energy future holindings txu_080106

Second Quarter 2006Earnings Discussion

August 1, 2006

2

Safe Harbor StatementThis presentation contains forward-looking statements, 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 company's SEC filings. In addition to the risks and uncertainties set forth in the company's SEC filings, the forward-looking statements in this release could be affected by actions of rating agencies, delays in implementing any future price-to-beat fuel factor adjustments, the ability of the company to attract and retain profitable customers, changes in demand for electricity, the impact of weather, changes in wholesale electricity prices or energy commodity prices, the company’s ability to hedge against changes in commodity prices and market heat rates, the company’s ability to fund certain investments described herein, delays in approval of, or failure to obtain, air and other environmental permits, changes in competitive market rules, changes in environmental laws or regulations, changes in electric generation and emissions control technologies, changes in projected demand for electricity in Texas, the ability of the company to attract and retain skilled labor for planning and building new generating units, changes in the cost and availability of materials necessary for the planned new generation units, the ability of the company to manage the significant construction program to a timely conclusion with limited cost overruns, the ability of the company to implement the initiatives that are part of its performance improvement program and growth strategy, and the terms under which the company executes those initiatives, and the decisions made and actions taken as a result of the company’s financial and growth strategies.

Regulation GThis presentation includes certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is included in the appendix of the printed version of the slides and the version included on the company’s website at www.txucorp.com under Investor Resources/Presentations.

3

Today’s Agenda

Q&AQ&A

Operational & Power Generation Program

Highlights


Highlights

Financial & Risk Management Overview


C. John WilderChairman & CEO

Power Generation Program Strategic Scenarios


Jonathan SieglerVice PresidentStrategy, Mergers & Acquisitions

David CampbellExecutive Vice President &Acting CFO

4

TXU’s Operational Earnings Improved Substantially

0.60

2.29

YTD 05 YTD 06

Reported earnings per shareYTD 05 vs. YTD 06; $ per diluted share

1.29

2.67

YTD 05 YTD 06

Operational earnings per shareYTD 05 vs. YTD 06; $ per diluted share

0.78

1.59

Q2 05 Q2 06

Operational earnings per shareQ2 05 vs. Q2 06; $ per diluted share

0.701.07

Q2 05 Q2 06

Reported earnings per shareQ2 05 vs. Q2 06; $ per diluted share

53%53% 104%104%

282%282% 107%107%

5

Operational Excellence Is Reflected In Improved Production Levels …

4,2505,098

Q2 05 Q2 06

Nuclear productionQ2 05 vs. Q2 06; GWh

14,855 15,142

Q2 05 Q2 06

Baseload (combined nuclear/lignite)Q2 05 vs. Q2 06; GWh

10,605 10,044

Q2 05 Q2 06

Lignite productionQ2 05 vs. Q2 06; GWh

30,172 31,096

YTD 05 YTD 06

Baseload (combined nuclear/lignite)YTD 05 vs. YTD 06; GWh

20%20% 2%2%

5%5%3%3%

6

…And Improved Delivery Reliability

74.5 73.5

Q2 05 Q2 06

SAIDI (non-storm)Q2 05 vs. Q2 06; minutes

1.15 1.11

Q2 05 Q2 06

SAIFI (non-storm)Q2 05 vs. Q2 06; frequency

1,630

3,830

YTD 05 YTD 06

Vegetation managementYTD 05 vs. YTD 06; miles trimmed

3

161

YTD 05 YTD 06

Cumulative automated metersYTD 05 vs. YTD 06; meters (000’s)

1%1% 4%4%

135%135% N.M.N.M.

7

12

13

14

15

16

17

18

19

Residential single family offers from incumbent providers (cents/kWh)

1 Denotes full, undiscounted Price to Beat. CPL and WTU provide existing residential customers as of 6/30/06 the Direct Electricity PlanTM which is priced at 16.0 and 16.3 cents/kWh respectively in the two service areas. Both price points are also included on the chart. For residential customers with an average usage of 1,500 kWh per month (average for single family). Time periods for prices and offers shown varies. Shows all known offers by incumbent providers in their historical service areas including renewable products as of July 31, 2006. TXU Energy low income discount funded by TXU Energy.

