Income Taxes

Effective Tax Rate

The income tax provision consisted of the following:



	Three months ended September 30,						Nine months ended September 30,
(In millions except otherwise noted)	2012			2011			2012			2011
Loss before income taxes	$	(105	)	$	(135	)	$	(185	)	$	(509	)
Income tax benefit	(113		)	(80		)	(246		)	(815		)
Effective tax rate	107.6		%	59.3		%	133.0		%	160.1		%

For the three and nine months ended September 30, 2012, NRG's overall effective tax rate was different than the statutory rate of 35% primarily due to the income tax benefits resulting from generation of ITCs from the Company's Agua Caliente solar project in Arizona and production tax credits, or PTCs, generated from certain Texas wind facilities.

For the three and nine months ended September 30, 2011, NRG's overall effective tax rate for both of these periods was different than the statutory rate of 35% primarily due to the recognition of previously uncertain tax benefits that were effectively settled upon audit examination for years 2004 through 2006 and that were mainly composed of net operating losses of $536 million, which had been classified as capital loss carryforwards for financial statement purposes.

Uncertain tax benefits

As of September 30, 2012, NRG has recorded a non-current tax liability of $67 million for uncertain tax benefits from positions taken on various state tax returns, including accrued interest. NRG has accrued interest related to these uncertain tax benefits of $2 million for the nine months ended September 30, 2012, and has accrued $15 million of interest and penalties since adoption. The Company recognizes interest and penalties related to uncertain tax benefits in income tax expense.

The Company is currently under federal examination for tax years 2007 through 2010 and continues to be under examination by various state and foreign tax jurisdictions for multiple years.

Tax Receivable and Payable

As of September 30, 2012, NRG recorded a current domestic tax receivable of $52 million, of which $24 million is related to federal cash grants filed, $18 million is related to property tax refunds as a result of the New York State Empire Zone program and $10 million relates to Federal income tax refunds for prior year tax return filings. As of September 30, 2012, NRG has a current tax payable of $15 million that represents a tax liability due for domestic state taxes of $13 million, as well as foreign taxes payable of $2 million. In addition, we have recorded a $51 million non-current asset for Empire Zone credits generated in 2010 through 2012, for which the receipt of cash is deferred pursuant to New York State law.