By Ben Fox Rubin
NRG Energy Inc. (NRG) swung to a fourth-quarter loss as the
merchant power generator posted substantial write-downs.
NRG, one of the biggest electricity producers in the U.S., last
year agreed to acquire an Edison International (EIX) unit's coal
plants, wind farms and other assets out of bankruptcy in a $2.6
billion deal. Edison Mission sells electricity in unregulated
markets and has struggled to make money through a prolonged period
of low prices, weak power demand and rising costs at the unit's
aging coal-fired power plants in Illinois. The deal is expected to
close in the first quarter.
For NRG, the pending acquisition is the latest in a string of
purchases that have bulked up its fleet of conventional power
plants and its retail power-sales business. NRG in 2012 became the
biggest wholesale electricity company in the U.S. after it bought
rival GenOn Energy in a deal valued at about $1.7 billion.
NRG reported a loss of $290 million, or 90 cents a share,
compared with a year-earlier profit of $252 million, $1.02 a share.
For the latest period, the company posted write-downs totaling $558
million primarily from its Indian River facility and Gladstone
investment, while the year-earlier period included bargain purchase
gains of $296 million related to the GenOn acquisition.
NRG Energy also boosted its dividend 17% to an annual payout of
56 cents a share, and backed its adjusted earnings guidance for
2014.
Write to Ben Fox Rubin at ben.rubin@wsj.com
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