2. Slide 1: Safe Harbor Statement & Regulation G
This presentation contains forward-looking statements, which are
subject to various risks and uncertainties. Discussion of risks and
uncertainties that could cause actual results to differ materially from
management's current projections, forecasts, estimates and
expectations is contained in the Company's earnings release and
SEC filings.
Regulation G
This presentation includes certain non-GAAP financial measures. A
reconciliation of these measures to the most directly comparable
GAAP measure is included in the appendix of the printed version of
the slides and the version included on the company’s website at
www.txucorp.com under Investor Resources/Presentations.
3. Slide 2: Solid Performance By All Core Businesses …
Operational Earnings Contribution by Segment
Q2 04 vs. Q2 05; YTD 04 vs. YTD 05; $ per diluted share
TXU Corp. Consolidated TXU Corp. Consolidated
2.58
1.57
208% 177%
0.93
208% 177%
0.51
Q2 04 Q2 05 YTD 04 YTD 05
TXU Energy Holdings TXU Energy Holdings
2.27
1.43
0.78
218% 191%
218% 191%
0.45
Q2 04 Q2 05 YTD 04 YTD 05
TXU Electric Delivery TXU Electric Delivery
0.35 0.65
0.18 94% 86%
0.35
94% 86%
Q2 04 Q2 05 YTD 04 YTD 05
4. Slide 3: … Enabled By An Industrial Skill Set
Market Leadership
Operational Excellence Risk/Return Mindset
• Superior customer
• Top decile throughput • Strict capital allocation
service/ brand discipline
• World class industrial
management
production costs • Risk/return
• Customer segmentation restructuring
• Industry leading
and pricing
reliability • Commodity risk
• Distinctive commodity management
• Lean corporate SG&A
sourcing
Performance Management
• High performance culture
• Integrated performance measurement system
• Employee development
• Incentives linked to key value drivers
5. Slide 4: Operational Excellence Is Reflected In Improved Production
Levels …
Lignite Units Nuclear Units
Capacity Factor1 Capacity Factor1
Q2 04 vs. Q2 05; percent Q2 04 vs. Q2 05; percent
96.2
101.4
92.9 98.5
4% 3%
4% 3%
Q2 04 Q2 05 Q2 04 Q2 05
Plant Outage Days- Planned Plant Outage Days- Planned
Q2 04 vs. Q2 05; days Q2 04 vs. Q2 05; days
33.3
63.5
62.1
27.0
19%
19%
2%
2%
Q2 05
Q2 04 Q2 05 Q2 04
Improved production results added ~ $30 million of contribution margin for the quarter.
Improved production results added ~ $30 million of contribution margin for the quarter.
1 Excludes planned outages and economic back-down.
6. Slide 5: … And Improved Productivity And Cost Management
Lignite Fuel Costs Nuclear Fuel Costs
Q2 04 vs. Q2 05; $/MWh Q2 04 vs. Q2 05; $/MWh
12.36 12.02
4.25 4.20
1%
3% 1%
3%
Q2 04 Q2 05 Q2 04 Q2 05
SG&A Expense1 – TXU Energy Holdings
Operating Costs – TXU Energy Holdings
Q2 04 vs. Q2 05; $ millions Q2 04 vs. Q2 05; $ millions
200 160
113
12% 29%
12% 29%
177
Q2 04 Q2 05 Q2 04 Q2 05
Improved costs results added ~ $74 million of EBIT for the quarter.
Improved costs results added ~ $74 million of EBIT for the quarter.
