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SEC Filing Details

10-K
NRG ENERGY, INC. filed this Form 10-K on 03/01/2018
Entire Document
 

Interest Expense
NRG's interest expense decreased by $42 million for the year ended December 31, 2016, compared to the same period in 2015, due to the following:
 
(In millions)
Decrease due to the repurchases of Senior Notes at the end of 2015 and 2016
$
(40
)
Decrease in derivative interest expense from changes in fair value of interest rate swaps
(19
)
Decrease due to the redemption of outstanding bonds related to NRG Peakers Finance Company
(8
)
Decrease due to the termination of Alta X and XI term loans and the related interest rate swaps in 2015
(6
)
Increase due to the replacement of the 2018 Term Loan Facility with the 2023 Term Loan Facility
9

Increase due to the issuance of NRG Yield Inc. 3.25% Convertible Senior Notes due 2020 and NRG Yield Operating LLC Revolving Credit Facility issued in 2015
8

Increase due to the issuance of NRG Yield Operating LLC 5.00% Senior Notes due 2026
7

Increase due to $200 million of debt issued by CVSR Holdco in August 2016
4

Other
3

 
$
(42
)
Income Tax Expense
For the year ended December 31, 2016, NRG recorded an income tax expense of $5 million on a pre-tax loss of $978 million. For the same period in 2015, NRG recorded an income tax expense of $1,345 million on pre-tax loss of $4,986 million. The effective tax rate was (0.5)% and (27.0)% for the years ended December 31, 2016 and 2015, respectively.
For the year ended December 31, 2016, 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.
 
Year Ended December 31,
 
2016
 
2015
 
(In millions
except as otherwise stated)
(Loss) before income taxes
$
(978
)
 
$
(4,986
)
Tax at 35%
(342
)
 
(1,745
)
State taxes

 
(215
)
Foreign operations
10

 
1

Federal and state tax credits, excluding PTCs

 
(5
)
Valuation allowance - current period activities
398

 
3,023

Impact of non-taxable entity earnings
22

 
(10
)
Book goodwill impairment

 
340

Net interest accrued on uncertain tax positions
1

 
(3
)
Production tax credits
(26
)
 
(33
)
Recognition of uncertain tax benefits
2

 
(15
)
Tax expense attributable to consolidated partnerships
(1
)
 
12

State rate change including true-up to current period activity
(59
)
 
(7
)
Other

 
2

Income tax expense
$
5

 
$
1,345

Effective income tax rate
(0.5
)%
 
(27.0
)%
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. 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.

89