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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) - JULY 31, 2000
TXU CORP.
(Exact name of registrant as specified in its charter)
TEXAS 1-12833 75-2669310
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
ENERGY PLAZA, 1601 BRYAN STREET, DALLAS, TEXAS 75201-3411
(Address of principal executive offices, including zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE - (214) 812-4600
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<PAGE>
ITEM 5. OTHER EVENTS.
TXU Corp. ("TXU"), a multinational energy services company with interests in the
United States, Europe and Australia, today announced record financial results
for the second quarter and 12 months ended June 30, 2000.
Earnings for the second quarter of 2000 were $0.87 per share of common stock on
record revenues of $4.6 billion (an increase of 23 percent) and record net
income of $227 million. This compares to $0.35 per share for the second quarter
of 1999. Excluding non-recurring items discussed below, operating earnings for
the second quarter of 2000 were $0.67 per share of common stock compared to
$0.52 per share for the same period in 1999, a 29 percent increase.
Earnings for the quarter reflect continued strong revenue growth, cost controls
and significant mitigation of potentially stranded costs (as discussed below)
from the U.S. Electric segment. Contribution from Australian operations improved
significantly as a result of integration of natural gas operations and the
additions of the only gas storage facility in Victoria in 1999 and 1,280 MW of
generating capacity in South Australia in May 2000. TXU Europe continued to
perform well in spite of the network rate reductions implemented April 1, 2000.
Earnings per share for both the quarter and 12 months ended benefited from
TXU's common stock repurchase program. TXU has repurchased over $400 million
or 12.7 million shares of common stock this year, bringing total repurchases
under the $1.6 billion program to more than 24.6 million shares since 1995.
Over $700 million remains under the program.
Earnings for the 12 months ended June 30, 2000 were $4.13 per share of common
stock on record revenues of $18.3 billion (an increase of 6 percent) and record
net income of $1.1 billion. This compares to $2.88 per share for the prior-year
period. Excluding non-recurring items, earnings for the current 12-month period
were $3.60 per share of common stock compared to $2.92 per share in the
prior-year period, a 23 percent increase.
Earnings for the 12 months ended June 30, 2000 reflect continued strong
contribution from U.S. Electric operations. The results also include significant
improvements from the U.S. Gas and Australia segments. The U.S. Gas segment, in
spite of very mild winter weather, improved results due to its revenue
enhancement program and continued cost control efforts. TXU Australia's
significantly improved contribution resulted from the same factors as the
quarter improvement. TXU Europe provided increased contribution in spite of
lower wholesale electricity prices in the first quarter and the network rate
reduction implemented April 1, 2000.
Quarter and 12 months ended June 30, 2000 results were affected by non-recurring
restructuring costs in Europe, primarily associated with the implementation of
the innovative "24-Seven" joint venture to operate TXU Europe's United Kingdom
electric distribution network with that of London Electricity, a gain on the
sale of the UK metering business, and a gain on the sale of substantially all of
the assets of TXU Processing in Texas. Current 12 months ended results were also
<PAGE>
affected by a gain on the sale of TXU's 20 percent interest in the partnerships
that operate PrimeCo Personal Communications LP's Texas business in the fourth
quarter of 1999.
Quarter and 12 months ended June 30, 1999 results were affected by the cost of a
fuel reconciliation settlement refund in Texas and non-recurring integration and
acquisition-related costs in Australia. The 12-month period was also affected by
a non-recurring gain from TXU Europe's renegotiation of a long-term gas contract
in the fourth quarter of 1998.
For the quarter ended June 30, 2000, U.S. Electric accelerated nuclear
mitigation was $151 million ($51 million related to transmission and
distribution depreciation transfer and $100 million to reduce earnings to the
earnings cap). For the 12 months ended June 30, 2000, accelerated nuclear
mitigation was $381 million ($198 million related to transmission and
distribution depreciation transfer and $183 million to reduce earnings to the
earnings cap). Nuclear mitigation recorded since January 1998, which reduces
potentially stranded costs, exceeds $1.6 billion.
<PAGE>
TXU CORP.
DALLAS, TEXAS
SUMMARY OF CONSOLIDATED EARNINGS
(UNAUDITED)
2ND QTR ENDED JUNE 30 2000 1999
---- ----
Operating Revenues $4,592,000,000 $3,729,000,000
Consolidated Net Income A$227,000,000 B$99,000,000
Average Number of Shares of 263,100,000 280,500,000
Common Stock Outstanding
Basic and Diluted Earnings Per Share $0.87 $0.35
12 MONTHS ENDED JUNE 30
Operating Revenues $18,289,000,000 $17,197,000,000
Consolidated Net Income C$1,124,000,000 D$811,000,000
Average Number of Shares of 271,800,000 281,400,000
Common Stock Outstanding
Basic and Diluted Earnings Per Share $4.13 $2.88
A - INCLUDES NET POSITIVE NON-RECURRING GAINS AND COSTS OF APPROXIMATELY $50
MILLION (AFTER TAX). [THIS INCLUDES NON-RECURRING GAINS AND RESTRUCTURING
RELATED COSTS AT TXU EUROPE AND A GAIN ON THE SALE OF TXU PROCESSING.]
