YTD CASH FLOW COMPARISON - Q4 2004 vs. Q4 2003
Net Cash Flow- Cash used of $742 million in 2004 vs. $684 million used in 2003
($58 million unfavorable cash change). Changes are as follows:
FAVORABLE
(UNFAVORABLE)
2004 2003 CHANGE
---- ---- -----------
Cash provided by operations.......................... $ 1,759 $ 2,413 $ (654)
Cash used in financing............................... (6,514) (1,731) (4,783)
Cash provided by (used in) investing................. 4,138 (1,400) 5,538
Currency effect...................................... -- -- --
------- ------- -------
Total cash used in continuing operations.......... (617) (718) 101
-------- -------- -------
Cash provided by (used in) discontinued operations (a) (125) 34 (159)
-------- ------- --------
Net change in cash and cash equivalents........... $ (742) $ (684) $ (58)
======== ======== ========
(a) Telecommunications, Domestic and International Gas, Australia, Europe,
Pedricktown and Strategic
CASH FROM OPERATIONS -- 2004 vs. 2003
FAVORABLE
(UNFAVORABLE)
CHANGE
-------------
Income from continuing operations before noncash accounting changes $ (485)
Noncash P&L items
(Depr., DFIT and Inv Tax Credits, Loss on early
extinguishment of debt, asset writedown and lease related
charges, net gain from sale of assets, MtM, net equity income/loss
from unconsol affiliates, regulatory-related liab., litigation
settlements, stock-based comp)................................. 1,459
Changes in assets/liabilities:
Federal tax refund in 2003 ................................. (616)
Net working capital (A/R, A/P and inventories).............. (272)
Payment to Enron in 2003.................................... 102
Taxes accrued.............................................. (779)
All other................................................... (63)
--------
Sub-total................................................ (1,628)
--------
Total ......................................................... $ (654)
========
Cash earnings were higher in 2004 by $974 million ($1,459 million increase
in non-cash P&L items offset by a $485 million decrease from income from
continuing items).
Changes in operating assets/liabilities in 2004 decreased by $1,628 million
vs. 2003 primarily due to:
o An income tax refund of $616 million received in 2003 primarily related to
tax benefits associated with the write-off of the investment in Europe.
o The change in taxes accrued resulted from a $500M current tax benefit in
2004 versus a $290M current tax expense in 2003.
o Decrease in working capital of $272 million consists of $452 million
increase in receivables offset by lower inventory of $61 million and higher
payables of $119 million.
1
YTD CASH USED IN FINANCING -- Q4 2004 vs. Q4 2003
2004 2003
---- ----
Net issuances/(retirements) of long term debt................. $ 2,018 $ 659
Buy-back of equity linked securities ......................... (1,105) --
Buy-back of exchangeable preferred membership interest (750) --
Buy-back of common stock...................................... (4,687) --
Common stock issued........................................... 112 23
Long-term debt held by subsidiary trusts...................... (546) --
Preferred securities of subsidiary (75) (98)
Net increase/(decrease) in short-term debt.................... 210 (2,305)
Redemption deposit applied to debt retirement................. -- 210
Premium paid for redemption of exchangeable subordinated
notes....................................... ................. (1,102) --
Debt premium, discount, & reacquisition expense............... (417) (38)
--------- ---------
Subtotal net debt activity.............................. (6,342) (1,549)
--------- ---------
Dividends paid................................................ (172) (182)
Total $ 6,514) $ (1,731)
========= =========
YTD CASH PROVIDED BY (USED IN) INVESTING -- Q4 2004 vs. Q4 2003
2004 2003
---- ----
Capital Expenditures:
TXU Energy................................................. $ (281) $ (163)
TXU Electric Delivery...................................... (600) (543)
Corp. & Other.............................................. (31) (15)
--------- ---------
Total (912) (721)
Acquisition of business....................................... - (150)
Disposition of business....................................... 4,662(b) 24
Investment in collateral trust................................ 525 (525)
Nuclear fuel.................................................. (87) (44)
Other (50) 16
--------- ---------
Total $ 4,138 $ (1,400)
========= =========
(b) Sale of Australia, Communications, Domestic Gas, TXU Fuel Co., and
Strategic.
