1.0.0.3 false Summary of Significant Accounting Policies false 1 $ false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 2 Notes to Consolidated Financial Statements 0 eme_NotesToFinancialStatementsAbstract eme false na duration string Notes to Financial Statements [Abstract] false false false false false true false false false 1 false false 0 0 false false Notes to Financial Statements [Abstract] false 3 Summary of Significant Accounting Policies 1 us-gaap_SignificantAccountingPoliciesTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=Content-Type content="text/html; charset=utf-8"> <META content="MSHTML 6.00.6000.16825" name=GENERATOR></HEAD> <BODY> Note 1. Summary of Significant Accounting Policies Basis of Presentation         EME's significant accounting policies were described in "Note 1Summary of Significant Accounting Policies" on page 110 of EME's annual report on Form 10-K for the year ended December 31, 2008. EME follows the same accounting policies for interim reporting purposes, with the exception of accounting principles adopted as of January 1, 2009 as discussed below in "New Accounting Pronouncements." This quarterly report should be read in conjunction with such financial statements.         In the opinion of management, all adjustments, including recurring accruals, have been made that are necessary to fairly state the consolidated financial position and results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America for the periods covered by this quarterly report on Form 10-Q. The results of operations for the six months ended June 30, 2009 are not necessarily indicative of the operating results for the full year.         Certain prior year reclassifications have been made to conform to the current year financial statement presentation pertaining to the adoption of SFAS No. 160. Except as indicated, amounts reflected in the notes to the consolidated financial statements relate to continuing operations of EME.         Management has performed an evaluation of subsequent events through August 7, 2009, the date the financial statements were issued. Cash, Cash Equivalents and Short-term Investments         Cash, cash equivalents and short-term investments as of June 30, 2009 and December 31, 2008 consisted of the following:  <DIV align=center> <TABLE cellSpacing=0 cellPadding=0 border=0> <TBODY> <TR> <TD style="FONT-FAMILY: times" align=left width=10></TD> <TD style="FONT-FAMILY: times" align=left width=240></TD> <TD style="FONT-FAMILY: times" width=24></TD> <TD style="FONT-FAMILY: times" align=right width=5></TD> <TD style="FONT-FAMILY: times" width=29></TD> <TD style="FONT-FAMILY: times" width=24></TD> <TD style="FONT-FAMILY: times" align=right width=5></TD> <TD style="FONT-FAMILY: times" width=44></TD> <TD style="FONT-FAMILY: times" width=3></TD></TR> <TR vAlign=bottom> <TH style="FONT-FAMILY: times" align=left colSpan=2>  </TH> <TH style="FONT-FAMILY: times"> </TH> <TH style="FONT-FAMILY: times" noWrap align=middle colSpan=2> <DIV style="MARGIN-BOTTOM: 0pt; WIDTH: 27pt; BORDER-BOTTOM: #000000 1pt solid">June 30, 2009 </DIV></TH> <TH style="FONT-FAMILY: times"> </TH> <TH style="FONT-FAMILY: times" noWrap align=middle colSpan=2> <DIV style="MARGIN-BOTTOM: 0pt; WIDTH: 45pt; BORDER-BOTTOM: #000000 1pt solid">December 31, 2008 </DIV></TH> <TH style="FONT-FAMILY: times"> </TH></TR> <TR vAlign=bottom> <TH style="FONT-FAMILY: times" align=left colSpan=2>  </TH> <TH style="FONT-FAMILY: times"> </TH> <TH style="FONT-FAMILY: times" align=middle colSpan=5>(in millions) </TH> <TH style="FONT-FAMILY: times"> </TH></TR> <TR vAlign=bottom bgColor=#cceeff> <TD style="FONT-FAMILY: times" colSpan=2> Cash</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>85</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>31</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR style="FONT-SIZE: 1.5pt" vAlign=top> <TD style="FONT-FAMILY: times" colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=bottom bgColor=white> <TD style="FONT-FAMILY: times" colSpan=2> Money market funds</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>1,560</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>1,581</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=bottom bgColor=#cceeff> <TD style="FONT-FAMILY: times" colSpan=2> U.S. government agency securities</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right></TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>164</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=bottom bgColor=white> <TD style="FONT-FAMILY: times" colSpan=2> Commercial paper</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right></TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>30</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=bottom bgColor=#cceeff> <TD style="FONT-FAMILY: times" colSpan=2> Time deposits (certificates of deposit)</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>11</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>1</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR style="FONT-SIZE: 1.5pt" vAlign=top> <TD style="FONT-FAMILY: times" colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=bottom bgColor=white> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> Total cash equivalents</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>1,571</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>1,776</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR style="FONT-SIZE: 1.5pt" vAlign=top> <TD style="FONT-FAMILY: times" colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=bottom bgColor=#cceeff> <TD style="FONT-FAMILY: times" colSpan=2> Commercial paper</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>1</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>1</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=bottom bgColor=white> <TD style="FONT-FAMILY: times" colSpan=2> Money market funds</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>1</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>3</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR style="FONT-SIZE: 1.5pt" vAlign=top> <TD style="FONT-FAMILY: times" colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=bottom bgColor=#cceeff> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> Total short-term investments</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>2</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>4</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR style="FONT-SIZE: 1.5pt" vAlign=top> <TD style="FONT-FAMILY: times" colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=bottom bgColor=white> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> Total cash, cash equivalents and short-term investments</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>1,658</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>1,811</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR style="FONT-SIZE: 1.5pt" vAlign=top> <TD style="FONT-FAMILY: times" colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV>         Cash equivalents, with the exception of money market funds, were stated at amortized cost plus accrued interest. The carrying value of cash equivalents equals the fair value as all investments have maturities of less than three months. For further discussion of money market funds, see Note 2Fair Value Measurements. For a discussion of restricted cash, see "Restricted Cash." <A name=page_xxx45001_1_7></A>         At June 30, 2009 and December 31, 2008, EME had classified all marketable debt securities as held-to-maturity under SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The securities were carried at amortized cost plus accrued interest, which was equal to its fair value. Held-to-maturity securities all mature within one year. Inventory         Inventory is stated at the lower of weighted average cost or market. Inventory at June 30, 2009 and December 31, 2008 consisted of the following:  <DIV align=center> <TABLE cellSpacing=0 cellPadding=0 border=0> <TBODY> <TR> <TD style="FONT-FAMILY: times" align=left width=253></TD> <TD style="FONT-FAMILY: times" width=24></TD> <TD style="FONT-FAMILY: times" align=right width=5></TD> <TD style="FONT-FAMILY: times" width=26></TD> <TD style="FONT-FAMILY: times" width=24></TD> <TD style="FONT-FAMILY: times" align=right width=5></TD> <TD style="FONT-FAMILY: times" width=44></TD> <TD style="FONT-FAMILY: times" width=3></TD></TR> <TR vAlign=bottom> <TH style="FONT-FAMILY: times" align=left>  </TH> <TH style="FONT-FAMILY: times"> </TH> <TH style="FONT-FAMILY: times" noWrap align=middle colSpan=2> <DIV style="MARGIN-BOTTOM: 0pt; WIDTH: 27pt; BORDER-BOTTOM: #000000 1pt solid">June 30, 2009 </DIV></TH> <TH style="FONT-FAMILY: times"> </TH> <TH style="FONT-FAMILY: times" noWrap align=middle colSpan=2> <DIV style="MARGIN-BOTTOM: 0pt; WIDTH: 45pt; BORDER-BOTTOM: #000000 1pt solid">December 31, 2008 </DIV></TH> <TH style="FONT-FAMILY: times"> </TH></TR> <TR vAlign=bottom> <TH style="FONT-FAMILY: times" align=left>  </TH> <TH style="FONT-FAMILY: times"> </TH> <TH style="FONT-FAMILY: times" align=middle colSpan=5>(in millions) </TH> <TH style="FONT-FAMILY: times"> </TH></TR> <TR vAlign=top bgColor=#cceeff> <TD style="FONT-FAMILY: times"> Coal, fuel oil and other raw materials</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>158</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>131</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=top bgColor=white> <TD style="FONT-FAMILY: times"> Spare parts, materials and supplies</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>62</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>58</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR style="FONT-SIZE: 1.5pt" vAlign=top> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR vAlign=top bgColor=#cceeff> <TD style="FONT-FAMILY: times"> Total</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>220</TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times" align=right>$</TD> <TD style="FONT-FAMILY: times" align=right>189</TD> <TD style="FONT-FAMILY: times"> </TD></TR> <TR style="FONT-SIZE: 1.5pt" vAlign=top> <TD style="FONT-FAMILY: times"> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD> <TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" align=right colSpan=2> </TD> <TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV> New Accounting Pronouncements Accounting Principles Adopted Statement of Financial Accounting Standards No. 165         In May 2009, the FASB issued SFAS No. 165, "Subsequent Events." SFAS No. 165 sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; the circumstances under which an entity should recognize these events or transactions; and the disclosures that an entity should make. EME adopted SFAS No. 165 effective April 1, 2009. The adoption of this standard had no impact on EME's consolidated results of operations, financial position or cash flows. FSP SFAS No. 157-4         In April 2009, the FASB issued FSP SFAS No. 