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The increase in cash flows in 2001 from 2000 of $968 million was driven by the effect of under-recovered fuel costs, reflecting high gas prices in 2000 that reduced cash flows in 2000 as the gas costs were incurred, but increased cash flows in 2001 as the costs were recovered from customers. The increase also reflected the year-over-year effect of margin deposit payments in 2000 and the return of those deposits in 2001.
Cash flows provided by financing activities for 2002 were $1.5 billion, primarily reflecting issuances of stock and debt. Issuances of debt and equity securities totaled $5.8 billion and retirements and repurchases of debt totaled $3.6 billion. Net redemptions of commercial paper totaled $844 million, and notes payable to banks increased $1.2 billion. As a result of the unbundling of US Holdings and related refinancings, there were substantial early retirements and re-issuances of long-term debt and retirements of preferred securities in 2001. Cash flows used in financing activities were $509 million in 2001 and $669 million in 2000. Cash dividends paid on common shares approximated $652 million, $621 million and $634 million in 2002, 2001 and 2000, respectively. Dividend payments on common shares are expected to total approximately $160 million in 2003. Cash flows used in investing activities totaled $847 million, $1,201 million and $299 million during 2002, 2001 and 2000, respectively. Proceeds in 2002 from the sale of the Handley and Mountain Creek power plants in the Dallas-Fort Worth area were $443 million. Acquisitions in 2002 included $36 million for a cogeneration and wholesale production business in New Jersey. Capital expenditures declined to $1.0 billion in 2002 from $1.2 billion in 2001. Capital expenditures are expected to total $1.1 billion in 2003. Nuclear fuel spending of $51 million reflected refuelings at the Comanche Peak nuclear generation plant. Other investing activities in 2002 included $147 million for terminations of out-of-the-money cash flow hedges, primarily reflecting declines in interest rates and a $30 million investment in an Australian joint venture to construct a gas pipeline from Victoria to South Australia. Depreciation and amortization expense reported in the statement of cash flows exceeds the amount reported in the statement of income by $91 million. This difference primarily represents amortization of nuclear fuel, which is reported as cost of energy sold in the statement of income consistent with industry practice, and amortization of regulatory assets, which is reported as operating costs in the statement of income. Investing Activities – Acquisitions and Dispositions Acquisitions TXU Corp. and its continuing operating subsidiaries have made the following acquisitions that were accounted for as purchase business combinations. The results of operations of the acquired companies are reflected in the consolidated financial statements from their respective acquisition dates.
(a) Transferred to the Pinnacle joint venture in August 2000. TXU Corp. may pursue potential investment opportunities from time to time when it concludes that such investments are consistent with its business strategies and will dispose of nonstrategic assets to allow redeployment of resources into faster growing opportunities in an effort to enhance the long-term return to its shareholders. | ||||||||||||||||||||||
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