Exhibit 11-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the Fiscal Year Ended December 31, 2010
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the transition period from to
Commission file number 1-16455
A. |
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Full title of the plan and the address of the plan, if different from that of the issuer named
below: |
GenOn Energy Savings Plan
P.O. Box 3795
Houston, TX 77253-3795
B. |
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Name and issuer of the securities held pursuant to the plan and the address of its principal
executive
office: |
GenOn Energy, Inc.
1000 Main Street
Houston, TX 77002
GENON ENERGY SAVINGS PLAN
TABLE OF CONTENTS
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1 |
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FINANCIAL STATEMENTS: |
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4 |
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SUPPLEMENTAL SCHEDULE: |
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13 |
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EXHIBIT: |
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Consent of Independent Registered Public Accounting Firm Melton & Melton, L.L.P. (Exhibit 23.1) |
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Exhibit 23.1 |
NOTE: Other schedules required by the Department of Labors Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they
are not applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and Participants in the GenOn Energy Savings Plan (formerly, the RRI Energy, Inc.
Savings Plan):
We have audited the accompanying statements of net assets available for benefits of the GenOn
Energy Savings Plan (the Plan) as of December 31, 2010 and 2009, and the statement of changes in
net assets available for benefits for the year ended December 31, 2010. These financial statements
are the responsibility of the Plans management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. We
were not engaged to perform an audit of the Plans internal control over financial reporting. Our
audit included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Plans internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31, 2010 and 2009, and
the changes in net assets available for benefits for the year ended December 31, 2010 in conformity
with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The accompanying supplemental schedule, listed in the Table of Contents, is
presented for the purpose of additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of Labors Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.
The supplemental schedule is the responsibility of the Plans management. The supplemental schedule
has been subjected to the auditing procedures applied in our audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ MELTON & MELTON, L.L.P.
Houston, Texas
June 27, 2011
- 1 -
GENON ENERGY SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2010 AND 2009
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December 31, |
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2010 |
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2009 |
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ASSETS: |
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Investments, at fair value |
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$ |
446,279,567 |
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$ |
361,102,425 |
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Receivables: |
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Contributions Receivable-Employer |
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4,259,644 |
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677,839 |
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Contributions Receivable-Participants |
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9,389 |
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6,484 |
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Notes Receivable from Participants |
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4,234,179 |
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4,069,620 |
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Assets Receivable from Merged Plan |
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114,408,216 |
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Total Receivables |
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122,911,428 |
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4,753,943 |
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NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE |
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569,190,995 |
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365,856,368 |
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Adjustment from fair value to contract
value for fully benefit-responsive
investment contracts |
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(3,687,618 |
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(1,156,758 |
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NET ASSETS AVAILABLE FOR BENEFITS |
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$ |
565,503,377 |
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$ |
364,699,610 |
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See notes to financial statements.
- 2 -
GENON ENERGY SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2010
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ADDITIONS: |
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Contributions: |
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Employer |
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$ |
13,840,093 |
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Participant |
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12,902,729 |
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Total contributions |
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26,742,822 |
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Gain on Investments: |
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Interest |
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1,558,184 |
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Dividends |
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7,005,982 |
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Net appreciation in fair value of investments |
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22,057,610 |
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Total gain on investments |
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30,621,776 |
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Interest on notes receivable from participants |
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224,296 |
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Assets transferred in, net |
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175,837,001 |
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Other Income |
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7,775 |
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Total additions |
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233,433,670 |
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DEDUCTIONS: |
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Benefits paid to participants |
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32,505,851 |
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Administrative expenses |
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124,052 |
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Total deductions |
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32,629,903 |
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NET INCREASE |
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200,803,767 |
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NET ASSETS AVAILABLE FOR BENEFITS: |
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BEGINNING OF YEAR |
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364,699,610 |
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NET ASSETS AVAILABLE FOR BENEFITS: |
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END OF YEAR |
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$ |
565,503,377 |
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See notes to financial statements.
- 3 -
GENON ENERGY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. |
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DESCRIPTION OF THE PLAN |
General On December 3, 2010, RRI Energy, Inc. (RRI Energy) and Mirant Corporation
(Mirant) completed their previously announced Merger (the Merger). Upon completion of the
Merger, Mirant became a wholly-owned subsidiary of RRI Energy and RRI Energy was renamed GenOn
Energy, Inc.