2
TXU CORP. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2004
(DOLLARS IN MILLIONS)
(UNAUDITED)
ELECTRIC ELIMINATIONS/
ENERGY DELIVERY OTHER ROUNDING TOTAL
------------ ------------ ------------ --------------- ----------
ASSETS
Current assets
Cash and cash equivalents 70 - 17 - 87
Restricted cash 6 43 - - 49
Advances to affiliates 686 - 14 (700) -
Accounts receivable - trade 1,139 72 400 (337) 1,274
Income taxes receivable - - 274 (237) 37
Accounts receivable - affiliates 42 221 40 (303) -
Notes or other receivables due from affiliates - 49 - (49) -
Inventories 284 33 3 - 320
Commodity contract assets 546 - - - 546
Assets of telecommunications holding company - - - - -
Other current assets 239 32 239 (8) 502
---------------------------------------------------------------------
Total current assets 3,012 450 987 (1,634) 2,815
---------------------------------------------------------------------
Investments
Restricted cash 15 13 39 - 67
Other investments 498 29 5,708 (5,571) 664
Property, plant and equipment - net 9,920 6,609 147 - 16,676
Notes or other receivables due from affiliates - 386 - (386) -
Goodwill 517 25 - - 542
Regulatory assets - net - 1,891 - - 1,891
Commodity contract assets 315 - - - 315
Cash flow hedge and other derivative assets 8 - (2) - 6
Other noncurrent assets 221 97 17 (67) 268
Assets held for sale 17 - 7 - 24
---------------------------------------------------------------------
Total assets 14,523 9,500 6,903 (7,658) 23,268
=====================================================================
LIABILITIES, PREFERRED SECURITIES OF SUBSIDIARIES
& SHAREHOLDERS' EQUITY
Current liabilities
Notes payable - banks 210 - - - 210
Advances from affiliates - 63 637 (700) -
Long-term debt due currently 31 182 15 1 229
Accounts payable - trade 861 58 369 (338) 950
Accounts payable - affiliates 234 27 43 (304) -
Notes or other liabilities due to affiliates 49 - - (49) -
Commodity contract liabilities 491 - - - 491
Liabilities of telecommunications holding company - - - - -
Other current liabilities 926 414 739 (243) 1,836
---------------------------------------------------------------------
Total current liabilities 2,802 744 1,803 (1,633) 3,716
---------------------------------------------------------------------
Accumulated deferred income taxes 1,848 1,497 - (44) 3,301
Investment tax credits 342 63 - - 405
Commodity contract liabilities 346 - - 1 347
Cash flow hedge and other derivative liabilities 178 - 17 - 195
Notes or other liabilities due to affiliates 386 - - (386) -
Long-term debt held by subsidiary trusts - - - - -
All other long-term debt, less amounts due currently 3,226 4,199 4,972 - 12,397
Other noncurrent liabilities and deferred credits 1,306 323 637 (6) 2,260
Liabilities held for sale 6 - - - 6
---------------------------------------------------------------------
Total liabilities 10,440 6,826 7,429 (2,068) 22,627
---------------------------------------------------------------------
Preferred securities of subsidiaries 511 - (473) - 38
Shareholders' equity
Preferred stock - not subject to mandatory redemption - - 300 - 300
Common stock - - (889) 1,090 201
Additional paid in capital 2,781 2,061 2,730 (4,965) 2,607
Retained earnings (deficit) 961 653 (1,815) (2,082) (2,283)
Accumulated other comprehensive income (loss) (170) (40) (379) 367 (222)
---------------------------------------------------------------------
Total shareholders' equity 3,572 2,674 (53) (5,590) 603
---------------------------------------------------------------------
Total liabilities, preferred securities of
subsidiaries & shareholders equity 14,523 9,500 6,903 (7,658) 23,268
=====================================================================
- --------------------------------------------------------------------------------
Page 1 of 3
TXU CORP. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2003
(DOLLARS IN MILLIONS)
(UNAUDITED)
ELECTRIC ELIMINATIONS/
ENERGY DELIVERY OTHER ROUNDING TOTAL
------------ ------------ ------------ ------------ ------------
ASSETS
Current assets
Cash and cash equivalents 18 245 566 - 829
Restricted cash - 12 - - 12
Advances to affiliates 289 - 25 (314) -
Accounts receivable - trade 943 58 526 (511) 1,016
Income taxes receivable - - 182 (182) -