1 Q2 04 excludes $3 million of special items.
7. Slide 6: TXU Energy’s Operational Metrics Improved For The Quarter …
Call Answer Times PUC Complaints/100K Customers
Q2 04 vs. Q2 05; seconds Q2 04 vs. Q2 05; number of
27 22
21
5%
56% 5%
56%
12
Q2 04 Q2 05
Q2 04 Q2 05
Time In IVR Retail Bad Debt
Q2 04 vs. Q2 05; seconds Q2 04 vs. Q2 05; $ millions
20
99
21% 55%
21% 55%
78
9
Q2 04 Q2 05
Q2 04 Q2 05
Source: PUC complaint data via Regulatory Compliance Services; TXU Energy
8. Slide 7: … As Commodity Prices Continue To Challenge Retail
Economics
Gas Prices: NYMEX vs. Embedded PTB Fuel Factor
Q2 04 vs. Q2 05; $/MMBtu
N. Texas Residential
NYMEX 12 month PTB
Q2 04 Q2 05
forward curve
8.50 Economics
Average gas
8.00
8.61
price
($/MMBtu)1
7.50
Gas price
7.87
embedded in
7.00
PTB ($/MMBtu)
6.50 Headroom at
3%
average gas
6.00 price2
Fuel Factor Adjustment Net margin3 (2)%
5.50 (FFA) to $7.87
5.00
Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05
1 NYMEX 12 month strip as of 08/01/05 closing.
2 Based on average customer usage of ~16,000 kWh/yr. Headroom defined as PTB rate – cost of energy (avg. NYMEX 12 mo. strip x 8.0 heat rate x
assumed 25% - 28% for load shaping, congestion, line losses and other ancillary costs) - avg. wires cost (based on published TXU Electric Delivery
Rates, excluding clawback).
3 Net margin includes impact of SG&A, bad debt, income taxes at 35% rate, revenue taxes of 1.8%.
Source: NYMEX, PUC, TXU Energy estimates
9. Slide 8: Sustaining The Profitability Of Competitive Offers Is
Challenging In This Commodity Environment
Campaign Economics1 - Illustrative
05; mixed measures
Date June 1 July 1 Aug 1 Timing of
campaign
Gas Price ($/MMBtu) 7.04 7.74 8.61
alone can
Heat Rate (MMBtu/MWh) 7.8 8.1 8.0
considerably
Headroom2 (%) 18 10 3 change the
outlook of the
Discount (%) -7 -7 -7
opportunity3
Gross Margin (%) 11 3 -4
1 Based on average customer usage of ~16,000 kWh/yr.
2 Headroom defined as PTB rate less cost of energy (avg. NYMEX 12 month strip x heat rate x assumed 25% - 28% for load shaping, congestion, line
losses and other ancillary costs) less average wires cost (based on published TXU Electric Delivery Rates, excluding clawback).
3 Example highlights commodity considerations. A complete opportunity evaluation would need to include additional campaign costs (customer
incentives, cost of acquisition, bad debt, SG&A) and campaign risks (campaign performance, load forecasting, incremental price volatility, wires
rates, early termination, and execution/operations).
Source: NYMEX, PUC, TXU Energy estimates
10. Slide 9: Customer Churn Is Driven In Part By Competitive Intensity
And Bad Debt Management
Higher customer loss rates driven by … are more than offset by customer mix
collections and competitor activity … and bad debt improvements
Customer Churn1 Retail Bad Debt Expense
1H 03-1H 05; percent 03-05E; $ millions
4.4
3.9
120
22% 41%
95
2.2
55-65
78% 54%
59%
46%
04
03 05E
1H03 1H05
1H04
Premise losses due to collections related activities
Premise losses due to competitive activities
Full-year retail bad debt is expected to be $30-40 million less than 2004.
Full-year retail bad debt is expected to be $30-40 million less than 2004.
At headroom levels of 10% (headroom at current forward curves is 3%), this is
At headroom levels of 10% (headroom at current forward curves is 3%), this is
economically equivalent to more than 10% customer churn.11
economically equivalent to more than 10% customer churn.