In connection with the closing of the Merger, Mirant Services, LLC, sponsor of the Mirant
Services Employee Savings Plan (Mirant Savings Plan), merged into GenOn Energy Services, LLC.
GenOn Energy Services, LLC, a subsidiary of GenOn Energy, Inc. is the Plan sponsor. The Mirant
Savings Plan was merged into the GenOn Energy Savings Plan (the Plan) on December 31, 2010,
with the Plan continuing as the surviving plan. Participant balances under the Mirant Savings
Plan were transferred into the GenOn Energy Savings Plan Trust and into investment options
offered by the Plan at the time of transfer.
The Plan is a defined contribution plan covering substantially all of the eligible
non-bargaining employees of GenOn Energy, Inc. or a subsidiary or an affiliate of GenOn Energy,
Inc. (collectively, the Company) that has adopted the Plan. The following description of the
Plan is provided for general information purposes only. Participants should refer to the Plan
document for a more complete description of the Plan provisions. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Eligibility Employees shall be initially eligible to participate in the Plan as soon as
practicable following the date the employee first begins service with the Company. Any
participant who terminates service and subsequently recommences service with the Company shall
again become eligible to participate in the Plan as soon as practicable following the first
date the employee recommences service; provided, however, that each such employee is otherwise
eligible to become a participant pursuant to the terms of the Plan.
The Plan provides for the automatic enrollment of eligible new employees into the Plan
effective on the first day of the first full pay period beginning 30 days after the employee
has received written notice of such automatic enrollment (the Automatic Contribution Notice
Period). The initial pre-tax contribution will be 3% of eligible compensation, incrementally
increasing by 1% per year each April up to a maximum of 6%. If the employee elects during the
Automatic Contribution Notice Period not to make pre-tax contributions, or to make
contributions to the Plan in an alternate manner, then the automatic contribution provision
will not apply. Any eligible employee who is enrolled in the automatic contributions
arrangement will be provided with a ninety (90) day period (commencing from the first payroll
period subject to the automatic contribution) to elect out of the arrangement and withdraw the
automatic contributions made on their behalf, adjusted for investment gains and losses. Any
employer matching contributions attributable to the returned automatic contributions will be
forfeited. See Note 10 Subsequent Events for a discussion of Plan amendments effective in
2011.
Contributions Participants may elect to contribute to the Plan on a pre-tax and/or after-tax
basis through periodic payroll contributions. Pre-tax contributions may be made from 1% up to
50% of the participants eligible compensation each pay period. Additionally, participants may
elect to make after-tax contributions from 1% up to 16% of eligible compensation each pay
period. Active participants who
are, or will be, age 50 or older during a calendar year are eligible to make additional pre-tax
contributions (Catch-Up Contributions) to the Plan for that year in excess of the annual
pre-tax contribution limit up to a maximum amount permitted by the Internal Revenue Code (the
Code).
- 4 -
The Plan adopted a qualified Roth contribution program. Under this program, participants may
elect to treat all or a portion of their contributions that would otherwise be eligible to
defer as pre-tax contributions as designated Roth contributions, as defined in section
402A(c)(1) of the Code. The total amount of participant pre-tax contributions combined with
Roth contributions was limited to $16,500 for 2010 and 2009. The maximum Catch-Up Contribution
amount was $5,500 for 2010 and 2009. Any contributions in excess of the pre-tax contribution
limit, excluding any Catch-Up Contributions, are made to the participants after-tax account,
unless the participant elects otherwise. All eligible compensation under the Plan is subject to
the section 401(a) (17) limit of the Code. This limit was $245,000 for 2010 and 2009.
Plan participants who contribute receive Company matching contributions equal to 100% of the
first 6% of their contribution. The Company also makes payroll profit-sharing contributions and
may make annual discretionary profit-sharing contributions. The payroll profit-sharing
contribution was 2% of eligible compensation, and was limited to the first $106,800 of the
participants eligible compensation for 2010 and 2009. The Company may also elect, in its sole
discretion, to make an annual discretionary profit-sharing contribution of up to 3% of the
participants eligible compensation in cash, Company stock or a combination. This contribution
will generally be made within 90 days following the end of the Plan year. The annual
discretionary profit-sharing contribution receivable at December 31, 2010 and 2009 was
approximately $4.3 million and $0.7 million, respectively. The receivable at December 31, 2010
included annual discretionary contributions of approximately $3.0 million attributable to the
pre-merger provisions of the Mirant Savings Plan. Participants in the Plan do not need to
contribute to the Plan to receive the payroll profit-sharing and annual discretionary
profit-sharing contributions. See Note 10 Subsequent Events for a discussion of Plan
amendments effective in 2011.
