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 <table style="font-size:10pt; font-family:'Times New Roman',times,serif;"> <tr> <td> 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 Requirements." 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 nine months ended September 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 noncontrolling interests, which were immaterial. 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 November 6, 2009, the date the financial statements were issued. Cash, Cash Equivalents and Short-term Investments         Cash, cash equivalents and short-term investments as of September 30, 2009 and December 31, 2008 consisted of the following: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 20%; WIDTH: 60%; 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="24"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="67"></td> <td style="FONT-FAMILY: times" width="24"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="64"></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: 47pt; 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: 45pt; 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="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"> 138</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; 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="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"> 1,070</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 style="HEIGHT: 0px" 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 style="HEIGHT: 0px" 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 style="HEIGHT: 0px" 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"> </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; 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="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"> 1,070</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; 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="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 style="HEIGHT: 0px" 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; 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="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; 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="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"> 1,210</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; 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>         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."         At September 30, 2009 and December 31, 2008, EME had classified all marketable debt securities as held-to-maturity. 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 September 30, 2009 and December 31, 2008 consisted of the following: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 20%; WIDTH: 60%; 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"></td> <td style="FONT-FAMILY: times" width="24"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="67"></td> <td style="FONT-FAMILY: times" width="24"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="64"></td> <td style="FONT-FAMILY: times" width="12"></td> </tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">   </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" nowrap="nowrap" align="center" colspan="2"> <div style="MARGIN-BOTTOM: 0pt; WIDTH: 47pt; 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: 45pt; 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">   </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"> Coal, fuel oil and other raw materials</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"> 154</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"> 131</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"> Spare parts, materials and supplies</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"> 63</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"> 58</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"> </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" valign="bottom"> Total</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"> 217</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"> 189</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"> </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> New Accounting Requirements Accounting Requirements Adopted General Principles         In June 2009, the FASB issued an accounting standard establishing the FASB Accounting Standards Codification (Codification) as 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 action, 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. The Codification is not intended to change U.S. GAAP or guidance issued by the Securities and Exchange Commission. EME adopted the Codification effective July 1, 2009. Subsequent Events         In May 2009, the FASB issued authoritative guidance that sets forth the period subsequent to 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 this guidance effective April 1, 2009. The adoption had no impact on EME's consolidated results of operations, financial position or cash flows. Fair Value Measurements and Disclosures         In April 2009, the FASB issued authoritative guidance affirming 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. This 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, this guidance 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 guidance also requires disclosures on a more disaggregated basis for investments in debt and equity securities measured at fair value. EME adopted this guidance effective April 1, 2009. The adoption had no impact on EME's consolidated results of operations, financial position or cash flows.         In April 2009, the FASB issued authoritative guidance requiring 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 guidance effective April 1, 2009. Since this guidance impacts disclosure only, the adoption did not have an impact on EME's consolidated results of operations, financial position or cash flows. For disclosures, see Note 2Fair Value Measurements.         Effective January 1, 2009, EME adopted authoritative guidance on nonrecurring fair value measurements of nonfinancial assets and liabilities. The adoption did not have a material impact on EME's consolidated financial statements. InvestmentsDebt and Equity Securities         In April 2009, the FASB amended existing authoritative guidance which determines whether impairment is other than temporary for debt securities. Under this amended guidance, 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 guidance effective April 1, 2009, resulting in increased disclosures. The adoption did not have an impact on EME's consolidated results of operations, financial position or cash flows. For disclosures, see "Cash, Cash Equivalents and Short-term Investments." InvestmentsEquity Method and Joint Ventures         In November 2008, the FASB clarified the accounting for certain transactions and impairment considerations involving equity method investments. Effective January 1, 2009, EME adopted this guidance prospectively. The adoption had no impact on EME's consolidated financial statements. Business Combinations         In April 2009, the FASB issued amended authoritative guidance addressing 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 guidance 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 guidance 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. The initial adoption had no impact on EME's consolidated results of operations, financial position or cash flows.         In December 2007, the FASB issued authoritative guidance establishing 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. This guidance determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This guidance applies prospectively to business combinations for which the acquisition date is on or after fiscal years beginning January 1, 2009. The initial adoption had no impact on EME's consolidated results of operations, financial position or cash flows. Consolidation         In December 2007, the FASB issued authoritative guidance requiring 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 statements 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 guidance effective January 1, 2009. In accordance with this guidance, 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 on noncontrolling interests, see Note 7Noncontrolling Interests. Derivatives and Hedging         In March 2008, the FASB issued authoritative guidance requiring 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 guidance effective January 1, 2009. Since this guidance impacts disclosure only, the adoption did not have an impact on EME's consolidated results of operations, financial position or cash flows. For information regarding EME's risk management activities, including derivative instruments and hedging activities, see Note 3Derivative Instruments. IntangiblesGoodwill and Other         In April 2008, the FASB issued authoritative guidance amending the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The intent of the guidance is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset under business combinations and other GAAP. EME adopted this guidance effective January 1, 2009. The adoption had no impact on EME's consolidated results of operations, financial position or cash flows. Accounting Requirements Not Yet Adopted CompensationRetirement Benefits         In December 2008, the FASB issued authoritative guidance requiring additional postretirement benefit plan asset disclosures by employers 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 guidance is effective for years ending after December 15, 2009 and therefore, EME will adopt this guidance at year-end 2009. This guidance will impact disclosures only and will not have an impact on EME's consolidated results of operations, financial position or cash flows. ConsolidationVariable Interest Entities         In June 2009, the FASB issued an amendment on the accounting and disclosure requirements for the consolidation of variable interest entities. This amendment 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 this amendment on January 1, 2010 and is currently evaluating the impact that the adoption will have on its consolidated financial statements. Fair Value Measurements         In August 2009, the FASB issued an accounting standards update that provides additional guidance on how companies should measure liabilities at fair value. While reaffirming the existing definition of fair value, the update reintroduced the concept of entry value into the determination of fair value. Entry value is the amount an entity would receive to enter into an identical liability. Under the new guidance, the fair value of a liability is not adjusted to reflect the impact of contractual restrictions that prevent its transfer. If the quoted price of a liability when traded as an asset includes the effect of a credit enhancement (i.e., a guarantee), this effect should be excluded from the measurement of the liability. EME adopted this guidance effective October 1, 2009. This guidance is not expected to have a material impact on its consolidated financial statements. Restricted Cash and Deposits         Cash balances that are restricted under margining agreements are classified as restricted cash included in current assets, as such amounts change frequently based on forward market prices. Cash balances that are restricted to pay amounts required for lease payments or to provide collateral are classified as restricted deposits.</td></tr></table> Note 1. Summary of Significant Accounting Policies Basis of Presentation         EME's significant accounting policies false false No definition available. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true