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Debt-riddled Energy Future Holdings, the former TXU Corp., reported a net loss of $80 million for the third quarter, a figure that included $90 million in losses on interest-rate hedges, the company reported Friday.That compared with net income of $3.6 billion for the third quarter of 2008, when the Dallas-based utility realized $3.95 billion in gains largely related to its long-term hedges on the price of natural gas, which is burned to generate electricity.
Adjusted for unusual items, results for the quarter that ended Sept. 30 showed earnings of $10 million, compared with a loss of $21 million in the third quarter of 2008."We had a solid operational performance for the quarter and continue to make good progress, even in the face of depressed commodity prices and economic conditions that remain challenging," CEO John Young said.The utility is trying to reduce debt and stretch out maturity dates on some of its $44 billion in debt. That burden is largely the result of TXU’s leveraged buyout for $45 billion in 2007, led by investors Kohlberg Kravis Roberts & Co. and TPG, an investment firm with offices in Fort Worth.But a recent exchange offer to bondholders, which was designed to trim the company’s debt by $2 billion and extend some debt maturities, has generally gotten a poor reception.The brutal recession, weakness in electric power demand and lower prices in the wholesale power market have put a damper on the utility’s revenue and strained its ability to pay down debt. Its major operating subsidiaries are TXU Electric, a retail electric provider; Luminant, a wholesale electric power generator; and Oncor Electric Delivery, a transmission and distribution company serving North Texas and other areas.Oncor reported Friday a net income of $132 million on operating revenue of $770 million for the third quarter, compared with a net income of $139 million on operating revenue of $728 million for the third quarter of 2008. Oncor officials have repeatedly stressed that the company has a "ring-fencing" agreement that protects it from liability for the heavy debt of its corporate parent.The parent, however, owns about 80 percent of Oncor and thus receives a proportionate share of cash distributions from it. Oncor has made three distributions this year, totaling about $149 million, of which the parent received $117.4 million. Oncor’s minority owner, Texas Transmission Investment Llc., received $31.5 million, and $270,000 went to Oncor management with a small ownership stake.Oncor emphasized Friday that it has solid credit ratings and major new capital expenditure programs. Those projects include $1.3 billion for building transmission lines linking West Texas wind power generation to urban areas like Dallas-Fort Worth and $686 million for installing 3.4 million "smart meters" that will give consumers more information about their electricity usage and an added tool to potentially reduce their bills.The transmission lines are to be completed in 2013, and the meter installations by the end of 2012.JACK Z. SMITH, 817-390-7724
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