Edgar Filing: GenOn Energy, Inc.

10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



x		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

		For the Quarterly Period Ended: September 30, 2015

o		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

GenOn Energy, Inc.

(Exact name of registrant as specified in its charter)

75-0655566 (I.R.S. Employer Identification No.)

Commission File Number: 001-16455

GenOn Americas Generation, LLC

(Exact name of registrant as specified in its charter)

51-0390520 (I.R.S. Employer Identification No.)

Commission File Number: 333-63240

GenOn Mid-Atlantic, LLC

(Exact name of registrant as specified in its charter)

58-2574140 (I.R.S. Employer Identification No.)

Commission File Number: 333-61668



Delaware (State or other jurisdiction of incorporation or organization)		(609) 524-4500 (Registrants' telephone number, including area code)

211 Carnegie Center, Princeton, New Jersey (Address of principal executive offices)		08540 (Zip Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (As a voluntary filer not subject to filing requirements, the registrant nevertheless filed all reports which would have been required to be filed by Section 15(d) of the Exchange Act during the preceding 12 months had the registrant been required to file reports pursuant to Section 15(d) of the Exchange Act solely as a result of having registered debt securities under the Securities Act of 1933.)



GenOn Energy, Inc.	o	Yes	o	No
GenOn Americas Generation, LLC	o	Yes	o	No
GenOn Mid-Atlantic, LLC	o	Yes	o	No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



GenOn Energy, Inc.	x	Yes	o	No
GenOn Americas Generation, LLC	x	Yes	o	No
GenOn Mid-Atlantic, LLC	x	Yes	o	No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



	Large accelerated filer	Accelerated filer	Non-accelerated filer	Smaller reporting company
GenOn Energy, Inc.	o	o	x	o
GenOn Americas Generation, LLC	o	o	x	o
GenOn Mid-Atlantic, LLC	o	o	x	o
			(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



GenOn Energy, Inc.	o	Yes	x	No
GenOn Americas Generation, LLC	o	Yes	x	No
GenOn Mid-Atlantic, LLC	o	Yes	x	No

Each Registrant’s outstanding equity interests are held by its respective parent and there are no equity interests held by nonaffiliates.



Registrant		Parent
GenOn Energy, Inc.		NRG Energy, Inc.
GenOn Americas Generation, LLC		NRG Americas, Inc.
GenOn Mid-Atlantic, LLC		NRG North America LLC

This combined Form 10-Q is separately filed by GenOn Energy, Inc., GenOn Americas Generation, LLC and GenOn Mid-Atlantic, LLC. Information contained in this combined Form 10-Q relating to GenOn Energy, Inc., GenOn Americas Generation, LLC and GenOn Mid-Atlantic, LLC is filed by such registrant on its own behalf and each registrant makes no representation as to information relating to registrants other than itself.

NOTE: WHEREAS GENON ENERGY, INC., GENON AMERICAS GENERATION, LLC AND GENON MID-ATLANTIC, LLC MEET THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q, THIS COMBINED FORM 10-Q IS BEING FILED WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTION H(2).

TABLE OF CONTENTS



CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATON		2
GLOSSARY OF TERMS		3
PART I — FINANCIAL INFORMATION		5
	Item 1 — CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	5
	Item 2 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	36
	Item 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	55
	Item 4 — CONTROLS AND PROCEDURES	55
PART II — OTHER INFORMATION		56
	Item 1 — LEGAL PROCEEDINGS	56
	Item 1A — RISK FACTORS	56
	Item 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	56
	Item 3 — DEFAULTS UPON SENIOR SECURITIES	56
	Item 4 — MINE SAFETY DISCLOSURES	56
	Item 5 — OTHER INFORMATION	56
	Item 6 — EXHIBITS	57
	SIGNATURES	58

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

(GenOn, GenOn Americas Generation and GenOn Mid-Atlantic)

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The words "believe," "project," "anticipate," "plan," "expect," "intend," "estimate" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Registrants’ actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors, risks and uncertainties include the factors described under Item 1A - Risk Factors, in Part I, Item 1A of the Registrants' Annual Report on Form 10-K for the year ended December 31, 2014, and the following:


•	General economic conditions, changes in the wholesale power markets and fluctuations in the cost of fuel;


•	Volatile power supply costs and demand for power;

•

Hazards customary to the power production industry and power generation operations such as fuel and electricity price volatility, unusual weather conditions, catastrophic weather-related or other damage to facilities, unscheduled generation outages, maintenance or repairs, unanticipated changes to fuel supply costs or availability due to higher demand, shortages, transportation problems or other developments, environmental incidents, or electric transmission or gas pipeline system constraints and the possibility that the Registrants may not have adequate insurance to cover losses as a result of such hazards;


•	The effectiveness of the Registrants’ risk management policies and procedures, and the ability of the Registrants’ counterparties to satisfy their financial commitments;


•	Counterparties' collateral demands and other factors affecting the Registrants' liquidity position and financial condition;


•	The Registrants’ ability to operate their businesses efficiently, manage capital expenditures and costs tightly, and generate earnings and cash flows from their asset-based businesses in relation to their debt and other obligations;


•	The Registrants’ ability to enter into contracts to sell power and procure fuel on acceptable terms and prices;


•	The liquidity and competitiveness of wholesale markets for energy commodities;


•	Government regulation, including compliance with regulatory requirements and changes in market rules, rates, tariffs and environmental laws and increased regulation of CO₂ and other GHG emissions;


•	Price mitigation strategies and other market structures employed by ISOs or RTOs that result in a failure to adequately compensate the Registrants' generation units for all of their costs;


•	The Registrants’ ability to borrow additional funds and access capital markets, as well as GenOn’s substantial indebtedness and the possibility that the Registrants may incur additional indebtedness going forward; and


•	Operating and financial restrictions placed on the Registrants and their subsidiaries that are contained in the indentures governing GenOn’s outstanding notes, and in debt and other agreements of certain of the Registrants’ subsidiaries and project affiliates generally.

