Appendix Tables
Appendix Table A1: Consolidated -- Description of Special Items
Q2 05 and Q2 04; $ millions and $ per share after tax
Special Item Income Statement Q2 05 Q2 05 Q2 05 Q2 04 Q2 04
Line Cash
TXU Energy
Holdings segment:
Outsourcing/
transition
costs Other deductions 2 0.01 2 - -
Severance and
related
expenses Other deductions - - - 46 0.14
Inventory/gas
plant
write-downs Other deductions - - - 51 0.15
Software
projects
write-off Other deductions - - - 70 0.21
Other charges SG&A - - - 2 -
TXU Electric
Delivery segment:
Outsourcing/
transition
costs Other deductions - - - 13 0.04
Corporate and Other:
Compensation/
professional
fees SG&A - - - 49 0.14
Litigation
settlement Other deductions - - - 65 0.19
Liability
management
expense Other deductions - - - 39 0.12
Outsourcing/
transition
costs Other deductions - - - 3 0.01
Income tax
benefit Income tax expense - - - (75) (0.22)
Total 2 0.01 2 263 0.78
Appendix Table A2: Consolidated - Description of Special Items
YTD 05 and YTD 04; $ millions and $ per share after tax
Special Item Income Statement YTD YTD YTD 05 YTD 05 YTD YTD
Line 05 05 Cash Non-Cash(7) 04 04
TXU Energy
Holdings segment:
Outsourcing/
transition
costs Other deductions 4 0.02 4 -
Severance and
related
expenses Other deductions - - - - 59 0.16
Inventory/
gas plant
write-down Other deductions - - - - 51 0.14
Software
projects
write-off Other deductions - - - - 70 0.20
TXU Electric
Delivery segment:
Outsourcing/
transition
costs Other deductions 1 - 1 - 13 0.04
Corporate
and Other:
Litigation
settlement
benefit Other income (23) (0.09) - (23) - -
Compensation/
professional
fees SG&A 3 0.01 3 - 63 0.17
Litigation
settlement Other deductions - - - - 65 0.18
Liability
management
expense Other deductions - - - - 39 0.11
Outsourcing/
transition
costs Other deductions 1 - 1 - 3 0.01
Income tax
benefit Income tax expense (138) (0.57) - (138) (75) (0.21)
Total (152) (0.63) 9 (161) 288 0.80
Appendix Table B: TXU Energy Holdings Segment -- Operating Revenues
Q2 05 vs. Q2 04 and YTD 05 vs. YTD 04; $ millions and mixed measures
Operating Revenue
Component Q2 05 Q2 04 % Change YTD 05 YTD 04 % Change
Retail electricity
revenues(8):
Native market:
Residential 838 750 11.7 1,474 1,400 5.3
Small business 270 258 4.7 498 514 (3.1)
Total native
market 1,108 1,008 9.9 1,972 1,914 3.0
Other markets:
Residential 99 72 37.5 156 115 35.7
Small business 15 8 87.5 27 14 92.9
Total other
markets 114 80 42.5 183 129 41.9
Large business 332 455 (27.0) 659 908 (27.4)
Total retail
electricity
revenues 1,554 1,543 0.7 2,814 2,951 (4.6)
Wholesale
electricity
revenues 549 476 15.3 1,065 942 13.1
Hedging and
risk mgmt.