Participant Accounts Individual accounts are maintained for each Plan participant. Each
participants account is credited with the participants contributions, the Companys matching
contributions, allocations of Company payroll profit-sharing and annual discretionary
profit-sharing contributions, if applicable, any rollover contributions made by the participant
and Plan earnings, and may be charged with an allocation of administrative expenses.
Participant accounts are funded as soon as administratively possible. The benefit to which a
participant is entitled is the benefit that can be provided from the participants vested
account.
Investments Participants direct the investment of their contributions, the Companys
matching contribution and the Companys payroll profit-sharing and annual discretionary
profit-sharing contribution into various investment options offered by the Plan. The Companys
annual discretionary profit-sharing contribution may be made in cash or Company stock. If the
contribution is made in Company stock, participants can transfer this contribution to any
available option. See Note 10 Subsequent Events for a discussion of Plan amendments effective
in 2011.
Vesting Participants are fully vested in their total account balance, including Company
contributions, under the Plan.
Notes Receivable from Participants Participants may borrow from their fund accounts up to a
maximum of $50,000 or 50% of their account balance, whichever is less. The loans are secured by
the balance in the participants account and bear interest at rates commensurate with local
prevailing rates as determined under the Plan. Principal and interest are paid ratably through
payroll deductions.
- 5 -
Payment of Benefits On termination of employment including death, disability, or retirement,
a participant or beneficiary may elect to receive either a lump-sum amount equal to the value
of the participants vested interest in his or her account, or monthly, quarterly, semi-annual
or annual installments not to exceed ten years. See Note 10 Subsequent Events for a
discussion of Plan amendments effective in 2011.
Forfeited Accounts Forfeited account balances consist primarily of unclaimed benefits
payable to participants, beneficiaries or distributees that cannot be located following
reasonable efforts by the plan administrator to do so. The forfeited benefits are reinstated
and paid upon notice of a valid claim for the same made by the participant, beneficiary or
other distributee at any time thereafter. To the extent unallocated forfeited amounts under the
Plan are not available; the reinstatement will be made by a mandatory contribution by the
Company allocated solely to such reinstatement. Balances held in the forfeiture accounts are
used to reinstate any such previously forfeited unclaimed benefits, reduce future Company
contributions or to pay Plan expenses, pursuant to the Plan document.
At December 31, 2010 and 2009, forfeited accounts totaled $132,385 and $144,758, respectively.
During 2010, employer contributions were reduced by $2,836 from the utilization of forfeited
accounts.
2. |
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SIGNIFICANT ACCOUNTING POLICIES |
Basis of Financial Presentation The accompanying financial statements of the Plan are
prepared under the accrual basis of accounting in conformity with accounting principles
generally accepted in the United States of America (GAAP).
Notes Receivable from Participants Notes receivable from participants are measured at their
unpaid principal balance plus any accrued but unpaid interest. Delinquent participant loans
are reclassified as distributions based upon the terms of the Plan document.
Adoption of New Accounting Guidance In January 2010, the Financial Accounting Standards
Board (FASB) issued guidance that requires additional disclosure about the amounts of and
reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements and
separate disclosures about purchases, sales, issuances and settlements relating to Level 3
measurements. This standard also clarifies existing disclosure requirements related to the
level of disaggregation of fair value measurements for each class of assets and liabilities and
disclosure about inputs and valuation techniques used to measure fair value for both recurring
and nonrecurring Level 2 and Level 3 measurements. As this newly issued accounting standard
only requires enhanced disclosure, the adoption of this standard did not have a material effect
on the Plans financial statements.