Forward-looking statements speak only as of the date they were made, and the Registrants undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause the Registrants’ actual results to differ materially from those contemplated in any forward-looking statements included in this Quarterly Report on Form 10-Q should not be construed as exhaustive.

GLOSSARY OF TERMS

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:



2014 Form 10-K		The Registrants' Annual Report on Form 10-K for the year ended December 31, 2014
ASC		The FASB Accounting Standards Codification, which the FASB established as the source of authoritative U.S. GAAP
ASU		Accounting Standards Updates, which reflect updates to the ASC
Average realized prices		Volume-weighted average power prices, net of average fuel costs and reflecting the impact of settled hedges
Bankruptcy Court		United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division
CAIR		Clean Air Interstate Rule
CenterPoint		CenterPoint Energy, Inc. and its subsidiaries, on and after August 31, 2002, and Reliant Energy, Incorporated and its subsidiaries prior to August 31, 2002
CFTC		U.S. Commodity Futures Trading Commission
CO2		Carbon Dioxide
CSAPR		Cross-State Air Pollution Rule
CWA		Clean Water Act
D.C. Circuit		U.S. Court of Appeals for the District of Columbia Circuit
Direct Energy		Direct Energy Business Marketing, LLC
Economic gross margin		Sum of energy revenue, capacity revenue, retail revenue and other revenue, less cost of sales
EPA		United States Environmental Protection Agency
Exchange Act		The Securities Exchange Act of 1934, as amended
FASB		Financial Accounting Standards Board
FCM		Forward Capacity Market
FERC		Federal Energy Regulatory Commission
FTRs		Financial Transmission Rights
FPA		Federal Power Act
GenOn		GenOn Energy, Inc. and, except where the context indicates otherwise, its subsidiaries
GenOn Americas Generation		GenOn Americas Generation, LLC and, except where the context indicates otherwise, its subsidiaries
GenOn Energy Holdings		GenOn Energy Holdings, Inc. and, except where the context indicates otherwise, its subsidiaries
GenOn Mid-Atlantic		GenOn Mid-Atlantic, LLC and, except where the context indicates otherwise, its subsidiaries, which include the coal generation units at two generating facilities under operating leases
GHG		Greenhouse Gases
HAPs		Hazardous Air Pollutants
ICAP		New York Installed Capacity
IPPNY		Independent Power Producers of New York
ISO		Independent System Operator, also referred to as RTO
ISO-NE		ISO New England Inc.
LIBOR		London Interbank Offered Rate
MATS		Mercury and Air Toxics Standards promulgated by the EPA
MC Asset Recovery		MC Asset Recovery, LLC
MDE		Maryland Department of the Environment
Mirant		GenOn Energy Holdings, Inc. (formerly known as Mirant Corporation) and, except where the context indicates otherwise, its subsidiaries
Mirant/RRI Merger		The merger completed on December 3, 2010 of Mirant Corporation and RRI Energy Inc. to form GenOn Energy, Inc.



Mirant Debtors		GenOn Energy Holdings, Inc. (formerly known as Mirant Corporation) and certain of its subsidiaries
MISO		Midcontinent Independent System Operator, Inc.
MMBtu		Million British Thermal Units
MW		Megawatt
MWh		Saleable megawatt hours net of internal/parasitic load megawatt-hours
NAAQS		National Ambient Air Quality Standards
Net Exposure		Counterparty credit exposure to GenOn, GenOn Americas Generation or GenOn Mid-Atlantic, as applicable, net of collateral
NERC		North American Electric Reliability Corporation
NextEra		NextEra Energy Resources, LLC
NO_x		Nitrogen Oxide
NPDES		National Pollution Discharge Elimination System
NPNS		Normal Purchase Normal Sale
NRG		NRG Energy, Inc. and, except where the context indicates otherwise, its subsidiaries
NRG Merger		The merger completed on December 14, 2012, whereby GenOn became a wholly owned subsidiary of NRG
NYISO		New York Independent System Operator
NYSPSC		New York State Public Service Commission
OCI		Other Comprehensive Income/(Loss)
PJM		PJM Interconnection, LLC
Plan		The plan of reorganization that was approved in conjunction with Mirant Corporation's emergence from bankruptcy protection on January 3, 2006
PPM		Parts Per Million
PSCs		Public Service Commissions
RCRA		Resource Conservation and Recovery Act of 1976
Registrants		GenOn, GenOn Americas Generation and GenOn Mid-Atlantic, collectively
REMA		NRG REMA LLC (formerly known as GenOn REMA, LLC)
RMR		Reliability Must-Run
RTO		Regional Transmission Organization
SCR		Selective Catalytic Reduction Control System
Securities Act		The Securities Act of 1933, as amended
SO₂		Sulfur Dioxide
U.S.		United States of America
U.S. GAAP		Accounting principles generally accepted in the United States

PART I - FINANCIAL INFORMATION

ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

GENON ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(In millions)
Operating Revenues
Operating revenues	$	648		$	713		$	1,950		$	2,300
Operating revenues — affiliate	(3		)	(4		)	6			17
Total operating revenues	645			709			1,956			2,317
Operating Costs and Expenses
Cost of operations	361			385			1,269			1,388
Cost of operations — affiliate	78			69			210			367
Depreciation and amortization	52			52			163			172
Impairment loss	—			60			—			60
General and administrative	—			19			—			60
General and administrative — affiliate	43			31			135			90
Acquisition-related transaction and integration costs	—			1			—			3
Total operating costs and expenses	534			617			1,777			2,140
Loss on sale of assets	—			—			—			(6		)
Operating Income	111			92			179			171
Other Income/(Expense)
Other income, net	—			2			4			4
Interest expense	(49		)	(46		)	(146		)	(140		)
Interest expense — affiliate	(3		)	(2		)	(8		)	(9		)
Total other expense	(52		)	(46		)	(150		)	(145		)
Income Before Income Taxes	59			46			29			26
Income tax expense	1			—			—			2
Net Income	$	58		$	46		$	29		$	24

See accompanying notes to condensed consolidated financial statements.