1 Native residential excluding drops to AREP.
11. Slide 10: Applying The Risk Return Mindset Has Resulted In Significant
Improvement In TXU’s Risk Profile
Major Business Risks
03-05; $ billions and $ per share
December 03
• Underwater gas hedge
• Poor financial forecasting
• Poor performance management
• High fixed costs
• Poor customer service
• Underfunded capital programs
October 04
• Weak governance
• Uneconomic leases/contracts • Uneconomic leases/contracts
• Litigation • Litigation
• Unregulated pension costs • Unregulated pension costs
• Above market OPEB • Above market OPEB
• Substantial bad debt • Substantial bad debt
June 05
• Legislative risk • Legislative risk
• Single plant nuclear risk
• Single plant nuclear risk • Single plant nuclear risk
• Environmental risk
• Environmental risk • Environmental risk
• Gas price/heat rate risk
• Gas price/heat rate risk • Gas price/heat rate risk
05E normalized FCF per share $2.52 $3.75 $7.00 – $7.45
Enterprise value $18.7 billion $27.8 billion $32.6 billion
12. Slide 11: Electric Delivery Operational Earnings Improved Substantially
Electric Delivery Segment - Operational Earnings Reconciliation
Q2 04 to Q2 05; $ millions and $ per share
Earnings Factor $ Millions $ Per Share
60 0.18
Q2 04 operational earnings
Contribution margin (revenues) 46 0.14
Operating costs (1) -
(25) (0.08)
Depreciation and amortization
SG&A 9 0.03
Franchise and revenue based taxes 3 0.01
Other income and deductions (3) (0.01)
Net interest 3 0.01
Income taxes (6) (0.02)
Effect of reduced shares - 0.09
Q2 05 operational earnings 86 0.35
13. Slide 12: TXU Corp. Earnings Improved Substantially
Reported Earnings Per Share Operational Earnings Per Share
Q2 04 vs. Q2 05; $ per diluted share Q2 04 vs. Q2 05; $ per diluted share
1.39
1.57
208%
208%
0.51
(1.87)
Q2 04 Q2 05
Q2 04 Q2 05
Reported Earnings Operational Earnings
Q2 04 vs. Q2 05; $ millions Q2 04 vs. Q2 05; $ millions
375
381
127%
127%
168
(598)
Q2 04 Q2 05 Q2 04 Q2 05
14. Slide 13: TXU Corp. Operational Earnings Improved In Each Segment
Consolidated – Operational Earnings Reconciliation
Q2 04 to Q2 05; $millions and $ per share after tax
Earnings Factor $ Millions $ Per Share
168 0.51
Q2 04 operational earnings
Energy Holdings segment 197 0.58
Electric Delivery segment 26 0.08
(10) (0.03)
Corporate expenses
Effect of reduced shares - 0.43
Q2 05 operational earnings 381 1.57
15. Slide 14: Energy Holdings Operational Earnings Improved Substantially
Energy Holdings Segment - Operational Earnings Reconciliation
Q2 04 to Q2 05; $ millions and $ per share
Earnings Factor $ Millions $ Per Share
150 0.45
Q2 04 operational earnings
Contribution margin 244 0.72
Operating costs 23 0.07
11 0.03
Depreciation and amortization
SG&A 47 0.14
Franchise and revenue based taxes 3 0.01
Other income and deductions (12) (0.04)
Net interest 3 0.01
Income taxes (122) (0.36)
Effect of reduced shares - 0.40
Q2 05 operational earnings 347 1.43
16. Slide 15: TXU Corp. Financial Flexibility Measures And Cash From
Operations Continue To Improve
Consolidated – Financial Flexibility Measures
Twelve Months Ended 6/30/05 and 6/30/04; $ millions and ratios
Financial Flexibility Measure 6/30/05 6/30/04 Change % Change
EBITDA1 3,220 2,466 754 30.6
Cash interest expense 712 721 (9) (1.2)
Debt 2 12,784 12,287 497 4.0
EBITDA/interest 4.5 3.4 1.1 32.4
Debt/EBITDA 4.0 5.0 (1.0) (20.0)
Consolidated – Cash and Free Cash Flow
YTD 05 and YTD 04; $ millions
Cash Flow Factor YTD 05 YTD 04 Change % Change
Cash provided by operating activities 594 487 107 22.0
Capital expenditures (507) (355) (152) (42.8)
Nuclear fuel (26) (47) 21 44.7
Free cash flow 61 85 (24) (28.2)