B - INCLUDES NON-RECURRING COSTS OF APPROXIMATELY $48 MILLION (AFTER TAX).
[THIS INCLUDES A FUEL RECONCILIATION SETTLEMENT AT TXU ELECTRIC AND
ACQUISITION AND INTEGRATION RELATED COSTS AT TXU AUSTRALIA REPORTED IN THE
SECOND QUARTER OF 1999.]
C - INCLUDES NET POSITIVE NON-RECURRING GAINS AND COSTS OF APPROXIMATELY $145
MILLION (AFTER TAX). [THIS INCLUDES ITEMS IN "A" ABOVE AND A FOURTH QUARTER
1999 GAIN ON THE SALE OF TXU'S 20% INTEREST IN THE PARTNERSHIPS THAT
OPERATE PRIMECO PERSONAL COMMUNICATIONS LP.]
D - INCLUDES NET NEGATIVE NON-RECURRING COSTS AND GAINS OF APPROXIMATELY $10
MILLION (AFTER TAX). [THIS INCLUDES ITEMS IN "B" ABOVE AND A FOURTH QUARTER
1998 TXU EUROPE GAIN ON RENEGOTIATION OF A GAS SUPPLY CONTRACT.]
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<TABLE>
<CAPTION>
TXU CORP. AND SUBSIDIARIES
FINANCIAL AND OPERATING REPORT
FOR THE PERIODS ENDED JUNE 30, 2000
STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
--------------------- % ----------------------- %
2000 1999 Change 2000 1999 Change
---------- ---------- -------- ----------- ----------- --------
Millions of Dollars Millions of Dollars
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES........................................ $ 4,592 $ 3,729 23.1 $ 18,289 $ 17,197 6.3
---------- ---------- -------- ----------- ----------- --------
OPERATING EXPENSES
Energy purchased for resale and fuel consumed........... 2,902 1,989 45.9 10,429 9,551 9.2
Operation and maintenance............................... 658 706 (6.8) 3,322 2,957 12.3
Depreciation and other amortization..................... 257 306 (16.0) 1,050 1,168 (10.1)
Goodwill amortization................................... 48 49 (2.0) 194 178 9.0
Taxes other than income................................. 159 158 0.6 644 646 (0.3)
---------- ---------- -------- ----------- ----------- --------
Total operating expenses.............................. 4,024 3,208 25.4 15,639 14,500 7.9
---------- ---------- -------- ----------- ----------- --------
OPERATING INCOME.......................................... 568 521 9.0 2,650 2,697 (1.7)
OTHER INCOME (DEDUCTIONS) - NET........................... 121 (22) - 423 49 -
---------- ---------- -------- ----------- ----------- --------
INCOME BEFORE INTEREST, OTHER CHARGES
AND INCOME TAXES........................................ 689 499 38.1 3,073 2,746 11.9
---------- ---------- -------- ----------- ----------- --------
INTEREST INCOME........................................... 31 30 3.3 139 167 (16.8)
INTEREST EXPENSE AND OTHER CHARGES
Interest................................................ 368 361 1.9 1,470 1,510 (2.6)
Distributions on preferred securities of subsidiary
trust of TXU Europe................................... 4 - - 5 - -
Distributions on mandatorily redeemable, preferred
securities of subsidiary trusts, each holding solely
junior subordinated debentures of the obligated
company:
TXU Corp. obligated................................. 8 3 - 25 9 -
Subsidiary obligated................................ 19 20 (5.0) 78 78 -
Preferred stock dividends of subsidiaries............... 3 3 - 14 14 -
Allowance for borrowed funds used during construction
and capitalized interest.............................. (3) (3) - (9) (10) (10.0)
---------- ---------- -------- ----------- ----------- --------
Total interest expense and other charges.............. 399 384 3.9 1,583 1,601 (1.1)
---------- ---------- -------- ----------- ----------- --------
INCOME BEFORE INCOME TAXES................................ 321 145 - 1,629 1,312 24.2
INCOME TAX EXPENSE........................................ 94 46 - 505 501 0.8
---------- ---------- -------- ----------- ----------- --------
NET INCOME................................................ $ 227 $ 99 129.3 $ 1,124 $ 811 38.6
========== ========== ======== ============ =========== ========
Average shares of common stock outstanding (millions)..... 263 280 -6.1% 272 281 -3.2%
Per share of common stock:
Basic and diluted earnings.............................. $0.87 $0.35 148.6% $4.13 $2.88 43.4%
Dividends declared...................................... $0.60 $0.575 4.3% $2.375 $2.275 4.4%
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</TABLE>
Reference is made to the Notes to Financial Statements contained in the Annual
Report on Form 10-K of TXU Corp. and Subsidiaries (TXU Corp.), all Quarterly
Reports to the Securities and Exchange Commission on Form 10-Q and on the
following pages of this report.