Average Undiscounted PTB 16.4 cents/kWh

Residential customers also have other offers available below PTB from new entrantsResidential customers also have other offers available below PTB from new entrants

TXU Energy Offers 9 Of The 10 Lowest Single Family Prices Among Incumbents In Their Historical Areas…

TXU PTB

CPL PTB1

WTU PTB1

RRI PTB

FC PTB

8

…Contributing To Improved Customer Retention

4.4

3.0

YTD 05 YTD 06

In-territory residential churn rateYTD 05 vs. YTD 06; percent

3.1

1.9

Q2 05 Q2 06

In-territory residential churn rateQ2 05 vs. Q2 06; percent

39%39% 32%32%

9

Key Questions For Today’s Call

1. How is the power generation program progressing?

2. How will the power generation program address the energy challenges facing the US and specifically Texas?

3. How did TXU develop its solution to meet these challenges in Texas?

4. Why did you size the power generation program the way you did?

5. How will this solution improve the environmental profile of Texas?

6. How does TXU view the uncertainty surrounding potential carbon regulation?

7. How does the power generation program fit into TXU’s financial and risk management strategy?

10

Status Update On The Power Generation Program

Key element Status of completion Progress25 50 75 100

PermittingAll permits deemed ‘administratively complete’Town hall meetings with community leadersCommitment letter to TCEQ for 20% net reduction

Plant design and engineering

Completed 20 ‘lean’ workout sessions Nearly 75% complete with the ‘open book’ process

Final engineering Completed Umbrella AgreementDetailed engineering underway

Supply/procurement & construction

Finalized commercial terms for rail car purchaseCompleted agreements for 8 steam turbinesIn negotiations for AQCS and structural steel

Rail infrastructure & transport agreements

Priority routes for dual-rail identifiedEngineering studies underwayTransportation negotiations underway

Fuel supply Multiple parties expressing interest

Forward power and equity sales

Active negotiations for 1.0 GWDiscussions for an additional 1.25 GWFinancial advisors retained for equity sales

Financing Secured $11 billion of non-recourse financingPreparing for syndication of financing

Operational readiness

Defining future-state operating model for powerDesigning training academy

11

Key Execution Metrics For The Power Generation Program

EPC contracts ($ millions, $/kW)

Cost

Construction program metrics

Safety

Expenditure (actual vs. plan $/month)

Rail infrastructure cost ($/kW)

Equipment delivery milestones

Schedule

Material delivery milestones

Construction activity milestones

Commercial operations target date

Substantial completion target date

Facility staffing (% ready)

Facility O&M cost

Facility heat rate

Facility availability

Operations readiness

and start-up

12

Scale Economies Provide Significant Benefits…

Reference plant cost savings vs. single plant

$/kW

Reference plant schedule reduction vs. single plant

Months

1,450 $/kW 140

70701,100 $/kW

70

Lean design/engineering

ConstructionEquipmentprocurement

Referenceplant

Engineer services/ overhead

Single plant estimate

24%

Scale related benefits

60 - 66 10-12

2-33-4

42-443

Early and parallel equipment order

ConstructionLean design/ engineering

Referenceplant

Other supplychain efficiencies

Single plant estimate

32%

•Reference plant scale benefits provide 10% out of the 24% total plant cost reductions•Reference plant scale benefits provide 22% out of the 32% of total schedule reduction

•Reference plant scale benefits provide 10% out of the 24% total plant cost reductions•Reference plant scale benefits provide 22% out of the 32% of total schedule reduction

Scale related benefits

13

...And Have Supported More Effective Procurement Of Equipment And MaterialsTXU has completed most of the “lean” workouts . . .

Foundations/site prepBoiler structural steelCritical pipingCritical valvesFeed and condensate systemCondensate chem. controlsPlant structural steelChimneyCoal handlingCooling towersElectrical controls/DCSRaceway and cableTransformersScope optimization

Start up and commissioningStructural steel erectionBoiler erectionTurbine erectionChem clean and airblowsHydro to turbine roll

Potential identified

Ideas generated

Decisions taken

100%total

70%total

Cost/Design

Schedule/Process

25

25

10

40

100% = $4.2B

8 Reference Plants

Purchasedlater

Initial RFQ issued

In negotiation

Acquired

. . . and has supported equipment and materials procurement

Lean improvement workout status

% Complete

Reference Plant material and equipment% Complete

33% 66% 100%0%

14

Our Customer Research Suggests Customers Want Low-Cost, Dependable Power

58

45

3734

19

Customers ranking electricity provider characteristic “extremely important”06; percent