In September 2010, the FASB issued amended guidance clarifying the classification and
measurement of participant loans by defined contribution plans. This amendment requires that
participant loans be classified as notes receivable from participants, which are segregated
from plan investments and measured at their principal balance plus any accrued but unpaid
interest. This amendment is effective for periods ending after December 15, 2010, with early
adoption permitted. This amendment requires retrospective application to all periods presented.
This amendment was adopted for the year ended December 31, 2010 and retrospectively applied to
December 31, 2009. Prior year amounts and disclosures have been revised to reflect the
retrospective application of adopting this new amendment. The adoption resulted in a
reclassification of participant loans totaling $4,069,620 from investments to notes receivable
from participants as of December 31, 2009. There was no impact to the Plans net assets as of
December 31, 2010 or 2009 as a result of the adoption.
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Fully Benefit-Responsive Investment Contracts Generally accepted accounting principles
require that investment contracts held by a defined contribution plan be reported at fair
value. However, contract value is the relevant measurement attribute for that portion of the
net assets available for benefits of a defined contribution plan attributable to fully
benefit-responsive investment contracts because contract value is the amount participants would
receive if they were to initiate permitted transactions under the terms of the Plan. The Plan
invests in investment contracts through participation in the Vanguard Retirement Savings Trust,
a common/collective trust fund. As required by GAAP, the statements of net assets available for
benefits present the fair value of the Vanguard Retirement Savings Trust as well as the
adjustment of the portion of the Vanguard Retirement Savings Trust related to fully
benefit-responsive contracts from fair value to contract value. The statement of changes in net
assets available for benefits is prepared on a contract value basis. The effect on the 2010 and
2009 financial statements was a decrease to the fair value of investments of ($3,687,618) and
($1,156,758), respectively.
Use of Estimates The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets, liabilities, and changes
therein, as of the date of the financial statements. Actual results could differ from those
estimates.
Market Risk The Plan provides for investments in various investment securities, including
CenterPoint Energy, Inc. common stock (closed to new investment) and the Companys common
stock, that are exposed to certain risks such as interest rate, credit, and overall market
volatility. Due to the level of risk, changes in the value of investment securities could occur
in the near term, and these changes could materially affect the amounts reported in the
statements of net assets available for benefits. See Note 10 Subsequent Events for a
discussion of Plan amendments effective in 2011.
Administrative Expenses Administrative expenses of the Plan are paid by either the Plan or
the Plans sponsor as provided in the Plan document.
Payment of Benefits Benefits are recorded when paid.
Investment Valuation and Income Recognition Investments are reported at fair value. Fair
value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation
or net depreciation includes the Plans gains and losses on investments bought and sold as well
as held during the year.
3. |
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ASSETS TRANSFERRED TO THE PLAN |
In connection with the December 2010 Merger, assets of $175,419,806 were transferred from the
Mirant Savings Plan into the Plan and are included within the statement of changes in net
assets available for benefits as assets transferred into the Plan. During 2010 there were also
net transfers from the GenOn Energy Union Savings Plan of $417,195 to the Plan due to employee
status changes.
- 7 -
Plan assets are held at Vanguard Fiduciary Trust Company (the Trustee). The following
presents investments that represent 5% or more of the Plans net assets:
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December 31, |
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2010 |
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2009 |
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Mutual Funds: |
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American Funds: EuroPacific Growth Fund Class A |
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$ |
** |
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$ |
20,457,015 |
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Neuberger Berman Genesis Trust |
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** |
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22,096,822 |
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PIMCO Total Return Fund, Institutional Class |
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37,325,728 |
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** |
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PIMCO Total Return Fund, Administrative Class |
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** |
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23,128,320 |
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Vanguard 500 Index Fund Signal Shares |
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30,761,064 |
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** |
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Vanguard 500 Index Fund Investor Shares |
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** |
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28,073,139 |
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Vanguard Windsor II Fund Investor Shares |
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** |
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25,161,597 |
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Common/Collective Trust Fund: |
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Vanguard Retirement Savings Trust IV * |
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89,958,783 |
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** |
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Vanguard Retirement Savings Trust * |
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** |
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52,351,830 |
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Common Stock Fund: |
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GenOn Energy Stock Fund |
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** |
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22,118,203 |
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* |
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The Vanguard Retirement Savings Trust, a fully benefit-responsive investment
contract, as listed above represents the contract value of the Plans investment. |
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Investment did not represent 5% or more of the Plans net assets at year end. |
During 2010, the Plans investments, including gains and losses on investments bought and sold,
as well as held during the year, appreciated in value as follows:
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Net appreciation |
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in fair value of |
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investments |
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Mutual funds |
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$ |
28,974,737 |
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Common stocks |
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(6,917,127 |
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$ |
22,057,610 |
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5. |
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FAIR VALUE MEASUREMENTS |
The fair value of the Plans assets is determined by incorporating assumptions that a market
participant would use in pricing those assets. The assumptions and inputs used fall within a
three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value
based on their observability. These tiers are: Level 1, defined as observable inputs such as
quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active
markets that are either directly or indirectly observable; and Level 3, defined as unobservable
inputs in which little or no market data exists, therefore requiring an entity to develop its
own assumptions.