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<TABLE>
<CAPTION>
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TXU CORP. AND SUBSIDIARIES
OPERATING AND FINANCIAL STATISTICS
PERIODS ENDED JUNE 30, 2000 AND 1999
Three Months Twelve Months
------------------------- ----------------------
2000 1999 2000 1999*
------------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
OPERATING STATISTICS
SALES VOLUMES
Electric (gigawatt-hours):
Residential......................................... 11,572 12,146 53,795 54,139
Commercial and industrial........................... 20,237 22,092 81,568 86,772
Other electric utilities............................ 1,139 1,042 3,487 4,101
------------- ----------- ---------- -----------
Total electric.................................... 32,948 35,280 138,850 145,012
============= =========== ========== ===========
Gas (billion cubic feet):
Residential......................................... 26 27 139 124
Commercial and industrial........................... 31 29 155 147
Pipeline transportation (billion cubic feet).......... 133 131 554 565
US energy trading and marketing:
Gas (billion cubic feet)............................ 306 241 1,136 1,208
Electric (gigawatt-hours)........................... 6,836 773 15,254 11,418
UK wholesale energy sales:
Gas (billion cubic feet)............................ 242 96 666 335
Electric (gigawatt-hours)........................... 33,263 17,694 94,889 76,106
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CUSTOMERS (end of period & in thousands)
Electric............................................ 5,872 6,314
Gas................................................. 2,536 2,583
Telephone access lines.............................. 167 108
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OPERATING REVENUES (millions of dollars)
Electric:
Residential......................................... $ 828 $ 881 $ 3,816 $ 3,900
Commercial and industrial........................... 872 946 3,577 4,065
Other electric utilities............................ 54 30 138 104
US fuel (including over/under-recovered)............ 577 371 1,915 1,659
Transmission service................................ 41 34 164 133
Other............................................... 132 170 689 734
------------- ----------- ---------- -----------
Subtotal.......................................... 2,504 2,432 10,299 10,595
Earnings in excess of earnings cap.................. (100) - (192) -
------------- ----------- ---------- -----------
Total electric.................................... 2,404 2,432 10,107 10,595
------------- ----------- ---------- -----------
Gas:
Residential......................................... 172 169 880 740
Commercial and industrial........................... 113 104 565 499
------------- ----------- ---------- -----------
Subtotal.......................................... 285 273 1,445 1,239
Agency & management fees............................ (17) (27) (63) (31)
------------- ----------- ---------- -----------
Net gas........................................... 268 246 1,382 1,208
------------- ----------- ---------- -----------
Pipeline transportation............................... 24 24 113 118
US energy trading and marketing....................... 1,179 542 3,840 3,142
UK wholesale energy sales............................. 564 443 2,426 2,189
Other revenues, net of intercompany eliminations...... 153 42 421 (55)
------------- ----------- ---------- -----------
Total operating revenues.......................... $ 4,592 $ 3,729 $ 18,289 $ 17,197
============= =========== ========== ===========
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FINANCIAL STATISTICS - JUNE 2000
COMMON STOCK DATA:
Shares outstanding - end of period (millions)............................................. 264
Book value per share - end of period...................................................... $29.73
Return on average common stock equity..................................................... 14.2%
Dividends declared as a percent of net income............................................. 56.9%
CAPITALIZATION RATIOS (end of period):
Long-term debt............................................................................ 61.7%
Preferred securities of subsidiary trusts................................................. 5.8
Preference and preferred stock............................................................ 2.0
Common stock equity....................................................................... 30.5
-----------
Total................................................................................. 100.0%
===========
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</TABLE>
* Includes volumes and revenues of Westar/Kinetik Energy from the date of
acquisition on February 24, 1999.
<PAGE>
Forward-Looking Statements
This report and other presentations made by TXU contain
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. Although TXU believes that in making any such
statement its expectations are based on reasonable assumptions, any such
statement involves uncertainties and is qualified in its entirety by reference
to factors contained in the Forward-Looking Statements sections of Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations in TXU's Annual Report on Form 10-K for the year December 31, 1999
and of Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations in TXU's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 2000, that could cause the actual results of TXU to
differ materially from those projected in such forward-looking statements.
Any forward-looking statement speaks only as of the date on which
such statement is made. TXU does not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time. It is not possible for TXU to
predict all of such factors, nor can it assess the impact of each such factor or
the extent to which any factor, or combination of factors, may cause results to
differ materially from those contained in any forward-looking statement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TXU CORP.
By: /s/ Jerry W. Pinkerton
-------------------------------------
Name: Jerry W. Pinkerton
Title: Controller and Principal
Accounting Officer
Date: July 31, 2000