1 Adjusted for special items as shown on Table 12.
2 Excludes transition bonds and debt-related restricted cash as shown on Tables 11 and 12.
17. Slide 16: Forward Natural Gas Prices And Heat Rates Increased In
The Second Quarter And Year-To-Date
NYMEX NG Contract Prices1 ERCOT North Zone 7x24 Heat Rates2
12/31/04 to 8/01/05; $/MMBtu 12/31/04 to 8/01/05; MMBtu/MWh
8.30
8.50 Cal 06 Cal 06
Cal 07 Cal 07
8.00 8.10
MMBtu/MWh
7.50
$/MMBtu
7.90
7.00
6.50
7.70
6.00
5.50 7.50
12/04 2/05 4/05 6/05 8/053
12/04 2/05 4/05 6/05 8/053
Declining ERCOT reserve margins have caused market heat-rates to expand. This
Declining ERCOT reserve margins have caused market heat-rates to expand. This
expansion combined with increasing natural gas prices has driven aasignificant
expansion combined with increasing natural gas prices has driven significant
increase in ERCOT forward power prices.
increase in ERCOT forward power prices.
1 NYMEX close prices for forward 12 month calendar strip as of dates indicated.
2 TXU forward price curve for 12 month calendar strip as of dates indicated. Curves are derived from OTC market-observed prices.
3 8/05 prices as of close of business 8/1/05.
18. Slide 17: TXU’s Natural Gas Position Is Balanced In 05 But Becomes
Long Over Time…
05 Nat Gas 06 Nat Gas 07 Nat Gas
Position1,5 Position1 Position1
Million MMBtu Million MMBtu Million MMBtu
Baseload production 480 490 480
Gas plants2 0 0 0
PPAs/tolls/other3 13 5 0
Total sources 493 495 480
Retail4 (488) (405-425) (350-365)
Net position 5 70-90 115-130
TXU’s exposure to natural gas prices goes from long 5 million MMBtu in 2005 to
TXU’s exposure to natural gas prices goes from long 5 million MMBtu in 2005 to
long 115-130 million MMBtu in 2007 (in other words, a +/-$1/MMBtu shift in the
long 115-130 million MMBtu in 2007 (in other words, a +/-$1/MMBtu shift in the
2007 natural gas price curve impacts EBITDA by +/-$115-$130 million).
2007 natural gas price curve impacts EBITDA by +/-$115-$130 million).
1 Estimate based on projected market heat rates, price-to-beat volumes net of churn rates, planned production levels, and current contract positions.
2 Since TXU gas plants run close to the margin (when market heat rate approx=plant heat rate) the net position is approximately 0. If gas plants are
able to run at more positive spark spreads, they will make the gas equivalent position longer.
3 Other items include wholesale heat rate positions that do not create incremental natural gas price exposure.
4 Assumes no fuel factor adjustment.
5 05 numbers are representative of full year positions. 05 net positions show positions as of June 30, 2005.
19. Slide 18: … As Does The Company’s Heat Rate Position
05 Heat Rate 06 Heat Rate 07 Heat Rate
Position1,3 Position1 Position1
TWh TWh TWh
Baseload production 60 62 60
Gas plants 8 8 10
PPAs/tolls/other 9 4 4
Total sources 77 74 74
Retail2 (61) (52-54) (44-46)
Net underlying position 16 20-22 28-30
TXU’s exposure to ERCOT market heat rates grows from being long 16 TWh in
TXU’s exposure to ERCOT market heat rates grows from being long 16 TWh in
2005 to being long 28-30 TWh in 2007.
2005 to being long 28-30 TWh in 2007.
1 Estimate based on projected price-to-beat volumes net of churn rates, planned production levels, and current contract positions.
2 Assumes no fuel factor adjustment.
3 05 numbers are representative of full year positions. 05 net positions show positions as of June 30, 2005.
