|NRG ENERGY, INC. filed this Form 10-K on 02/29/2016|
NRG's interest expense increased by $9 million for the year ended December 31, 2015, compared to the same period in 2014 due to the following:
Income Tax Expense
For the year ended December 31, 2015, NRG recorded income tax expense of $1,342 million on a pre-tax loss of $5,094 million. For the same period in 2014, NRG recorded an income tax expense of $3 million on pre-tax income of $135 million. The effective tax rate was (26.3)% and 2.2% for the years ended December 31, 2015, and 2014, respectively.
For the year ended December 31, 2015, NRG's overall effective tax rate was different than the statutory rate of 35% primarily due to recording of a valuation allowance on the federal and certain state net deferred tax assets that may not be realizable under a “more likely than not” measurement. In addition, a portion of the book goodwill impairment is classified as a permanent reversal impacting the effective tax rate.
The effective income tax rate may vary from period to period depending on, among other factors, the geographic and business mix of earnings and losses and changes in valuation allowances in accordance with ASC 740, Income Taxes, or ASC 740. These factors and others, including the Company's history of pre-tax earnings and losses, are taken into account in assessing the ability to realize deferred tax assets.