The document is an investor presentation for a proposed merger between TXU and an investor group. It summarizes that the TXU board determined the merger maximized shareholder value after a thorough evaluation process led by independent directors. The merger provides shareholders with a meaningful premium compared to TXU's standalone plan in a challenging market, legislative, and regulatory environment. Completing the merger would transfer risks such as regulatory risk to the buyer while providing shareholders with a premium value for their shares.
Oil and Gas Industry | What went wrong? | A presentation by AOGOFlame Of Truth
India’s exploration policy has to be in sync with the perception that India’s geological Prospectivity is poor to moderate. Geology of the country cannot be changed but Government Policy and its implementation can ensure extensive appraisal and exploration. Focus of the Government should be on providing appropriate policy and an enabling operating environment to make the sector attractive for investors
In 2014, the Delaware courts issued several key decisions – perhaps the most important to date – concerning the legal standards governing going-private transactions involving controlling stockholders.
Attendees joined West Coast private equity practice chair Eva Davis and litigation partner John Schreiber for an interactive webinar focused on the following topics:
a) Key Delaware cases from 2014 covering going-private transactions and their impact on the applicable legal standards of review
b) What is a controlling stockholder and what this means for founders and private equity and venture capital funds who hold stock in public companies
c) Recommended process steps and considerations for Delaware corporations and their controlling and minority stockholders when engaging in take-private transactions
d) Key litigation takeaways from the latest string of decisions
Sidoti & Company Spring 2017 Convention PresentationJim Jenkins
This document summarizes the potential impact of the Trump administration on securities regulation based on a presentation by the law firm Harter Secrest & Emery LLP. It outlines changes to SEC leadership and budget under Trump that indicate less enforcement. It also discusses efforts to repeal parts of Dodd-Frank and roll back regulations like those around conflict minerals and resource extraction payments. Overall the future of post-2008 financial crisis rules is uncertain but deregulation is a key focus.
Collateral Management and Market Developments - WhitepaperNIIT Technologies
1) Collateral management has become increasingly important for financial institutions due to market developments like increased collateral circulation and new regulations requiring more collateral. It is no longer a back office function but a major challenge.
should build or buy systems that can integrate with existing
2) Key features of collateral management include bi-party agreements between two parties, tri-party agreements involving a third party custodian, collateral trading and re-hypothecation, and repurchase (repo) agreements.
infrastructure and provide a centralized view of collateral across
3) Best practices for financial institutions include regularly revaluing collateral, maintaining relationships with key clients, performing regular portfolio reconciliations, considering outsourcing collateral
The document discusses the size and composition of the credit default swap (CDS) market. It estimates that the gross notional value of CDS contracts outstanding globally is $25 trillion, with 77% of that between dealers. However, netting reduces overall risk by an estimated 90% due to compression. The net exposure remaining is estimated to be $2.4 trillion. For U.S. companies alone, the initial margin requirements for clearinghouses are estimated to total around $75 billion, with dealers contributing close to $20 billion and clients $55 billion.
The document provides an overview of Lender Processing Services (LPS) and its end-to-end mortgage solutions. LPS offers a comprehensive suite of technology solutions, data services, and processing services to support the origination, servicing, and default portions of the mortgage lifecycle. LPS has leading market positions and long-term relationships with the largest financial institutions in the country.
The document outlines the Reserve Bank of India's Strategic Debt Restructuring (SDR) scheme for banks. Under the SDR, banks can convert a stressed company's debt into equity, allowing them to gain majority control. This facilitates a change in ownership and management to try and turn the company around. If viability milestones are not met, banks collectively converting debt to equity to gain over 51% ownership. The scheme provides exemptions to banks and temporary benefits, like maintaining existing asset classification of loans converted for 18 months. The goal is to address operational and managerial inefficiencies at stressed companies through change in control.
Spectrum acted as the exclusive restructuring and financial advisor to Southwest Georgia Ethanol LLC, a ethanol manufacturing company that faced a liquidity crisis due to increased corn prices and operational issues. Spectrum helped the company file for Chapter 11 bankruptcy and emerge from bankruptcy in only 11 months with no debt and a potential recovery for equity holders. Spectrum also advised Third Party Logistics company 3PD, Inc. in successfully refinancing its credit facilities when it faced potential covenant violations during the recession. Additionally, Spectrum advised Quixote Corporation, a $100 million company with a hostile debt situation, in its successful restructuring and sale to a strategic buyer, providing shareholders a 3.4x return on investment.
Oil and Gas Industry | What went wrong? | A presentation by AOGOFlame Of Truth
India’s exploration policy has to be in sync with the perception that India’s geological Prospectivity is poor to moderate. Geology of the country cannot be changed but Government Policy and its implementation can ensure extensive appraisal and exploration. Focus of the Government should be on providing appropriate policy and an enabling operating environment to make the sector attractive for investors
In 2014, the Delaware courts issued several key decisions – perhaps the most important to date – concerning the legal standards governing going-private transactions involving controlling stockholders.
Attendees joined West Coast private equity practice chair Eva Davis and litigation partner John Schreiber for an interactive webinar focused on the following topics:
a) Key Delaware cases from 2014 covering going-private transactions and their impact on the applicable legal standards of review
b) What is a controlling stockholder and what this means for founders and private equity and venture capital funds who hold stock in public companies
c) Recommended process steps and considerations for Delaware corporations and their controlling and minority stockholders when engaging in take-private transactions
d) Key litigation takeaways from the latest string of decisions
Sidoti & Company Spring 2017 Convention PresentationJim Jenkins
This document summarizes the potential impact of the Trump administration on securities regulation based on a presentation by the law firm Harter Secrest & Emery LLP. It outlines changes to SEC leadership and budget under Trump that indicate less enforcement. It also discusses efforts to repeal parts of Dodd-Frank and roll back regulations like those around conflict minerals and resource extraction payments. Overall the future of post-2008 financial crisis rules is uncertain but deregulation is a key focus.
Collateral Management and Market Developments - WhitepaperNIIT Technologies
1) Collateral management has become increasingly important for financial institutions due to market developments like increased collateral circulation and new regulations requiring more collateral. It is no longer a back office function but a major challenge.
should build or buy systems that can integrate with existing
2) Key features of collateral management include bi-party agreements between two parties, tri-party agreements involving a third party custodian, collateral trading and re-hypothecation, and repurchase (repo) agreements.
infrastructure and provide a centralized view of collateral across
3) Best practices for financial institutions include regularly revaluing collateral, maintaining relationships with key clients, performing regular portfolio reconciliations, considering outsourcing collateral
The document discusses the size and composition of the credit default swap (CDS) market. It estimates that the gross notional value of CDS contracts outstanding globally is $25 trillion, with 77% of that between dealers. However, netting reduces overall risk by an estimated 90% due to compression. The net exposure remaining is estimated to be $2.4 trillion. For U.S. companies alone, the initial margin requirements for clearinghouses are estimated to total around $75 billion, with dealers contributing close to $20 billion and clients $55 billion.
The document provides an overview of Lender Processing Services (LPS) and its end-to-end mortgage solutions. LPS offers a comprehensive suite of technology solutions, data services, and processing services to support the origination, servicing, and default portions of the mortgage lifecycle. LPS has leading market positions and long-term relationships with the largest financial institutions in the country.
The document outlines the Reserve Bank of India's Strategic Debt Restructuring (SDR) scheme for banks. Under the SDR, banks can convert a stressed company's debt into equity, allowing them to gain majority control. This facilitates a change in ownership and management to try and turn the company around. If viability milestones are not met, banks collectively converting debt to equity to gain over 51% ownership. The scheme provides exemptions to banks and temporary benefits, like maintaining existing asset classification of loans converted for 18 months. The goal is to address operational and managerial inefficiencies at stressed companies through change in control.
Spectrum acted as the exclusive restructuring and financial advisor to Southwest Georgia Ethanol LLC, a ethanol manufacturing company that faced a liquidity crisis due to increased corn prices and operational issues. Spectrum helped the company file for Chapter 11 bankruptcy and emerge from bankruptcy in only 11 months with no debt and a potential recovery for equity holders. Spectrum also advised Third Party Logistics company 3PD, Inc. in successfully refinancing its credit facilities when it faced potential covenant violations during the recession. Additionally, Spectrum advised Quixote Corporation, a $100 million company with a hostile debt situation, in its successful restructuring and sale to a strategic buyer, providing shareholders a 3.4x return on investment.
NiSource is an energy holding company whose subsidiaries provide natural gas, electricity and other energy products and services. The company operates in four business segments: Gas Distribution Operations; Gas Transmission and Storage Operations; Electric Operations; and Other Operations. In 2005, NiSource reported operating income of $952.8 million, with Gas Distribution Operations, Gas Transmission and Storage Operations, and Electric Operations accounting for 37%, 34%, and 29% of operating income, respectively.
energy future holindings TXU_Q3_2003_Earnings_Packfinance29
TXU reported improved financial results for the third quarter and first nine months of 2003 compared to the same periods in 2002. Third quarter earnings from continuing operations increased 15% to $368 million, or $1.01 per share, due to higher contribution margins and lower costs across all business segments. For the first nine months, earnings from continuing operations were $650 million, or $1.82 per share. TXU expects full-year 2003 earnings from continuing operations to be around $2.00 per share.
MGM MIRAGE had a successful financial year in 2001 despite challenges from the events of September 11th. The company saw increased revenues and EBITDA compared to 2000 due to the full-year impact of the MGM Grand/Mirage Resorts merger. The company reduced its debt load significantly in 2001 and saw many of its properties receive prestigious awards. New attractions and amenities were also introduced across various MGM MIRAGE casinos and hotels during the year. Construction of the Borgata in Atlantic City remained on schedule for its planned opening in 2002.
The Sherwin-Williams Company 2008 Annual Report provides financial highlights and key metrics for 2008. Net sales declined slightly to $7.979 billion from $8.005 billion in 2007. Net income also declined to $476.876 million from $615.578 million. The company utilized its cash to complete three acquisitions, make capital expenditures, reduce debt, repurchase shares, and pay dividends despite challenging market conditions in 2008. The actions helped mitigate the effects of a drop in demand and rising costs, allowing the company to gain market share in most segments.
energy future holindings TCEH10QJun2008_Finalfinance29
- Texas Competitive Electric Holdings Company LLC (TCEH) reported a net loss of $3.24 billion for the quarter ended June 30, 2008 and $4.44 billion for the six months ended June 30, 2008.
- TCEH experienced large net losses from commodity hedging and trading activities of $4.73 billion for the quarter and $6.29 billion for the six months.
- Interest expense also significantly increased to $576 million for the quarter and $1.18 billion for the six months due to increased debt levels following TCEH's acquisition in October 2007.