The following is a description of the valuation methodologies used for the investments measured
at fair value, including the general classification of such instruments pursuant to the
valuation hierarchy.
- 8 -
Mutual funds
The shares of registered investment companies held by the Plan are valued at quoted market
prices in an active market (which are based on the redeemable net asset value of the shares)
and are classified as Level 1 investments.
Common/collective trust fund
The Vanguard Retirement Savings Trust is a collective investment trust fund that invests solely
in the Vanguard Retirement Savings Master Trust. The underlying investments of the Master Trust
are primarily in pools of investment contracts that are issued by insurance companies and
commercial banks and in contracts that are backed by high-quality bonds, bond and securities
trusts, and mutual funds. The investments of the Master Trust are valued based on the aggregate
market values of the applicable bonds, bond and securities trusts, and other investments and
are classified as Level 2 investments.
Common stock funds
The common stock funds consist of the common stock of GenOn Energy, Inc., the common stock of
CenterPoint Energy Inc. and cash and/or money market investments sufficient to help accommodate
daily transactions within each fund and are classified as Level 1 investments.
As of December 31, 2010, the Plans investments measured at fair value on a recurring basis
were as follows:
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Fair Value Measurements Using Input |
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Type |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Common stock funds |
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$ |
22,804,364 |
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$ |
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$ |
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$ |
22,804,364 |
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Mutual funds: |
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Bond funds |
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56,645,913 |
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56,645,913 |
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Balanced funds |
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74,095,542 |
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74,095,542 |
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Domestic equity funds |
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161,525,602 |
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161,525,602 |
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International equity funds |
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37,429,360 |
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37,429,360 |
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Money market fund |
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132,385 |
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132,385 |
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Common/collective trust fund |
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93,646,401 |
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|
93,646,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
352,633,166 |
|
|
$ |
93,646,401 |
|
|
$ |
|
|
|
$ |
446,279,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2009, the Plans investments measured at fair value on a recurring basis
were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using Input |
|
|
|
|
|
|
Type |
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Common stock funds |
|
$ |
29,655,420 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
29,655,420 |
|
Mutual funds: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bond funds |
|
|
40,788,892 |
|
|
|
|
|
|
|
|
|
|
|
40,788,892 |
|
Balanced funds |
|
|
62,213,904 |
|
|
|
|
|
|
|
|
|
|
|
62,213,904 |
|
Domestic equity funds |
|
|
139,061,483 |
|
|
|
|
|
|
|
|
|
|
|
139,061,483 |
|
International equity funds |
|
|
35,729,380 |
|
|
|
|
|
|
|
|
|
|
|
35,729,380 |
|
Money market fund |
|
|
144,758 |
|
|
|
|
|
|
|
|
|
|
|
144,758 |
|
Common/collective trust fund |
|
|
|
|
|
|
53,508,588 |
|
|
|
|
|
|
|
53,508,588 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
307,593,837 |
|
|
$ |
53,508,588 |
|
|
$ |
|
|
|
$ |
361,102,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 9 -
The fair values of common stock and mutual funds are determined based on quoted market prices.
The bond funds are designed to deliver a high level of interest income by attempting to track
the performance
of a broad, market-weighted bond index. The balanced funds are funds that invest in both stocks
and bonds. These funds are designed to deliver capital appreciation and reasonable amounts of
current income, while providing a moderate level of risk to the investor. The domestic stock
funds are designed to deliver long-term capital appreciation and income by tracking the
performance of a benchmark index that measures the investment return of small- and
mid-capitalization stocks or investment in a variety of companies stock. The international
stock funds are designed to provide long-term capital appreciation by investing primarily in
the stocks of seasoned companies located outside of the United States that are considered to
have above-average growth potential.