GENON ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Unaudited)



	Three months ended September 30,					Nine months ended September 30,
	2015		2014			2015			2014
	(In millions)
Net Income	$	58	$	46		$	29		$	24
Other Comprehensive (Loss)/Income, net of tax of $0:
Defined benefit plans	—		(5		)	(2		)	3
Other comprehensive (loss)/income	—		(5		)	(2		)	3
Comprehensive Income	$	58	$	41		$	27		$	27

See accompanying notes to condensed consolidated financial statements.

GENON ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



	September 30, 2015			December 31, 2014
	(unaudited)
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	1,093		$	920
Funds deposited by counterparties	40			54
Accounts receivable — trade	110			120
Inventory	426			507
Derivative instruments	371			591
Derivative instruments — affiliate	20			11
Cash collateral paid in support of energy risk management activities	73			38
Prepayments and other current assets	156			150
Total current assets	2,289			2,391
Property, plant and equipment, net of accumulated depreciation of $597 and $436	3,052			3,045
Other Assets
Intangible assets, net of accumulated amortization of $50 and $66	73			72
Derivative instruments	240			195
Derivative instruments — affiliate	6			10
Other non-current assets	238			201
Total other assets	557			478
Total Assets	$	5,898		$	5,914
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Current portion of long-term debt and capital leases	$	6		$	10
Accounts payable	132			135
Accounts payable — affiliate	82			14
Derivative instruments	306			382
Derivative instruments — affiliate	20			35
Cash collateral received in support of energy risk management activities	40			54
Accrued expenses and other current liabilities	279			238
Total current liabilities	865			868
Other Liabilities
Long-term debt and capital leases	3,073			3,120
Derivative instruments	139			69
Derivative instruments — affiliate	12			3
Out-of-market contracts	912			969
Other non-current liabilities	469			484
Total non-current liabilities	4,605			4,645
Total Liabilities	5,470			5,513
Commitments and Contingencies
Stockholder's Equity
Common stock: $0.001 par value, 1 share authorized and issued at September 30, 2015 and December 31, 2014	—			—
Additional paid-in capital	325			325
Retained earnings	107			78
Accumulated other comprehensive loss	(4		)	(2		)
Total Stockholder's Equity	428			401
Total Liabilities and Stockholder's Equity	$	5,898		$	5,914

See accompanying notes to condensed consolidated financial statements.

GENON ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Nine months ended September 30,
	2015			2014
	(In millions)
Cash Flows from Operating Activities
Net Income	$	29		$	24
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	163			172
Amortization of financing costs and debt discount/premiums	(43		)	(43		)
Amortization of out-of-market contracts and emission allowances	(23		)	(17		)
Loss on sale of asset	—			6
Impairment loss	—			60
Changes in derivative instruments	158			323
Changes in collateral deposits supporting energy risk management activities	(35		)	(73		)
Changes in other working capital	103			(173		)
Net Cash Provided by Operating Activities	352			279
Cash Flows from Investing Activities
Capital expenditures	(175		)	(125		)
Proceeds from sale of assets, net of cash disposed of	—			50
Other	—			5
Net Cash Used by Investing Activities	(175		)	(70		)
Cash Flows from Financing Activities
Payments for short and long-term debt	(4		)	(1		)
Net Cash Used by Financing Activities	(4		)	(1		)
Net Increase in Cash and Cash Equivalents	173			208
Cash and Cash Equivalents at Beginning of Period	920			760
Cash and Cash Equivalents at End of Period	$	1,093		$	968

See accompanying notes to condensed consolidated financial statements.

GENON AMERICAS GENERATION, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(In millions)
Operating Revenues
Operating revenues	$	587		$	667		$	1,808		$	2,123
Operating revenues — affiliate	21			(25		)	40			110
Total operating revenues	608			642			1,848			2,233
Operating Costs and Expenses
Cost of operations	181			198			711			753
Cost of operations — affiliate	315			336			925			1,185
Depreciation and amortization	18			21			55			70
General and administrative	—			2			—			7
General and administrative — affiliate	20			19			61			58
Total operating costs and expenses	534			576			1,752			2,073
Loss on sale of assets	—			—			—			(6		)
Operating Income	74			66			96			154
Other Expense
Interest expense	(17		)	(17		)	(49		)	(50		)
Interest expense — affiliate	(1		)	(2		)	(4		)	(6		)
Total other expense	(18		)	(19		)	(53		)	(56		)
Income Before Income Taxes	56			47			43			98
Income tax	—			—			—			—
Net Income	$	56		$	47		$	43		$	98

See accompanying notes to condensed consolidated financial statements.