The document summarizes TXU's third quarter results for 2001. Earnings increased 14% compared to the same period last year, to $1.42 per share, on record revenues of $6.6 billion, up 13%. Key events in the quarter included strengthening the balance sheet through asset sales, launching new subsidiaries and services, and ongoing preparations for electric industry restructuring in Texas. TXU expects to meet its full-year earnings guidance of $3.65 to $3.70 per share for 2001. Segment results were strong across the US, Europe and Australia.
This document is an SEC Form 10-K/A annual report filed by Calpine Corporation. It provides amendments to Calpine's original Form 10-K annual report for the fiscal year ending December 31, 2003. The amendments include revised and expanded disclosures related to Calpine's oil and gas operations in Items 1, 2, 8, and 15 of the filing. The amendments were filed in connection with the SEC's review of a Calpine registration statement and incorporate disclosures requested by the SEC regarding Calpine's oil and gas business.
TXU Energy Holdings reported strong earnings growth in the first quarter of 2005 compared to the same period last year. Operational earnings from TXU Power drove the majority of the improvement at TXU Energy Holdings. While margins have improved for TXU Power, long-term returns on invested capital still need to be enhanced to meet industry standards. Residential retail gross margins for TXU Energy have remained small, especially compared to other retail sectors. A pending fuel factor adjustment filing aims to balance competitive pressures while maintaining one of the lowest fuel factors in the state.
This document is Calpine Corporation's quarterly report filed with the SEC for the quarter ended June 30, 2006. It provides financial statements and notes for Calpine Corporation and its subsidiaries. Some key details include:
- The consolidated balance sheet shows the company's financial position as of June 30, 2006 compared to December 31, 2005. Total assets were $18.4 billion as of June 30, 2006.
- The income statement shows a net loss of $153 million for the quarter ended June 30, 2006 compared to a net loss of $179 million for the same period in 2005.
- Cash flow statements show that cash used in operating activities was $154 million for the six months ended June 30
This document is Calpine Corporation's annual report (Form 10-K) filed with the SEC for the fiscal year ending December 31, 2001. It provides an overview of Calpine's business operations, including that it is a leading independent power company engaged in power generation and electricity sales in the US, Canada and UK. As of March 2002, Calpine has interests in 64 power plants with 12,090 MW of capacity, has 24 projects under construction with 14,142 MW of additional capacity, and 34 projects in advanced development that could add 15,100 MW if market conditions are right. The filing includes details on Calpine's properties, legal proceedings, operating results, management, risks, and financial statements.
Calpine Corporation reported third quarter 2008 earnings results. Key highlights included record operating revenues of $3.2 billion, a 37% increase over third quarter 2007. Adjusted EBITDA was a record $593 million, a 17% increase. Cash flow from operations was also a record at $941 million. The company achieved excellent operational performance during the quarter despite hurricanes. Calpine provided guidance for full-year 2008 adjusted EBITDA of $1.65-1.675 billion and discussed near-term strategies around hedging, operations excellence, and growth opportunities.
TXU proposed building 9 GW of new generation capacity in Texas to meet growing demand. They reviewed various generation technologies including wind, gas, supercritical coal (SCPC), and integrated gasification combined cycle (IGCC). SCPC was identified as the optimal near-term solution due to its competitive cost and reliability advantages over other technologies. While wind and gas will also be part of the solution, significant cost reductions and technological breakthroughs are still needed for nuclear and IGCC to become competitive long-term options in the next 10-15 years. TXU aims to leverage its construction expertise and experience to build out its generation portfolio in an efficient and environmentally responsible manner.
Este documento presenta los estados financieros consolidados de una compañía para los años 2001 y 2000. Resume los activos corrientes y no corrientes, así como los pasivos corrientes de la compañía para ambos años. Los activos totales en 2001 fueron de $10,497,443 mil y los pasivos totales fueron de $887,910 mil.
energy future holindings TCEH10QJun2008_Finalfinance29
- Texas Competitive Electric Holdings Company LLC (TCEH) reported a net loss of $3.24 billion for the quarter ended June 30, 2008 and $4.44 billion for the six months ended June 30, 2008.
- TCEH experienced large net losses from commodity hedging and trading activities of $4.73 billion for the quarter and $6.29 billion for the six months.
- Interest expense also significantly increased to $576 million for the quarter and $1.18 billion for the six months due to increased debt levels following TCEH's acquisition in October 2007.
The document contains a single number - 5.5% - which appears to indicate a percentage or rate of some kind. No other context or details are provided that would help explain what the given percentage refers to.
The document contains charts and tables showing trends in premium lubricant sales, revenue, gross profit, and gallons of lubricants sold by Ashland Consumer Markets (Valvoline) from 2005 to 2009. Some key metrics increased over time, with premium lubricants as a percentage of branded volume and gross profit percentages generally rising from 2005 to 2008. Revenue increased each year, reaching over $150 million in some months of 2008. Lubricant gallons sold peaked around 2005-2007 then declined.
This document is a Form 10-Q quarterly report filed by Calpine Generating Company, LLC and CalGen Finance Corp. with the SEC for the quarter ended September 30, 2004. It includes consolidated financial statements and notes for Calpine Generating Company, LLC, which owns and operates 14 power generation facilities across the United States. The financial statements show that as of September 30, 2004, Calpine Generating Company had total assets of $6.7 billion, total liabilities of $2.7 billion, and a member's equity of $4.1 billion. For the nine months ended September 30, 2004, the company reported a net loss of $25 million on total revenues of $1.3 billion.
This document provides notice of the annual meeting of shareholders of TXU Corp. to be held on May 10, 2002. The purposes of the meeting are to elect directors, approve an amendment to the Restated Articles of Incorporation regarding a stock split, reapprove the Long-Term Incentive Compensation Plan, and approve the selection of auditors. Shareholders are requested to sign and return the proxy regardless of whether they will attend. Details are provided on voting procedures, requirements for shareholder proposals to be considered at the 2003 annual meeting, and nominees for election to the board of directors.
Pepco Holdings, Inc. held an analyst conference on October 5-6, 2004 to discuss the company's performance. The presentation included an overview of PHI's businesses, strategy, and corporate governance practices. It noted PHI has $7.1 billion in revenues and focuses on its regulated electric and gas delivery business, which accounts for 72% of operating income. The Power Delivery segment was discussed, which includes the transmission and distribution of electricity to 1.8 million customers across several mid-Atlantic states.
EnLink Midstream held an analyst and investor day on March 30, 2015 to discuss its vision and strategy. The presentation included forward-looking statements and defined non-GAAP financial measures. It also noted that the SEC prohibits the disclosure of certain resource estimates. The agenda included presentations from EnLink Midstream and Devon Energy executives on the companies' visions and the natural gas and liquids businesses. The management team was introduced, which includes experienced leaders from Crosstex Energy and Devon. EnLink Midstream aims to execute its growth strategy through a diversified portfolio, organic expansion projects, and dropdowns from Devon Energy.
This document provides an overview of EnLink Midstream's 2015 Analyst & Investor Day. It begins with forward-looking statements and disclosures about non-GAAP financial measures used. The agenda outlines presentations on EnLink Midstream's vision and strategy, its sponsorship with Devon Energy, and its natural gas and liquids businesses. The management team is introduced, consisting of experienced leaders from Crosstex Energy and Devon. The document emphasizes EnLink Midstream's growth strategy through organic expansion projects and dropdown acquisitions from Devon, as well as its stable cash flows, investment grade credit rating, and focus on safely serving customers.
NiSource is an energy holding company whose subsidiaries provide natural gas, electricity and other energy products and services. The company operates in four business segments: Gas Distribution Operations; Gas Transmission and Storage Operations; Electric Operations; and Other Operations. In 2005, NiSource reported operating income of $952.8 million, with Gas Distribution Operations, Gas Transmission and Storage Operations, and Electric Operations accounting for 37%, 34%, and 29% of operating income, respectively.
energy future holindings TXU_Q3_2003_Earnings_Packfinance29
TXU reported improved financial results for the third quarter and first nine months of 2003 compared to the same periods in 2002. Third quarter earnings from continuing operations increased 15% to $368 million, or $1.01 per share, due to higher contribution margins and lower costs across all business segments. For the first nine months, earnings from continuing operations were $650 million, or $1.82 per share. TXU expects full-year 2003 earnings from continuing operations to be around $2.00 per share.
MGM MIRAGE had a successful financial year in 2001 despite challenges from the events of September 11th. The company saw increased revenues and EBITDA compared to 2000 due to the full-year impact of the MGM Grand/Mirage Resorts merger. The company reduced its debt load significantly in 2001 and saw many of its properties receive prestigious awards. New attractions and amenities were also introduced across various MGM MIRAGE casinos and hotels during the year. Construction of the Borgata in Atlantic City remained on schedule for its planned opening in 2002.
The Sherwin-Williams Company 2008 Annual Report provides financial highlights and key metrics for 2008. Net sales declined slightly to $7.979 billion from $8.005 billion in 2007. Net income also declined to $476.876 million from $615.578 million. The company utilized its cash to complete three acquisitions, make capital expenditures, reduce debt, repurchase shares, and pay dividends despite challenging market conditions in 2008. The actions helped mitigate the effects of a drop in demand and rising costs, allowing the company to gain market share in most segments.
energy future holindings TCEH10QJun2008_Finalfinance29
- Texas Competitive Electric Holdings Company LLC (TCEH) reported a net loss of $3.24 billion for the quarter ended June 30, 2008 and $4.44 billion for the six months ended June 30, 2008.
- TCEH experienced large net losses from commodity hedging and trading activities of $4.73 billion for the quarter and $6.29 billion for the six months.
- Interest expense also significantly increased to $576 million for the quarter and $1.18 billion for the six months due to increased debt levels following TCEH's acquisition in October 2007.
The document summarizes TXU's third quarter results for 2001. Earnings increased 14% compared to the same period last year, to $1.42 per share, on record revenues of $6.6 billion, up 13%. Key events in the quarter included strengthening the balance sheet through asset sales, launching new subsidiaries and services, and ongoing preparations for electric industry restructuring in Texas. TXU expects to meet its full-year earnings guidance of $3.65 to $3.70 per share for 2001. Segment results were strong across the US, Europe and Australia.
This document is an SEC Form 10-K/A annual report filed by Calpine Corporation. It provides amendments to Calpine's original Form 10-K annual report for the fiscal year ending December 31, 2003. The amendments include revised and expanded disclosures related to Calpine's oil and gas operations in Items 1, 2, 8, and 15 of the filing. The amendments were filed in connection with the SEC's review of a Calpine registration statement and incorporate disclosures requested by the SEC regarding Calpine's oil and gas business.
TXU Energy Holdings reported strong earnings growth in the first quarter of 2005 compared to the same period last year. Operational earnings from TXU Power drove the majority of the improvement at TXU Energy Holdings. While margins have improved for TXU Power, long-term returns on invested capital still need to be enhanced to meet industry standards. Residential retail gross margins for TXU Energy have remained small, especially compared to other retail sectors. A pending fuel factor adjustment filing aims to balance competitive pressures while maintaining one of the lowest fuel factors in the state.