20. Slide 19: The Increases In Natural Gas Prices And Heat Rates Positively
Impact TXU
Estimated EBITDA Impact Relative to 2006 Guidance
06E; $ millions
Gas price ($/MMBtu)
Heat rate
7.711 8.572
4.00 6.00 8.00
(MMBtu/MWh)
9.0 (188) 27 210 242 303
As of
8.052 (267) (93) 57 82 132
August 1st, 2005
7.71 (297) (137) 0 23 69
7.5 (314) (162) (32) (10) 33
As of
March 31st, 2005
Based on current curves/position estimates, the following thumbrules apply22:
Based on current curves/position estimates, the following thumbrules apply:
Gas price: +/- $1/MMBtu ~ +/- 80 million in EBITDA in 06
Gas price: +/- $1/MMBtu ~ +/- 80 million in EBITDA in 06
Heat rate: +/- 11MMBtu/MWh ~ +/- $180 million in EBITDA in 06
Heat rate: +/- MMBtu/MWh ~ +/- $180 million in EBITDA in 06
1 Based on forward curves as of March 31st, 2005.
2 Based on forward curves as of August 1st, 2005.
21. Slide 20: TXU’s Financial Profile Has Significantly Improved
Normalized OCF2
Operational EPS1 Normalized FCF3
03-05E; $ billions
03-05E; $ per share 03-05E; $ billions
1.7-1.8
2.6-2.7
6.25-6.45
2.0 1.0
1.5
2.82 0.7
77%
302% 150%
77%
302% 150%
1.58
03 04 05E
03 04 05E 03 04 05E
ROIC1 EBITDA1/interest Total debt4/EBITDA1
03-05E; percent 03-05E; ratio 03-05E; percent
14.6
5.1
4.8-4.9
4.2
4.0
8.4 3.0-3.2 39%
62%
3.0 39%
161% 62%
161%
5.6
03 04 05E 03 04 05E 03 04 05E
1 Results are from continuing operations excluding special items.
2 2003 normalized operating cash flow (OCF) ($2.4B) excluding cash tax refund ($0.6B) and 2002 collections; 2004 normalized OCF ($1.8B) excluding
special items (-$0.3B); 2005 normalized OCF excludes an estimated $125 million of special items.
3 Normalized free cash flow is defined as normalized operating cash flow less capital expenditures and nuclear fuel.
4 Total debt excludes transition bonds.
22. Slide 21: Understanding TXU’s Short-Term Growth Outlook
Component $ Per Share
05E guidance midpoint (4th quarter 04) 5.75
Expected growth 05E-06E (16%-20%) 0.90 – 1.15
06E guidance (4th quarter 04) 6.65 – 6.90
Higher natural gas and wholesale prices1 1.20
Pro forma 06E 7.85 – 8.10
Increased share count2 (0.10)
Increased churn and demand elasticity (0.15)
Contingency (0.25)
Current 06E guidance3 7.35 - 7.60
Commodity movements 0.35
06E guidance at 8/1 commodity prices 7.70 - 7.95
Initial revised guidance based on Cal 06 natural gas price of $7.07/MMBtu
Initial revised guidance based on Cal 06 natural gas price of $7.07/MMBtu
Based on 8/1/05 Cal 06 gas price of $8.57/MMBtu, the new range would be $7.70 -$7.95
Based on 8/1/05 Cal 06 gas price of $8.57/MMBtu, the new range would be $7.70 -$7.95
1 Includes increased wholesale prices due to higher gas prices, and fuel factor adjustments to $7.87/MMBtu natural gas.
2 Includes change in dilution due to long-term compensation, increase in share price, other.
3 TXU plans to conduct a detailed review of the 06 business plan over the summer and provide an updated outlook in the fall.