GENON AMERICAS GENERATION, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



	September 30, 2015		December 31, 2014
	(unaudited)
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	248	$	103
Funds deposited by counterparties	40		54
Accounts receivable — trade	99		106
Accounts receivable — affiliate	57		—
Note receivable — affiliate	331		331
Inventory	253		318
Derivative instruments	371		591
Derivative instruments — affiliate	200		261
Cash collateral paid in support of energy risk management activities	64		29
Prepayments and other current assets	96		90
Total current assets	1,759		1,883
Property, plant and equipment, net of accumulated depreciation of $225 and $170	1,111		1,110
Other Assets
Intangible assets, net of accumulated amortization of $50 and $66	73		72
Derivative instruments	240		196
Derivative instruments — affiliate	103		60
Other non-current assets	122		111
Total other assets	538		439
Total Assets	$	3,408	$	3,432
LIABILITIES AND MEMBER'S EQUITY
Current Liabilities
Current portion of long-term debt and capital leases	$	1	$	5
Accounts payable	72		50
Accounts payable — affiliate	—		23
Derivative instruments	306		382
Derivative instruments — affiliate	182		292
Cash collateral received in support of energy risk management activities	40		54
Accrued expenses and other current liabilities	135		93
Total current liabilities	736		899
Other Liabilities
Long-term debt and capital leases	922		929
Derivative instruments	139		69
Derivative instruments — affiliate	120		66
Out-of-market contracts	527		547
Other non-current liabilities	105		106
Total non-current liabilities	1,813		1,717
Total Liabilities	2,549		2,616
Commitments and Contingencies
Member’s Equity
Member’s interest	859		816
Total Member’s Equity	859		816
Total Liabilities and Member’s Equity	$	3,408	$	3,432

See accompanying notes to condensed consolidated financial statements.

GENON AMERICAS GENERATION, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Nine months ended September 30,
	2015			2014
	(In millions)
Cash Flows from Operating Activities
Net Income	$	43		$	98
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	55			70
Amortization of debt premiums	(7		)	(7		)
Amortization of out-of-market contracts and emission allowances	14			10
Loss on sale of assets	—			6
Changes in derivative instruments	132			258
Changes in collateral deposits supporting energy risk management activities	(35		)	(131		)
Changes in other working capital	—			49
Net Cash Provided by Operating Activities	202			353
Cash Flows from Investing Activities
Capital expenditures	(53		)	(25		)
Decrease in note receivable — affiliate	—			(32		)
Proceeds from sale of assets, net of cash disposed of	—			50
Net Cash Used by Investing Activities	(53		)	(7		)
Cash Flows from Financing Activities
Payments for short and long-term debt	(4		)	—
Capital contributions	—			37
Distributions to member	—			(320		)
Net Cash Used by Financing Activities	(4		)	(283		)
Net Increase in Cash and Cash Equivalents	145			63
Cash and Cash Equivalents at Beginning of Period	103			63
Cash and Cash Equivalents at End of Period	$	248		$	126

See accompanying notes to condensed consolidated financial statements.

GENON MID-ATLANTIC, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(In millions)
Operating Revenues
Operating revenues	$	4		$	46		$	8		$	(110	)
Operating revenues — affiliate	216			199			684			878
Total operating revenues	220			245			692			768
Operating Costs and Expenses
Cost of operations	121			141			420			535
Cost of operations — affiliate	20			26			102			29
Depreciation and amortization	16			18			49			61
General and administrative — affiliate	15			15			44			48
Total operating costs and expenses	172			200			615			673
Operating Income	48			45			77			95
Other Expense
Interest expense	—			—			(1		)	(1		)
Interest expense — affiliate	(1		)	(1		)	(2		)	(3		)
Total other expense	(1		)	(1		)	(3		)	(4		)
Income Before Income Taxes	47			44			74			91
Income tax	—			—			—			—
Net Income	$	47		$	44		$	74		$	91

See accompanying notes to condensed consolidated financial statements.

GENON MID-ATLANTIC, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



	September 30, 2015		December 31, 2014
	(unaudited)
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	291	$	157
Accounts receivable — trade	3		10
Inventory	158		166
Derivative instruments	29		100
Derivative instruments — affiliate	181		141
Prepayments and other current assets	75		80
Total current assets	737		654
Property, plant and equipment, net of accumulated depreciation of $184 and $135	928		958
Other Assets
Intangible assets, net	13		10
Derivative instruments — affiliate	128		141
Other non-current assets	116		87
Total other assets	257		238
Total Assets	$	1,922	$	1,850
LIABILITIES AND MEMBER'S EQUITY
Current Liabilities
Current portion of long-term debt and capital leases	$	1	$	5
Accounts payable	20		27
Accounts payable — affiliate	2		14
Derivative instruments	—		1
Derivative instruments — affiliate	128		127
Accrued expenses and other current liabilities	78		53
Total current liabilities	229		227
Other Liabilities
Derivative instruments — affiliate	49		22
Out-of-market contracts	527		547
Other non-current liabilities	49		60
Total non-current liabilities	625		629
Total Liabilities	854		856
Commitments and Contingencies
Member’s Equity
Member’s interest	1,068		994
Total Member’s Equity	1,068		994
Total Liabilities and Member’s Equity	$	1,922	$	1,850

See accompanying notes to condensed consolidated financial statements.

GENON MID-ATLANTIC, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Nine months ended September 30,
	2015			2014
	(In millions)
Cash Flows from Operating Activities
Net Income	$	74		$	91
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	49			61
Amortization of out-of-market contracts and emission allowances	(20		)	(12		)
Changes in derivative instruments	71			259
Changes in other working capital	(10		)	(3		)
Net Cash Provided by Operating Activities	164			396
Cash Flows from Investing Activities
Capital expenditures	(26		)	(11		)
Net Cash Used by Investing Activities	(26		)	(11		)
Cash Flows from Financing Activities
Payments for short and long-term debt	(4		)	—
Distributions to member	—			(320		)
Net Cash Used by Financing Activities	(4		)	(320		)
Net Increase in Cash and Cash Equivalents	134			65
Cash and Cash Equivalents at Beginning of Period	157			64
Cash and Cash Equivalents at End of Period	$	291		$	129

See accompanying notes to condensed consolidated financial statements.

