Business Acquisition (Notes) (NRG Yield)

6 Months Ended

Jun. 30, 2013

NRG Yield

Business Acquisition

Business Acquisition

Business Acquisition

On December 14, 2012, through its acquisition of GenOn Energy, Inc., or GenOn, NRG acquired 100% of the Marsh Landing project, or Marsh Landing, a 720 MW natural gas-fueled peaking facility being constructed near Antioch, California. In July 2013, NRG transferred ownership of Marsh Landing to NRG Yield LLC. Power generated from Marsh Landing is sold to Pacific Gas & Electric, or PG&E, under a 10 year PPA. In connection with the acquisition, NRG Yield assumed obligations under a credit agreement for up to $650 million in construction and permanent financing for the Marsh Landing generating facility. The Marsh Landing generating facility reached commercial operations on May 1, 2013.

The initial accounting for the business combination is not complete because the evaluation necessary to assess the fair values of certain net assets acquired is still in process. The provisional amounts are subject to revision until the evaluations are completed to the extent that any additional information is obtained about the facts and circumstances that existed as of the acquisition date. The allocation of the purchase price may be modified up to one year from the date of the acquisition as more information is obtained about the fair value of assets acquired and liabilities assumed. During the six months ended June 30, 2013, a measurement period adjustment was recorded increasing the provisional fair value of the acquired property, plant and equipment by $73 million, from $537 million to $610 million. Accordingly, the provisional fair value of the net assets acquired was $138 million. The primary driver for the revised fair value was the use of an income approach rather than a cost approach.