The common collective trust fund invests in fully benefit-responsive investment contracts. The
fair value of the common collective trust fund is based on the quoted market values of the
underlying investments, as the common collective trust itself is not actively traded on an
exchange.
Although it has not expressed any intention to do so, the Company has the right under the Plan
to discontinue its contributions at any time and to terminate the Plan subject to the
provisions of ERISA. In the event of a plan termination, participants would remain 100% vested
in their account.
7. |
|
RELATED PARTY TRANSACTIONS |
The Plan invests in shares of mutual funds and a common/collective trust fund managed by an
affiliate of the Trustee, as well as in shares of common stock of the Company. The Plan also
provides for notes receivable from participants. Transactions in such investments and notes
receivable qualify as party-in-interest transactions which are exempt from the prohibited
transaction rules.
The Plan obtained its latest determination letter dated July 23, 2007, in which the Internal
Revenue Service stated that the Plan was in compliance with the applicable requirements of the
Code. The Plan has been amended since receiving the determination letter. However, the plan
administrator believes that the Plan is currently designed and being operated in compliance
with the applicable requirements of the Code. Therefore, no provision for income taxes has been
included in the Plans financial statements.
Accounting principles generally accepted in the United States of America require plan
management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset)
if the Plan has taken an uncertain position that more likely than not would not be sustained
upon examination by federal and state tax authorities. The Plan administrator has analyzed the
tax positions taken by the Plan, and has concluded that as of December 31, 2010 and 2009, there
are no uncertain positions taken or expected to be taken that would require recognition of a
liability (or asset) or disclosure in the financial statements. The Plan is subject to routine
audits by taxing jurisdictions, however, there are currently no audits for any tax periods in
progress. The Plan administrator believes it is no longer subject to income tax examinations
for years prior to 2007.
- 10 -
9. |
|
RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 |
The following is a reconciliation of net assets available for benefits per the financial
statements to the Form 5500:
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per the financial statements |
|
$ |
565,503,377 |
|
|
$ |
364,699,610 |
|
Adjustment from contract value to fair value for fully
benefit-responsive investment contracts |
|
|
3,687,618 |
|
|
|
1,156,758 |
|
Participant loans deemed distributed |
|
|
(20,261 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per the Form 5500 |
|
$ |
569,170,734 |
|
|
$ |
365,856,368 |
|
|
|
|
|
|
|
|
The following is a reconciliation of the change in net assets available for benefits per the
financial statements to the Form 5500:
|
|
|
|
|
|
|
Year Ended |
|
|
|
December 31, 2010 |
|
|
|
|
|
|
Increase in net assets available for benefits per the financial statements |
|
$ |
200,803,767 |
|
Add: Change in adjustment from contract value to fair value for
fully benefit-responsive investment contracts |
|
|
2,530,860 |
|
Less: Participant loans deemed distributed |
|
|
(20,261 |
) |
|
|
|
|
Increase in net assets available for benefits per the Form 5500 |
|
$ |
203,314,366 |
|
|
|
|
|
- 11 -
Effective January 1, 2011, the Company adopted the following amendments to the Plan:
|
(1) |
|
The Plan was amended to provide for an automatic pre-tax contribution deferral
of 6% of eligible compensation for new participants, when no other election is made.