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Basis of Presentation (GenOn, GenOn Americas Generation and GenOn Mid-Atlantic)

GenOn Energy, Inc., a wholly owned subsidiary of NRG, is a wholesale power generator engaged in the ownership and operation of power generation facilities, with approximately 17,752 MW of net electric generating capacity located in the U.S. In the first nine months of 2015, GenOn mothballed Osceola and Shawville, retired Coolwater, Glen Gardner, Gilbert and Werner, and restored Unit 2 at Bowline to full capacity following the boiler restoration completed in June 2015, resulting in a net decrease in generation capacity of 1,777 MW from December 31, 2014. Shawville is planned to return to service with a natural gas addition during the summer of 2016.

GenOn Americas Generation is a wholesale power generator with approximately 7,985 MW of net electric generating capacity located, in many cases, near major metropolitan areas. During June 2015, GenOn Americas Generation restored Unit 2 at Bowline to full capacity, as discussed above, resulting in an increase of 389 MW from December 31, 2014. GenOn Americas Generation's electric generating capacity is part of the 17,752 MW of net electric generating capacity of GenOn.

GenOn Mid-Atlantic operates and owns or leases 4,683 MW of net electric generating capacity in Maryland near Washington, D.C. GenOn Mid-Atlantic’s electric generating capacity is part of the 7,985 MW of net electric generating capacity of GenOn Americas Generation. GenOn Mid-Atlantic’s generating facilities serve the Eastern PJM markets.

GenOn Americas Generation and GenOn Mid-Atlantic are Delaware limited liability companies and indirect wholly owned subsidiaries of GenOn. GenOn Mid-Atlantic is an indirect wholly owned subsidiary of GenOn Americas Generation.

The Registrants sell power from their generation portfolio, offer capacity or similar products to retail electric providers and others, and provide ancillary services to support system reliability.

This is a combined quarterly report of the Registrants for the quarter ended September 30, 2015. The notes to the condensed consolidated financial statements apply to the Registrants as indicated parenthetically next to each corresponding disclosure. The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with the SEC's regulations for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to the Registrants' financial statements in the Registrants' 2014 Form 10-K. Interim results are not necessarily indicative of results for a full year.

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all material adjustments consisting of normal and recurring accruals necessary to present fairly the Registrants' consolidated financial positions as of September 30, 2015, and the results of operations, comprehensive income/(loss) and cash flows for the three and nine months ended September 30, 2015, and 2014.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reclassifications

Certain prior year amounts have been reclassified for comparative purposes. The reclassifications did not affect results from operations, net assets or cash flows.

Note 2 — Summary of Significant Accounting Policies (GenOn, GenOn Americas Generation and GenOn Mid-Atlantic)

Oil Inventory Adjustment (GenOn, GenOn Americas Generation, and GenOn Mid-Atlantic)

During the nine months ended September 30, 2015, certain oil inventory was identified as unusable and the related value of $16 million was written off to cost of operations in the statement of operations.

Impairment Loss (GenOn)

During the three months ended September 30, 2014, GenOn determined that it would mothball the 463 MW natural gas-fired Osceola facility in Saint Cloud, Florida. GenOn considered this to be an indicator of impairment and performed an impairment test for these assets under ASC 360, Property, Plant and Equipment. The carrying amount of the assets was higher than the future net cash flows expected to be generated by the assets and as a result, the assets were considered to be impaired. GenOn measured the impairment loss as the difference between the carrying amount and the fair value of the assets. Due to the location of the facility, it was determined that the best indicator of fair value is the market value of the combustion turbines. GenOn recorded an impairment loss of approximately $60 million during the three months ended September 30, 2014, which represents the excess of the carrying value over the fair market value, and mothballed the facility effective January 1, 2015.

Recent Accounting Developments (GenOn, GenOn Americas Generation, and GenOn Mid-Atlantic)

ASU 2015-02 — In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, or ASU No. 2015-02. The amendments of ASU No. 2015-02 were issued in an effort to minimize situations under previously existing guidance in which a reporting entity was required to consolidate another legal entity in which that reporting entity did not have: (1) the ability through contractual rights to act primarily on its own behalf; (2) ownership of the majority of the legal entity's voting rights; or (3) the exposure to a majority of the legal entity's economic benefits. ASU No. 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The guidance in ASU No. 2015-02 is effective for periods beginning after December 15, 2015. Early adoption is permitted. The Registrants adopted the standard effective January 1, 2015 and the adoption of this standard did not impact the Registrants' results of operations, cash flows or financial position.

ASU 2014-16 — In November 2014, the FASB issued ASU No. 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity, or ASU No. 2014-16. The amendments of ASU No. 2014-16 clarify how U.S. GAAP should be applied in determining whether the nature of a host contract is more akin to debt or equity and in evaluating whether the economic characteristics and risks of an embedded feature are "clearly and closely related" to its host contract. The guidance in ASU No. 2014-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Registrants adopted the standard effective January 1, 2015 and the adoption of this standard did not impact the Registrants' results of operations, cash flows or financial position.

ASU 2014-09 — In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU No. 2014-09. The amendments of ASU No. 2014-09 complete the joint effort between the FASB and the International Accounting Standards Board, or IASB, to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards, or IFRS, and to improve financial reporting. The guidance in ASU No. 2014-09 provides that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for the goods or services provided and establishes the following steps to be applied by an entity: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies the performance obligation. In August 2015, the FASB issued ASU 2015-14, which formally deferred the effective date by one year to make the guidance of ASU No. 2014-09 effective for annual reporting periods beginning after December 15, 2017, including interim periods therein. Early adoption is permitted, but not prior to the original effective date, which was for annual reporting periods beginning after December 15, 2016. The Registrants are currently evaluating the impact of the standard on the Registrants' results of operations, cash flows and financial position.