Accounts receivable - affiliates 17 205 41 (263) -
Notes or other receivables due from affiliates - 13 - (13) -
Inventories 386 29 4 - 419
Commodity contract assets 548 - - - 548
Assets of telecommunications holding company - - 110 - 110
Other current assets 225 33 70 (25) 303
--------------------------------------------------------------------
Total current assets 2,426 595 1,524 (1,308) 3,237
--------------------------------------------------------------------
Investments
Restricted cash - 13 570 (1) 582
Other investments 479 32 7,735 (7,614) 632
Property, plant and equipment - net 10,345 6,333 125 - 16,803
Notes or other receivables due from affiliates - 423 - (423) -
Goodwill 533 25 - - 558
Regulatory assets - net - 1,872 - - 1,872
Commodity contract assets 109 - - - 109
Cash flow hedge and other derivative assets 88 - - - 88
Other noncurrent assets 126 39 82 (33) 214
Assets held for sale 59 - 7,142 1 7,202
--------------------------------------------------------------------
Total assets 14,165 9,332 17,178 (9,378) 31,297
====================================================================
LIABILITIES, PREFERRED SECURITIES OF SUBSIDIARIES
& SHAREHOLDERS' EQUITY
Current liabilities
Notes payable - banks - - - - -
Advances from affiliates - 25 289 (314) -
Long-term debt due currently 1 243 433 1 678
Accounts payable - trade 712 43 546 (511) 790
Accounts payable - affiliates 228 16 19 (263) -
Notes or other liabilities due to affiliates 13 - - (13) -
Commodity contract liabilities 502 - - - 502
Liabilities of telecommunications holding company - - 603 - 603
Other current liabilities 936 387 207 (208) 1,322
--------------------------------------------------------------------
Total current liabilities 2,392 714 2,097 (1,308) 3,895
--------------------------------------------------------------------
Accumulated deferred income taxes 1,950 1,432 228 (11) 3,599
Investment tax credits 360 68 2 - 430
Commodity contract liabilities 47 - - - 47
Cash flow hedge and other derivative liabilities 140 - 100 - 240
Notes or other liabilities due to affiliates 423 - - (423) -
Long-term debt held by subsidiary trusts - - 546 - 546
All other long-term debt, less amounts due currently 3,084 3,982 3,542 - 10,608
Other noncurrent liabilities and deferred credits 1,262 280 766 (6) 2,302
Liabilities held for sale 11 - 2,941 - 2,952
--------------------------------------------------------------------
Total liabilities 9,669 6,476 10,222 (1,748) 24,619
--------------------------------------------------------------------
Preferred securities of subsidiaries 497 - 262 - 759
Shareholders' equity
Preferred stock - not subject to mandatory redemption - - 300 - 300
Common stock - - 48 - 48
Additional paid in capital 3,688 2,501 8,901 (6,993) 8,097
Retained earnings (deficit) 422 380 (2,550) (750) (2,498)
Accumulated other comprehensive income (loss) (111) (25) (5) 113 (28)
--------------------------------------------------------------------
Total shareholders' equity 3,999 2,856 6,694 (7,630) 5,919
--------------------------------------------------------------------
Total liabilities, preferred securities of
subsidiaries & shareholders equity 14,165 9,332 17,178 (9,378) 31,297
====================================================================
- --------------------------------------------------------------------------------
Page 2 of 3
TXU CORP. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATING BALANCE SHEET - VARIANCE
DECEMBER 31, 2004 VS DECEMBER 31, 2003
(DOLLARS IN MILLIONS)
(UNAUDITED)
ELECTRIC ELIMINATIONS/
ENERGY DELIVERY OTHER ROUNDING TOTAL
------------ ------------ ------------ ------------ ------------
ASSETS
Current assets
Cash and cash equivalents 52 (245) (549) - (742)
Restricted cash 6 31 - - 37
Advances to affiliates 397 - (11) (386) -
Accounts receivable - trade 196 14 (126) 174 258
Income taxes receivable - - 92 (55) 37
Accounts receivable - affiliates 25 16 (1) (40) -
Notes or other receivables due from affiliates - 36 - (36) -
Inventories (102) 4 (1) - (99)
Commodity contract assets (2) - - - (2)
Assets of telecommunications holding company - - (110) - (110)
Other current assets 14 (1) 169 17 199
--------------------------------------------------------------------
