SEC Filings

10-K
NRG ENERGY, INC. filed this Form 10-K on 02/29/2016
Entire Document
 
                

 
For the Year Ended December 31, 2014
 
Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
 
Debt
Securities
 
Other
 
Trust Fund
Investments
 
Derivatives (a)
 
Total
 
(In millions)
Beginning balance as of January 1, 2014
$
16

 
$
10

 
$
56

 
$
13

 
$
95

Total gains/(losses) realized/unrealized:
 
 
 
 
 
 
 
 
 
Included in OCI
2

 

 

 

 
2

Included in earnings

 
1

 

 
(24
)
 
(23
)
Included in nuclear decommissioning obligations

 

 
(5
)
 

 
(5
)
Purchases

 

 
2

 
49

 
51

Contracts acquired in Dominion and EME acquisitions

 

 

 
39

 
39

Sales

 

 
(1
)
 

 
(1
)
Transfers into Level 3 (b)

 

 

 
2

 
2

 Transfer out of Level 3 (b)

 

 

 
1

 
1

Ending balance as of December 31, 2014
$
18

 
$
11

 
$
52

 
$
80

 
$
161

Gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of December 31, 2014
$

 
$

 
$

 
$
20

 
$
20

(a)
Consists of derivatives assets and liabilities, net.
(b)
Transfers in/out of Level 3 are related to the availability of external broker quotes, and are valued as of the end of the reporting period. All transfers in/out are with Level 2.
Realized and unrealized gains and losses included in earnings that are related to the energy derivatives are recorded in operating revenues and cost of operations.
Non-derivative fair value measurements
NRG's investments in debt securities are classified as Level 3 and consist of non-traded debt instruments that are valued based on third-party market value assessments.
The trust fund investments are held primarily to satisfy NRG's nuclear decommissioning obligations. These trust fund investments hold debt and equity securities directly and equity securities indirectly through commingled funds. The fair values of equity securities held directly by the trust funds are based on quoted prices in active markets and are categorized in Level 1. In addition, U.S. government and federal agency obligations are categorized as Level 1 because they trade in a highly liquid and transparent market. The fair values of corporate debt securities are based on evaluated prices that reflect observable market information, such as actual trade information of similar securities, adjusted for observable differences and are categorized in Level 2. Certain equity securities, classified as commingled funds, are analogous to mutual funds, are maintained by investment companies, and hold certain investments in accordance with a stated set of fund objectives. The fair value of the equity securities classified as commingled funds are based on net asset values per fund share (the unit of account), derived from the quoted prices in active markets of the underlying equity securities. However, because the shares in the commingled funds are not publicly quoted, not traded in an active market and are subject to certain restrictions regarding their purchase and sale, the commingled funds are categorized in Level 3. See also Note 6, Nuclear Decommissioning Trust Fund.

150