activities:
Realized gains
(losses) 5 24 (79.2) (24) 34 -
Reversal of
prior recognized
unrealized gains (14) (9) 55.6 (23) (39) (41.0)
Unrealized gains
(losses) on open
positions(9) 56 (4) - 41 8 -
Total 47 11 - (6) 3 -
Other revenues 77 85 (9.4) 157 176 (10.8)
Total operating
revenues 2,227 2,115 5.3 4,030 4,072 (1.0)
Average
revenue ($/MWh):
Residential 117.80 101.53 16.0 109.39 96.27 13.6
Small business 116.38 101.28 14.9 113.59 101.06 12.4
Large business 79.43 67.14 18.3 77.19 67.33 14.6
Average wires
charge ($/MWh) 22.84 20.86 9.5 23.95 21.59 10.9
Appendix Table C: TXU Energy Holdings Segment -- Retail and Wholesale
Sales
Q2 05 vs. Q2 04 and YTD 05 vs. YTD 04; mixed measures
Volume Component Q2 05 Q2 04 % Change YTD 05 YTD 04 % Change
Retail electricity
sales (GWh):
Native market:
Residential 7,100 7,367 (3.6) 13,417 14,486 (7.4)
Small business 2,289 2,542 (10.0) 4,323 5,075 (14.8)
Total native
market 9,389 9,909 (5.2) 17,740 19,561 (9.3)
Other markets:
Residential 858 731 17.4 1,486 1,249 19.0
Small business 165 89 85.4 304 150 -
Total other
markets 1,023 820 24.8 1,790 1,399 27.9
Large business 4,172 6,771 (38.4) 8,534 13,480 (36.7)
Total retail
electricity
sales 14,584 17,500 (16.7) 28,064 34,440 (18.5)
Wholesale
electricity sales 11,331 12,171 (6.9) 22,811 24,724 (7.7)
Total
electricity
sales 25,915 29,671 (12.7) 50,875 59,164 (14.0)
Volumes (GWh)
- weather
adjusted(10):
Residential 7,643 8,098 (5.6) 14,727 15,735 (6.4)
Small business 2,411 2,631 (8.4) 4,601 5,225 (11.9)
Large business 4,166 6,771 (38.5) 8,542 13,480 (36.6)
Average KWh/
customer(11):
Residential 3,809 3,649 4.4 7,091 7,108 (0.2)
Small business 8,096 8,161 (0.8) 15,028 16,222 (7.4)
Large business 71,057 87,380 (18.7) 129,342 184,108 (29.7)
Average KWh/customer
- weather adjusted(10):
Residential 3,659 3,649 0.3 7,008 7,108 (1.4)
Small business 7,957 8,161 (2.5) 14,944 16,222 (7.9)
Large business 71,294 87,380 (18.4) 129,466 184,108 (29.7)
Weather - percent
of normal(12):
Cooling
degree days 102.2 89.9 13.7 101.3 92.2 9.9
Heating
degree days 106.9 109.9 (2.7) 89.6 93.8 (4.5)
Appendix Table D: TXU Energy Holdings Segment -- Retail Customer Counts
Q2 05 vs. Q4 04 and Q2 05 vs. Q2 04; end of period, thousands, # of
meters
Customer Component Q2 05 Q4 04 % Change Q2 05 Q2 04 % Change
Retail electricity
customers:
Native market:
Residential 1,865 1,951 (4.4) 1,865 2,037 (8.4)
Small business 294 309 (4.9) 294 318 (7.5)
Total native
market 2,159 2,260 (4.5) 2,159 2,355 (8.3)
Other markets:
Residential 193 194 (0.5) 193 183 5.5
Small business 7 6 16.7 7 6 16.7
Total other
markets 200 200 - 200 189 5.8
Large business 56 76 (26.3) 56 77 (27.3)
Total retail
electricity
customers 2,415 2,536 (4.8) 2,415 2,621 (7.9)
Estimated share
of market (%)(13):
Native market:
Residential 77 81 (4.9) 77 85 (9.4)
Small business 74 78 (5.1) 74 83 (10.8)
Total ERCOT:
Residential 42 44 (4.5) 42 45 (6.7)
Small business 30 31 (3.2) 30 33 (9.1)
Large business 25 33 (24.2) 24 35 (31.4)
Appendix Table E: TXU Energy Holdings Segment -- Cost of Energy Sold and
Delivery Fees
Q2 05 vs. Q2 04 and YTD 05 vs. YTD 04; $ millions
Cost Component Q2 05 Q2 04 % Change YTD 05 YTD 04 % Change
Nuclear fuel
(base-load) 18 17 5.9 38 38 -
Lignite/coal
(base-load) 119 116 2.6 234 242 (3.3)
Total base-load 137 133 3.0 272 280 (2.9)
Gas/oil fuel and
purchased power 671 788 (14.8) 1,186 1,456 (18.5)
Other cost of
energy sold 70 57 22.8 133 112 18.8
Cost of energy sold 878 978 (10.2) 1,591 1,848 (13.9)
Delivery fees 338 370 (8.6) 681 754 (9.7)
Cost of energy sold
and delivery fees 1,216 1,348 (9.8) 2,272 2,602 (12.7)
