|NRG ENERGY, INC. filed this Form 10-K on 03/01/2018|
NOLs, Deferred Tax Assets and Uncertain Tax Position Implications, under ASC 740
As of December 31, 2017, the Company had domestic pre-tax book loss of $1,557 million and foreign pre-tax book income of $17 million. For the year ended December 31, 2017, the Company generated an NOL of $630 million due to a current year taxable loss. As of December 31, 2017, the Company has cumulative domestic federal NOL carryforwards of $2.8 billion, which will begin expiring in 2026 and cumulative state NOL carryforwards of $2.2 billion for financial statement purposes. In addition, NRG has cumulative foreign NOL carryforwards of $224 million, which do not have an expiration date. As a result of the Company's tax position, including the benefit of a worthless stock deduction of $9.5 billion upon GenOn emerging from bankruptcy and upon evaluation of the Tax Cuts and Jobs Act potential impact on taxable income and based on current forecasts, the Company anticipates income tax payments, primarily due to state and local jurisdictions, of up to $20 million in 2018.
The Company has recorded a long term receivable of $64 million representing refundable alternative minimum tax credits from the IRS, net of sequestration, which are anticipated to be received from 2019 through 2022 pursuant to the 50% annual limitation as enacted by the Tax Act upon repeal of corporate AMT effective January 1, 2018.
In addition to these amounts, the Company has $30 million of tax effected uncertain tax benefits for which the Company has recorded a non-current tax liability of $33 million until such final resolution with the related taxing authority. The $33 million non-current tax liability for uncertain tax benefits is from positions taken on various state returns, including accrued interest.
The Company is no longer subject to U.S. federal income tax examinations for years prior to 2015. With few exceptions, state and local income tax examinations are no longer open for years before 2010.
Off-Balance Sheet Arrangements
Obligations under Certain Guarantee Contracts
NRG and certain of its subsidiaries enter into guarantee arrangements in the normal course of business to facilitate commercial transactions with third parties. These arrangements include financial and performance guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. See also Item 15 — Note 26, Guarantees, to the Consolidated Financial Statements for additional discussion.
Retained or Contingent Interests
NRG does not have any material retained or contingent interests in assets transferred to an unconsolidated entity.
Obligations Arising Out of a Variable Interest in an Unconsolidated Entity
Variable interest in Equity investments — As of December 31, 2017, NRG has several investments with an ownership interest percentage of 50% or less in energy and energy-related entities that are accounted for under the equity method of accounting. Several of these investments are variable interest entities for which NRG is not the primary beneficiary.
NRG's pro-rata share of non-recourse debt held by unconsolidated affiliates was approximately $606 million as of December 31, 2017. This indebtedness may restrict the ability of these subsidiaries to issue dividends or distributions to NRG. See also Item 15 — Note 16, Investments Accounted for by the Equity Method and Variable Interest Entities, to the Consolidated Financial Statements for additional discussion.