The automatic enrollment will become effective on the first day of the first full pay
period beginning 30 days after the eligible new employee has received notice of such
automatic enrollment. |
|
|
|
|
Any eligible employee who is enrolled in the automatic contributions arrangement will be
provided with a ninety (90) day period (commencing from the first payroll period subject
to the automatic contribution) to elect out of the arrangement and withdraw the
automatic contributions made on their behalf, adjusted for investment gains and losses. |
|
|
(2) |
|
Employees who participate in the GenOn Mirant Pension Plan (formerly the Mirant
Services Pension Plan) are not eligible to receive the Companys payroll profit-sharing
and annual discretionary profit-sharing contributions. |
|
|
(3) |
|
The Plan was amended to freeze the GenOn Energy Stock Fund as of December 31,
2010 and to liquidate the GenOn Energy Stock Fund and the CenterPoint Energy Stock Fund
under the Plan by December 31, 2011. |
|
|
(4) |
|
Upon a participants entitlement to payment of benefits, the participant may
elect to receive full or partial lump-sum distributions in cash, provided that no
lump-sum distribution may be paid to the participant unless he has elected such
distribution pursuant to an election, in the form and manner prescribed by the plan
administrator. If the participant elects to receive a partial distribution, then the
amount distributed shall be charged to, and paid from, the participants
accounts on a pro-rata basis. The Plan will honor valid installment payment elections
made prior to January 1, 2011 under the former RRI Energy, Inc. Savings Plan. No
participant or beneficiary shall be eligible to elect to receive installment payments on
or after January 1, 2011. |
Significant events occurring after the balance sheet date and prior to the issuance of the
financial statements are monitored to determine the impacts, if any, of events on the financial
statements to be issued. All subsequent events were evaluated through the filing date of this
Form 11-K.
- 12 -
GENON ENERGY SAVINGS PLAN
Schedule H, Line 4(i) Schedule of Assets (Held at End of Year)
As of December 31, 2010
EIN 56-2368220
PLAN 001
|
|
|
|
|
|
|
|
|
|
|
( a ) |
|
( b ) |
|
( c ) |
|
( d ) |
|
( e ) |
|
|
|
|
|
Description of investment including |
|
|
|
|
|
|
|
Identity of issue, borrower, lessor or |
|
maturity date, rate of interest, |
|
|
|
|
|
|
|
similar party |
|
collateral, par, or maturity value |
|
Cost |
|
Current value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual Funds: |
|
|
|
|
|
|
|
|
|
|
American Funds: EuroPacific Growth Fund Class R5 |
|
Registered Investment Company |
|
** |
|
$ |
19,740,434 |
|
|
|
American Funds: Growth Fund of America Class R5 |
|
Registered Investment Company |
|
** |
|
|
3,753,903 |
|
|
|
American Funds: New Perspective Fund Class R5 |
|
Registered Investment Company |
|
** |
|
|
6,308,151 |
|
|
|
Artisan International Fund, Investor Class |
|
Registered Investment Company |
|
** |
|
|
4,084,445 |
|
|
|
Davis New York Venture Fund Class Y |
|
Registered Investment Company |
|
** |
|
|
1,865,066 |
|
|
|
Dodge & Cox Balanced Fund |
|
Registered Investment Company |
|
** |
|
|
9,510,680 |
|
|
|
Morgan Stanley Institutional Fund Trust Midcap Growth Class I |
|
Registered Investment Company |
|
** |
|
|
13,424,147 |
|
|
|
Neuberger Berman Genesis Fund, Institutional Class |
|
Registered Investment Company |
|
** |
|
|
22,305,989 |
|
|
|
PIMCO Total Return Fund, Institutional Class |
|
Registered Investment Company |
|
** |
|
|
37,325,728 |
|
|
|
T. Rowe Price Equity Income Fund, Retail Class |
|
Registered Investment Company |
|
** |
|
|
1,839,188 |
|
|
|
T. Rowe Small-Cap Stock Fund |
|
Registered Investment Company |
|
** |
|
|
5,204,204 |
|
|
|
Turner Small Cap Growth Fund Class I Shares |
|
Registered Investment Company |
|
** |
|
|
5,679,573 |
|
* |
|
Vanguard 500 Index Fund Signal Shares |
|
Registered Investment Company |
|
** |
|
|
30,761,064 |
|