Appendix Table F: TXU Energy Holdings Segment -- Generation and Supply
Statistics
Q2 05 vs. Q2 04 and YTD 05 vs. YTD 04; mixed measures
Generation and
Supply Statistic Q2 05 Q2 04 % Change YTD 05 YTD 04 % Change
Production and
purchased power (GWh):
Nuclear (base-load) 4,250 3,992 6.5 9,047 8,845 2.3
Lignite/coal
(base-load) 10,605 10,223 3.7 21,125 20,426 3.4
Total base-load 14,855 14,215 4.5 30,172 29,271 3.1
Gas/oil 1,005 1,401 (28.3) 1,265 2,311 (45.3)
Purchased power 10,780 15,237 (29.3) 20,586 29,469 (30.1)
Total energy
supply 26,640 30,853 (13.7) 52,023 61,051 (14.8)
Less line loss
and other 725 1,182 (38.7) 1,148 1,887 (39.2)
Net energy
supply 25,915 29,671 (12.7) 50,875 59,164 (14.0)
Base-load capacity
factors (%):
Nuclear 84.9 79.9 6.3 90.8 88.4 2.7
Lignite/coal 86.9 83.9 3.6 87.3 83.8 4.2
Total base-load 86.3 82.8 4.2 88.3 85.1 3.8
Base-load capacity
factors(14) (%):
Nuclear 101.4 98.5 2.9 100.8 98.8 2.0
Lignite/coal 96.2 92.9 3.6 96.1 92.6 3.8
Total base-load 97.6 94.5 3.3 97.4 94.4 3.2
Fuel and purchased
power costs ($/MWh):
Nuclear generation 4.20 4.25 (1.2) 4.19 4.34 (3.5)
Lignite/coal
generation(15) 12.02 12.36 (2.8) 11.98 12.81 (6.5)
Total base-load 9.78 10.08 (3.0) 9.64 10.25 (6.0)
Gas/oil generation
and purchased power 56.59 47.17 20.0 54.27 45.60 19.0
ERCOT MCPE(16) ($/MWh) 54.40 43.90 23.9 48.88 38.80 26.0
ERCOT MWD(17) ($/MWh) 55.80 45.41 22.9 50.05 41.90 19.5
Gas Daily(18) ($/MMBtu) 6.84 6.00 14.0 6.47 5.69 13.7
Implied heat rate(19)
(MMBtu/MWh) 8.16 7.57 7.8 7.74 7.36 5.2
NYMEX strip(20)
($/MMBtu) 7.55 6.21 21.6 7.24 5.84 24.0
Appendix Table G: TXU Energy Holdings -- Maturity Dates of Net Unrealized
Mark-to-Market Assets/Liabilities
6/30/05; $ millions unless noted
Less Than More Than
Source of Fair Value 1 Year 1-3 Years 4-5 Years 5 Years Total
Prices actively quoted 14 59 2 - 75
Prices provided by
other external sources (35) (34) (2) (4) (75)
Prices based on models 19 14 - - 33
Total (2) 39 - (4) 33
Percentage (%) of total
fair value (6) 118 - (12) 100
Appendix Table H: TXU Energy Holdings Segment -- Changes in Commodity
Contract Assets and Liabilities
YTD 05; $ millions
Change Component Impact
Balance of net commodity contract
assets -- beginning of period 23
Settlements of positions included
in the opening balance(21) (23)
Unrealized mark-to-market valuations
of positions held at end of period 35
Other activity(22) 50
Balance of net commodity contract
assets -- end of period 85
Appendix Table I: TXU Electric Delivery Segment -- Operating Revenues
Q2 05 vs. Q2 04 and YTD 05 vs. YTD 04; $ millions
Revenue Component Q2 05 Q2 04 % Change YTD 05 YTD 04 % Change
Electricity
transmission and
distribution:
Affiliated (TXU
Energy Holdings) 304 335 (9.3) 615 685 (10.2)
Nonaffiliated 260 183 42.1 499 356 40.2
Total 564 518 8.9 1,114 1,041 7.0
Appendix Table J1: TXU Electric Delivery Segment -- Operating Statistics
Q2 05 and Q2 04; mixed measures
Operating Statistic Q2 05 Q2 04 % Change
Volumes - Electricity distribution (GWh) 25,459 24,900 2.2
Electricity points of delivery
- number of meters (end of
period, in thousands)(23) 2,996 2,954 1.4
System Average Interruption
Duration Index (SAIDI) (non-storm)(24) 77.71 75.77 (2.6)
System Average Interruption
Frequency Index (SAIFI) (non-storm)(24) 0.98 0.95 (3.2)
Customer Average Interruption
Duration Index (CAIDI) (non-storm)(24) 79.10 79.93 1.0
Appendix Table J2: TXU Electric Delivery Segment -- Operating Statistics
YTD 05 and YTD 04; mixed measures
Operating Statistic YTD 05 YTD 04 % Change
Volumes - Electricity distribution (GWh) 48,907 48,531 0.8