Note 3 — Fair Value of Financial Instruments (GenOn, GenOn Americas Generation and GenOn Mid-Atlantic)

This footnote should be read in conjunction with the complete description under Note 4, Fair Value of Financial Instruments, to the Registrants' 2014 Form 10-K.

For cash and cash equivalents, funds deposited by counterparties, accounts receivable, note receivable — affiliate, accounts payable, accrued liabilities, restricted cash, and cash collateral paid and received in support of energy risk management activities, the carrying amounts approximate fair value because of the short-term maturity of those instruments and are classified as Level 1 within the fair value hierarchy.

The estimated carrying amounts and fair values of GenOn and GenOn Americas Generation’s debt are as follows:

GenOn



	As of September 30, 2015				As of December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Long-term debt, including current portion	$	3,076	$	2,566	$	3,122	$	2,706

The fair value of long-term debt that is estimated using reported market prices for instruments that are publicly traded is classified as Level 2 within the fair value hierarchy. The fair value of non-publicly traded debt is based on the income approach valuation technique using current interest rates for similar instruments with equivalent credit quality and is classified as Level 3 within the fair value hierarchy.

GenOn Americas Generation



	As of September 30, 2015				As of December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Long-term debt, including current portion	$	922	$	694	$	929	$	720

The fair value of long-term debt is estimated using reported market prices for instruments that are publicly traded and is classified as Level 2 within the fair value hierarchy.

Recurring Fair Value Measurements

Derivative assets and liabilities are carried at fair market value. Realized and unrealized gains and losses included in earnings that are related to energy derivatives are recorded in operating revenues and cost of operations.

GenOn

The following tables present assets and liabilities (including affiliate amounts) measured and recorded at fair value on GenOn’s consolidated balance sheet on a recurring basis and their level within the fair value hierarchy:



	As of September 30, 2015
	Fair Value
	Level 1 ^(a)		Level 2 ^(a)		Level 3		Total
	(In millions)
Derivative assets:
Commodity contracts	$	190	$	437	$	10	$	637
Derivative liabilities:
Commodity contracts	$	130	$	337	$	10	$	477
Other assets ^(b)	$	14	$	—	$	—	$	14

(a) There were no transfers between Levels 1 and 2 during the three and nine months ended September 30, 2015.

(b) Relates to mutual funds held in a rabbi trust for non-qualified deferred compensation plans for certain key and highly compensated employees.



	As of December 31, 2014
	Fair Value
	Level 1 ^(a)		Level 2 ^(a)		Level 3		Total
	(In millions)
Derivative assets:
Commodity contracts	$	179	$	582	$	46	$	807
Derivative liabilities:
Commodity contracts	$	105	$	371	$	13	$	489
Other assets ^(b)	$	21	$	—	$	—	$	21

(a) There were no transfers between Levels 1 and 2 during the year ended December 31, 2014.

(b) Relates to mutual funds held in a rabbi trust for non-qualified deferred compensation plans for certain key and highly compensated employees.

The following table reconciles, for the three and nine months ended September 30, 2015, and 2014, the beginning and ending balances for derivatives that are recognized at fair value in GenOn's consolidated financial statements at least annually using significant unobservable inputs:



	Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	Derivatives ^(a)						Derivatives^(a)
	(In millions)
Beginning balance	$	14		$	(44	)	$	33		$	(4	)
Total (losses)/gains included in earnings — realized/unrealized	(18		)	1			(44		)	3
Purchases	(2		)	22			5			(19		)
Transfers into Level 3 ^(b)	—			1			—			—
Transfers out of Level 3 ^(b)	6			—			6			—
Ending balance	$	—		$	(20	)	$	—		$	(20	)
Losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of September 30	$	(14	)	$	—		$	(20	)	$	(1	)

(a) Consists of derivative assets and liabilities, net.

(b) Transfers in/out of level 3 are related to the availability of external broker quotes and are valued as of the end of the reporting period.

GenOn Americas Generation

The following tables present assets and liabilities (including affiliate amounts) measured and recorded at fair value on GenOn Americas Generation's consolidated balance sheet on a recurring basis and their level within the fair value hierarchy:



	As of September 30, 2015
	Fair Value
	Level 1 ^(a)		Level 2 ^(a)		Level 3		Total
	(In millions)
Derivative assets:
Commodity contracts	$	255	$	640	$	19	$	914
Derivative liabilities:
Commodity contracts	$	148	$	581	$	18	$	747

(a) There were no transfers between Levels 1 and 2 during the three and nine months ended September 30, 2015.



	As of December 31, 2014
	Fair Value
	Level 1 ^(a)		Level 2 ^(a)		Level 3		Total
	(In millions)
Derivative assets:
Commodity contracts	$	208	$	848	$	52	$	1,108
Derivative liabilities:
Commodity contracts	$	137	$	640	$	32	$	809

(a) There were no transfers between Levels 1 and 2 during the year ended December 31, 2014.

The following table reconciles, for the three and nine months ended September 30, 2015, and 2014, the beginning and ending balances for GenOn Americas Generation's derivatives that are recognized at fair value in the consolidated financial statements at least annually using significant unobservable inputs:



	Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	Derivatives ^(a)						Derivatives ^(a)
	(In millions)
Beginning balance	$	12		$	(41	)	$	20		$	(1	)
Total (losses)/gains included in earnings — realized/unrealized	(16		)	1			(26		)	1
Purchases	(1		)	22			1			(18		)
Transfers out of Level 3 ^(b)	6			—			6			—
Ending balance	$	1		$	(18	)	$	1		$	(18	)
(Losses)/gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of September 30	$	(13	)	$	1		$	(11	)	$	—

(a) Consists of derivative assets and liabilities, net.