Source: TXU Survey, n=100

Dependable/provides

exceptional service

Has competitive

rates

Appreciates customer’s business

Offers money-saving

products

Is an innovative

leader

15

Key Elements Of The Technology Review

1.51

1.35

2.174

1.66

0

0.37

0

Emission costs

($/MWh)

9.1

8.2

8.5

10.0

n/a

7.0

n/a

Heat rate(MMBtu/

MWh)

94

85

85

94

95

601

36

Capacity factor

(%)

4

6

6

4

10

2

1

Construc-tion time

(years)

1,100

1,600

1,800

1,000

2,5002

700

1,400

Capital cost

($/kW)

64-6728Ultrasuper-critical coal

48-5122Super-critical coal

71-74

47-50

743

74

87

Break-even price

($/MWh)

12CCGT

44IGCC

22Sub-critical coal

50Advanced nuclear

53

O&M

($/kW-yr)

Wind

Technology

1 Represents capacity factor of current CCGT in ERCOT.2 Includes decommissioning and spent fuel storage3 Represents breakeven power price without government subsidies. 4 Assumes burning bituminous coal.

Unproven technology

16

Announced New Coal-Based Generation Development By Technology In US And Europe

38

10

843

Pulverized coal IGCC

Capacity announced, planned or under construction06; GW

Source: Energy Velocity, Platts, company press releases

Europe

US

122

13

Even in markets facing carbon constraints, pulverized coal is the technology of choice

Even in markets facing carbon constraints, pulverized coal is the technology of choice

17

TXU Will Continue To Invest In Technologies Across All Horizons

Strategic growth horizons

Horizon 1

Technologies commercially viable today

Supercritical coalSub-critical coalWind, Hydro Steam turbine technologies

Horizon 2

Horizon 3

Horizon 4

Technologies commercially viable in 5-15 yearsUltra-supercritical coalSupercritical retrofitsIGCC

Technologies commercially viable in 15-25 yearsNext generation nuclear

Technologies commercially viable in more than 25 years

SolarHydrogenFusion

18

The TXU Model Provides A Distinct Competitive Advantage

The TXU model provides more than a $12/MWh all in cost advantage over the typical builder

The TXU model provides more than a $12/MWh all in cost advantage over the typical builder

60-634

7

48-511

Typical competitor

build

Breakeven power price 06; $/MWh

Capital cost advantage

($1,450 $1,150)

Operational advantage

(CF 90% 94%)

Build schedule advantage

(6 yrs 4 yrs)

TXU reference

plant

19

0.02

0.12

0.18

0.24 0.250.28 0.29 0.30 0.30

0.42

0.27

CA TX NY GA NJ IL FL US avg PA MI OH

Texas Has One Of The Cleanest Generating Fleets In The Country

Improvements in coal will continue to increase efficiency of the Texas portfolio and reduce its emissions profile

Improvements in coal will continue to increase efficiency of the Texas portfolio and reduce its emissions profile

Average NOx emission rates for 10 most populous states04; Lbs/MMBtu

Source: TCEQ

20

Mobile Sources Account For The Overwhelming Majority Of NOx Emissions And Ozone In North Texas

51

27

11

8 3

NOx emissions within DFW area05; percent

100% = 520 tons/day

On-roadmobile

Off-road mobile

Point sources

Area sources

Electric generation units

The expectation is that electric generation units will remain a minimal contributor to North Texas NOx emissions and DFW ozone

The expectation is that electric generation units will remain a minimal contributor to North Texas NOx emissions and DFW ozone

40

135

2

40

Contribution to peak ozone days1

Aug 09E; percent

100% = 95 ppb peak ozone (8 day average)

Background per EPA model

Biogenic

DFWarea man-made

Non-DFW man-made

Electric generation units2

1 TCEQ testimony, 7/13/06: “Future case contributions to DFW ozone”; average for 8 days in August 09 from DFW SIP modeling (using 05 emissions baseline)2 Generation units includes the 9 largest coal units (~1%) plus all other EGUs in region (~1%); ‘man-made’ totals exclude EGU total shown separately.