Total current assets 586 (145) (537) (326) (422)
--------------------------------------------------------------------
Investments
Restricted cash 15 - (531) 1 (515)
Other investments 19 (3) (2,027) 2,043 32
Property, plant and equipment - net (425) 276 22 - (127)
Notes or other receivables due from affiliates - (37) - 37 -
Goodwill (16) - - - (16)
Regulatory assets - net - 19 - - 19
Commodity contract assets 206 - - - 206
Cash flow hedge and other derivative assets (80) - (2) - (82)
Other noncurrent assets 95 58 (65) (34) 54
Assets held for sale (42) - (7,135) (1) (7,178)
--------------------------------------------------------------------
Total assets 358 168 (10,275) 1,720 (8,029)
====================================================================
LIABILITIES, PREFERRED SECURITIES OF SUBSIDIARIES
& SHAREHOLDERS' EQUITY
Current liabilities
Notes payable - banks 210 - - - 210
Advances from affiliates - 38 348 (386) -
Long-term debt due currently 30 (61) (418) - (449)
Accounts payable - trade 149 15 (177) 173 160
Accounts payable - affiliates 6 11 24 (41) -
Notes or other liabilities due to affiliates 36 - - (36) -
Commodity contract liabilities (11) - - - (11)
Liabilities of telecommunications holding company - - (603) - (603)
Other current liabilities (10) 27 532 (35) 514
--------------------------------------------------------------------
Total current liabilities 410 30 (294) (325) (179)
------------------------------------------------------------------
Accumulated deferred income taxes (102) 65 (228) (33) (298)
Investment tax credits (18) (5) (2) - (25)
Commodity contract liabilities 299 - - 1 300
Cash flow hedge and other derivative liabilities 38 - (83) - (45)
Notes or other liabilities due to affiliates (37) - - 37 -
Long-term debt held by subsidiary trusts - - (546) - (546)
All other long-term debt, less amounts due currently 142 217 1,430 - 1,789
Other noncurrent liabilities and deferred credits 44 43 (129) - (42)
Liabilities held for sale (5) - (2,941) - (2,946)
--------------------------------------------------------------------
Total liabilities 771 350 (2,793) (320) (1,992)
--------------------------------------------------------------------
Preferred securities of subsidiaries 14 - (735) - (721)
Shareholders' equity
Preferred stock - not subject to mandatory redemption - - - - -
Common stock - - (937) 1,090 153
Additional paid in capital (907) (440) (6,171) 2,028 (5,490)
Retained earnings (deficit) 539 273 735 (1,332) 215
Accumulated other comprehensive income (loss) (59) (15) (374) 254 (194)
------------------------------------------------------------------
Total shareholders' equity (427) (182) (6,747) 2,040 (5,316)
------------------------------------------------------------------
Total liabilities, preferred securities of
subsidiaries & shareholders equity 358 168 (10,275) 1,720 (8,029)
==================================================================
- --------------------------------------------------------------------------------
Page 3 of 3
TXU CORP. REGULATORY SUMMARY
- --------------------------------------------------------------------------------
COMPANY SUMMARY/EVENTS
- --------------------------------------------------------------------------------
TXU Energy PRICE TO BEAT (PTB) applies to former franchise area
residential and small/medium business (< 1MW of load)
customers. Until 1/1/05 TXU Energy was permitted to offer
only one rate -- the PTB -- to residential customers. TXU
Energy has been permitted to offer rates other than the
PTB to small/medium commercial customers since 2004 and as
of 1/1/05 can offer rates other than the PTB to
residential customers. TXU Energy must also make service
at the PTB price available until 1/1/07. The fuel
component of the PTB can be changed twice per year if gas
prices (20-day average of NYMEX 12-month strip) change by
more than 5% (10% after 11/15 of any year) from the
current price upon which PTB fuel factor is based. Changes
in the PTB fuel factor are initiated by TXU Energy through
a filing with the PUC. TXU Energy adjusted the PTB twice
in 2004:
PUC NO. 29516 - Application of TXU Energy Retail Company
to Increase Price to Beat Fuel Factor filed March 25, 2004
+ Requesting 7.9% increase in PTB fuel factor.