This document is Calpine Corporation's quarterly report filed with the SEC for the quarter ended June 30, 2006. It provides financial statements and notes for Calpine Corporation and its subsidiaries. Some key details include:
- The consolidated balance sheet shows the company's financial position as of June 30, 2006 compared to December 31, 2005. Total assets were $18.4 billion as of June 30, 2006.
- The income statement shows a net loss of $153 million for the quarter ended June 30, 2006 compared to a net loss of $179 million for the same period in 2005.
- Cash flow statements show that cash used in operating activities was $154 million for the six months ended June 30
This document is Calpine Corporation's annual report (Form 10-K) filed with the SEC for the fiscal year ending December 31, 2001. It provides an overview of Calpine's business operations, including that it is a leading independent power company engaged in power generation and electricity sales in the US, Canada and UK. As of March 2002, Calpine has interests in 64 power plants with 12,090 MW of capacity, has 24 projects under construction with 14,142 MW of additional capacity, and 34 projects in advanced development that could add 15,100 MW if market conditions are right. The filing includes details on Calpine's properties, legal proceedings, operating results, management, risks, and financial statements.
Calpine Corporation reported third quarter 2008 earnings results. Key highlights included record operating revenues of $3.2 billion, a 37% increase over third quarter 2007. Adjusted EBITDA was a record $593 million, a 17% increase. Cash flow from operations was also a record at $941 million. The company achieved excellent operational performance during the quarter despite hurricanes. Calpine provided guidance for full-year 2008 adjusted EBITDA of $1.65-1.675 billion and discussed near-term strategies around hedging, operations excellence, and growth opportunities.
TXU proposed building 9 GW of new generation capacity in Texas to meet growing demand. They reviewed various generation technologies including wind, gas, supercritical coal (SCPC), and integrated gasification combined cycle (IGCC). SCPC was identified as the optimal near-term solution due to its competitive cost and reliability advantages over other technologies. While wind and gas will also be part of the solution, significant cost reductions and technological breakthroughs are still needed for nuclear and IGCC to become competitive long-term options in the next 10-15 years. TXU aims to leverage its construction expertise and experience to build out its generation portfolio in an efficient and environmentally responsible manner.
Este documento presenta los estados financieros consolidados de una compañía para los años 2001 y 2000. Resume los activos corrientes y no corrientes, así como los pasivos corrientes de la compañía para ambos años. Los activos totales en 2001 fueron de $10,497,443 mil y los pasivos totales fueron de $887,910 mil.
energy future holindings TCEH10QJun2008_Finalfinance29
- Texas Competitive Electric Holdings Company LLC (TCEH) reported a net loss of $3.24 billion for the quarter ended June 30, 2008 and $4.44 billion for the six months ended June 30, 2008.
- TCEH experienced large net losses from commodity hedging and trading activities of $4.73 billion for the quarter and $6.29 billion for the six months.
- Interest expense also significantly increased to $576 million for the quarter and $1.18 billion for the six months due to increased debt levels following TCEH's acquisition in October 2007.
The document contains a single number - 5.5% - which appears to indicate a percentage or rate of some kind. No other context or details are provided that would help explain what the given percentage refers to.
The document contains charts and tables showing trends in premium lubricant sales, revenue, gross profit, and gallons of lubricants sold by Ashland Consumer Markets (Valvoline) from 2005 to 2009. Some key metrics increased over time, with premium lubricants as a percentage of branded volume and gross profit percentages generally rising from 2005 to 2008. Revenue increased each year, reaching over $150 million in some months of 2008. Lubricant gallons sold peaked around 2005-2007 then declined.
This document is a Form 10-Q quarterly report filed by Calpine Generating Company, LLC and CalGen Finance Corp. with the SEC for the quarter ended September 30, 2004. It includes consolidated financial statements and notes for Calpine Generating Company, LLC, which owns and operates 14 power generation facilities across the United States. The financial statements show that as of September 30, 2004, Calpine Generating Company had total assets of $6.7 billion, total liabilities of $2.7 billion, and a member's equity of $4.1 billion. For the nine months ended September 30, 2004, the company reported a net loss of $25 million on total revenues of $1.3 billion.
This document provides notice of the annual meeting of shareholders of TXU Corp. to be held on May 10, 2002. The purposes of the meeting are to elect directors, approve an amendment to the Restated Articles of Incorporation regarding a stock split, reapprove the Long-Term Incentive Compensation Plan, and approve the selection of auditors. Shareholders are requested to sign and return the proxy regardless of whether they will attend. Details are provided on voting procedures, requirements for shareholder proposals to be considered at the 2003 annual meeting, and nominees for election to the board of directors.
Pepco Holdings, Inc. held an analyst conference on October 5-6, 2004 to discuss the company's performance. The presentation included an overview of PHI's businesses, strategy, and corporate governance practices. It noted PHI has $7.1 billion in revenues and focuses on its regulated electric and gas delivery business, which accounts for 72% of operating income. The Power Delivery segment was discussed, which includes the transmission and distribution of electricity to 1.8 million customers across several mid-Atlantic states.
EnLink Midstream held an analyst and investor day on March 30, 2015 to discuss its vision and strategy. The presentation included forward-looking statements and defined non-GAAP financial measures. It also noted that the SEC prohibits the disclosure of certain resource estimates. The agenda included presentations from EnLink Midstream and Devon Energy executives on the companies' visions and the natural gas and liquids businesses. The management team was introduced, which includes experienced leaders from Crosstex Energy and Devon. EnLink Midstream aims to execute its growth strategy through a diversified portfolio, organic expansion projects, and dropdowns from Devon Energy.
This document provides an overview of EnLink Midstream's 2015 Analyst & Investor Day. It begins with forward-looking statements and disclosures about non-GAAP financial measures used. The agenda outlines presentations on EnLink Midstream's vision and strategy, its sponsorship with Devon Energy, and its natural gas and liquids businesses. The management team is introduced, consisting of experienced leaders from Crosstex Energy and Devon. The document emphasizes EnLink Midstream's growth strategy through organic expansion projects and dropdown acquisitions from Devon, as well as its stable cash flows, investment grade credit rating, and focus on safely serving customers.
New Zealand Energy Corp. is developing and producing oil and natural gas in New Zealand from a large conventional and unconventional resource base. The company made its first oil discovery in 2011, which tested over 1,100 barrels per day of oil. It plans to advance this well to commercial production in the fourth quarter of 2011. New Zealand Energy has a low-cost exploration model across five permits totaling over 2 million acres. It is led by a management team with extensive oil and gas industry experience.
This document summarizes a New York investor meeting held by Xcel Energy on November 29, 2005. The presentation outlines Xcel's strategy of investing in regulated utility assets to earn its allowed rate of return and achieve earnings growth targets. It highlights Xcel's financial performance objectives and discusses its investments in infrastructure, environmental stewardship, and supportive regulatory treatment across its utility territories. The presentation also reviews Xcel's operational focus and organizational structure.
This document summarizes a New York investor meeting held by Xcel Energy on November 29, 2005. The presentation outlines Xcel's strategy of investing in regulated utility assets to earn the allowed rate of return and deliver earnings per share growth of 5-7% annually. It highlights Xcel's environmental stewardship through renewable energy initiatives and discusses regulatory support for major projects. The organizational structure and roles of key executives are also summarized.
This document summarizes a New York investor meeting held by Xcel Energy on November 29, 2005. The presentation outlines Xcel's strategy of investing in regulated utility assets to earn its allowed rate of return and achieve earnings growth targets. It highlights Xcel's financial performance objectives and discusses its investments in transmission, distribution and customer service. The presentation also provides details on Xcel's construction program, environmental stewardship initiatives, and supportive regulatory treatment across its utility territories.
dominion resources Management's Discussion and Analysis of Financial Conditio...finance17
This document provides an overview and discussion of Dominion Energy's Management Discussion and Analysis (MD&A). The MD&A discusses Dominion's operations, financial condition, results of operations, accounting matters, segments, energy trading activities, liquidity, future issues, market risks, and risk factors. It owns a large portfolio of energy generation, transmission, distribution, storage and exploration assets and operates primarily in the eastern US. The discussion cautions that forward-looking statements are based on beliefs and assumptions which may differ from actual results due to various risk factors.
This document provides an overview of an energy conference presentation. It includes the following key points:
1) The presentation discusses strategic goals of reducing debt by $2-3 billion and achieving a net debt to EBITDA ratio of 2x. It also aims for free cash flow neutrality and margin enhancement.
2) Operational highlights from the first quarter of 2018 include a 16% increase in oil production and an 11% increase in total production compared to the same period last year.
3) The Powder River Basin is identified as a core asset with the potential to recover over 2.6 billion barrels of oil equivalent of resources from the Turner zone, where the company plans to increase drilling activity throughout 2018
This document provides an overview and update from Pembina Pipeline Corporation. It begins with forward-looking statements and information disclosures. It then discusses Pembina's value proposition as an efficient, well-managed midstream company with a solid business platform and growth opportunities. The document reviews Pembina's corporate profile, businesses, operating areas, recent developments, financial performance, and the oil sands and heavy oil business in more detail. It provides capital spending plans for 2013 with a focus on expanding pipeline capacity. In summary, the document outlines Pembina's operations and growth strategy as a leading North American midstream company.
This document provides an overview and agenda for EnLink Midstream's 2014 Analyst & Investor Day. It begins with forward-looking statements and disclosures about non-GAAP financial measures used. The agenda then outlines the presentations that will be made on the company's roadmap for growth, natural gas and liquids businesses, financial outlook, and non-operated investments. Background is given on EnLink Midstream's MLP structure and relationship with sponsor Devon Energy, as well as the experience of the management team. Key aspects of the company's growth strategy are its fee-based contracts, strategic assets, and investment grade balance sheet to fund expansion.
TECK SEPARATION CONFERENCE CALL - APRIL 10, 2023TeckResourcesLtd
Teck Resources is considering a separation into two publicly traded companies, Teck Metals and Elk Valley Resources, to maximize shareholder value. The separation would allow shareholders to benefit from two world-class pure-play businesses and unlock significant value. It minimizes execution risk compared to Glencore's unsolicited proposal, which would dilute Teck's assets and expose shareholders to unwanted thermal coal. Glencore has consistently underperformed peers on value creation and its proposal lacks a clear plan to exit coal.
Mdr day1-ir presentation final 051018 230 pm cstinvestorcbi
McDermott provides an investor overview document that discusses their positioning as a premier global EPCI provider with a $10 billion revenue base and $14 billion backlog. They highlight their fully vertically integrated onshore-offshore capabilities across attractive growth markets. McDermott cautions that the document contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. The document discusses strategic objectives around growing revenue and earnings, expanding technology leadership, maintaining safety and disciplined capital allocation.
