1.0.0.3 false Variable Interest Entities 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 Variable Interest Entities 1 us-gaap_ScheduleOfVariableInterestEntitiesTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <table style="font-size:10pt; font-family:'Times New Roman',times,serif;"> <tr> <td> Note 8. Variable Interest Entities Projects or Entities that are Consolidated         EME has purchased a majority interest in a number of wind projects under joint development agreements with third-party developers. At September 30, 2009 and December 31, 2008, EME had majority interests in 15 wind projects with a total generating capacity of 700 MW that had minority interests held by others. The projects are located in Iowa, Minnesota, New Mexico, Nebraska and Texas. Minority interest holders have key rights over matters such as budgets, incurrence of debt, and sale of the project, and in certain cases, receive a higher allocation of income and losses after a minimum return is earned by EME. In determining that EME was the primary beneficiary, a key factor was the conclusion that the power sales agreements did not constitute a variable interest since the agreements have a fixed unit price and do not absorb expected losses. Based on the allocation of income and losses, EME expects to earn a majority of the expected gains or absorb the majority of the expected losses from these entities and, therefore, determined that it is the primary beneficiary.         The following table presents summarized financial information of the wind projects that had minority interests held by others consolidated by EME at September 30, 2009 and December 31, 2008: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 15%; WIDTH: 70%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left" width="10"></td> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="91"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="88"></td> <td style="FONT-FAMILY: times" width="12"></td> </tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left" colspan="2">   </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" nowrap="nowrap" align="center" colspan="2"> <div style="MARGIN-BOTTOM: 0pt; WIDTH: 66pt; BORDER-BOTTOM: #000000 1pt solid"> September 30, 2009 </div></th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" nowrap="nowrap" align="center" colspan="2"> <div style="MARGIN-BOTTOM: 0pt; WIDTH: 64pt; BORDER-BOTTOM: #000000 1pt solid"> December 31, 2008 </div></th> <th style="FONT-FAMILY: times">  </th></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left" colspan="2">   </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="5"> (in millions) </th> <th style="FONT-FAMILY: times">  </th></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Current assets</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> $</td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 37</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> $</td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 31</td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Net property, plant and equipment</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 964</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 957</td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Other long-term assets</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 2</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 2</td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2">  </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> Total assets</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> $</td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 1,003</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> $</td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 990</td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2">  </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Current liabilities</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> $</td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 25</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> $</td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 29</td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Long-term obligations net of current maturities</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 21</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 25</td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Deferred revenues</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 20</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 15</td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Other long-term liabilities</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 20</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 18</td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2">  </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> Total liabilities</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> $</td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 86</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> $</td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 87</td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2">  </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Noncontrolling interest</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> $</td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 78</td> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> $</td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 77</td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2">  </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr></table></div> </div>         Assets serving as collateral for the debt obligations had a carrying value of $82 million and $85 million at September 30, 2009 and December 31, 2008, respectively, and primarily consist of property, plant and equipment. The consolidated statements of income and cash flow for the nine months ended September 30, 2009 includes $8 million of pre-tax loss and $35 million of operating cash flow related to variable interest entities that are consolidated. Projects that are not Consolidated         EME has a number of investments in power projects that are accounted for under the equity method. Under the equity method, the project assets and related liabilities are not consolidated on EME's consolidated balance sheet. Rather, EME's financial statements reflect its investment in each entity and it records only its proportionate ownership share of net income or loss.         Entities formed to own these projects are generally structured with a management committee in which EME exercises significant influence but cannot exercise unilateral control over the operating, funding or construction activities of the project entity. Two of these projects have secured long-term debt to finance the assets constructed and/or acquired by them. These financings generally are secured by a pledge of the assets of the project entity, but do not provide for any recourse to EME. Accordingly, a default on a long-term financing of a project could result in foreclosure on the assets of the project entity resulting in a loss of some or all of EME's project investment, but would not require EME to contribute additional capital. At September 30, 2009, entities which EME has accounted for under the equity method had indebtedness of $251 million, of which $113 million is proportionate to EME's ownership interest in these projects. At December 31, 2008, entities which EME has accounted for under the equity method had indebtedness of $294 million, of which $128 million is proportional to EME's ownership interest in these projects.         As of September 30, 2009 and December 31, 2008, EME has five significant variable interests in projects that are not consolidated consisting of the Big 4 projects and the Sunrise project. These projects are natural gas-fired facilities with a total generating capacity of 1,782 MW. An operations and maintenance subsidiary of EME operates the Big 4 projects, but EME does not supply the fuel consumed or purchase the power generated by these facilities. EME concluded that the power purchase agreements for these projects represented variable interests in the related projects and, therefore, it was not the primary beneficiary of these entities. Accordingly, EME continues to account for its variable interests under the equity method. EME's maximum exposure to loss in these variable interest entities is limited to its investment in these entities, which totaled $353 million and $326 million as of September 30, 2009 and December 31, 2008, respectively, and is classified as investments in unconsolidated affiliates on EME's consolidated balance sheets.         As of September 30, 2009 and December 31, 2008, EME has a 50% interest in the March Point project. EME has guaranteed, jointly and severally with Texaco Inc., the obligations of March Point Cogeneration Company under its project power sales agreements to repay capacity payments to the project's power purchaser in the event that the power sales agreements terminate, March Point Cogeneration Company abandons the project, or the project fails to return to normal operations within a reasonable time after a complete or partial shutdown, during the term of the power sales agreements. The obligations under this indemnification agreement as of September 30, 2009 and December 31, 2008, if payment were required, would be $44 million and $56 million, respectively. EME has not recorded a liability related to the indemnity. EME's maximum exposure to loss at September 30, 2009 is $51 million. During the first quarter of 2009, EME commenced recording its share of equity in income from the March Point project. EME recorded $4 million and $7 million during the third quarter and nine months ended September 30, 2009, respectively. To the extent that cash is received from the project in excess of EME's investment, such amount will be recorded as equity in income.</td></tr></table> Note 8. Variable Interest Entities Projects or Entities that are Consolidated         EME has purchased a false false No definition available. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true