance I LLC, Credit Suisse International, and Credit Suisse Securities (USA) LLC (incorporated herein by
reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 12, 2009).
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10.27
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Preferred Interest Amendment Agreement, dated December 19, 2008, by and among NRG Common Stock Finance I LLC, Credit Suisse International, and Credit Suisse Securities (USA) LLC (incorporated herein by
reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 12, 2009).
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10.28
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Agreement with respect to Preferred Interest Purchase Agreement, dated December 19, 2008, by and among NRG Common Stock Finance I LLC, Credit Suisse International, and Credit Suisse Securities (USA) LLC
(incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 12, 2009).
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10.29
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Agreement with respect to Preferred Interest Purchase Agreement, dated December 19, 2008, by and among NRG Common Stock Finance II LLC, Credit Suisse International, and Credit Suisse Securities (USA) LLC
(incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 12, 2009).
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10.30
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Amended and Restated Long-Term Incentive Plan (incorporated herein by reference to NRG Energy, Inc.'s 2009 proxy statement on Schedule 14A filed on June 16, 2009).
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10.31
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NRG Energy, Inc. Executive Change-in-Control and General Severance Agreement, dated December 9, 2008 (incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on
February 12, 2009).
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Exhibit Number
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Description
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10.32
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Amended and Restated Contribution Agreement (NRG), dated March 25, 2008, by and among Texas Genco Holdings, Inc., NRG South Texas LP and NRG Nuclear Development Company LLC and Certain Subsidiaries
Thereof (incorporated herein by reference to NRG Energy, Inc.'s quarterly report on Form 10-Q filed on May 1, 2008).
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10.33
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Contribution Agreement (Toshiba), dated February 29, 2008, by and between Toshiba Corporation and NRG Nuclear Development Company LLC (incorporated herein by reference to NRG Energy, Inc.'s quarterly report
on Form 10-Q filed on May 1, 2008).
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10.34
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Multi-Unit Agreement, dated February 29, 2008, by and among Toshiba Corporation, NRG Nuclear Development Company LLC and NRG Energy, Inc (incorporated herein by reference to NRG Energy, Inc.'s quarterly
report on Form 10-Q filed on May 1, 2008).
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10.35
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Amended and Restated Operating Agreement of Nuclear Innovation North America LLC, dated May 1, 2008 (incorporated herein by reference to NRG Energy, Inc.'s quarterly report on Form 10-Q filed on
May 1, 2008).
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10.36
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LLC Membership Purchase Agreement between Reliant Energy, Inc. and NRG Retail LLC, dated as of February 28, 2009 (incorporated herein by reference to NRG Energy, Inc.'s quarterly report on
Form 10-Q filed on April 30, 2009).
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10.37
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Project Agreement, Settlement Agreement and Mutual Release, dated March 1, 2010, by and among by and among Nuclear Innovation North America LLC, the City of San Antonio acting by and through the City Public
Service Board of San Antonio, a Texas municipal utility, NINA Texas 3 LLC and NINA Texas 4 LLC, and solely for purposes of certain sections of the Settlement Agreement, by NRG Energy, Inc and NRG South Texas LP (incorporated
herein by reference to NRG Energy, Inc.'s current report on Form 8-K filed on March 2, 2010).
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10.38
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STP 3 & 4 Owners Agreement, dated March 1, 2010, by and among Nuclear Innovation North America LLC, the City of San Antonio, NINA Texas 3 LLC and NINA Texas 4 LLC (incorporated
herein by reference to NRG Energy, Inc.'s current report on Form 8-K filed on March 2, 2010).
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10.39
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2009 Executive Change-in-Control and General Severance Plan (incorporated herein by reference to NRG Energy, Inc.'s current report on Form 8-K filed on April 1, 2010).
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10.40
|
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Investment and Option Agreement by and among Nuclear Innovation North America LLC, Nuclear Innovation North America Investments Holdings LLC and TEPCO Nuclear Energy America LLC, dated as of May 10,
2010 (incorporated herein by reference to NRG Energy, Inc.'s quarterly report on Form 10-Q filed on August 2, 2010).