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Victory Energy Corporation is a public oil and gas exploration company focused on development in the Permian Basin. The company owns interests in several producing properties in the basin. Victory plans to deploy $15 million in 2014 for drilling, completions, and acquisitions to increase production and proved reserves. The goal is to achieve over 30 million barrels of proved reserves by year-end and increase revenue to over $1 million. A key focus is the recently acquired 4,050 acre Fairway project, which Victory expects can generate a 60% internal rate of return over three years of planned drilling.
The document discusses regulatory models for the energy and water sectors on the small island of Curaçao. It examines four models: 1) the DEZ model where the government sets tariffs; 2) the DEZ+ model where a regulator has legal mandate to approve tariffs but the government can overrule; 3) an advisory model where an independent office proposes tariffs but the government is still responsible; and 4) an independent model where tariff setting is fully independent from the government. The document argues that while the independent model has benefits, implementing major institutional changes carries risks for systems with weak governance, and recommends a gradual approach starting with a regulatory contract to build legitimacy and stability over time.
Progress energy resources corp. cibc new york mini conference no-appendixProgressEnergy
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The document contains a single number - 5.5% - which appears to indicate a percentage or rate of some kind. No other context or details are provided that would help explain the meaning or significance of this number.
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The document contains a single number - 5.5% - which appears to indicate a percentage or rate of some kind. No other context or details are provided, so a concise 3 sentence summary cannot capture much meaningful information from this very brief document.
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This document provides an overview of Chesapeake Energy Corporation (CHK) from a March 2009 investor presentation. It summarizes that CHK is a leading producer of natural gas in the US, with production of over 2 billion cubic feet per day. It has top-quality assets in major shale plays like the Haynesville, Marcellus, Barnett, and Fayetteville, giving it low finding and development costs. Joint venture deals have also provided significant value for the company while improving its balance sheet. Looking ahead, CHK expects to continue increasing production and reserves at a low cost despite the economic downturn.
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2. Safe Harbor Statement and Additional Information
This presentation contains forward-looking statements, including, among others, any statements identified as “assumptions,” 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 TXU Corp.’s filings with the Securities and Exchange Commission (SEC). Specifically, TXU Corp. (TXU) makes
reference to the section entitled “Risk Factors” in its most recent Form 10-K and subsequent reports on Form 10-Q, and the section entitled “Cautionary
Statement Regarding Forward-Looking Statements” in its most recent definitive proxy statement. In addition to the risks and uncertainties set forth in the TXU ’s
SEC reports or periodic reports, the forward-looking statements described in this presentation could be affected by, among other things, changes in wholesale
electricity prices, long-term natural gas prices, ERCOT heat rates, coal prices or uranium prices; changes in ERCOT market dynamics; changes in interest rates;
the ability to manage TXU’s construction program to a timely conclusion with limited cost overruns, including the ability to meet cost and schedule estimates for
the construction of the proposed three new coal-fueled units and the ability to meet salvage value estimates for equipment previously ordered for the eight
discontinued development units; the implementation of new regulations concerning carbon emission reduction; the commercial viability of alternative energy
sources; the ability of TXU’s retail business to achieve gross residential margin and market share estimates in the territories in which it operates; business
uncertainty and contractual restrictions that may exist during the pendency of TXU’s previously announced proposed merger; the amount of the costs, fees,
expenses and charges related to the merger and the execution of certain financings that will be obtained to consummate the merger; the impact of the substantial
indebtedness incurred to finance the consummation of such merger; the occurrence of any event, change or other circumstances that could give rise to the
termination of the agreement governing the proposed merger; failure to obtain shareholder approval or any other failure to satisfy other conditions required to
complete the transactions contemplated by the merger agreement, including required regulatory approvals; risks that the proposed merger disrupts current plans
and operations and diverts management’s attention from ongoing business concerns; and potential difficulties in employee retention as a result of the proposed
merger. Many of the aforementioned risks and uncertainties are beyond TXU’s ability to control or predict.
Regulation G
This presentation includes certain non-GAAP financial measures. Financial definitions and reconciliation of these measures to the most directly comparable
GAAP measures are included in Appendix-Regulation G Reconciliations of the printed version of the slides and the version included on the company’s website at
www.txucorp.com under Investor Resources/Presentations.
Additional Information and Where to Find It
In connection with the proposed merger of TXU with Texas Energy Future Merger Sub Corp., a wholly-owned subsidiary of Texas Energy Future Holdings Limited
Partnership (the “Merger”), TXU has filed a proxy statement with the SEC. A definitive proxy statement and a form of proxy has been mailed to the shareholders
of TXU. BEFORE MAKING ANY VOTING DECISION, TXU’S SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE MERGER
CAREFULLY AND IN ITS ENTIRETY BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. TXU’s shareholders are able to
obtain, without charge, a copy of the proxy statement and other relevant documents filed by TXU with the SEC from the SEC’s website at
http://www.sec.gov. TXU’s shareholders are also able to obtain, without charge, a copy of the proxy statement and other relevant documents by directing a
request by mail or telephone to Corporate Secretary, TXU Corp., Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201, telephone: (214) 812-4600, or from TXU’s
website, http://www.txucorp.com/proxy.
Participants in the Solicitation
TXU and its directors and officers may be deemed to be participants in the solicitation of proxies from TXU’s shareholders with respect to the Merger. Information
about TXU’s directors and executive officers and their ownership of TXU’s common stock is set forth in TXU’s definitive proxy statement. Shareholders may
obtain additional information regarding the interests of TXU and its directors and executive officers in the Merger, which may be different than those of TXU’s
shareholders generally, by reading the proxy statement and other relevant documents regarding the Merger.
1
3. Today’s Agenda
• Dynamic evaluation process
• Non-management led buyout
Transaction Process
Transaction Process • Fact-based process led by four independent directors and advisors
and Overview
and Overview • Merger terms including a 50-day “go-shop” process, with no match rights, to help
ensure maximum value for shareholders
• Market, legislative and regulatory challenges undermine integrated business model
• If the transaction is not completed, TXU would not expect to remain integrated
Management Stand-Alone Plan • Stand-Alone Plan entails separation into 3 businesses with high performance targets
Management Stand-Alone Plan
• Each business would face challenges and opportunities going forward; the board
determined that the investor group offer maximized value to shareholders
• Relative to Stand-Alone Plan, investor group offer provides meaningful implied
premium based on a variety of fact-based methodologies
• Other market signals confirm that the merger represents maximum value
Evaluation of Offer
Evaluation of Offer
• PUC approval of future transactions involving Oncor reduces likelihood of future
premium (the investor group offer is grandfathered)
• Substantial uncertainty in underlying commodities and asset values
• Potential for value leakage from Luminant in high power price scenarios
• Possible downward revaluation of Oncor
Other Value Considerations
Other Value Considerations
• Potential for continued regulatory intervention in TXU Energy
• Meaningful implied premium based on fundamental and market analysis
• Offer maximizes value and is superior to the Stand-Alone Plan
Conclusion
Conclusion
2
4. The Process Was Led By Independent Directors With Significant
Transaction Experience
Members of the
Strategic
Transactions
Committee Experience
• Senior Managing Director, Diamond Castle Holdings, LLC
• Former Managing Director, Investment Banking, CSFB
Michael W. Ranger
• Former Managing Director and Group Head of Global Energy and Power
(chairman)
Group, Investment Banking, DLJ
• Former Executive Vice President and CFO, Centex
Leldon E. Echols
• Former Managing Partner, Audit Practice, Arthur Andersen LLP
• Former President and Chief Executive Officer, Shell Oil Company
• Former President and Chief Executive Officer, Shell Exploration and
Jack E. Little
Production Company
• Chairman, President and Chief Executive Officer, UAL Corporation and
United Air Lines
• Former Non-Executive Chairman, Dynegy
Glenn F. Tilton
• Former Vice-Chairman, Chevron Texaco Corporation
• Former Chairman and CEO, Texaco
The Strategic Transactions Committee (STC) was led by directors with deep sector and
The Strategic Transactions Committee (STC) was led by directors with deep sector and
functional expertise across Energy and M&A and advised by independent legal and
functional expertise across Energy and M&A and advised by independent legal and
financial advisors
financial advisors
3
5. The Board Concluded The Merger Maximized Value…
Details1
Issue
• Offer represents a 25% premium both at announcement and today, and the TXU Board of Directors
(Board) believed it remained a meaningful premium when reaffirming its decision on July 12, 2007
• Offer maximizes value to shareholders and is superior to any alternative the Board considered,
including high performance execution of the alternative Stand-Alone Plan
The offer of
• Offer implies a meaningful premium to the value of the TXU baseload fleet ($/KW) and is equivalent to
$69.25/share
represented selling forward long-term natural gas at a premium to the value embedded in other securities with the
best value to same type of exposure
shareholders • A robust 50-day “go-shop” period, with no match rights, was conducted soliciting interest from over 70
parties with no superior offer received
• The current state of debt and equity markets make alternative transactions unlikely and could reduce
the value of TXU’s Stand-Alone Plan
• Merger agreement transferred significant pre-closing legislative and regulatory risk to the investor
group
• Offer transfers future regulatory, operational, construction and environmental risks to buyers
The offer
minimized • Public policy environment has become more difficult since February
risk to
• Public Utility Commission of Texas (PUC) approval for any future transactions involving Oncor reduces
existing
likelihood of future premium
shareholders
• Strong financing commitments from lenders were made to investor group
• $1 billion break fee to be paid by investor group in certain circumstances
• In February 2007 two advisors (Credit Suisse and Lazard) issued fairness opinions stating the proposal
is fair, from financial point of view, to TXU shareholders
The offer was
• Lazard updated its opinion in July stating the proposal is fair, from financial point of view, to TXU
evaluated by
shareholders (Lazard terms currently have no incentive tied to closing deal)
objective and
• The process was led by the STC, which was composed of four independent and experienced directors
independent
parties • No agreements have been struck with management regarding future employment under new ownership
• C. John Wilder does not intend to stay post closing
4
For a more comprehensive description of reasons see pages 22-26 of the proxy statement
1
6. …And Offers A Significant Premium Over TXU’s Next Best
Alternative
Estimated acquisition premium as of August 9, 2007
08E; Percent
30%
27%
24% 25%
20%
#1 #3 #4 #5 #6
Announcement DCF Adjusted Implied Implied gas
