The power industry's overall net income sagged 50.5% to $3.28 billion in the second quarter, hit by a surge in "mark to market" unrealized losses. At Energy Future Holdings, the $4.8 billion MTM after-tax impact - 11 times the $418 million a year before at TXU Corp. - exceeded the industry's entire second-quarter profit (EUW, 18 Aug, 21). Without MTM and other major one-time items, however, profits gained a healthy 33%, probably mainly on higher power prices, since it looks like sales were flat, with milder weather in most of the country. The total disclosed after-tax MTM loss was $5.47 billion in second-quarter 2008, and 81.8% was at EFH. Unlike TXU, most companies that report MTM saw gains in second-quarter 2007. So the industry's total reported after-tax MTM loss then was only $398 million. Just removing those MTM impacts from both years would result in an overall second-quarter 2008 profit of $9.1 billion, a 30.2% improvement from 2007.
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