21

TXU Developing The Cleanest Large-Scale Coal Fleet In U.S.SO2 emissionsLbs/MMBtu

The combination of investment in the newest emissions control technology and an innovative voluntary retrofit program will make TXU’s coal fleet the

cleanest large-scale fleet in the nation

The combination of investment in the newest emissions control technology and an innovative voluntary retrofit program will make TXU’s coal fleet the

cleanest large-scale fleet in the nation1 TXU after new power generation development program and retrofitsSource: EPA

0.880.950.980.981.051.05

1.231.261.271.291.34

1.611.67

0.310.470.49

0.660.730.76

TXUABCDEFGHI

JKLMNOPQR

NOx emissionsLbs/MMBtu

0.300.320.330.340.340.350.350.350.360.390.400.410.42

0.050.10

0.200.240.290.30

TXUBGFKNHEJLRCPDQOI

AM

3.463.793.893.98

4.434.554.915.085.115.125.41

5.986.31

3.383.33

3.123.082.98

2.39CTXU

FPI

QADKJGEHOLNRMB

Hg emissionsMillionths of lbs/MMBtu

1 1

1

22

Benefits Of The Power Generation Program

Better reliabilityBetter reliabilityProvide 5 years worth of urgently needed suppliesIncrease reserve margins back to safe levels, averting blackouts, scarcity pricing, limits to economic growth

Lower costsLower costsLower wholesale electricity costs by $1.7 billionEnable long-term wholesale offers up to 20% off short-termReduce Texas’ over-reliance on high-priced natural gas

Cleaner airCleaner airReduce key emission totals by 20%, rates by nearly 70%Invest $2.5 billion in latest environmental technology Protect air quality, including urban non-attainment areas

Stronger economyStronger economy

Create jobs: 40,000 during construction, 21,000 ongoingDrive a $14 billion increase in annual gross state productAdd tens of millions of dollars in local property taxes

23

Today’s Agenda

Q&AQ&A


Highlights


Highlights








24

36 37 3943

4850-55

65 75 85 95 05 15E

Coal Generation Has Made Impressive Efficiency Gains Over The Last 40 Years And The Trend Is Expected To Continue

Improvements in coal will continue to increase efficiency and reduce its emissions profile

Improvements in coal will continue to increase efficiency and reduce its emissions profile

Maximum coal plant thermal efficiency 65-15E; percent

33%

25

Estimated Costs Of Green House Gas Mitigation

1 Includes transportation (0-5 $/ton) and geological (0.6-8.3 $/ton) storage costs. Based on technology using bituminous coal as feedstock. Based on coal prices of $1-1.50 per MMBtu

Source: Boston Consulting Group, IPCC Special Report – Carbon Dioxide Capture and Storage; MIT; EPA

HFC-23 destruction

Landfill gas capture/flaring

Manure management

Steam system improvements

Compressor pump efficiency

Water waste treatment

Renewable power (non-biomass)

IGCC w/CO2 capture and storage1

0.50-1

1-4

3-6

5-10

5-10

10-15

30-40

15-50

TXU expects the cost of supercritical retrofits to be drastically reduced over the next 15 years

TXU expects the cost of supercritical retrofits to be drastically reduced over the next 15 years

Cost to mitigate green house gas emissions$/ton

45-65Supercritical coal retrofit

26

Today’s Agenda

Q&AQ&A


Highlights


Highlights








27

TXU Corp. And Energy Holdings Showed Strong Growth During The Quarter…

0.71

1.51

Q2 05 Q2 06

TXU Energy Holdings

Operational earnings contribution by segmentQ2 05 vs. Q2 06; $ per diluted share

0.78

1.59

Q2 05 Q2 06

TXU Corp. Consolidated

0.18 0.18

Q2 05 Q2 06

TXU Electric Delivery

113%113%

104%104%

28

…As Well As Year-To-Date…

0.32 0.32

YTD 05 YTD 06

TXU Electric Delivery

1.14

2.61

YTD 05 YTD 06

TXU Energy Holdings

Operational earnings contribution by segmentYTD 05 vs. YTD 06; $ per diluted share

1.29

2.67

YTD 05 YTD 06

TXU Corp. Consolidated

107%107%

129%129%

29

…At The Same Time, The Business Continues To Drive Cost Leadership

592 577

YTD 05 YTD 06

TXU Energy Holdings and TXU CorpTotal operating costs and SG&A expense1

YTD 05 vs. YTD 06; $ millions

312 285

Q2 05 Q2 06

TXU Energy Holdings and TXU CorpTotal operating costs and SG&A expense1

Q2 05 vs. Q2 06; $ millions

9%9% 3%3%

1 Excludes TXU Electric Delivery

30

TXU Substantially Improved Financial Flexibility Measures…

4.0

2.5

Q2 05 Q2 06

Debt/EBITDAQ2 05 vs. Q2 06; percent

4.55.8

YTD 05 YTD 06

EBITDA/interestQ2 05 vs. Q2 06; ratio

61

1,049

YTD 05 YTD 06

Free cash flowYTD 05 vs. YTD 06; $ millions

594

1,904

YTD 05 YTD 06

Operating cash flowYTD 05 vs. YTD 06; $ millions

221%221% N.M.N.M.