25. Table 1: TXU Corp. Operational Earnings Reconciliation
Quarter Ended June 30, 2005 and 2004
$ millions and $ per share after tax
Q2 05 Q2 05 Q2 04 Q2 04
Net income (loss) available for common 375 1.39 (598) (1.87)
Discontinued operations 4 0.02 (330) (1.03)
Extraordinary gain - - (16) (0.05)
Buyback premium on EPMI - - 849 2.65
Preference stock dividends 4 0.02 5 0.02
Income (loss) from continuing operations 383 1.43 (90) (0.28)
Effect of ASR true-up - 0.15 - -
Effect of share dilution - - - 0.03
Preference stock dividends (4) (0.02) (5) (0.02)
Special items 2 0.01 263 0.78
Operational earnings 381 1.57 168 0.51
26. Table 2: TXU Corp. Operational Earnings Reconciliation
Year-To-Date June 30, 2005 and 2004
$ millions and $ per share after tax
YTD 05 YTD 05 YTD 04 YTD 04
Net income (loss) available for common 791 1.21 (425) (1.32)
Discontinued operations (11) (0.05) (380) (1.18)
Extraordinary gain - - (16) (0.05)
Buyback premium on EPMI - - 849 2.64
Preference stock dividends 10 0.04 11 0.03
Income (loss) from continuing operations 790 1.20 39 0.12
Effect of ASR true-up - 2.05 - -
Effect of share dilution/rounding - - - 0.04
Preference stock dividends (10) (0.04) (11) (0.03)
Special items (152) (0.63) 288 0.80
Operational earnings 628 2.58 316 0.93
27. Table 3: TXU Energy Holdings Operational Earnings Reconciliation
Quarter Ended June 30, 2005 and 2004
$ millions and $ per share after tax
Q2 05 Q2 05 Q2 04 Q2 04
Net income (loss) available for common 344 1.42 (46) (0.14)
Discontinued operations 1 - 27 0.08
Income (loss) from continuing operations 345 1.42 (19) (0.06)
Special items 2 0.01 169 0.50
Effect of share dilution/rounding - - - 0.01
Operational earnings 347 1.43 150 0.45
28. Table 4: TXU Energy Holdings Operational Earnings Reconciliation
Year-To-Date June 30, 2005 and 2004
$ millions and $ per share after tax
YTD 05 YTD 05 YTD 04 YTD 04
Net income (loss) available for common 544 2.24 67 0.21
Discontinued operations 4 0.02 30 0.09
Income (loss) from continuing operations 548 2.26 97 0.30
Effect of ASR true-up/rounding - (0.01) - -
Effect of share dilution/rounding - - 1 (0.02)
Special items 4 0.02 180 0.50
Operational earnings 552 2.27 278 0.78
29. Table 5: TXU Electric Delivery Operational Earnings Reconciliation
Quarter Ended June 30, 2005 and 2004
$ millions and $ per share after tax
Q2 05 Q2 05 Q2 04 Q2 04
Net income (loss) available for common 86 0.35 63 0.20
Extraordinary gain - - (16) (0.05)
Income (loss) from continuing operations 86 0.35 47 0.15
Effect of share dilution/rounding - - - (0.01)
Special items - - 13 0.04
Operational earnings 86 0.35 60 0.18
30. Table 6: TXU Electric Delivery Operational Earnings Reconciliation
Year-To-Date June 30, 2005 and 2004
$ millions and $ per share after tax
YTD 05 YTD 05 YTD 04 YTD 04
Net income (loss) available for common 157 0.65 129 0.40
Extraordinary gain - - (16) (0.05)
Income (loss) from continuing operations 157 0.65 113 0.35
Effect of share dilution/rounding - - - (0.04)
Special items 1 - 13 0.04
Operational earnings 158 0.65 126 0.35
31. Table 7: TXU Corp. Operational Earnings Reconciliation
Twelve Months Ended December 31, 2004 and 2003
$ per share after tax
04 03
Net income (loss) available for common (1.29) 1.62
Discontinued operations (1.26) (0.20)
Extraordinary gain (0.05) -
Cum. effect of changes in accounting principles (0.03) 0.15
Premium on EPMI 2.83 -
Preference stock dividends 0.07 0.06
Income from continuing operations 0.27 1.63
Preference stock dividends (0.07) (0.06)
