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Energy Future Reports $407 Million Third-Quarter Loss

Oct. 29 (Bloomberg) -- Energy Future Holdings Corp., the Texas power company that was taken private in 2007 in the largest buyout in history, reported its seventh consecutive quarterly loss.

The third-quarter loss narrowed to $407 million from $710 million a year earlier, the closely held company said in a filing with the U.S. Securities and Exchange Commission made public today.

Sales fell 24.5 percent to $1.75 billion on low power prices and weaker demand due to milder summer weather, according to the filing.

Faced with power prices that have fallen by half since the buyout, Energy Future, the biggest generation owner in Texas, has sought to reduce its risk of default by extending debt maturities and asking bondholders to swap their holdings at discounted prices for new securities.

The company may need to restructure its balance sheet next year as low natural gas prices, which help set the price of electricity, have cut into the company’s cash flow, Moody’s Investors Service said in a research note on Aug. 9.

The company’s $1.83 billion of 10.25 percent bonds due November 2015 traded at 23 cents on the dollar on Oct. 25 from a high of 88.5 cents in January 2010, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Energy Future, formerly known as TXU Corp., was sold to a group led by KKR & Co. and TPG Capital in 2007, in a $43.2 billion cash transaction.

Energy Future’s units include Oncor, a regulated power-line business; TXU Energy, a retail electricity seller with about 1.8 million customers; and Luminant, which owns more than 15,400 megawatts of generation capacity in Texas.

(Energy Future has scheduled an earnings conference call tomorrow for investors and analysts at 11 a.m. New York time, accessible at EVTS <GO>.)

To contact the reporters on this story: Mark Chediak in San Francisco at mchediak@bloomberg.net;

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net.

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