SEC Filings

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

Mark-to-market for Economic Hedging Activities
Mark-to-market for economic hedging activities includes asset-backed hedges that have not been designated as cash flow hedges and ineffectiveness on cash flow hedges. Total net mark-to-market results decreased by $385 million during the year ended December 31, 2015, compared to the same period in 2014.
The breakdown of gains and losses included in operating revenues and operating costs and expenses by region was as follows:
 
For the Year Ended December 31, 2015
 
 
 
NRG Business
 
 
 
 
 
 
 
 
 
NRG Home
 
Gulf Coast
 
East
 
West
 
B2B
 
NRG Renew
 
NRG Yield
 
Eliminations (a)
 
Total
 
(In millions)
Mark-to-market results in operating revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reversal of previously recognized unrealized (gains)/losses on settled positions related to economic hedges
$

 
$
(408
)
 
$
(288
)
 
$
6

 
$
(1
)
 
$
(3
)
 
$
(2
)
 
$
(46
)
 
$
(742
)
Reversal of acquired gain positions related to economic hedges

 

 
(84
)
 

 

 

 

 

 
(84
)
Net unrealized gains on open positions related to economic hedges

 
342

 
174

 
4

 
5

 

 

 
57

 
582

Total mark-to-market (losses)/gains in operating revenues
$

 
$
(66
)
 
$
(198
)
 
$
10

 
$
4

 
$
(3
)
 
$
(2
)
 
$
11

 
$
(244
)
Mark-to-market results in operating costs and expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reversal of previously recognized unrealized losses/(gains) on settled positions related to economic hedges
$
256

 
$
34

 
$
15

 
$
(1
)
 
$
117

 
$

 
$

 
$
46

 
$
467

Reversal of acquired gain positions related to economic hedges
(3
)
 

 

 
(18
)
 
(1
)
 

 

 

 
(22
)
Net unrealized (losses)/gains on open positions related to economic hedges
(192
)
 
(51
)
 
(93
)
 
1

 
(181
)
 

 

 
(57
)
 
(573
)
Total mark-to-market gains/(losses) in operating costs and expenses
$
61

 
$
(17
)
 
$
(78
)
 
$
(18
)
 
$
(65
)
 
$

 
$

 
$
(11
)
 
$
(128
)
(a)
Represents the elimination of the intercompany activity between NRG Home and NRG Business.
Mark-to-market results consist of unrealized gains and losses. The settlement of these transactions is reflected in the same caption as the items being hedged.
For the year ended December 31, 2015, the $244 million loss in operating revenues from economic hedge positions was driven primarily by the reversal of previously recognized unrealized gains on contracts that settled during the period and the reversal of acquired contracts largely offset by an increase in value of open positions as a result of decreases in ERCOT and PJM electricity prices. The $128 million loss in operating costs and expenses from economic hedge positions was driven primarily by a decrease in the value of open positions as a result of decreases in ERCOT electricity and coal prices and the reversal of acquired contracts, largely offset by the reversal of previously recognized unrealized losses on contracts that settled during the period.
In accordance with ASC 815, the following table represents the results of the Company's financial and physical trading of energy commodities for the year ended December 31, 2015, and 2014. The realized and unrealized financial and physical trading results are included in operating revenue. The Company's trading activities are subject to limits within the Company's Risk Management Policy and are primarily transacted through BETM.
 
Year ended December 31,
(In millions)
2015
 
2014
Trading gains/(losses)
 
 
 
Realized
$
57

 
$
136

Unrealized
(76
)
 
14

Total trading (losses)/gains
$
(19
)
 
$
150


72