Appendix Table K: Details of Discontinued Operations
Q2 05, Q2 04, YTD 05 and YTD 04; $ millions and $ per share after tax
Discontinued
Operation Q2 05 Q2 05 Q2 04 Q2 04 YTD 05 YTD 05 YTD 04 YTD 04
TXU Energy
Holdings
segment (1) - (27) (0.08) (4) (0.02) (30) (0.09)
TXU
Australia - - (118) (0.37) 1 - (86) (0.27)
TXU
Gas (3) (0.02) (158) (0.49) 14 0.07 (120) (0.37)
Corporate
and Other - - 633 1.97 - - 616 1.91
Total (4) (0.02) 330 1.03 11 0.05 380 1.18
Attachment 1: Financial Definitions
Cash Interest Expense (non-GAAP): Interest expense and related charges
less amortization of discount and reacquired debt expense plus capitalized
interest. Cash interest expense is a measure used by TXU to assess credit
quality.
Contribution Margin: Operating revenues (GAAP) less cost of energy sold
and delivery fees (GAAP).
EBIT (non-GAAP): Income from continuing operations before interest income,
interest expense and related charges, and income tax and special items. EBIT
is a measure used by TXU to assess performance.
EBITDA (non-GAAP): Income from continuing operations before interest
income, interest expense and related charges, and income tax plus depreciation
and amortization and special items. EBITDA is a measure used by TXU to assess
performance.
EBITDA/Interest (non-GAAP): EBITDA divided by cash interest expense is a
measure used by TXU to assess credit quality.
Total Debt/EBITDA (non-GAAP): Total debt less transition bonds and debt-
related restricted cash divided by EBITDA. Transition, or securitization,
bonds are serviced by a regulatory transition charge on wires rates and are
therefore excluded from debt in credit reviews. Debt-related restricted cash
is treated as net debt in credit reviews. Debt/EBITDA is a measure used by
TXU to assess credit quality.
Free Cash Flow (non-GAAP): Cash provided by operating activities less
capital expenditures and nuclear fuel. Used predominantly as a forecasting
tool to estimate cash available for dividends, debt reduction, and other
investments.
Income from Continuing Operations per Share (GAAP): Per share (diluted)
income from continuing operations before cumulative effect of changes in
accounting principles, before preference stock dividends.
Operational Earnings (non-GAAP): Income from continuing operations net of
preference stock dividends, excluding special items and the adjustment in 2005
for the cost of the true-up payment on the 52.5 million share accelerated
common stock repurchase. TXU relies on operational earnings for evaluation of
performance and believes that analysis of the business by external users is
enhanced by visibility to both reported GAAP earnings and operational
earnings.
Operational Earnings per Share (non-GAAP): Per share (diluted) income
from continuing operations net of preference stock dividends, excluding
special items and the adjustment in 2005 for the cost of a true-up payment on
the 52.5 million share accelerated common stock repurchase.
Reported Earnings per Share (GAAP): Per share (diluted) net income
available to common shareholders.
Return on Average Common Stock Equity Based on Net Income (GAAP): Twelve
months ended net income available for common stock (GAAP) divided by the
average of the beginning and ending common stock equity (GAAP) for the period
calculated.
Return on Average Common Stock Equity Based on Operational Earnings (non-
GAAP): Twelve months ended operational earnings (non-GAAP) divided by the
average of the beginning and ending common stock equity (GAAP) for the period
calculated. This measure is used to evaluate operational performance and
management effectiveness.