multiple baseload asset prices
values
5.4 7.4 6.9
Implied value 6.3 6.5
in investor
group offer
($ billions)
All methods reflect approximately the same 25% premium as implied
All methods reflect approximately the same 25% premium as implied
at time of announcement
at time of announcement
5
7. Today’s Agenda
• Dynamic evaluation process
• Non-management led buyout
Transaction Process
Transaction Process • Fact-based process led by four independent directors and advisors
and Overview
and Overview • Merger terms including a 50-day “go-shop” process, with no match rights, to help
ensure maximum value for shareholders
• Market, legislative and regulatory challenges undermine integrated business model
• If the transaction is not completed, TXU would not expect to remain integrated
Management Stand-Alone Plan • Stand-Alone Plan entails separation into 3 businesses with high performance targets
Management Stand-Alone Plan
• Each business would face challenges and opportunities going forward; the board
determined that the investor group offer maximized value to shareholders
• Relative to Stand-Alone Plan, investor group offer provides meaningful implied
premium based on a variety of fact-based methodologies
• Other market signals confirm that the merger represents maximum value
Evaluation of Offer
Evaluation of Offer
• PUC approval of future transactions involving Oncor reduces likelihood of future
premium (the investor group offer is grandfathered)
• Substantial uncertainty in underlying commodities and asset values
• Potential for value leakage from Luminant in high power price scenarios
• Possible downward revaluation of Oncor
Other Value Considerations
Other Value Considerations
• Potential for continued regulatory intervention in TXU Energy
• Meaningful implied premium based on fundamental and market analysis
• Offer maximizes value and is superior to the Stand-Alone Plan
Conclusion
Conclusion
6
8. In Light Of The Market, Regulatory And Legislative Challenges,
Management’s Stand-Alone Plan Contemplated A Separation Of
Integrated TXU
An Integrated Holding Company Three Separate Businesses
TXU shareholders TXU shareholders TXU shareholders TXU shareholders
TXU Corp
Potential for incremental debt
••Separation would likely have occurred through spin offs11of both Oncor and TXU Energy
Separation would likely have occurred through spin offs of both Oncor and TXU Energy
••Capital structures would have been tailored to minimize capital costs in light of prevailing market
Capital structures would have been tailored to minimize capital costs in light of prevailing market
conditions
conditions
••Luminant likely to have retained existing TXU Corp. and Competitive Holdings debt and been
Luminant likely to have retained existing TXU Corp. and Competitive Holdings debt and been
recapitalized with up to $5 to $6 billion to support capex and redistributions to shareholders
recapitalized with up to $5 to $6 billion to support capex and redistributions to shareholders
••Oncor likely to have been separated with existing Oncor debt
Oncor likely to have been separated with existing Oncor debt
••TXU Energy likely to have been separated without assuming existing or incremental leverage
TXU Energy likely to have been separated without assuming existing or incremental leverage
7
In the scenario of tax-free distributions of Oncor and TXU Energy (retail) to current shareholders, the company is still expected to incur a significant tax expense
1
9. The Stand-Alone Plan Assumes High Performance
Indicative EBITDA1 and Capex
08E-11E; $ billions
Components 08E 09E 10E 11E
EBITDA2 4.6 5.5 6.0 5.8
Luminant 2.9 3.7 4.0 3.7
Oncor 1.4 1.4 1.5 1.5
TXU Energy (Retail) 0.3 0.4 0.5 0.6
Forward hedge position3 (0.1) (0.1) (0.2) (0.3)
Total capex 2.6 2.0 1.3 1.3
Luminant 1.9 1.3 0.6 0.5
Oncor 0.7 0.7 0.7 0.8
TXU Energy (Retail) 0.1 < 0.1 < 0.1 < 0.1
Even with a high performance plan, the valuation of the Stand-Alone Plan is
Even with a high performance plan, the valuation of the Stand-Alone Plan is
inferior to the investor group offer
inferior to the investor group offer
For assumptions upon which these projections are based, see pages 48-51 of the proxy statement
1
See Appendix – Regulation G Reconciliations for definition and reconciliation
2
As of June 30, 2006, estimated mark-to-market value of forward hedge positions for the natural gas trades in the long-term corporate hedging program. Not included in EBITDA (mark-
3
8
to-market impact flows through income statement in 2007)
10. The Plan Reflects Market Assumptions For Commodity Drivers
And High Performance Targets For Operational Drivers
Assumption Units 08E 09E 10E 11E
HSC natural gas price $/MMBtu 8.13 8.30 8.14 7.87
HSC 7X24 ERCOT heat rate MMBtu/MWh 8.1 8.3 8.3 8.3
7X24 ERCOT power price $/MWh 66 69 68 65
Oncor load growth rate % 2 2 2 2
Coal generation TWh 43 52 61 61
Nuclear generation TWh 19 20 20 20
Total residential volumes1 TWh 28 30 32 35
Average residential gross margin1 $/MWh 20 20 23 23
••The Board compared the value implied in this plan versus the investor group
The Board compared the value implied in this plan versus the investor group
offer and determined the offer maximized value
offer and determined the offer maximized value
9
Includes volumes within Oncor service territory as well as out-of-territory growth in ERCOT; gross margins reflect estimated weighted average across all residential customers in ERCOT
1
11. Each Business Is Structurally Advantaged And Enabled By
Separation…
New name
TXU Power/Wholesale/ TXU Energy TXU Electric Delivery
Former name Construction/Development
Meet customers’ power needs Become a national leader in Become the most economical
through operation, origination competitive retail electricity by and reliable transmission and
and construction of the most achieving industry leading distribution service company
efficient and environmentally customer service and creating in the US through a
Mission friendly supply technologies an innovative set of new commitment to redefine top
products and services to meet decile reliability and cost
Manage customers’ risks customers’ needs and use performance
through wholesale products electricity more efficiently
2nd largest deregulated output Large scale competitive retailer 6th largest T&D company
Industry leading performance Strong brand recognition High growth region
2 GW of active development Superior service Top quartile performance
Competitive
Low cost lignite reserves Most innovative product No commodity exposure
position
64 TWh of baseload production portfolio Efficient capital recovery
Structurally advantaged and No longer affiliated with Pure play wires company with
strategically nimble generator baseload generation; on the no commodity exposure; well
Strategic
well-positioned to lead buildout same competitive and regulatory positioned to lead massive
flexibility through
of over 300 GW of new “playing field” as leading infrastructure buildout across
separation
generation needed in US over competitors; positioned to enter US
the next 15 years markets outside of ERCOT
10
12. … But Faces Challenges Going Forward
Business Challenges
• Carbon regulation
• Forced divestiture of assets due to potential zonal
capacity caps
• Rising raw material, fuel and labor costs
• Hedges limit ability to benefit from 07-12 gas price
increases
• Incremental leverage and recapitalization could be
more costly in current environment
• New generation that will lower heat rates and power
prices
• PUCT authority over future acquisitions of Texas based
utilities limits strategic flexibility and potential ability to
obtain acquisition premiums in other transactions
• Potential for changes in authorized ROE
• Continued regulatory intervention in Texas competitive
market framework including potential price caps
• Aggressive competitors looking to gain share from the
former monopoly/incumbent
• Ability to sustain profitability in high commodity
environment
11
13. Today’s Agenda
• Dynamic evaluation process
• Non-management led buyout
Transaction Process
Transaction Process • Fact-based process led by four independent directors and advisors
and Overview
and Overview • Merger terms including a 50-day “go-shop” process, with no match rights, to help
ensure maximum value for shareholders
• Market, legislative and regulatory challenges undermine integrated business model
• If the transaction is not completed, TXU would not expect to remain integrated
Management Stand-Alone Plan • Stand-Alone Plan entails separation into 3 businesses with high performance targets
Management Stand-Alone Plan
• Each business would face challenges and opportunities going forward; the board
determined that the investor group offer maximized value to shareholders
• Relative to Stand-Alone Plan, investor group offer provides meaningful implied
premium based on a variety of fact-based methodologies
• Other market signals confirm that the merger represents maximum value
Evaluation of Offer
Evaluation of Offer
• PUC approval of future transactions involving Oncor reduces likelihood of future
premium (the investor group offer is grandfathered)
• Substantial uncertainty in underlying commodities and asset values
• Potential for value leakage from Luminant in high power price scenarios
• Possible downward revaluation of Oncor
Other Value Considerations
Other Value Considerations
• Potential for continued regulatory intervention in TXU Energy
• Meaningful implied premium based on fundamental and market analysis
• Offer maximizes value and is superior to the Stand-Alone Plan
Conclusion
Conclusion
12
14. The Board Considered A Variety Of Methodologies To Estimate
The Premium In The Offer Relative To The Stand-Alone Plan
Midpoint Midpoint implied
implied premium Midpoint
premium at considered by implied
announcement the Board in premium on
July1
Methodology Description in February August 9
Comparison of offer to stock price prior to
Announcement
1 announcement and performance of 25% 17% 24%
premium
comparables since announcement
Market tests via robust “go shop“ process 3
3
“Go-shop”
2 that solicited interest from over 70 N/A
process
companies
Comparison of offer to DCF value of
3 DCF 17% 14% 20%
changes since announcement
Comparison of multiples (P/E, EV/EBITDA2)
Comparable
4 in offer to comparable companies 26% 16% 30%
multiples
Comparison of implied baseload asset
Implied baseload
5 value in offer to fundamental and market 23% 10% 25%
asset values
signals
Comparison of implied long-term gas price
6 Implied gas price 30% 8% 27%
in offer to fundamental and market signals
Management’s view, following consultation 3
3
3
7 LBO economics with independent financial advisers, of LBO
economics in Transaction
• •In early July, the Board concluded that in spite of market fluctuations the implied premium in the
In early July, the Board concluded that in spite of market fluctuations the implied premium in the
offer was still meaningful
offer was still meaningful
• •In early August, the implied premium remains at 25%, as was the case at the time of announcement
In early August, the implied premium remains at 25%, as was the case at the time of announcement
Based on information as of July 2, 2007
1
See Appendix – Regulation G Reconciliations for definition
2
13
“Go-shop” process confirmed no better offer; LBO economics suggest significant risk transfer
3
15. #1: Upon Announcement, The Transaction Provided A Significant
Premium To TXU’s Market Value
…is comparable to other recent large
Material transaction premium…
transactions,…
Share price comparison
Transaction premiums for deals > $10 billion1
07; $/share at close 25%
25% 05-07; Percent
25
24 24
69.25
55.01 55.61
40-day 20-day Transaction
average average Mean Median Transaction
…other recent energy transactions… …and implied multiples for the power sector
Premiums for power transactions1 Average power sector EV/EBITDA2 Implies a
26%
04-07; Percent 07E; Multiple
25 premium
9.4
8.1
18
15 14
FPL / EXC / DUK / TXU
Transaction4
Integrated
CEG PEG CIN
Merchants 3
Comparable transaction premiums over the last 3 years based on the average closing price during the 20 trading-day period prior to announcement
1
See Appendix – Regulation G Reconciliations for definition
2
Integrated merchants includes AYE, CEG, EXC, FE, PEG, PPL. EV/EBITDA multiple is based on 2008 Consensus EBITDA estimate
3
14
Transaction EV/EBITDA multiple is based on management‘s February estimate of 2007 year end debt and 2008 EBITDA
4
16. #1: The Offer Continues To Imply A Significant Premium To
Management’s Stand-Alone Plan
Lazard2
Integrated3
Implied premium in offer1
Weighted4
Feb 07- Aug 07; Percent
28
26
25 25 25
20 19
18
13
Considered by the Considered by the August 9, 2007
board in February board in July (Today)
Average 25% 17% 24%
premium
Applying the updated multiples of the comparables to TXU revised forecast
Applying the updated multiples of the comparables to TXU revised forecast
implies a 19-28% premium over management’s Stand-Alone Plan55