* |
|
Vanguard Capital Opportunity Fund Investor Shares |
|
Registered Investment Company |
|
** |
|
|
8,976,731 |
|
* |
|
Vanguard Dividend Growth Fund |
|
Registered Investment Company |
|
** |
|
|
6,521,118 |
|
* |
|
Vanguard Growth Equity Fund |
|
Registered Investment Company |
|
** |
|
|
19,422,436 |
|
* |
|
Vanguard Inflation-Protected Securities Fund Investor Shares |
|
Registered Investment Company |
|
** |
|
|
2,088,619 |
|
* |
|
Vanguard PRIMECAP Fund Investor Shares |
|
Registered Investment Company |
|
** |
|
|
5,525,280 |
|
* |
|
Vanguard Prime Money Market Fund |
|
Registered Investment Company |
|
** |
|
|
132,385 |
|
* |
|
Vanguard Target Retirement 2005 Fund |
|
Registered Investment Company |
|
** |
|
|
845,531 |
|
* |
|
Vanguard Target Retirement 2010 Fund |
|
Registered Investment Company |
|
** |
|
|
1,405,084 |
|
* |
|
Vanguard Target Retirement 2015 Fund |
|
Registered Investment Company |
|
** |
|
|
13,456,320 |
|
* |
|
Vanguard Target Retirement 2020 Fund |
|
Registered Investment Company |
|
** |
|
|
3,990,096 |
|
* |
|
Vanguard Target Retirement 2025 Fund |
|
Registered Investment Company |
|
** |
|
|
19,639,432 |
|
* |
|
Vanguard Target Retirement 2030 Fund |
|
Registered Investment Company |
|
** |
|
|
4,063,735 |
|
- 13 -
GENON ENERGY SAVINGS PLAN
Schedule H, Line 4(i) Schedule of Assets (Held at End of Year)
As of December 31, 2010 continued
EIN 56-2368220
PLAN 001
|
|
|
|
|
|
|
|
|
|
|
( a ) |
|
( b ) |
|
( c ) |
|
( d ) |
|
( e ) |
|
|
|
|
|
Description of investment including |
|
|
|
|
|
|
|
Identity of issue, borrower, lessor or |
|
maturity date, rate of interest, |
|
|
|
|
|
|
|
similar party |
|
collateral, par, or maturity value |
|
Cost |
|
Current value |
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Vanguard Target Retirement 2035 Fund |
|
Registered Investment Company |
|
** |
|
|
10,868,621 |
|
* |
|
Vanguard Target Retirement 2040 Fund |
|
Registered Investment Company |
|
** |
|
|
2,687,508 |
|
* |
|
Vanguard Target Retirement 2045 Fund |
|
Registered Investment Company |
|
** |
|
|
4,809,160 |
|
* |
|
Vanguard Target Retirement 2050 Fund |
|
Registered Investment Company |
|
** |
|
|
1,051,216 |
|
* |
|
Vanguard Target Retirement 2055 Fund |
|
Registered Investment Company |
|
** |
|
|
12,649 |
|
* |
|
Vanguard Target Retirement Income Fund |
|
Registered Investment Company |
|
** |
|
|
1,755,509 |
|
* |
|
Vanguard Total Bond Market Index Fund Signal Shares |
|
Registered Investment Company |
|
** |
|
|
17,231,566 |
|
* |
|
Vanguard Total International Stock Index Fund |
|
Registered Investment Company |
|
** |
|
|
7,296,330 |
|
* |
|
Vanguard Total Stock Market Index Fund Signal Shares |
|
Registered Investment Company |
|
** |
|
|
10,933,677 |
|
* |
|
Vanguard Windsor II Fund Investor Shares |
|
Registered Investment Company |
|
** |
|
|
25,313,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common/Collective Trust Fund: |
|
|
|
|
|
|
|
|
* |
|
Vanguard Retirement Savings Trust IV |
|
Common/Collective Trust |
|
** |
|
|
93,646,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Funds: |
|
|
|
|
|
|
|
|
|
|
CenterPoint Energy Stock Fund |
|
Company Stock Fund |
|
** |
|
|
7,146,529 |
|
* |
|
GenOn Energy Stock Fund |
|
Company Stock Fund |
|
** |
|
|
15,657,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
446,279,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Participant Loans |
|
Interest rates between 4.25% 10.50% |
|
$0 |
|
$ |
4,234,179 |
|
|
|
|
* |
|
Represents a party-in-interest. |
|
** |
|
Cost information has been omitted because all investments are participant-directed. |
- 14 -
SIGNATURE
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the Benefits
Committee of GenOn Energy Services, LLC has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
|
|
|
|
|
GENON ENERGY SAVINGS PLAN
|
|
|
By: |
|
/s/ DONNA BENEFIELD
|
|
|
|
|
Donna Benefield |
|
|
|
|
Chairman of the Benefits Committee of GenOn Energy Services, LLC, Plan Administrator |
|
|
June 27, 2011
- 15 -