Return on Invested Capital Based on Adjusted Net Income (non-GAAP):
Twelve months ended net income (GAAP) plus after-tax interest expense and
related charges net of interest income on restricted cash related to debt,
divided by the average of the beginning and ending total capitalization less
debt-related restricted cash for the period calculated. This measure is used
to evaluate operational performance and management effectiveness.
Return on Invested Capital Based on Adjusted Operational Earnings (non-
GAAP): Twelve months ended operational earnings (non-GAAP) plus preference
stock dividends plus after-tax interest expense and related charges net of
interest income on restricted cash related to debt, divided by the average of
the beginning and ending total capitalization less debt-related restricted
cash for the period calculated. This measure is used to evaluate operational
performance and management effectiveness.
Special Items: Unusual charges related to the implementation of the
performance improvement program and other charges, credits or gains that are
unusual or nonrecurring. Special items are included in reported GAAP
earnings, but are excluded from operational earnings. Special items
associated with the performance improvement program include debt
extinguishment losses and costs related to severance programs, asset
impairments and facility closures.
Total Capitalization (non-GAAP): Total debt plus shareholders equity.
Total Debt (GAAP): Long-term debt (including current portion), plus bank
loans and commercial paper plus long-term debt held by subsidiary trusts plus
preferred securities of subsidiaries, including exchangeable preferred
membership interests (EPMI).
Total Debt less Transition Bonds and Restricted Cash (non-GAAP): TXU also
uses a total debt measure that excludes transition bonds and restricted cash.
Transition, or securitization, bonds are serviced by a regulatory transition
charge on wires rates and are therefore excluded from debt in credit reviews.
Debt-related restricted cash is treated as net debt in credit reviews. TXU
uses this measure to evaluate its debt and capitalization levels.
Exhibits: Regulation G - Reconciliation of Non-GAAP Financial Measures to the
Most Directly Comparable GAAP Attachment 2: Financial Measures
Exhibit 1: Return on Average Common Stock Equity Calculation
Twelve months ended 6/30/05 and 6/30/04; $ millions unless otherwise noted
Component 6/30/05 6/30/04 Ref
Net income (loss) available
for common stock 830 (10) A
Income from continuing operations
before extraordinary gain and
cumulative effect of changes
in accounting principles 831 412
Special items 388 288
Preference stock dividends (21) (22)
Operational earnings 1,198 678 B
Average common equity 2,245 4,506 C
Return on average common
equity - based on net
income - percent (A/C) 37.0 (0.2)
Return on average common
equity - based on
operational earnings -
percent (B/C) 53.4 15.0
Exhibit 2: Return on Average Invested Capital Calculation
Twelve months ended 6/30/05 and 6/30/04; $ millions unless otherwise noted
Component 6/30/05 6/30/04 Ref
Net income 851 861
After-tax interest expense
and related charges net of
interest income (a) 442 463
Total return (based on
net income) 1,293 1,324 A
Operational earnings 1,198 678
Preference stock dividends 21 22
After-tax interest expense and
related charges net of
interest income (a) 442 463
Total return (based on
operational earnings) 1,661 1,163 B
Average total capitalization 16,440 18,054 C
Return on average invested
capital - based on net
income (A/C) (%) 7.9 7.3
Return on average invested
capital - based on
operational earnings (B/C)(%) 10.1 6.4
(a) After-tax interest expense and related charges net of interest income
Interest expense 721 739
Interest income (41) (27)
Net 680 712
Tax at 35% 238 249
Net of tax 442 463
Exhibit 3: Interest and Debt Coverage Ratios
Twelve months ended 6/30/05 and 6/30/04; $ millions unless otherwise noted
Component 6/30/05 6/30/04 Ref
Income from continuing operations
before income taxes and
extraordinary items 1,124 493
Interest expense and
related charges 721 739
Interest income (41) (27)
Depreciation and amortization 769 740
EBITDA 2,573 1,945
Special items 647 521
EBITDA (excluding special items) 3,220 2,466 A
Interest expense and related
charges 721 739
Amortization of discount and
reacquired debt expense (25) (29)
Capitalized interest 16 11
Cash interest expense 712 721 B
Total debt 13,996 14,094 C
Transition bonds (1,212) (1,282)
Debt-related restricted cash - (525)
Total debt less transition bonds 12,784 12,287 D
Cash provided by operating
activities 1,865 1,662 E
Reconciling adjustments from
cash flow statement 1,034 1,250
Income from continuing operations 831 412
EBITDA/interest - ratio (A/B) 4.5 3.4
Debt/EBITDA - ratio (D/A) 4.0 5.0
Cash provided by operating
activities + cash interest
expense/cash interest
expense-ratio (E+B/B) 3.6 3.3
Total debt/cash provided by
operating activities - ratio (C/E) 7.5 8.5
Exhibit 4a: Consolidated -- Operational Earnings Reconciliation
Q2 05; $ millions and $ per share after tax
Factor Energy Energy Electric Electric Corp. Corp. Total Total
Holdings Holdings Delivery Delivery & Other & Other
Operational
earnings 347 1.43 86 0.35 (52) (0.21) 381 1.57
Special items (2) (0.01) - - - - (2)(0.01)
Effect of ASR
true-up - - - - - (0.15) - (0.15)
Preference stock
dividends - - - - 4 0.02 4 0.02
Income (loss)
from cont.