38%38%29%29%

31

…Reaching Top Quartile Levels In The Sector…

Financial metrics for peer group1 (n=25)03-062; various measures

4th Quartile 3rd Quartile Median 2nd Quartile

Total debt/EBITDA(X)

6.0 4.2 3.5 2.8 1.7

Total debt/ enterprise value(%) 71.7 47.3 42.1 39.1 20.6

TXU LTM2

Top

TXU 03

EBITDA/interest(X)

3.6 4.5 5.5 6.72.3

1 Combined SPELEC and S&P Multi-Utility Index.2 Quartiles based on LTM as of Mar 06 performance; TXU performance based on LTM ended Jun 06.

TXU 05

4.0 4.9 5.8#6

4.2 3.1 2.5#2

42.7 34.2 31.8#3

3.0

5.1

64.8

TXU 04

32

~0-10~0-10~(10)-0Expected underlying position

~99~99~99Percentage hedged

(170)

(310)

480

09E

(150)

(330)

480

08E

(110)Natural gas hedges

(370)Retail and wholesale activity2

470Total “generation long” position

07E

Natural gas position07E-09E; million MMBtu

Heat rate position07E-09E; million MWh

(30)(31)(36)Retail and wholesale activity2

~33~31~24Expected underlying position

~48 ~50 ~60 Percentage hedged

n.a.

63

09E

n.a.

62

08E

n.a.Natural gas hedges

60Total “generation long” position1

07E

…And Significantly Reduced Natural Gas Price Exposure…

TXU has mitigated almost 100% of its estimated natural gas exposure from 07-09 while maintaining the majority of its long-term heat rate exposure. Since October 2005, TXU has also reduced its 2009-2011 natural gas exposure by a cumulative 1 billion MMBtu

TXU has mitigated almost 100% of its estimated natural gas exposure from 07-09 while maintaining the majority of its long-term heat rate exposure. Since October 2005, TXU has also reduced its 2009-2011 natural gas exposure by a cumulative 1 billion MMBtu

1 Includes solid fuel and gas plants; excludes any new plant construction.2 Assumes native market retail position diminishes over time (currently approximately 8% annually) due to competitor activity and acts as a short position

while net margin remains at or below sustainable range of 5 to 10%.

33

…Resulting In Low Exposure To Near Term Commodity And Heat Rate Movements

EBITDA impact of $1/MMBtu change in natural gas1

07E-09E; $ millions

EBITDA impact of 0.2 MMBtu/MWh change in market heat rate1

07E-09E; $ millions

As a result of the commodity hedging program, TXU has a relatively low sensitivityto natural gas price and heat rate changes over the next three years

As a result of the commodity hedging program, TXU has a relatively low sensitivityto natural gas price and heat rate changes over the next three years

Change in EBITDA (%) <1% <1% <1% <1% <1% ~1%

1 Based on NYMEX natural gas prices as of 6/30/06; based on estimated natural gas and heat rate exposure as described in position tables. Excludes any new plant construction.

07E 08E 09E 07E 08E 09E

~40

~55 ~55

~0-10 ~0-10 ~0-10

34

Hedging And Project Financing Provide An Efficient Vehicle For The Power Generation Program

0%-7%-39%-35 percent8%8%-19%-30 percent

37%37%21%-20 percent 96%96%100%0 percent (as of July 21)

Case 3Hedging/

project financing

Case 2Hedging/

no project financing

Case 1No hedging/

no project financing

Shift in the natural gas curve ($/MMBtu)

0%-51%-98%-50 percent

154%154%179%+20 percent

Indicative sensitivity of the power generation program to TXU relative to natural gas price Jul 06; percent1

1 Percent of Case 1 baseline value using current forward curve as of July 21, 2006.

35

Today’s Agenda

Q&AQ&A


Highlights


Highlights








Appendix –Regulation G Reconciliations

37

Financial Definitions

Cash provided by operating activities.Operating Cash Flow (GAAP)

Income from continuing operations net of preference stock dividends, excluding special items. TXU relies on operational earnings for evaluation of performance and believes that analysis of the business by external users is enhanced by visibility to both reported GAAP earnings and operational earnings.