Effect of diluted shares calculation 0.04 0.01
Special items 2.58 -
Operational earnings 2.82 1.58
32. Table 8: TXU Energy Holdings SG&A Reconciliation
Quarter Ended June 30, 2005 and 2004
$ millions and $ per share after tax
Q2 05 Q2 04
Selling, general and administrative expenses 113 163
Special items - (3)
Operational selling, general and administrative expenses 113 160
33. Table 9: TXU Corp. Normalized Operating and Free Cash Flow
Twelve Months Ended December 31, 2004 and 2003
$ millions
04 03
Cash provided by operating activities 1,758 2,413
Special items 284 -
2003 tax refund - (601)
2002 collections in 2003 - (337)
Normalized operating cash flow 2,042 1,475
Capital expenditures (912) (721)
Nuclear fuel (87) (44)
Normalized free cash flow 1,043 710
34. Table 10: TXU Corp. Return On Average Invested Capital Calculation
Twelve Months Ended December 31, 2004 and 2003
$ millions unless otherwise noted
04 03 Ref
Net income 485 582
After-tax interest expense and related charges net of interest income 434 486
Total return (based on net income) 919 1,068 A
Operational earnings 887 544
Preference stock dividends 22 22
After-tax interest expense and related charges net of interest income(1) 434 486
Total return (based on operational earnings) 1,343 1,052 B
Average total capitalization 16,019 18,831 C
Return on average invested capital–based on net income - % (A/C) 5.7 5.7
Return on average invested capital–based on operational earnings - % (B/C) 8.4 5.6
___________
(1)After-tax interest expense and related charges net of interest income
Interest expense 695 784
Interest income (28) (36)
Net 667 748
Tax at 35% 233 262
Net of tax 434 486
35. Table 11: TXU Corp. Total Debt
Years Ended June 30, 2005, 2004 and December 31, 2004, 2003
$ millions
6/30/05 12/31/04 6/30/04 12/31/03
Debt
Notes payable 1,320 210 2,675 -
Long-term debt due currently 1,313 229 534 678
Long-term debt held by sub Trusts - - 309 546
All other long-term debt, less due currently 11,325 12,412 10,463 10,608
Preferred securities of subs 38 38 113 759
Total debt 13,996 12,889 14,094 12,591
36. Table 12: TXU Corp. Interest and Debt Coverage Ratios
Twelve Months Ended June 30, 2005, 2004 and December 31, 2004, 2003
$ millions unless otherwise noted
6/30/05 12/31/04 6/30/04 12/31/03 Ref
Income from continuing operations before taxes and extraordinary items 1,124 123 493 818
Interest expense and related charges 721 695 739 784
Interest income (41) (28) (27) (36)
Depreciation and amortization 769 760 740 724
EBITDA 2,573 1,550 1,945 2,290
Special Items 647 1,190 521 -
EBITDA (excluding special items) 3,220 2,740 2,466 2,290 A
Interest expense and related charges 721 695 739 784
Amortization of discount and reacquired debt expense (25) (27) (29) (31)
Capitalized interest 16 12 11 12
Cash interest expense 712 680 721 765 B
Total debt 13,996 12,889 14,094 12,591 C
Transition bonds (1,212) (1,258) (1,282) (500)
Debt-related restricted cash - - (525) (525)
Total debt less transition bonds and debt-related restricted cash 12,784 11,631 12,287 11,566 D
Cash provided by operating activities 1,865 1,758 1,662 2,413 E
Reconciling adjustments from cash flow statement 1,034 1,677 1,250 1,847
Income from continuing operations 831 81 412 566
EBITDA/interest – ratio (A/B) 4.5 4.0 3.4 3.0
Debt/EBITDA – ratio (D/A) 4.0 4.2 5.0 5.1
Cash provided by operating activities/cash interest expense – ratio (E/B) 3.6 2.6 3.3 3.2
Total debt/cash flow from operating activities – ratio (C/E) 7.5 7.3 8.5 5.2