operations 345 1.42 86 0.35 (48) (0.34) 383 1.43
Discontinued
operations (1) - - - (3) (0.02) (4)(0.02)
Preference
stock dividends - - - - (4) (0.02) (4)(0.02)
Net income
to common 344 1.42 86 0.35 (55) (0.38) 375 1.39
Average shares
- diluted 243
Average shares
- basic 238
Exhibit 4b: Consolidated -- Operational Earnings Reconciliation
Q2 04; $ millions and $ per share after tax
Factor Energy Energy Electric Electric Corp. Corp. Total Total
Holdings Holdings Delivery Delivery & Other & Other
Operational
earnings 150 0.45 60 0.18 (42) (0.12) 168 0.51
Special
items (169) (0.50) (13) (0.04) (81) (0.24) (263)(0.78)
Effect of
share
dilution - (0.01) - 0.01 - (0.03) - (0.03)
Preference
stock
dividends - - - - 5 0.02 5 0.02
Income (loss)
from cont.
operations (19) (0.06) 47 0.15 (118) (0.37) (90)(0.28)
Discontinued
operations (27) (0.08) - - 357 1.11 330 1.03
Buyback premium
on EPMI - - - - (849) (2.65) (849)(2.65)
Extraordinary
gain - - 16 0.05 - - 16 0.05
Preference
stock
dividends - - - - (5) (0.02) (5)(0.02)
Net income to
common (46) (0.14) 63 0.20 (615) (1.93) (598)(1.87)
Average shares
- diluted 337
Average shares
- basic 320
Exhibit 4c: Consolidated -- Operational Earnings Reconciliation
YTD 05 04; $ millions and $ per share after tax
Factor Energy Energy Electric Electric Corp. Corp. Total Total
Holdings Holdings Delivery Delivery & Other & Other
Operational
earnings 552 2.27 158 0.65 (82) (0.34) 628 2.58
Special items (4) (0.02) (1) - 157 0.65 152 0.63
Effect of ASR
true-up/
rounding - 0.01 - - (2.06) - (2.05)
Preference
stock
dividends - - - - 10 0.04 10 0.04
Income (loss)
from cont.
operations 548 2.26 157 0.65 85 (1.71) 790 1.20
Discontinued
operations (4) (0.02) - - 15 0.07 11 0.05
Preference
stock
dividends - - - - (10) (0.04) (10)(0.04)
Net income to
common 544 2.24 157 0.65 90 (1.68) 791 1.21
Average shares
- diluted 243
Average shares
- basic 238
Exhibit 4d: Consolidated -- Operational Earnings Reconciliation
YTD 04; $ millions and $ per share after tax
Factor Energy Energy Electric Electric Corp. Corp. Total Total
Holdings Holdings Delivery Delivery & Other & Other
Operational
earnings 278 0.78 126 0.35 (88) (0.20) 316 0.93
Special items(180) (0.50) (13) (0.04) (95) (0.26)(288)(0.80)
Effect of
share
dilution/
rounding (1) 0.02 - 0.04 1 (0.10) - (0.04)
Preference
stock
dividends - - - - 11 0.03 11 0.03
Income (loss)
from cont.