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions that Are Not Orderly." FSP SFAS No. 157-4 affirms the objective of a fair value measurement, which is to identify the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction at the measurement date between market participants ("exit price") under current market conditions. FSP SFAS No. 157-4 includes guidance on identifying circumstances that indicate when there is no active market or transactions where the price inputs being used represent distressed or forced sales. If either of these conditions exists, FSP SFAS No. 157-4 provides additional direction for estimating fair value and requires disclosure of a change in valuation technique (and the related inputs) resulting from the application of this position and to quantify its effects, if practicable. This position also requires disclosures on a more disaggregated basis for investments in debt and equity securities measured at fair value. EME adopted FSP SFAS No. 157-4 effective April 1, 2009. The adoption of this position had no impact on EME's consolidated results of operations, financial position or cash flows. FSP SFAS No. 115-2 and SFAS No. 124-2         In April 2009, the FASB issued FSP SFAS No. 115-2 and SFAS No. 124-2, "Recognition and Presentation of Other-Than-Temporary Impairments." This position amends existing guidance for <A name=page_xxx45001_1_8></A>determining whether impairment is other than temporary for debt securities. Under this position, an entity writes down to fair value through earnings, impaired debt securities that it currently intends to sell or for which it is more likely than not it will be required to sell before the anticipated recovery. If an entity does not intend and will not be required to sell a debt security but it is probable that the entity will not collect all amounts due, the entity will separate the other-than-temporary impairment into two components: 1) the amount due to credit loss would be recognized in earnings, and 2) the remaining portion would be recognized in other comprehensive income. EME adopted this position effective April 1, 2009, resulting in increased disclosures. The adoption of this position did not have an impact on EME's consolidated results of operations, financial position or cash flows. For disclosures, see "Cash and Cash Equivalents and Short-term Investments." FSP SFAS No. 107-1 and APB No. 28-1         In April 2009, the FASB issued FSP SFAS No. 107-1 and APB No. 28-1, "Interim Disclosures about Fair Value of Financial Instruments." This position requires disclosures about the fair value of all financial instruments, for which it is practicable to estimate that fair value, for interim reporting periods as well as annual statements. EME adopted this position effective April 1, 2009. Since FSP SFAS No. 107-1 and APB No. 28-1 impacts disclosure only, the adoption of this position did not have an impact on EME's consolidated results of operations, financial position or cash flows. For disclosures, see Note 2Fair Value Measurements. Statement of Financial Accounting Standards No. 157         Effective January 1, 2009, EME adopted SFAS No. 157 for nonrecurring fair value measurements of nonfinancial assets and liabilities. The adoption of SFAS No. 157 for nonrecurring fair value measurements did not have a material impact on EME's consolidated financial statements. Statement of Financial Accounting Standards No. 141(R)         In December 2007, the FASB issued SFAS No. 141(R), which establishes principles and requirements for how the acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at the acquisition date fair value. SFAS No. 141(R) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after fiscal years beginning January 1, 2009. Adoption of this standard had no impact on EME's consolidated results of operations, financial position or cash flows because there were no business combinations during the first six months of 2009. Statement of Financial Accounting Standards No. 141(R)-1         In April 2009, the FASB issued FSP SFAS No. 141(R)-1, "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies" to amend guidance in SFAS No. 141(R). FSP SFAS No. 141(R)-1 addresses the initial recognition, measurement and subsequent accounting for assets and liabilities arising from contingencies in a business combination, and requires that such assets acquired or liabilities assumed be initially recognized at fair value at the acquisition date if fair value can be determined during the measurement period. If the acquisition-date fair value cannot be determined, the asset acquired or liability assumed arising from a contingency is recognized only if certain criteria are met. This position also requires that a systematic and rational basis for subsequently measuring and accounting for the assets or liabilities be developed depending on their nature. This position was effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after fiscal years beginning January 1, 2009. <A name=page_xxx45001_1_9></A>Adoption of this standard had no impact on EME's consolidated results of operations, financial position or cash flows because there were no business combinations during the first six months of 2009. Statement of Financial Accounting Standards No. 160         In December 2007, the FASB issued SFAS No. 160, which requires an entity to present noncontrolling interests that reflect the ownership interests in subsidiaries held by parties other than the entity, within the equity section but separate from the entity's equity in the consolidated financial statements. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interests to be clearly identified and presented on the face of the consolidated statement of income; changes in ownership interests to be accounted for similarly as equity transactions; and when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary and the gain or loss on the deconsolidation of the subsidiary to be measured at fair value. EME adopted this pronouncement effective January 1, 2009. In accordance with this standard, EME reclassified noncontrolling interests of $80 million at December 31, 2008 to a component of equity on EME's consolidated balance sheet. For additional information regarding the adoption of SFAS No. 160, see Note 7Noncontrolling Interests. Statement of Financial Accounting Standards No. 161         In March 2008, the FASB issued SFAS No. 161, which requires additional disclosures related to derivative instruments, including how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. EME adopted this pronouncement effective January 1, 2009. Since SFAS No. 161 impacts disclosures only, the adoption of this standard did not have an impact on EME's consolidated results of operations, financial position or cash flows. For additional information regarding the adoption of SFAS No. 161, see Note 3Derivative Instruments. FSP SFAS No. 142-3         In April 2008, the FASB issued FSP SFAS No. 142-3, "Determination of the Useful Life of Intangible Assets," which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, "Goodwill and Other Intangible Assets." The intent of the position is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R) and other GAAP. EME adopted this pronouncement effective January 1, 2009. The adoption of this position had no impact on EME's consolidated results of operations, financial position or cash flows. EITF Issue No. 08-6         In November 2008, the FASB ratified the consensus in EITF Issue No. 08-6, "Equity Method Investment Accounting Considerations." This issue clarifies the accounting for certain transactions and impairment considerations involving equity method investments. Effective January 1, 2009, EME adopted this issue prospectively. The adoption had no impact on EME's consolidated financial statements. <A name=page_xxx45001_1_10></A> Accounting Principles Not Yet Adopted FSP SFAS No. 132(R)-1         In December 2008, the FASB issued FSP SFAS No. 132(R)-1, "Employers' Disclosures about Postretirement Benefit Plan Assets." This position requires additional plan asset disclosures about the major categories of assets, the inputs and valuation techniques used to measure fair value, the level within the fair value hierarchy, the effect of using significant unobservable inputs (Level 3) and significant concentrations of risk. This position is effective for years ending after December 15, 2009 and therefore, EME will adopt FSP SFAS No. 132(R)-1 at year-end 2009. FSP SFAS No. 132(R)-1 will impact disclosures only and will not have an impact on EME's consolidated results of operations, financial position or cash flows. Statement of Financial Accounting Standards No. 167         In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation No. 46(R)." SFAS No. 167 changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity's purpose and design and a company's ability to direct the activities of the entity that most significantly impact the entity's economic performance. EME will adopt SFAS No. 167 on January 1, 2010 and is currently evaluating the impact, if any, that the adoption of this standard will have on its consolidated financial statements. Statement of Financial Accounting Standards No. 168         In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles." This Statement establishes the Codification to become the source of authoritative, nongovernmental U.S. GAAP superseding existing FASB, American Institute of Certified Public Accountants (AICPA), Emerging Issues Task Force (EITF) and related literature. Following this Statement, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or EITF Abstracts. Instead, the FASB will issue Accounting Standards Updates. Two levels of U.S. GAAP will exist: authoritative and non-authoritative. Codification is not intended to change U.S. GAAP or guidance issued by the SEC. However, Codification will affect the way EME researches accounting issues and references U.S. GAAP in its notes to consolidated financial statements and MD&A. EME will adopt this Statement in the third quarter of 2009. Restricted Cash         Cash balances that are restricted to pay amounts required for lease payments, margining, or to provide collateral are classified as restricted cash. Cash balances that are restricted under margining agreements are classified as short term as such amounts change frequently based on forward market prices. </BODY></HTML> Note 1. Summary of Significant Accounting Policies Basis of Presentation         EME's significant accounting false false No definition available. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true