implies a 19-28% premium over management’s Stand-Alone Plan
Based on 25% premium at announcement and changes based on comparable EV/ 08 EBITDA ratios and management estimates of TXU 08 EBITDA
1
Lazard represents mean EV/08EBITDA of AEP, AYE, CEG, EIX, NRG, RRI, SRE
2
Integrated represents mean EV/08EBITDA of AYE,CEG,EXC,FE,PEG,PPL
3
Weighted is 70% IPP and 30% T&D; IPP represents mean EV/08 EBITDA of DYN, MIR, NRG, RRI;T&D represents mean EV/EBITDA of CNP,EAS,ED,ITC,NST,NU,POM
4
15
See Appendix for calculation
5
17. #2: …That Was Further Confirmed Through A Rigorous “Go-
Shop” Process
Requested Signed
Parties confidentiality confidentiality Definitive
Contacted agreement agreement proposals
Financial
31 11 6 0
buyers:
50 days
ending 4/16/07
Strategic 43 9 4 0
buyers:
During the 50-day “Go-Shop” period Lazard contacted 74 parties including utilities, energy
During the 50-day “Go-Shop” period Lazard contacted 74 parties including utilities, energy
companies, financial buyers and infrastructure investors, but received no definitive proposals
companies, financial buyers and infrastructure investors, but received no definitive proposals
likely to be superior to the Transaction
likely to be superior to the Transaction
Different structures and partnerships were explored to maximize potential offer
Different structures and partnerships were explored to maximize potential offer
The majority of the increase in the returns of the comparable companies occurred during the
The majority of the increase in the returns of the comparable companies occurred during the
“Go-Shop” process, allowing potential bidders to include the market view in their thinking
“Go-Shop” process, allowing potential bidders to include the market view in their thinking
16
18. #3: A DCF Analysis Of Estimated Changes Since Announcement
Affirms A Strong Premium Remains
TXU equity value
07; $/share 69.25
6.5 ~58
55.6 0.2 0.3
0.3
1.1 3.2
Price at Increase Decrease Retail Higher Reduction Midpoint Implied Investor
3 coal cost4
announ- in natural in market discount in new increase price group
cement gas price heat rate build in natural today offer
(07-12)1 (07-12)2 program5 gas price
(2013+)6
••The combination of negative impacts during the short-term period with positive
The combination of negative impacts during the short-term period with positive
impacts in the long-term outlook of natural gas (increases between $0.60 and
impacts in the long-term outlook of natural gas (increases between $0.60 and
$1.30/MMBtu)continue to imply aapremium of 15%-26%66
$1.30/MMBtu)continue to imply premium of 15%-26%
••A bottoms up DCF analysis supports the same premium range
A bottoms up DCF analysis supports the same premium range
Impact of TXU cash flow based on increase of liquid period gas prices (07-12) between Feb 20, 2007 and Aug 9, 2007
1
Decrease of liquid period heat rate between Feb 20, 2007 and Aug 9, 2007
2
Increased Retail discount from 6% to 10% starting Jun 2007 for legacy PTB customers
3
Reflects $0.15/MMBtu higher PRB cost
4
Value reduction due to Governor’s order being declared unconstitutional and the subsequent suspension of reference plants (3 were included in Feb.)
5
2013+ NYMEX has increased ~$1/MMBtu (between $0.60- $1.30/MMBtu) since announcement based on values embedded in comparable securities per management’s analysis (could
6
17
represent other changes including heat rates, coal prices, future merger activity); move in 2012 forward would suggest ~$0.75/MMBtu or $5/share
19. #4: TXU Has Historically Traded At A Discount To Comparable
Indexes On A P/E And EV/EBITDA1 Basis
TXU
Integrated2
Forward P/E3 Forward EV/EBITDA3
Feb 06- Feb 07; Ratio Feb 06-Feb 07; Ratio
EV/EBITDA implied
P/E implied in
in offer =10.0x4
20 offer = 15.7x4 11
15 9
Avg=14.5 Avg=7.8
10 7
Avg=10.4 Avg=7.3
5 5
Feb 06 Aug 06 Feb 07 Feb 06 Aug 06 Feb 07
••On average, TXU was traded at aa4.1 turn discount to comparable indexes on aaforward
On average, TXU was traded at 4.1 turn discount to comparable indexes on forward
P/E basis and aa0.5 turn discount on aaforward EV/EBITDA basis
P/E basis and 0.5 turn discount on forward EV/EBITDA basis
••This discount can largely be explained through adjusting the multiples for underwater
This discount can largely be explained through adjusting the multiples for underwater
contracts (POLR obligations), securitization and step out growth programs55
contracts (POLR obligations), securitization and step out growth programs
••Wall Street analysts have identified aanumber of reasons that TXU trades at aadiscount
Wall Street analysts have identified number of reasons that TXU trades at discount
See Appendix – Regulation G Reconciliations for definition
1
Includes AYE, CEG, EXC, FE, PEG, PPL
2
Equity and enterprise values based on the given day divided by FY+2 net income or EBITDA
3
Based on management’s Stand-Alone Plan
4
18
See appendix for methodology
5
20. #4: The Offer Implies A Significant Premium On Both A
Conventional And Adjusted Multiples Basis
EV/EBITDA adjusted
Comparable for average historic
EV/EBITDA1 discount2
group
Lazard3 8.2 7.7
Integrated4 8.8 8.3
Weighted5 8.9 8.4
TXU 10.0 10.0
Mean implied
26% 38%
premium
••Current trading multiples for peer companies suggest a premium of between
Current trading multiples for peer companies suggest a premium of between
26%-38%
26%-38%
••The premium is consistent with this range when both TXU and the
The premium is consistent with this range when both TXU and the
comparables are adjusted for underwater contracts/POLR agreements,
comparables are adjusted for underwater contracts/POLR agreements,
securitization and step out growth (e.g., TXU new build)66
securitization and step out growth (e.g., TXU new build)
As of Aug 9, 2007; assumes a per share price of $69.25 for TXU; see Appendix – Regulation G Reconciliations for definition
1
Comparables adjusted for historic discount between Feb 06 and Feb 07 (0.5x EV/EBITDA adjustment)
2
3 Lazard represents mean of AEP, AYE, CEG, EIX, NRG, RRI, SRE; P/E excludes RRI
4 Integrated represents mean of AYE,CEG,EXC, FE, PEG, PPL
5 Weighted is 70% IPP and 30% T&D. IPP represents mean of DYN, MIR, NRG, RRI;T&D represents mean multiple of CNP,EAS,ED,ITC,NST,NU,POM; P/E excludes RRI
6 See appendix for adjustment methodology
19
Source: Capital IQ, company filings, company presentations, equity research reports
21. #5: The Implied Value For Luminant’s Baseload Assets In The
Investor Group’s Offer Represents A Significant Premium
Equivalent ERCOT baseload asset value1
08E; $/KW
Assumes no value
3,180
for recently
permitted plants
2,240
2,130
Assumes full
2,630
value for recently
permitted plants
Implied baseload Mean replacement Mean comparable
value in investor costs for coal and equity securities2
group offer nuclear plants
Implied premium on Luminant baseload assets3 ($ billions) 5.0 3.9
2.0 2.0
Implied premium on Oncor and TXU Energy ($ billions)
7.0 5.9
Total premium ($ billions)
28% 22%
Implied premium for TXU (percent)
Baseload value implied in Aug 9, 2007 enterprise value, corrected for differences of short-term power prices, long-term gas basis differential, long-term CCGT reinvestment economics,
1
capacity factor, emission control capex, fuel price, CO2 tax pass through and state tax difference
Comparable securities include AYE, CEG, EXC, MIR, NRG, PEG, PPL, RRI; based on Northbridge analysis
2
20
Premium based on assuming full value for recently permitted plants
3
22. #6: The Investor Group Offer Implies A Higher Long-Term Gas
Price Than Is Indicated By Other Market Signals
Long-term (2013+) Henry Hub natural gas prices
$/MMBtu
9.6
Assumes no value
for recently
permitted plants
Assumes full
7.9 6.7 6.4
value for recently
6.0
permitted plants
Implied in Mean replacement Mean implied in Mean implied in long
investor group costs for incremental comparable Power lived E&P equity
equity securities1
offer North American securities2
production
Implied premium on Luminant baseload assets3 ($
6.0 3.9 4.7
billions)
Implied premium on Oncor and TXU Energy ($ billions) 2.0 2.0 2.0
Total premium ($ billions) 8.0 5.9 6.7
Implied premium for TXU (percent) 33% 23% 26%
Includes AYE, CEG, EXC, MIR, NRG, PEG, PPL, and RRI, based on Northbridge analysis
1
Includes COG, KWK, SWN
2
21
Premium based on assuming full value for recently permitted plants
3
23. #7: Analysis Of Hypothetical LBO Economics Suggests A Highly
Volatile Return Profile Linked To Natural Gas And Exit Multiples
Equivalent 2013 exit Hypothetical return
on investment1
EV/EBITDA multiple 2013+ NYMEX
(ratio) ($/MMBtu) (%)
6.6 6.0 -36%
7.2 6.5 -13%
7.7 7.0 -2%
8.3 7.5 5%
8.8 8.0 11%
9.4 8.5 16%
10.0 9.0 20%
Even assuming financing was available, current credit conditions would reduce the
Even assuming financing was available, current credit conditions would reduce the
amount aanew LBO buyer would be willing to pay to replicate the same returns22
amount new LBO buyer would be willing to pay to replicate the same returns
Based on management’s view, following consultation with Lazard, and the current TXU plan does not account for potential business model changes by the investor group
1
Assuming new buyer capitalization structure would be 75% debt and debt would be 100 bps more expensive, buyer could only pay $66/share to replicate economics at $8.00/MMBtu
2
long-term gas 22
24. The Current TXU Trading Price Suggests That The Market Believes
A Meaningful Premium Exists In The Deal
Based on August 9, 2007 share price of $63.55/share and transaction price of $69.25/share
Assumed Implied TXU stock
probability of price if deal Implied premium
breaks1
close in offer
(Percent) ($/share) (Percent)
20% 62.4 11%
40% 60.4 15%
60% 56.5 23%
80% 44.8 55%
The current value for TXU’s security suggests that if the deal was to break, TXU’s
The current value for TXU’s security suggests that if the deal was to break, TXU’s
security would likely trade meaningfully below $69.25 share
security would likely trade meaningfully below $69.25 share
23
Based on stock price as of Aug 9, 2007; assumes closure in 4th quarter 2007, 8% cost of equity
1
25. Today’s Agenda
• Dynamic evaluation process
• Non-management led buyout
Transaction Process
Transaction Process • Fact-based process led by four independent directors and advisors
and Overview
and Overview • Merger terms including a 50-day “go-shop” process, with no match rights, to help
ensure maximum value for shareholders
• Market, legislative and regulatory challenges undermine integrated business model
• If the transaction is not completed, TXU would not expect to remain integrated
Management Stand-Alone Plan • Stand-Alone Plan entails separation into 3 businesses with high performance targets
Management Stand-Alone Plan
• Each business would face challenges and opportunities going forward; the board
determined that the investor group offer maximized value to shareholders
• Relative to Stand-Alone Plan, investor group offer provides meaningful implied
premium based on a variety of fact-based methodologies
• Other market signals confirm that the merger represents maximum value
Evaluation of Offer
Evaluation of Offer
• PUC approval of future transactions involving Oncor reduces likelihood of future
premium (the investor group offer is grandfathered)
• Substantial uncertainty in underlying commodities and asset values
• Potential for value leakage from Luminant in high power price scenarios
• Possible downward revaluation of Oncor
Other Value Considerations
Other Value Considerations
• Potential for continued regulatory intervention in TXU Energy
• Meaningful implied premium based on fundamental and market analysis
• Offer maximizes value and is superior to the Stand-Alone Plan
Conclusion
Conclusion
24
26. The Board Believed That Potential For Value Leakage Increased
Across Each Of TXU’s Businesses In High Power Price
Environments
Suppliers
Suppliers
• •PRB transportation costs up
PRB transportation costs up
almost 100%
almost 100%
• •Uranium costs up 1000%
Uranium costs up 1000%
• •Labor rates up 90% over the last 22
Labor rates up 90% over the last
years
years
• •Construction and equipment costs
Construction and equipment costs
up 40% in last 22years
up 40% in last years
Customers/3rd party
Customers/3rd party
Competitors/substitutes
Competitors/substitutes stakeholders
stakeholders
Reduced
/new entrants
/new entrants • •Price caps (retail/ wholesale)
Price caps (retail/ wholesale)
• •68 GW of proposed new capacity in Value
68 GW of proposed new capacity in • •Increased permitting timelines
Increased permitting timelines
ERCOT
Capture
ERCOT • •Forced environmental retrofits or
Forced environmental retrofits or
• •Potential for new technologies
Potential for new technologies taxes
taxes
• •Potential for low cost labor
Potential for low cost labor • •Reduced authorized ROEs
Reduced authorized ROEs
Competitive markets are efficient; if economic rent exists, all parts of the supply
Competitive markets are efficient; if economic rent exists, all parts of the supply