(b) Transfers out of level 3 are related to the availability of external broker quotes and are valued as of the end of the reporting period.

GenOn Mid-Atlantic

The following tables present assets and liabilities (including affiliate amounts) measured and recorded at fair value on GenOn Mid-Atlantic's consolidated balance sheet on a recurring basis and their level within the fair value hierarchy:



	As of September 30, 2015
	Fair Value
	Level 1 ^(a)		Level 2 ^(a)		Level 3		Total
	(In millions)
Derivative assets:
Commodity contracts	$	168	$	169	$	1	$	338
Derivative liabilities:
Commodity contracts	$	61	$	116	$	—	$	177

(a) There were no transfers between Levels 1 and 2 during the three and nine months ended September 30, 2015.



	As of December 31, 2014
	Fair Value
	Level 1 ^(a)		Level 2 ^(a)		Level 3		Total
	(In millions)
Derivative assets:
Commodity contracts	$	145	$	211	$	26	$	382
Derivative liabilities:
Commodity contracts	$	71	$	73	$	6	$	150

(a) There were no transfers between Levels 1 and 2 during the year ended December 31, 2014.

The following table reconciles, for the three and nine months ended September 30, 2015, and 2014, the beginning and ending balances for GenOn Mid-Atlantic's derivatives that are recognized at fair value in the consolidated financial statements at least annually using significant unobservable inputs:



	Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	Derivatives^(a)						Derivatives ^(a)
	(In millions)
Beginning balance	$	13		$	(41	)	$	20		$	—
Total (losses)/gains included in earnings — realized/unrealized	(15		)	1			(25		)	—
Purchases	(3		)	22			—			(18		)
Transfers out of Level 3 ^(b)	6			—			6			—
Ending balance	$	1		$	(18	)	$	1		$	(18	)
(Losses)/gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of September 30	$	(13	)	$	1		$	(11	)	$	—

(a) Consists of derivative assets and liabilities, net.

(b) Transfers out of level 3 are related to the availability of external broker quotes and are valued as of the end of the reporting period.

Derivative Fair Value Measurements

A portion of the Registrants' contracts are exchange-traded contracts with readily available quoted market prices. A majority of the Registrants' contracts are non-exchange-traded contracts valued using prices provided by external sources, primarily price quotations available through brokers or over-the-counter and on-line exchanges. The remainder of the assets and liabilities represent contracts for which external sources or observable market quotes are not available for the whole term or for certain delivery months. These contracts are valued using various valuation techniques including but not limited to internal models that apply fundamental analysis of the market and corroboration with similar markets. As of September 30, 2015, contracts valued with prices provided by models and other valuation techniques make up 2% of GenOn's derivative assets and 2% of GenOn's derivative liabilities, 2% of GenOn Americas Generation’s derivative assets and 2% of GenOn Americas Generation's derivative liabilities and less than 1% of GenOn Mid-Atlantic’s derivative assets and less than 1% of GenOn Mid-Atlantic's derivative liabilities.

The Registrants' significant positions classified as Level 3 include physical and financial power and physical coal executed in illiquid markets as well as financial transmission rights, or FTRs. The significant unobservable inputs used in developing fair value include illiquid power and coal location pricing, which is derived as a basis to liquid locations. The basis spread is based on observable market data when available or derived from historic prices and forward market prices from similar observable markets when not available. For FTRs, the Registrants use the most recent auction prices to derive the fair value.

The following tables quantify the significant unobservable inputs used in developing the fair value of the Registrants' Level 3 positions as of September 30, 2015 and December 31, 2014:

GenOn



	Significant Unobservable Inputs
	September 30, 2015
	Fair Value						Input/Range
	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low			High		Weighted Average
	(In millions)
Power Contracts	$	6	$	—	Discounted Cash Flow	Forward Market Price (per MWh)	$	12		$	56	$	30
Coal Contracts	—		10		Discounted Cash Flow	Forward Market Price (per ton)	46			49		47
FTRs	4		—		Discounted Cash Flow	Auction Prices (per MWh)	(1		)	4		1
	$	10	$	10



	Significant Unobservable Inputs
	December 31, 2014
	Fair Value						Input/Range
	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low			High		Weighted Average
	(In millions)
Power Contracts	$	39	$	5	Discounted Cash Flow	Forward Market Price (per MWh)	$	18		$	68	$	46
Coal Contracts	3		1		Discounted Cash Flow	Forward Market Price (per ton)	53			56		54
FTRs	4		7		Discounted Cash Flow	Auction Prices (per MWh)	(10		)	3		(1		)
	$	46	$	13

GenOn Americas Generation



	Significant Unobservable Inputs
	September 30, 2015
	Fair Value						Input/Range
	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low		High		Weighted Average
	(In millions)
Power Contracts	$	5	$	5	Discounted Cash Flow	Forward Market Price (per MWh)	$	12	$	56	$	30
Coal Contracts	10		9		Discounted Cash Flow	Forward Market Price (per ton)	46		49		47
FTRs	4		4		Discounted Cash Flow	Auction Prices (per MWh)	—		1		—
	$	19	$	18



	Significant Unobservable Inputs
	December 31, 2014
	Fair Value						Input/Range
	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low			High		Weighted Average
	(In millions)
Power Contracts	$	39	$	18	Discounted Cash Flow	Forward Market Price (per MWh)	$	18		$	68	$	46
Coal Contracts	3		3		Discounted Cash Flow	Forward Market Price (per ton)	53			56		54
FTRs	10		11		Discounted Cash Flow	Auction Prices (per MWh)	(1		)	1		—
	$	52	$	32

