Dispositions TXU Corp. and its continuing operating subsidiaries have disposed of the following businesses, investments and assets:
In April 2002, TXU Energy completed the sale of its Handley and Mountain Creek generating plants in the Dallas-Fort Worth area with total plant capacity of 2,334 megawatts for $443 million in cash. Concurrent with the sale, TXU Energy entered into a tolling agreement to purchase power during the summer months through 2006. The terms of the tolling agreement include above-market pricing, representing a fair value liability of $190 million. A pre-tax gain on the sale of $146 million, net of the effects of the tolling agreement, was deferred and is being recognized in other income during summer months over the five-year term of the tolling agreement. Both the value of the tolling agreement and the deferred gain are reported in other liabilities in the balance sheet. Future Capital Expenditures Capital expenditures are estimated at $1.1 billion for 2003, substantially all of which are for maintenance and organic growth of existing operations, and are expected to be funded by cash flows from operations. Approximately 58% is planned for the North America Energy Delivery segment, 29% for the North America Energy segment, 11% for Australia and 2% for other activities. Financing Activities Equity In December 2002, TXU Corp. issued 35 million common shares in a public offering. In June 2002, TXU Corp. issued 11.8 million common shares in a public offering. Net proceeds of $1.1 billion from these offerings were used for general corporate purposes, including the repayment of commercial paper and to provide advances to subsidiaries. In April 2001, TXU Corp. repurchased 1.3 million shares of its common stock for $44 million under one of two existing equity purchase agreements with certain financial institutions. Following that purchase, TXU Corp. terminated both agreements without purchasing additional shares. Settlement of these agreements had no effect on earnings. During 2000, TXU Corp. repurchased approximately 18.6 million shares of its common stock for $596 million through open market purchases. No additional repurchases were made and none are planned for 2003. In October 2002, TXU Corp. declared a common stock dividend of $0.125 per share, payable on January 2, 2003, which represented an 80% reduction from the previous dividend rate. The decrease was in response to capital market concerns regarding the liquidity of TXU Corp. and its US and Australian subsidiaries. See Note 3 to Financial Statements regarding events related to TXU Europe. TXU Corp. paid quarterly dividends of $0.60 a share in April 2002, July 2002 and October 2002. TXU Corp. or its predecessor has declared common stock dividends payable in cash in each year since incorporation in 1945. The Board of Directors of TXU Corp., at its February 2003 meeting, declared a quarterly dividend of $0.125 a share, payable April 1, 2003, to shareholders of record on March 7, 2003. Future dividends may vary and are subject to consideration of TXU Corp.’s operating cash flow levels and capital requirements as well as financial and other business conditions existing at the time. | ||||||||||||||||||||||||||||||||||||||||||||||||
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