+ Resulted in a $3.39/month or 3.4% increase to
residential customers using 1,000 kWh per month.
+ Approved by the PUC on May 19, 2004 and implemented on
May 20, 2004.
PUC NO. 29837 - Application of TXU Energy Retail Company
to Increase Price to Beat Fuel Factor filed June 10, 2004.
+ Requesting 12.7% increase in PTB fuel factor.
+ Resulted in a $5.87/month or 5.7% increase to
residential customers using 1000 kWh per month.
+ Approved by the PUC on August 3, 2004 and implemented on
August 4, 2004.
TXU SESCO TXU SESCO PRICE TO BEAT - TXU SESCO has entered into an
agreement with FPL Energy Marketing, Inc. for its 2005 PTB
power supply. TXU SESCO filed for recovery of the expenses
associated with the increase in purchased power costs over
the current contract with Constellation (Docket No.
30178). TXU SESCO entered into a joint stipulation which
eliminated the need for a hearing and approved the request
as filed. The Commission issued a final order on December
2, 2004. TXU SESCO revenues will increase by approximately
$7.5 million annually due primarily to a 12.1% increase
for a residential customer using 1,000 kWh per month.
Nevertheless, TXU SESCO will continue to have the lowest
Price to Beat rates, statewide.
TXU Electric TXU ELECTRIC DELIVERY (FORMERLY ONCOR) GENERAL RATE CASE:
Delivery Authorized ROE of 11.25%, Capital structure of 60% Debt,
40% Equity. Reports are filed annually for review with the
PUC. Certain cities within TXU Electric Delivery's
historical service territory, acting in their role as a
regulatory authority (with original jurisdiction), have
initiated inquiries to determine if the rates of TXU
Electric Delivery, which have been established by the
Public Utility Commission, are just and reasonable. 23
cities have passed such resolutions (and 11 have passed
resolutions supporting the other cities). TXU Electric
Delivery has the right to appeal any city action to the
Public Utility Commission. TXU Electric Delivery is
currently engaged in settlement discussions with the
cities and cities have granted an indefinite suspension in
the filing date.
PUC NO. 29253 - Petition of TXU Electric Delivery Company
for Approval of Transmission Cost Recovery Factor (TCRF)
Update
+ The PUC approved TXU Electric Delivery's proposed TCRF
on March 1, 2004
+ The increase will recover an additional $9.2 million in
annual revenue.
PUC NO. 29425 - Application of TXU Electric Delivery
Company for Interim Update of Wholesale Transmission Rates
filed March 3, 2004
+ Approved and effective April 15, 2004.
+ Total annualized revenue increase of $14 million
2ND 2004 TCRF UPDATE (DOCKET NO. 29985) -
+ TXU Electric Delivery filed its 2nd 2004 TCRF request
July 26, 2004.
+ Proposed total annualized revenue increase of $29.5
million ($9.8 for the remainder of 2004).
+ New TCRF rates were implemented September 1, 2004.
TXU CORP. SUMMARY OF SIGNIFICANT LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
DATE FILED CASE INFORMATION SUMMARY AND STATUS (1)
- -------------------- ----------------------------------------------- -------------------------------------------------
July 7, 2003 TEXAS COMMERCIAL ENERGY V. TXU ENERGY, INC., Filing made by an ERCOT market participant (Texas
ET AL.; Civil Action No. C-03-249; United Commercial Energy or TCE) against TXU Energy and
States District Court for the Southern other wholesale market participants in ERCOT
District of Texas asserting antitrust and other claims. TXU Energy
maintains the claims are without merit and filed a
motion to dismiss which the Court granted. The
dismissal has been appealed to the Fifth Circuit
by the Plaintiff. The appeal remains pending.