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10.41
|
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Parent Company Agreement by and among NRG Energy, Inc., Nuclear Innovation North America LLC, TEPCO and TEPCO Nuclear Energy America LLC, dated as of May 10, 2010 (incorporated herein by reference to
NRG Energy, Inc.'s quarterly report on Form 10-Q filed on August 2, 2010).
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10.42
|
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Letter of Credit and Reimbursement Agreement, dated as of June 30, 2010 (incorporated herein by reference to NRG Energy, Inc.'s current report on Form 8-K filed on July 1, 2010).
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10.43
|
|
Letter of Credit and Reimbursement Agreement, dated as of June 30, 2010 (incorporated herein by reference to NRG Energy, Inc.'s current report on Form 8-K filed on July 1, 2010).
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10.44
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The NRG Energy, Inc. Amended and Restated Long Term Incentive Plan (incorporated herein by reference to NRG Energy, Inc.'s current report on Form 8-K filed on August 3, 2010).
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Exhibit Number
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|
Description
|
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10.45
|
|
Amended and Restated Credit Agreement, dated July 1, 2011, by and among NRG Energy, Inc., the lenders party thereto, and the joint lead bookrunners and joint lead arrangers party thereto (incorporated herein by
reference to NRG Energy, Inc.'s current report on Form 8-K filed on July 5, 2011).
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10.46
|
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Form of Market Stock Unit Grant Agreement (incorporated herein by reference to NRG Energy, Inc.'s current report on Form 8-K/A filed on September 12, 2011).
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10.47
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Registration Rights Agreement, dated September 24, 2012, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Securities Inc., Merrill, Lynch, Pierce, Fenner & Smith Incorporated,
Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. Incorporated and RBS
Securities Inc., as initial purchasers (incorporated herein by reference to NRG Energy, Inc.'s current report on Form 8-K filed on September 24, 2012).
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10.48
|
|
NRG 2010 Stock Plan for GenOn Employees (incorporated herein by reference to NRG Energy, Inc.'s annual report).
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10.49
|
|
Revolving Credit Agreement among GenOn Energy, Inc., as Borrower, GenOn Americas, Inc., as Borrower, the several lenders from time to time parties hereto, and NRG Energy, Inc., as Administrative Agent,
dated as of December 14, 2012 (incorporated by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 27, 2013).
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10.50
|
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First Amendment Agreement, dated as of February 6, 2013, to the Amended and Restated Credit Agreement and the Second Amended and Restated Collateral Trust Agreement (incorporated by reference to NRG Energy,
Inc.'s quarterly report on Form 10-Q filed on May 7, 2013).
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10.51
|
|
Second Amendment Agreement, dated as of June 4, 2013, to the Amended and Restated Credit Agreement and the Second Amended and Restated Collateral Trust Agreement (incorporated herein by reference to Exhibit 10.1
to NRG Energy, Inc.'s current report on Form 8-K filed on June 10, 2013).
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10.52
|
|
NRG Energy, Inc. Long-Term Incentive Plan Market Stock Unit Agreement (incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 28, 2014).
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10.53
|
|
NRG Energy, Inc. 2010 Stock Plan for GenOn Employees Market Stock Unit Agreement (incorporated herein by reference to NRG Energy, Inc.'s annual report on Form 10-K filed on February 28, 2014).
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21.1
|
|
Subsidiaries of NRG Energy, Inc. (incorporated herein by reference to NRG Energy Inc.'s annual report on Form 10-K filed on February 28, 2014).
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23.1
|
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm for NRG Energy, Inc.
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23.2
|
|
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm of Edison Mission Energy.
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23.3
|
|
Consent of David R. Hill, Executive Vice President and General Counsel of NRG Energy, Inc. (included in Exhibit 5.1).
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23.4
|
|
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm of Midwest Generation, LLC.
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Exhibit Number
|
|
Description
|
|
24.1
|
|
Power of Attorney (previously filed).
|
-
-
Schedules
have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished to the
Securities and Exchange Commission upon request.
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