Operational Earnings (non-GAAP)

Total debt less transition bonds and debt-related restricted cash.Debt

Total debt less transition bonds and debt-related restricted cash divided by EBITDA. Transition, or securitization, bonds are serviced by a regulatory transition charge on wires rates and are therefore excluded from debt in credit reviews. Debt-related restricted cash is treated as net debt in credit reviews. Debt/EBITDA is a measure used by TXU to assess credit quality.

Debt/EBITDA (non-GAAP)

Operating revenues (GAAP) less fuel and purchased power costs and delivery fees (GAAP).Contribution Margin

Cash from operating activities, less capital expenditures and nuclear fuel. Used by TXU predominantly as a forecasting tool to estimate cash available for dividends, debt reduction, and other investments.

Free Cash Flow (non-GAAP)

EBITDA divided by cash interest expense is a measure used by TXU to assess credit quality.EBITDA/Interest (non-GAAP)

Income from continuing operations before interest income, interest expense and related charges, and income tax plus depreciation and amortization and special items. EBITDA is a measure used by TXU to assess performance.

EBITDA (non-GAAP)

Interest expense and related charges less amortization of discount and reacquired debt expense plus capitalized interest. Cash interest expense is a measure used by TXU to assess credit quality.

Cash Interest Expense(non-GAAP)

Capital expenditures.Cap ex

DefinitionMeasure

38

Financial Definitions – cont.

Per share (diluted) net income available to common shareholders.Reported Earnings per Share (GAAP)

Per share (diluted) income from continuing operations net of preference stock dividends, excluding special items. Operational earnings for first quarter 2005 excludes the effect of the adjustment in 2005 for the cost of the true-up payment on the 52.5 million-share accelerated common stock repurchase.

Operational Earnings per Share (non-GAAP)

Long-term debt (including current portion), plus bank loans and commercial paper, plus long-term debt held by subsidiary trusts and preferred securities of subsidiaries.

Total Debt (GAAP)

Operational earnings (non-GAAP) plus preference stock dividends plus after-tax interest expense and related charges, net of interest income on restricted cash related to debt, divided by the average of the beginning and ending total capitalization less debt-related restricted cash. This measure is used to evaluate operational performance and management effectiveness.

Return on Invested Capital (ROIC) - (non-GAAP)

Unusual charges related to the implementation of the performance improvement program and other charges, credits or gains, that are unusual or nonrecurring. Special items are included in reported GAAP earnings, but are excluded from operational earnings.

Special Items (Non-GAAP)

DefinitionMeasure

39

Table 1: TXU Corp. Operational Earnings Reconciliation Quarter Ended June 30, 2006 and 2005$ millions and $ per share after tax

0.07---Effect of share repurchase dilution

381

2

(4)

383

4

4

375

Q2 05

1.59

0.52

-

1.07

-

-

1.07

Q2 06

0.78739Operational earnings

-242Special items

(0.01)-Preference stock dividends

0.72497Income from continuing operations

0.01-Preference stock dividends

0.01-Discontinued operations

0.70497Net income available for common

Q2 05Q2 06

40

Table 2: TXU Corp. Operational Earnings Reconciliation Year-to-Date June 30, 2006 and 2005$ millions and $ per share after tax

1.02---Effect of share repurchase dilution

628

(152)

(10)

790

10

(11)

791

YTD 05

2.67

0.51

-

2.16

-

(0.13)

2.29

YTD 06

1.291,255Operational earnings

(0.31)242Special items

(0.02)-Preference stock dividends

0.601,013Income from continuing operations

0.02-Preference stock dividends

(0.02)(60)Discontinued operations

0.601,073Net income available for common

YTD 05YTD 06

41

Table 3: TXU Energy Holdings Operational Earnings ReconciliationQuarter Ended June 30, 2006 and 2005$ millions and $ per share after tax

0.713450.99461Income from continuing operations

0.713440.99461Net income available for common

-20.52243Special items

347

1

Q2 05

1.51

-

Q2 06


--Discontinued operations

Q2 05Q2 06

42

Table 4: TXU Energy Holdings Operational Earnings ReconciliationYear-to-Date June 30, 2006 and 2005$ millions and $ per share after tax