April 28, 2003 WILLIAM J. MURRAY V. TXU CORP., TXU ENERGY Filing made by a former employee claiming breach of
COMPANY, LLC AND TXU PORTFOLIO MANAGEMENT contract and employment termination under Section 806
COMPANY, LP F/K/A TXU ENERGY TRADING COMPANY of the Sarbanes-Oxley Act of 2002. The TXU Defendants
LP; Cause No. 3-03-CV-0888-P; United States believe the claims are without merit but cannot
District Court for the Northern District of predict the outcome of this action. Discovery in this
Texas, Dallas Division case is ongoing and the Court has set the case for
trial in June 2005.
February 3, 2004 PATRICK GOODENOUGH, JAMES BRANT HARGRAVE, Three ERISA lawsuits consolidated and a putative
KARI LYN SMITH AND CARL PFEIL, ON BEHALF OF class action filing made on February 3, 2004.
THE TXU THRIFT PLAN, AND ALL OTHER PERSONS Plaintiffs seek to represent a class of participants
SIMILARLY SITUATED, VS. TXU CORP. ET AL.; in employee benefit plans during the period between
Case No. 3:02-CV-2573-K; United States April 26, 2001 and October 11, 2002. The TXU
District Court for the Northern District of Defendants believe the claims are without merit but
Texas, Dallas Division cannot predict the outcome of this action. Initial
class action certification related discovery has
been completed and the Plaintiffs' initial class
certification motion was denied without prejudice.
A second class certification motion is pending
before the Court for decision.
March 10, 2003 KIMBERLY PAIGE KILLEBREW, ON BEHALF OF Filing made by an alleged retail consumer of
HERSELF AND ALL SIMILARLY-SITUATED electricity asserting defendants engaged in
INDIVIDUALS V. TXU CORP. AND TXU PORTFOLIO manipulation of the wholesale electric market and
MANAGEMENT COMPANY LP,; Cause No. 3:04cv806; violation of antitrust and other laws. The TXU
United States District Court for the Northern Defendants believe the claims are without merit but
District of Texas, Dallas Division cannot predict the outcome of this action. The case
has been stayed pending the final ruling in the
appeal of the TCE litigation described above.
October 23, 2002 BRUCE GIRDAUSKAS, DERIVATIVELY ON BEHALF OF Derivative filing made by a purported shareholder
TXU CORP. VS. TXU CORP. ET AL; Cause No. alleging breach of fiduciary duty. TXU Corp.
02-10191; 116th Judicial District Court of believes the claims are without merit but cannot
Dallas County, Texas predict the outcome of this action. Plaintiff failed
to make a pre-suit demand upon the directors as
required by law, and the case is currently stayed.
THE PLAINTOFF HAS FILED A MOTION TO LIFT THE STAY
WHICH HAS NOT YET BEEN ADDRESSED BY THE COURT.
BELIEVES THE CASE SHOULD BE DISMISSED.
January 2003, RICHARD SCHWARTZ, ET AL., V. TXU CORP ET AL.; A number of lawsuits were filed and consolidated, and
October 2002, Civil Action No.: 3:02-CV-2243-K; United an amended consolidated complaint was filed on July
November 2002, States District Court for the Northern 21, 2003. The complaint alleges violations of the
December 2002 District of Texas, Dallas Division Securities Act of 1933 and the Securities Exchange
Act of 1934, all relating to alleged materially
false and misleading statements. On January 20,
2005 a memorandum of understanding was signed
pursuant to which the case will be settled in
exchange for payment of $150 million, at least $66
million of which will be paid by TXU's D&O
Carriers. The settlement is subject to court
approval.
OTHER ITEMS
October, 2003 TXU EUROPE CLAIMS TXU Corp. received notice from certain creditors and
administrators of TXU Europe regarding potential
claims against the directors and officers for
allegedly failing to minimize the potential losses
to the creditors of TXU Europe. On January 28,
2005, TXU entered into a settlement agreement
providing for payment of approximately $220
million to the administrators of TXU Europe Ltd in
order to resolve the claims of the TXU Europe
companies and creditors of those companies.
(1) Detailed descriptions of these proceedings are available in the company's
10-K and 10-Q filings with the SEC.