operations 97 0.30 113 0.35 (171) (0.53) 39 0.12
Discontinued
operations (30) (0.09) - - 410 1.27 380 1.18
Buyback
premium on
EPMI - - - - (849) (2.64)(849)(2.64)
Extraordinary
gain - - 16 0.05 - - 16 0.05
Preference
stock
dividends - - - - (11) (0.03) (11)(0.03)
Net income to
common 67 0.21 129 0.40 (621) (1.93)(425)(1.32)
Average shares
- diluted 358
Average shares
- basic 322
(1) A summary of the calculations of diluted earnings per share for the
quarter and year-to-date periods is provided in Tables 1a and 1b on
page 3.
(2) Operational earnings is a non-GAAP measure that adjusts net income for
special items. See Attachment 1: Financial Definitions for a detailed
definition of operational earnings and other GAAP and non-GAAP
financial measures used in this release.
(3) TXU Corp. does not provide net income outlook because it cannot
reliably predict future special items or extraordinary events.
(4) See Appendix Table K for details of discontinued operations.
(5) For the second quarter 2005, the dilution calculation for reported and
operational earnings reflects the addition to net income of interest
on convertible senior notes of $0.2 million after tax and addition of
4.6 million shares related to the effect of share-based compensation
(2.8 million), convertible senior notes (0.7 million) and equity-
linked securities (1.1 million). The diluted earnings per share
calculation for reported earnings also reflects a reduction of net
income by a $36 million increase in the actual cash true-up of the
company's share repurchase program from the value estimated at March
31, 2005. For the second quarter 2004, reported earnings per share
are based upon basic shares because common stock equivalents are not
dilutive. For the operational earnings dilution calculation, the $4
million after-tax interest expense on the EPMI, which were repurchased
by TXU Corp. on April 26, 2004, are added to net income, and the
related weighted average 17 million shares are added to the weighted
average share count.
(6) For the 2005 year-to-date period, the dilution calculation for
reported and operational earnings reflects the addition to net income
of interest on convertible senior notes of $0.4 million after tax and
addition of 5 million shares related primarily to the effect of share-
based compensation (3.4 million), convertible senior notes (0.7
million) and equity-linked securities (0.9 million). The diluted
earnings per share calculation for reported earnings also reflects a
reduction of net income by a $498 million change in the actual cash
true-up of the company's share repurchase program from the value
estimated at December 31, 2004. For year-to-date 2004, reported
earnings per share are based upon basic shares because common stock
equivalents are not dilutive. For the operational earnings dilution
calculation, the $18 million after-tax interest expense on the EPMI
are added to net income, and the related weighted average 37 million
shares are added to the weighted average share count.
(7) While these items are reflected in earnings for the current period,
the cash impact, if any, will be realized in future periods. These
items are considered non-cash for the current period.
(8) Breakout of native and other markets are estimates and provided for
reference only.
(9) Net unrealized mark-to-market gains/(losses): second quarter 2005
includes $3 million of ineffectiveness gains related to cash flow
hedges versus $2 million of ineffectiveness losses for the comparable
period in 2004. Year-to-date 2005 includes $6 million of
ineffectiveness gains related to cash flow hedges versus $17 million
of ineffectiveness losses for the comparable period in 2004.
(10) 2005 amounts adjusted for estimated weather effect as compared to
2004.
(11) Based upon the average of the period beginning and ending customers.
(12) Average for service territory is based on a 50 percent - DFW, 25
percent - Mineral Wells and 25 percent Waco weighting. Weather data
is obtained from WeatherBank, Inc., an independent company that
collects and archives weather data from reporting stations of the
National Oceanic and Atmospheric Administration (a federal agency
under the U.S. Department of Commerce). Energy degree days
calculation includes both heating degree and cooling degree days.
(13) End of period. Estimated market share for residential and small and
medium business is based on the estimated number of customers
(meters) in the native market and the estimated number of customers
(meters) in ERCOT that have choice. Estimated market share for large
business is based on the estimated annualized consumption for this
overall market within ERCOT.
(14) Excludes planned outages and economic back-down.
