The company we have built is far from finished, but over the past three years, TXU’s turnaround has created more value than in the 20 years preceding it.
In assessing our progress versus where we were in 2003, we have followed a rigorous management approach that measures our performance against the hallmarks of the best industrial companies: operational excellence, market leadership, a strict risk/return mindset for all key business decisions, and performance management. We believe that executing against these elements is necessary for delivering top-quartile financial and operating performance. A high-level version of the comprehensive scorecard we have used to monitor our performance against where we were in 2003 appears below, followed by my notes about how we’ve done.
- financial performance
- |
- operational excellence
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- market leadership
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- risk\return mindset
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- performance management
| performance scorecard | ||||
|---|---|---|---|---|
| Performance Metric | Measure | 20031 | 2006 | % Improvement |
| FINANCIAL PERFORMANCE2 | ||||
| Operational earnings per share | $/share | 1.01 | 5.55 | 450 |
| Normalized operating cash flow | $ millions | 1,860 | 4,976 | 168 |
| Normalized free cash flow | $ millions | 860 | 2,679 | 212 |
| Return on invested capital | percent | 6.5 | 21.7 | 234 |
| EBITDA/interest | ratio | 3.0 | 6.4 | 113 |
| OPERATIONAL EXCELLENCE | ||||
| Lignite generation | gigawatt-hours | 41,311 | 43,837 | 6 |
| Nuclear generation | gigawatt-hours | 17,717 | 19,795 | 12 |
| SAIDI3 | minutes | 74.2 | 79.1 | (7) |
| Safety4 | rate | 0.26 | 0.10 | 62 |
| Total operating costs and SG&A expenses5 | $ millions | 2,773 | 2,192 | 21 |
| Fixed costs6 | $ millions | 4,359 | 3,096 | 29 |
| MARKET LEADERSHIP | ||||
| Call answer time | seconds | 268 | 11 | 96 |
| PUC complaints | # thousands | 5.4 | 2.7 | 50 |
| Retail bad-debt expense/retail revenue | percent | 1.8 | 1.0 | 44 |
| RISK/RETURN MINDSET | ||||
| Total shareholder return (3-year) | percent | (40) | 393 | - |
1 Based on actual 2003 financial results including subsequently discontinued operations.
2 See financial definitions and Regulation G reconciliations
3 System Average Interruption Duration Index: the number of minutes an average customer’s power is out during a year.
4 Based on Lost Time Incident Rate: the number of injuries requiring time away from the job per 200,000 employee hours worked.
5 2003 includes $477 million related to discontinued operations.
6 Includes non-variable operating costs and SG&A expenses, interest expense, and maintenance capital expenditures.
