Energy Future Holdings ends first quarter with $40 billion of debt and $2.5 billion of liquidity

By Paul Deckelman

New York, May 2 - Energy Future Holdings Corp. and its various subsidiaries ended the 2013 first quarter with some $40.2 billion of total debt - little changed from the prior quarter - according to disclosures in the Dallas-based power generation company and utility operator's latest quarterly report, filed Thursday with the Securities and Exchange Commission.

The company also estimated that as of quarter-end on March 31, it had a little over $2.5 billion of liquidity, consisting of $2.31 billion of cash and equivalents and $212 million of available borrowing capacity at its Texas Competitive Electric Holdings subsidiary's letter-of-credit facility. TCEH's separate $2.05 billion revolving credit facility was fully drawn, according to data furnished by the company in connection with its quarterly earnings call.

Mum's the word

But there was little real discussion of liquidity and leverage matters during that call. Energy Future's chief financial officer, Paul Keglevic, noted during his presentation that the company had made an 8-K filing with the SEC on April 15, outlining discussions the company was holding with some of its first-lien creditors on a possible restructuring of the company. He said that those discussions had not led to any kind of an agreement. The 8-K filing had also contained "a substantial amount of financial data," he said.

While asserting that Energy Future "will continue to explore our options leading up to our next significant debt maturity in October 2014," he said that the company would have no further comment on any of the financial information contained in that filing.

During the question-and-answer portion of the call that followed the formal presentations by Keglevic and by Energy Future's president and chief executive officer, John Young, the CFO specifically declined to answer a query from an analyst relating to whether the $450 million of cash held at another one of the company subsidiaries, Energy Future Intermediate Holdings Corp., would be sufficient to meet the unit's needs over the next 12 to 24 months, given a high past rate of cash burn. He instead referred him back to the April 15 8-K and told him to do his own calculations.

Keglevic likewise declined to forecast whether the company would be able to remain in compliance with the various credit facility and bond indenture covenants in its complicated capital structure, beyond noting that when it held its previous conference call at the start of the year, looking over the 2012 finances, information on one of its slides indicated that "based on those numbers, we did not see an interest coverage compliance problem during 2013."

$40 billion of debt

At March 31, Energy Future's consolidated balance sheet showed $38.01 billion of long-term debt, with another $90 million considered the current portion of that long-term debt and $2.14 billion of short-term borrowings.

That compares with $37.82 billion of long-term debt at Dec. 31, 2012, plus another $103 million of current portion and $2.14 billion of short-term debt.

The vast bulk of the company's debt was incurred during its 2007 leveraged buyout by Kohlberg Kravis Roberts & Co., TPG and Goldman Sachs Capital Partners.

Accrued interest on the balance sheet totaled $721 million in the latest quarter versus $571 million a year earlier.

The $2.31 billion of cash and equivalents was up from $1.91 billion at the end of 2012.

The company had $947 million of restricted cash on the balance sheet in both periods, mostly supporting outstanding letters of credit.

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