chain will seek ways to capture it
chain will seek ways to capture it
25
27. Competitors Will Likely Add Capacity In High Power Price
Environments That Would Cannibalize Potential Value
Levelized breakeven power cost for different technologies1
$/MWh
79
70
Implied power
price in offer2
61
61 59
IGCC Nuclear Wind SCPC CCGT @
$6.50/MMBtu
Expected to come
0 0 6.0 4.0 1.6
on line by 2012
(GW)
Incremental proposed 1 19 23 4 11
new build in ERCOT
(GW)
Before the market reached the long-term power price implied in the offer, it is likely new
Before the market reached the long-term power price implied in the offer, it is likely new
capacity would be added to cannibalize the power price; over 11 GW of new capacity is
capacity would be added to cannibalize the power price; over 11 GW of new capacity is
expected to be on line in ERCOT by 2012
expected to be on line in ERCOT by 2012
Assumes cost to build for nuclear of $2,500/Kw; IGCC--$2,200/Kw; wind--$1,500/Kw; SCPC--$1,800/Kw ; CCGT--$ 650/Kw at 6.45 heat rate; 10% IRR; Nuclear receives federal loan
1
guarantee and 25% of allocated production tax credits for first 8 years; $20/MWh wind PTC per year for the first 10 years
26
Range based on the value attributed to Oak Grove and Sandow 5 (low end of range equals full value- high end of range equals no value)
2
28. T&D Businesses Are Currently Trading Significantly Above Their
Long-Term Averages
Market/book ratio1 10 year US treasury rate
92-07; Ratio 92-07; Percent
2.5 8%
T&D index1
2
6%
1.5
1
4%
15 year average
0.5 10 year UST
market /book ratio
0 2%
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
T&D businesses are currently trading 38% above their 15 year average; policy
T&D businesses are currently trading 38% above their 15 year average; policy
makers may attempt to correct this by reducing authorized ROEs
makers may attempt to correct this by reducing authorized ROEs
27
Includes CNP, EAS, ED, ITC, NST, NU, POM
1
29. Commodity Price Volatility May Put Retail Margins At Risk
Residential retail prices
Residential gross margin1
Current TXU
$/MWh
$/MWh standard rate
(FlexProtect)
120 130 132 140 150
7.00 17 27 29 37 47
Natural gas prices
8.00 6 16 18 26 36
$/MMBtu
8.40 2 12 14 22 32
9.00 -4 6 8 16 26
2010 forward
NYMEX price2
Competitively passing through commodity prices may be required for the
Competitively passing through commodity prices may be required for the
retail business to maintain competitive gross margins of $25-$35/MWh
retail business to maintain competitive gross margins of $25-$35/MWh
Gross margin equals retail price minus cost of power minus cost of wires; does not include hedging, collateral, bad debt or revenue taxes
1
28
Based on forward curve as of Aug 8, 2007
2
30. Today’s Agenda
• Dynamic evaluation process
• Non-management led buyout
Transaction Process
Transaction Process • Fact-based process led by four independent directors and advisors
and Overview
and Overview • Merger terms including a 50-day “go-shop” process, with no match rights, to help
ensure maximum value for shareholders
• Market, legislative and regulatory challenges undermine integrated business model
• If the transaction is not completed, TXU would not expect to remain integrated
Management Stand-Alone Plan • Stand-Alone Plan entails separation into 3 businesses with high performance targets
Management Stand-Alone Plan
• Each business would face challenges and opportunities going forward; the board
determined that the investor group offer maximized value to shareholders
• Relative to Stand-Alone Plan, investor group offer provides meaningful implied
premium based on a variety of fact-based methodologies
• Other market signals confirm that the merger represents maximum value
Evaluation of Offer
Evaluation of Offer
• PUC approval of future transactions involving Oncor reduces likelihood of future
premium (the investor group offer is grandfathered)
• Substantial uncertainty in underlying commodities and asset values
• Potential for value leakage from Luminant in high power price scenarios
• Possible downward revaluation of Oncor
Other Value Considerations
Other Value Considerations
• Potential for continued regulatory intervention in TXU Energy
• Meaningful implied premium based on fundamental and market analysis
• Offer maximizes value and is superior to the Stand-Alone Plan
Conclusion
Conclusion
29
31. The Board Concluded The Investor Group Offers A Significant
Premium Over TXU’s Next Best Alternative
Estimated acquisition premium as of August 9, 2007
08E; Percent
30%
27%
24% 25%
20%
#1 #3 #4 #5 #6
Announcement DCF Adjusted Implied Implied gas
multiple baseload asset prices
values
5.4 7.4 6.9
Implied value 6.3 6.5
in investor
group offer
($ billions)
All methods reflect approximately the same 25% premium as implied
All methods reflect approximately the same 25% premium as implied
at time of announcement
at time of announcement
30
32. Achieving The Value Assumed In The Stand-Alone Plan Requires
High-Performance Results From The Base Businesses
What has to be achieved to execute Stand-Alone Plan
Current forward curve actualizes and long-term gas prices remain above $6.35/MMBtu
Gas remains on the margin 100% of the time, notwithstanding potential impacts of
demand destruction or supply additions
Long-term ERCOT market heat rates equilibrate at CCGT reinvestment economics (no
Commodity
Commodity
overbuild)
Mine-mouth PRB costs remain on the long-term cost curve and the two Western
railroads do not exert natural gas parity pricing
Interest rates remain low, maintaining historically low costs of capital
Public policy makers allow the retail market to work and competitors to achieve
sustainable margins throughout the commodity cycle
Regulatory Public policy makers allow the wholesale market to work and allow marginal capacity
Regulatory
to recover marginal costs and a return on capital
No forced generation divestiture
US carbon regulations develop such that prices remain below $15/ton, and industry
supported allocation methodologies are implemented
Environmental
Environmental Current environmental regulation trajectories (CAIR, CAMR) remain in place for
regulated pollutants (SOx, NOx, Hg)
Continued capital investments will allow currently operating facilities to continue to
operate for more than the next 30 years
Operations Productivity gains can be made to offset inflationary costs
Operations
Solid fuel capacity factors can be maintained above 90%
Even if these conditions are achieved, the Stand-Alone Plan is inferior to
Even if these conditions are achieved, the Stand-Alone Plan is inferior to
the investor group offer
the investor group offer
31
33. Matching The Premium Implied In The Offer Price Would Require
Substantial Additional Value Capture On Top Of The Base Plan
Alternatives that would match the implied deal premium of 25%
• Successfully originating, developing and constructing 15
TXU reference plants coming on line starting in 2013
• Reducing costs by $800 million per year: 130% of Power
O&M; 60% of total TXU (excl T&D) non-fuel cost
Along with
executing the • Reducing coal costs by $40/ton (All-in coal cost is $30/ton)
Stand-Alone plan,
incremental value • Increasing baseload output by 20 TWh (23% increase in
would be required capacity factor across existing and proposed plants)
to match the
implied offer • Increasing (and sustaining) retail residential gross margins
premium of 25%1 from $23/MWh to $55/MWh
• Buying a merchant generator2 and increasing EBITDA by
110% (operations synergies would likely add only 12%)
• An upward shift of the 2013+ levelized gas price by
$2.20/MMBtu across all years3
These scenarios are highly speculative or difficult to achieve
These scenarios are highly speculative or difficult to achieve
Equivalent to each initiative individually
1
Assumes 20% premium over fair value
2
32
Assumes no premium on Oncor or TXU Energy
3
34. The Board Recommends That TXU Shareholders Vote For The
Transaction
• Prior to the initial inquiries from the investor group, management had been working with the Board
to refine its optimal Stand-Alone Plan
The Stand-Alone Plan consisted initially of a separation of Oncor but transformed into a three
way split to more fully separate the generation and retail businesses in light of market,
regulatory and legislative challenges
If the transaction is not completed, TXU does not expect to continue as an integrated company
The Stand-Alone Plan contemplated a reduction in the number of new coal units and a price cut
for North Texas retail customers
• In parallel to developing this Plan, the Board evaluated the investor group offer relative to
management’s Stand-Alone Plan and other strategic options and decided in February that the
investor group offer maximized value for TXU shareholders
The process was led by experienced independent directors and advisors and no management
has entered into employment arrangements with the investor group
The offer represented a 25% premium to the average closing price during the 20 trading-day
period prior to rumors of the merger
The offer represented a 17%-30% premium over fundamental and market valuations
The Board viewed the offer as a significant premium over the projected potential value of TXU
even assuming perfect execution of management’s Stand-Alone Plan
33
35. The Board Recommends That TXU Shareholders Vote For The
Transaction (cont)
• In light of volatile commodity and equity market signals, the Board reevaluated its recommendation
in July and affirmed the recommendation based on a refreshed view of the fundamentals, and the
risk transfer away from TXU shareholders
The Board believed that the offer continued to represent a meaningful premium on July 12, 2007
The Board believed new laws in Texas requiring PUC approval of any utility acquisition reduced
the likelihood of alternative transactions offering shareholders a premium (investor group offer
grandfathered)
The Board’s independent financial advisor, Lazard, updated its fairness opinion and concluded
the deal was fair from a financial point of view
The current state of debt and equity markets made alternative transactions unlikely and could
reduce value of TXU’s Stand-Alone Plan
• As of August 9, 2007, the market would imply that the premium is approximately 25%, the same as at
the time of announcement in February 2007
34
37. Safe Harbor Statement and Additional Information
This presentation contains forward-looking statements, including, among others, any statements identified as “assumptions,” 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 TXU Corp.’s filings with the Securities and Exchange Commission (SEC). Specifically, TXU Corp. (TXU) makes
reference to the section entitled “Risk Factors” in its most recent Form 10-K and subsequent reports on Form 10-Q, and the section entitled “Cautionary
Statement Regarding Forward-Looking Statements” in its most recent definitive proxy statement. In addition to the risks and uncertainties set forth in the TXU ’s
SEC reports or periodic reports, the forward-looking statements described in this presentation could be affected by, among other things, changes in wholesale
electricity prices, long-term natural gas prices, ERCOT heat rates, coal prices or uranium prices; changes in ERCOT market dynamics; changes in interest rates;
the ability to manage TXU’s construction program to a timely conclusion with limited cost overruns, including the ability to meet cost and schedule estimates for
the construction of the proposed three new coal-fueled units and the ability to meet salvage value estimates for equipment previously ordered for the eight
discontinued development units; the implementation of new regulations concerning carbon emission reduction; the commercial viability of alternative energy
sources; the ability of TXU’s retail business to achieve gross residential margin and market share estimates in the territories in which it operates; business
uncertainty and contractual restrictions that may exist during the pendency of TXU’s previously announced proposed merger; the amount of the costs, fees,
expenses and charges related to the merger and the execution of certain financings that will be obtained to consummate the merger; the impact of the substantial
indebtedness incurred to finance the consummation of such merger; the occurrence of any event, change or other circumstances that could give rise to the
termination of the agreement governing the proposed merger; failure to obtain shareholder approval or any other failure to satisfy other conditions required to
complete the transactions contemplated by the merger agreement, including required regulatory approvals; risks that the proposed merger disrupts current plans
and operations and diverts management’s attention from ongoing business concerns; and potential difficulties in employee retention as a result of the proposed
merger. Many of the aforementioned risks and uncertainties are beyond TXU’s ability to control or predict.