(15) Includes depreciation and amortization of lignite mining plant and
equipment and related asset retirement obligations, which are
reported as depreciation and amortization expense, but are part of
overall fuel costs.
(16) MCPE is Market Clearing Price of Energy in ERCOT. Prices quoted are
for MCPE North Zone (24x7) as most of TXU Energy's generation
capacity and customers are in the North Zone. MCPE does not include
shaping, ancillary services and other retail related purchased power
costs.
(17) MWD refers to indexed prices as referenced in the Megawatt Daily
publication. Prices quoted are for MWD North Zone (24x7) as most of
TXU Energy Holding's generation capacity and customers are in the
North Zone. MWD pricing is based upon surveys.
(18) Houston Ship Channel average daily prices.
(19) The efficiency at which a marginal unit converts fuel to electricity.
Calculated by dividing ERCOT MWD price by Gas Daily natural gas
price.
(20) Average daily 12-month strip closing price for the period.
(21) Represents unrealized mark-to-market valuations of these positions as
of the beginning of the period settled or recognized in earnings
during the quarter.
(22) Includes initial values of positions involving the receipt or payment
of cash or other consideration, including $56 million related to
natural gas physical swap transactions, as well as option premiums
and related amortization. Year-to-date includes $12 million charge
related to nonperformance by a coal contract counterparty. These
activities have no effect on unrealized mark-to-market valuations.
(23) Includes lighting sites, principally guard lights, for which TXU
Energy Retail is the REP, which are not included in TXU Energy
Retail's customer count. Such sites totaled 88,242 and 98,292 at June
30, 2005 and 2004, respectively. Adjusting for the guard lights,
which have minimal value, points of delivery increased 1.8 percent.
(24) SAIDI is the number of minutes in a year the average customer is out
of electric service. SAIFI is the number of times in a year the
average customer experiences an interruption to electric service.
CAIDI is the duration of the average interruption to electric
service.
TXU CORP.
DALLAS, TEXAS
SUMMARY OF CONSOLIDATED EARNINGS
(Unaudited)
THREE MONTHS ENDED June 30 2005 2004 % Change
Operating Revenues $2,486,000,000 $2,303,000,000 7.9%
Income (Loss) from Continuing
Operations (a) $383,000,000 ($90,000,000) -
Consolidated Net Income
(Loss) Available for
Common Stock (b) $375,000,000 (c) ($598,000,000) -
Average Number of Shares of
Common Stock Outstanding,
Basic 238,000,000 320,000,000 -25.6%
Average Number of Shares of
Common Stock Outstanding,
Diluted 243,000,000 320,000,000 -24.1%
Basic Earnings Per Share $1.57 ($1.87) -
Diluted Earnings Per Share $1.39 ($1.87) -
SIX MONTHS ENDED June 30 2005 2004 % Change
Operating Revenues $4,526,000,000 $4,435,000,000 2.1%
Income from Continuing
Operations (a) $790,000,000 $39,000,000 -
Consolidated Net Income
Available for Common Stock (b) $791,000,000 (d) ($425,000,000) -
Average Number of Shares of
Common Stock Outstanding,
Basic 238,000,000 322,000,000 -26.1%
Average Number of Shares of
Common Stock Outstanding,
Diluted 243,000,000 322,000,000 -24.5%
Basic Earnings Per Share $3.32 ($1.32) -
Diluted Earnings Per Share $1.21 ($1.32) -
(a) Before extraordinary items and after preference stock dividends.
Includes ($2) million in Q2 05 of special charges related to outsourcing
transition costs and $152 million in YTD 05 of income from special items
primarily related to a tax benefit and insurance recovery. Includes ($263)
million in Q2 04 and ($288) million in YTD 04 of special charges related
primarily to TXU's restructuring program.
(b) Includes a loss from discontinued operations of ($4) million in Q2
05, and income from discontinued operations of $11 million in YTD 05.
(c) Includes significant charges of ($849) million associated with the
repurchase of preferred securities, income from discontinued operations of
$330 million, and an extraordinary gain of $16 million related to TXU's
restructuring program.
(d) Includes significant charges of ($849) million associated with the
repurchase of preferred securities, income from discontinued operations of
$380 million, and an extraordinary gain of $16 million related to TXU's
restructuring program.
SOURCE TXU Corp.
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