1.125442.09981Net income available for common

0.0140.51243Special items

552

4

YTD 05

2.61

-

YTD 06

1.141,224Operational earnings

0.01-Discontinued operations

YTD 05YTD 06

43

Table 5: TXU Electric Delivery Operational Earnings Reconciliation Quarter Ended June 30, 2006 and 2005$ millions and $ per share after tax

----Special items

86

86

Q2 05

0.18

0.18

Q2 06


0.1886Income from continuing operations

Q2 05Q2 06

44

Table 6: TXU Electric Delivery Operational Earnings Reconciliation Year-to-Date June 30, 2006 and 2005$ millions and $ per share after tax


-1--Special items

158

YTD 05

0.32

YTD 06


YTD 05YTD 06

45

Table 7: TXU Corp. Operating Cash Flow and Free Cash Flow Year-to-Date June 30, 2006 and 2005$ millions, unless otherwise noted

611,049Free cash flow

(26)

(507)

594

YTD 05

(30)Nuclear fuel

(825)Capital expenditures

1,904Reported cash provided by operating activities

YTD 06

46

Table 8: TXU Corp. Total Debt As of June 30, 2006 and 2005$ millions

11,32510,872All other long-term debt, less due currently

1,313169Long-term debt due currently

Notes payable:

13,996

38

1,320

-

6/30/05

1,240Banks

1,263Commercial paper

-Preferred securities of subsidiaries

13, 544Total debt

Debt

6/30/06

473.3

5.8

2.5

5.8

12,324

(100)

(1,120)

13,544

859

24

(14)

849

4,961

314

4,647

811

(49)

849

1,038

1,998

(2,105)

4,103

6/30/06

7.5

3.6

4.0

4.5

12,784

-

(1,212)

13,996

712

16

(25)

721

3,220

647

2,573

769

(41)

721

293

831

(1,034)

1,865

6/30/05

7.3

3.6

4.2

4.0

11,631

-

(1,258)

12,889

680

12

(27)

695

2,740

1,190

1,550

760

(28)

695

42

81

(1,677)

1,758

12/31/04

4.8

4.5

3.1

4.9

12,213

-

(1,167)

13,380

801

17

(18)

802

3,919

(18)

3,937

776

(48)

802

632

1,018

(1,775)

2,793

12/31/05

252Income tax expense

A2,413Cash provided by operating activities

B(1,847)Reconciling adjustments from cash flow statement

724Depreciation and amortization

5.2

4.2

5.1

3.0

11,566

(525)

(500)

12,591

765

12

(31)

784

2,290

-

2,290

(36)

784

566

12/31/03

EBITDA/interest – ratio (C/D)

Debt/EBITDA – ratio (F/C)

Cash provided by operating activities + cash interest expense/cash interest expense–ratio (A+D/D)

Total debt/cash flow from operating activities – ratio (E/A)

ETotal debt

Interest expense and related charges

FTotal debt less transition bonds and debt-related restricted cash

Debt-related restricted cash

EBITDA

Transition bonds

DCash interest expense

Capitalized interest

Amortization of discount and reacquired debt expense

CEBITDA (excluding special items)

Special Items

Interest income

Interest expense and related charges

Income from continuing operations before extraordinary items andcumulative effect of changes in accounting principles

Ref

Table 9: TXU Corp. Interest and Debt Coverage RatiosTwelve Months Ended June 30, 2006 and 2005$ millions unless otherwise noted

48

YTD 2006 2005 2004 2003

DebtNotes payable 2,503 798 210 -Long-term debt due currently 169 1,250 229 678 Long-term debt held by subsidiary trusts - - - 546 Other long-term debt less due current 10,872 11,332 12,412 10,608 Transition bonds (1,120) (1,167) (1,258) (500) Preferred securities of subsidiaries - - 38 759

Total debt less transition bonds 12,424 12,213 11,631 12,091 Preference stock - - 300 300

Total debt and preference stock 12,424 12,213 11,931 12,391

Market capitalizationShares outstanding 462 471 480 648 Price per share 59.79 50.19 32.28 11.86

Total market capitalization 27,623 23,639 15,494 7,685

Cash and debt-related restricted cash (235) (107) (202) (1,423)

Enterprise value 39,812 35,745 27,223 18,653

Total debt/enterprise value (%) 31.8 34.2 42.7 64.8

Table 10: TXU Corp. Debt to Enterprise Value Year-to-Date June 30, 2006 and Twelve Months Ended December 31, 2005, 2004 and 2003$ millions, unless otherwise noted

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