GenOn Mid-Atlantic

Significant Unobservable Inputs

September 30, 2015

Fair Value

Input/Range

Assets

Liabilities

Valuation Technique

Significant Unobservable Input

Low

High

Weighted Average

(In millions)

FTRs

—

Discounted Cash Flow

Auction Prices (per MWh)

—



	Significant Unobservable Inputs
	December 31, 2014
	Fair Value						Input/Range
	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low			High		Weighted Average
	(In millions)
Power Contracts	$	26	$	5	Discounted Cash Flow	Forward Market Price (per MWh)	$	24		$	68	$	47
FTRs	—		1		Discounted Cash Flow	Auction Prices (per MWh)	(1		)	1		—
	$	26	$	6

The following table provides sensitivity of fair value measurements to increases/(decreases) in significant unobservable inputs as of September 30, 2015, and December 31, 2014:



Significant Unobservable Input	Position	Change In Input	Impact on Fair Value Measurement
Forward Market Price Power/Coal	Buy	Increase/(Decrease)	Higher/(Lower)
Forward Market Price Power/Coal	Sell	Increase/(Decrease)	Lower/(Higher)
FTR Prices	Buy	Increase/(Decrease)	Higher/(Lower)
FTR Prices	Sell	Increase/(Decrease)	Lower/(Higher)

The fair value of each contract is discounted using a risk free interest rate. In addition, the Registrants apply a non-performance/credit reserve to reflect credit risk which is calculated based on published default probabilities. The Registrants' (non-performance)/credit reserves were as follows:



	As of September 30, 2015			As of December 31, 2014
	(In millions)
GenOn	$	(1	)	$	—
GenOn Americas Generation	(1		)	—
GenOn Mid-Atlantic	3			2

Concentration of Credit Risk

In addition to the credit risk discussion as disclosed in Note 2, Summary of Significant Accounting Policies, to the Registrants' 2014 Form 10-K, the following is a discussion of the concentration of credit risk for the Registrants’ financial instruments. Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. The Registrants are exposed to counterparty credit risk through various activities including wholesale sales and fuel purchases.

Counterparty Credit Risk

The Registrants' counterparty credit risk policies are disclosed in their 2014 Form 10-K. As of September 30, 2015, GenOn's counterparty credit exposure was $337 million and GenOn held $30 million of collateral (cash and letters of credit) against those positions, resulting in a net exposure of $307 million. Approximately 71% of GenOn's exposure before collateral is expected to roll off by the end of 2016. As of September 30, 2015, GenOn Americas Generation’s counterparty credit exposure was $329 million and GenOn Americas Generation held $30 million of collateral (cash and letters of credit) against those positions, resulting in a net exposure of $299 million. Approximately 72% of GenOn Americas Generation’s exposure before collateral is expected to roll off by the end of 2016. As of September 30, 2015, GenOn Mid-Atlantic’s counterparty credit exposure was $29 million and GenOn Mid-Atlantic held no collateral (cash and letters or credit) against those positions, resulting in a net exposure of $29 million. 100% of GenOn Mid-Atlantic’s exposure before collateral is expected to roll off by the end of 2016. The following tables highlight net counterparty credit exposure by industry sector and by counterparty credit quality. Net counterparty credit exposure is defined as the aggregate net asset position for the Registrants with counterparties where netting is permitted under the enabling agreement and includes all cash flow, mark-to-market, NPNS and non-derivative transactions. The exposure is shown net of collateral held and includes amounts net of receivables or payables.



	Net Exposure ^(a) (% of Total)
Category	GenOn		GenOn Americas Generation		GenOn Mid-Atlantic
Financial institutions	74	%	76	%	100	%
Utilities, energy merchants, marketers and other	8		5		—
ISOs	18		19		—
Total as of September 30, 2015	100	%	100	%	100	%



	Net Exposure ^(a) (% of Total)
Category	GenOn		GenOn Americas Generation		GenOn Mid-Atlantic
Investment grade	100	%	100	%	100	%
Total as of September 30, 2015	100	%	100	%	100	%

(a) Counterparty credit exposure excludes transportation contracts because of the unavailability of market prices.

The Registrants have counterparty credit risk exposure to certain counterparties, each of which represent more than 10% of their respective total net exposure discussed above. The aggregate of such counterparties' exposure was $249 million, $249 million and $29 million for GenOn, GenOn Americas Generation and GenOn Mid-Atlantic, respectively. Changes in hedge positions and market prices will affect credit exposure and counterparty concentration. Given the credit quality, diversification and term of the exposure in the portfolio, the Registrants do not anticipate a material impact on their financial position or results of operations from nonperformance by any of their counterparties.

Note 4 — Accounting for Derivative Instruments and Hedging Activities (GenOn, GenOn Americas Generation and GenOn Mid-Atlantic)

This footnote should be read in conjunction with the complete description under Note 5, Accounting for Derivative Instruments and Hedging Activities, to the 2014 Form 10-K.

Energy-Related Commodities (GenOn)

As of September 30, 2015, GenOn had energy-related derivative financial instruments extending through 2019.

Volumetric Underlying Derivative Transactions (GenOn, GenOn Americas Generation and GenOn Mid-Atlantic)

The following table summarizes the net notional volume buy/(sell) of the Registrants’ open derivative transactions broken out by commodity, excluding those derivatives that qualified for the NPNS exception as of September 30, 2015, and December 31, 2014. Option contracts are reflected using delta volume. Delta volume equals the notional volume of an option adjusted for the probability that the option will be in-the-money at its expiration date.

GenOn

GenOn Americas Generation

GenOn Mid-Atlantic

Total Volume

As of September 30, 2015

As of December 31, 2014

As of