Regulation G
This presentation includes certain non-GAAP financial measures. Financial definitions and reconciliation of these measures to the most directly comparable
GAAP measures are included in Appendix-Regulation G Reconciliations of the printed version of the slides and the version included on the company’s website at
www.txucorp.com under Investor Resources/Presentations.
Additional Information and Where to Find It
In connection with the proposed merger of TXU with Texas Energy Future Merger Sub Corp., a wholly-owned subsidiary of Texas Energy Future Holdings Limited
Partnership (the “Merger”), TXU has filed a proxy statement with the SEC. A definitive proxy statement and a form of proxy has been mailed to the shareholders
of TXU. BEFORE MAKING ANY VOTING DECISION, TXU’S SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE MERGER
CAREFULLY AND IN ITS ENTIRETY BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. TXU’s shareholders are able to
obtain, without charge, a copy of the proxy statement and other relevant documents filed by TXU with the SEC from the SEC’s website at
http://www.sec.gov. TXU’s shareholders are also able to obtain, without charge, a copy of the proxy statement and other relevant documents by directing a
request by mail or telephone to Corporate Secretary, TXU Corp., Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201, telephone: (214) 812-4600, or from TXU’s
website, http://www.txucorp.com/proxy.
Participants in the Solicitation
TXU and its directors and officers may be deemed to be participants in the solicitation of proxies from TXU’s shareholders with respect to the Merger. Information
about TXU’s directors and executive officers and their ownership of TXU’s common stock is set forth in TXU’s definitive proxy statement. Shareholders may
obtain additional information regarding the interests of TXU and its directors and executive officers in the Merger, which may be different than those of TXU’s
shareholders generally, by reading the proxy statement and other relevant documents regarding the Merger.
36
38. Today’s Agenda
• Dynamic evaluation process
• Non-management led buyout
Transaction Process
Transaction Process • Fact-based process led by four independent directors and advisors
and Overview
and Overview • Merger terms including a 50-day “go-shop” process, with no match rights, to help
ensure maximum value for shareholders
• Market, legislative and regulatory challenges undermine integrated business model
• If the transaction is not completed, TXU would not expect to remain integrated
Management Stand-Alone Plan • Stand-Alone Plan entails separation into 3 businesses with high performance targets
Management Stand-Alone Plan
• Each business would face challenges and opportunities going forward; the board
determined that the investor group offer maximized value to shareholders
• Relative to Stand-Alone Plan, investor group offer provides meaningful implied
premium based on a variety of fact-based methodologies
• Other market signals confirm that the merger represents maximum value
Evaluation of Offer
Evaluation of Offer
• PUC approval of future transactions involving Oncor reduces likelihood of future
premium (the investor group offer is grandfathered)
• Substantial uncertainty in underlying commodities and asset values
• Potential for value leakage from Luminant in high power price scenarios
• Possible downward revaluation of Oncor
Other Value Considerations
Other Value Considerations
• Potential for continued regulatory intervention in TXU Energy
• Meaningful implied premium based on fundamental and market analysis
• Offer maximizes value and is superior to the Stand-Alone Plan
Conclusion
Conclusion
37
39. The Board Followed A Robust And Objective Process…
Date1 Description
Nov 27, 2006 CEO meets with representatives of KKR and TPG (investor group) based on unsolicited call earlier in the month
Nov 30, 2006 TXU enters into confidentiality agreement, and investor group commences preliminary due diligence
Early Dec 2006 Senior financial executives and limited other executives meet with investor group
CEO informs chairman of Finance and Business Development Committee that TXU has entered into a confidentiality
Mid Dec 2006
agreement and is in the process of preliminary due diligence
Early Jan 2007 CEO informs entire TXU Corp. Board of Directors (Board) of investor group’s interest to make a proposal to acquire TXU
Jan 18, 2007 Investor group indicates willingness to purchase TXU for $66/share subject to several more weeks of due diligence
• Board meets to discuss investor group proposal and forms independent Strategic Transactions Committee (STC)
• Board instructs management not to discuss post-transaction employment with investor group
Jan 22, 2007
• TXU hires Credit Suisse (CS) and Sullivan & Cromwell; the STC hires Cravath; the STC later hires Lazard (Feb. 9)
Late Jan 2007 STC requests management and CS help STC evaluate strategic alternatives relative to investor group proposal
Mid Feb 2007 STC negotiates with investor group to raise bid to $69.25/share and shift regulatory and legislative risk to investor group
Board meets with its financial and legal advisors as well as management and its financial and legal advisors and concluded
Feb 21, 2007
there is a good probability of reaching final agreement
• CS and Lazard deliver opinions that the deal is fair, from a financial point of view, to TXU shareholders
Feb 25, 2007
• Board authorizes execution of the merger agreement
Feb 26, 2007 Merger announced; Lazard begins “go-shop” process
• “Go-shop” period ends after soliciting interest from over 70 parties but receiving no superior proposals
• During “go-shop” process, at Lazard’s request, TXU CEO traveled to Europe with Lazard to meet potential acquirers and
Apr 16, 2007
sought meetings with logical domestic acquirers
Jul 9, 2007 STC meets with Lazard, legal counsel and management to review updated perspectives on value of investor group offer
Jul 12, 2007 Lazard delivers updated fairness opinion that the deal is fair, and full Board recommends approval of the merger
July 24, 2007 TXU files definitive proxy statement; C. John Wilder announces intention to resign if merger closes
• •The Board leveraged independent, objective advice, using market and fundamental signals to drive its decision
The Board leveraged independent, objective advice, using market and fundamental signals to drive its decision
• •Before filing the definitive proxy, the Board reaffirmed that the deal represented the best value to shareholders
Before filing the definitive proxy, the Board reaffirmed that the deal represented the best value to shareholders
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For a more comprehensive description of events see pages 18-22 of the proxy statement
1
40. …That Was Led By Independent Directors With Significant
Transaction Experience
Members of the
Strategic
Transactions
Committee Experience
• Senior Managing Director, Diamond Castle Holdings, LLC
• Former Managing Director, Investment Banking, CSFB
Michael W. Ranger
• Former Managing Director and Group Head of Global Energy and Power
(chairman)
Group, Investment Banking, DLJ
• Former Executive Vice President and CFO, Centex
Leldon E. Echols
• Former Managing Partner, Audit Practice, Arthur Andersen LLP
• Former President and Chief Executive Officer, Shell Oil Company
• Former President and Chief Executive Officer, Shell Exploration and
Jack E. Little
Production Company
• Chairman, President and Chief Executive Officer, UAL Corporation and
United Air Lines
• Former Non-Executive Chairman, Dynegy
Glenn F. Tilton
• Former Vice-Chairman, Chevron Texaco Corporation
• Former Chairman and CEO, Texaco
The Strategic Transactions Committee (STC) was led by directors with deep sector and
The Strategic Transactions Committee (STC) was led by directors with deep sector and
functional expertise across Energy and M&A and advised by independent legal and
functional expertise across Energy and M&A and advised by independent legal and
financial advisors
financial advisors
39
41. The Board Compared The Transaction To A Number Of Different
Strategic Options…
Strategic alternative Description
• Current business model assuming construction of Oak Grove and
Sandow 5 (2.2 GW)
Base case
• Cases with no new build and original new build program (9 GW)
were also evaluated
• Current business model with additional $8-$20 billion of leverage
Base case with leveraged
recapitalization and recapitalization
• Separation of Oncor through tax-advantaged structure with
Oncor separation
subsequent share repurchases at TXU Corp.
Oncor and TXU Energy
• Separation of TXU subsidiaries into three separate businesses
(retail) separation (the Stand-
(baseload generator, transmission and distribution, electric retail)
Alone Plan)
• Either acquisition of merchant generator, combination with large
Merger/Acquisition
US integrated player or acquisition by large European strategic
• KKR and TPG offer
Investor group proposal
Ultimately, each option was evaluated against the Stand-Alone Plan which had been
Ultimately, each option was evaluated against the Stand-Alone Plan which had been
discussed with the Board prior to the investor group proposal and was further
discussed with the Board prior to the investor group proposal and was further
developed in parallel during the merger evaluation process
developed in parallel during the merger evaluation process
40