Ushering in some stability back into its business, TXU recorded 2003 earnings from continuing operations — before cumulative effect of changes in accounting principles, net of preference stock dividends — of $715 million, or $2.03 per diluted share of common stock. Comparable earnings before extraordinary charges in 2002 were $160 million, or $0.58 per diluted share of common stock.
Net income available for common stock for the year was $560 million, or $1.62 per diluted share of common stock, as compared to the 2002 net loss available for common stock of $4.2 billion, or $15.23 per diluted share of common stock.
“TXU had a good year in 2003. We delivered on our initiatives, and our shareholders realized a total return of more than 30%, six percentage points higher than the S&P Electric Utilities index,” said Dan Farell, CFO. “We remain committed to delivering strong results and will continue to strengthen the balance sheet, enhance credit, pursue industry leading cost competitiveness and capitalize on market leadership positions.”
TXU’s fourth quarter 2003 earnings from continuing operations — net of preference stock dividends — were $66 million, or $0.20 per diluted share of common stock, compared to a loss of $547 million, or $1.84 per diluted share of common stock for 4Q2002. Fourth quarter 2003 net income available for common stock was $23 million, or $0.07 per diluted share, compared to 4Q2002’s net loss available for common stock of $4.88 billion, or $16.44 per diluted share.
The company’s energy segment, which includes the company’s retail, generation and portfolio management operations, primarily in Texas, contributed $56 million of income in the fourth quarter and $493 million for the full year 2003, compared to a loss of $311 million and income of $319 million for the fourth quarter and full year 2002, respectively.
TXU’s energy delivery segment earned $36 million in the fourth quarter of 2003 and $299 million for the year, compared to $8 million in the fourth quarter of 2002 and $228 million for the year. The energy delivery segment includes the electric transmission and distribution assets as well as the company’s natural gas pipeline and distribution business. TXU attributed the 2003 improvement in the segment to a $14 million increase from Oncor Electric Delivery and a $57 million increase from TXU Gas. In 2003, Oncor had higher revenues as a result of increased transmission tariffs, new transition charge revenues associated with securitization bonds and higher miscellaneous services revenues. The year over year improvement in TXU Gas was attributed to higher contribution margin, a $36 million ($23 million net of tax) charge for early retirement of debt in the fourth quarter of 2002, and lower interest expense due to decreased debt levels.
Looking forward towards full-year 2004 results, TXU said its objective is to deliver 2004 earnings from continuing operations of $2.15 per diluted share of common stock. The company also forecasted 1Q2004 earnings from continuing operations to be around $0.45 per diluted share of common stock.
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