2. Safe Harbor Statement
This 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 G
This 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.
2
3. Today’s Agenda
Operational &
Operational & C. John Wilder
Power Generation Program
Power Generation Program Chairman & CEO
Highlights
Highlights
Jonathan Siegler
Power Generation Program
Power Generation Program Vice President
Strategic Scenarios
Strategic Scenarios Strategy, Mergers & Acquisitions
David Campbell
Financial & Risk
Financial & Risk Executive Vice President &
Management Overview
Management Overview Acting CFO
Q&A
Q&A
3
4. TXU’s Operational Earnings Improved Substantially
Operational earnings per share
Reported earnings per share
Q2 05 vs. Q2 06; $ per diluted share
Q2 05 vs. Q2 06; $ per diluted share
1.59
1.07 53% 104%
53% 104%
0.78
0.70
Q2 05 Q2 06
Q2 05 Q2 06
Reported earnings per share Operational earnings per share
YTD 05 vs. YTD 06; $ per diluted share YTD 05 vs. YTD 06; $ per diluted share
2.29 2.67
1.29
282% 107%
282% 107%
0.60
YTD 05 YTD 06 YTD 05 YTD 06
4
5. Operational Excellence Is Reflected In Improved Production
Levels …
Baseload (combined nuclear/lignite)
Nuclear production
Q2 05 vs. Q2 06; GWh
Q2 05 vs. Q2 06; GWh
14,855 15,142
5,098
4,250
20% 2%
20% 2%
Q2 05 Q2 06
Q2 05 Q2 06
Lignite production Baseload (combined nuclear/lignite)
Q2 05 vs. Q2 06; GWh YTD 05 vs. YTD 06; GWh
31,096
30,172
10,605 10,044
5%
5% 3%
3%
Q2 05 Q2 06 YTD 05 YTD 06
5
7. TXU Energy Offers 9 Of The 10 Lowest Single Family Prices
Among Incumbents In Their Historical Areas…
Residential single family offers from incumbent providers (cents/kWh)
WTU
PTB1
19
CPL
18 Average Undiscounted PTB 16.4 cents/kWh PTB1
RRI
17 PTB
16
FC
TXU
PTB
15 PTB
14
13
12
Residential customers also have other offers available below PTB from new entrants
Residential customers also have other offers available below PTB from new entrants
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
7
Energy.
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?
9
10. Status Update On The Power Generation Program
Key element Status of completion Progress
25 50 75 100
All permits deemed ‘administratively complete’
Permitting Town hall meetings with community leaders
Commitment letter to TCEQ for 20% net reduction
Plant design and Completed 20 ‘lean’ workout sessions
engineering Nearly 75% complete with the ‘open book’ process
Completed Umbrella Agreement
Final engineering Detailed engineering underway
Finalized commercial terms for rail car purchase
Supply/procurement
Completed agreements for 8 steam turbines
& construction In negotiations for AQCS and structural steel
Priority routes for dual-rail identified
Rail infrastructure &
Engineering studies underway
transport agreements Transportation negotiations underway
Fuel supply Multiple parties expressing interest
Active negotiations for 1.0 GW
Forward power and
Discussions for an additional 1.25 GW
equity sales Financial advisors retained for equity sales
Secured $11 billion of non-recourse financing
Financing
Preparing for syndication of financing
Operational Defining future-state operating model for power
readiness Designing training academy
10
11. Key Execution Metrics For The Power Generation Program
EPC contracts ($ millions, $/kW)
Cost Expenditure (actual vs. plan $/month)
Rail infrastructure cost ($/kW)
Equipment delivery milestones
Material delivery milestones
Construction
program Schedule Construction activity milestones
metrics
Substantial completion target date
Commercial operations target date
Facility staffing (% ready)
Operations
Facility O&M cost
readiness
Facility heat rate
and start-up
Facility availability
Safety
11
12. Scale Economies Provide Significant Benefits…
Reference plant cost savings vs. single plant Scale related benefits
$/kW
1,450 $/kW 140 24%
70 70
70 1,100 $/kW
Single plant Lean design/ Engineer Equipment Construction Reference
estimate engineering services/ procurement plant
overhead
Reference plant schedule reduction vs. single plant Scale related benefits
Months
60 - 66 10-12 32%
3 3-4
2-3 42-44
Single plant Early and parallel Other supply Lean design/ Construction Reference
estimate equipment order chain efficiencies engineering plant
•• Referenceplant scale benefits provide 10% out of the 24% total plant cost reductions
Reference plant scale benefits provide 10% out of the 24% total plant cost reductions
•• Referenceplant scale benefits provide 22% out of the 32% of total schedule reduction
Reference plant scale benefits provide 22% out of the 32% of total schedule reduction
12
13. ...And Have Supported More Effective Procurement Of
Equipment And Materials
. . . and has supported equipment
and materials procurement
TXU has completed most of the “lean” workouts . . .
Reference Plant material and
Lean improvement workout status
equipment
Potential Ideas Decisions
% Complete
% Complete identified generated taken
100% = $4.2B
0% 33% 66% 100%
Foundations/site prep
Boiler structural steel Purchased 25
Critical piping later
Critical valves
Feed and condensate system
Condensate chem. controls Initial RFQ
25
Plant structural steel issued
100%
Cost/
Chimney total
Design
Coal handling
In negotiation 10
Cooling towers
Electrical controls/DCS
Raceway and cable
Transformers
Acquired 40
Scope optimization
Start up and commissioning
Structural steel erection
Boiler erection 70% 8 Reference
Schedule/ Turbine erection
total Plants
Process Chem clean and airblows
Hydro to turbine roll
13
14. Our Customer Research Suggests Customers Want Low-
Cost, Dependable Power
Customers ranking electricity provider characteristic “extremely important”
06; percent
58
45
37
34
19
Dependable Has Appreciates Offers Is an
/provides competitive customer’s money- innovative
exceptional rates business saving leader
service products
14
Source: TXU Survey, n=100
15. Key Elements Of The Technology Review
Unproven technology
Capital Construc- Capacity Heat rate O&M Emission Break-
cost tion time factor (MMBtu/ costs even price
Technology ($/kW) (years) (%) MWh) ($/kW-yr) ($/MWh) ($/MWh)
Wind 1,400 1 36 n/a 53 0 87
601
CCGT 700 2 7.0 12 0.37 74
Advanced
2,5002 743
nuclear 10 95 n/a 50 0
Sub-critical
coal 1,000 4 94 10.0 22 1.66 47-50
2.174
IGCC 1,800 6 85 8.5 44 71-74
Ultrasuper-
critical coal 1,600 6 85 8.2 28 1.35 64-67
Super-critical
coal 1,100 4 94 9.1 22 1.51 48-51
1 Represents capacity factor of current CCGT in ERCOT.
2 Includes decommissioning and spent fuel storage
3 Represents breakeven power price without government subsidies.
4 Assumes burning bituminous coal.
15
16. Announced New Coal-Based Generation Development By
Technology In US And Europe
Capacity announced, planned or under construction
06; GW
122
38
Europe
US 84
3
13
10
Pulverized coal IGCC
Even in markets facing carbon constraints,
Even in markets facing carbon constraints,
pulverized coal is the technology of choice
pulverized coal is the technology of choice
Source: Energy Velocity, Platts, company press releases
16
17. TXU Will Continue To Invest In Technologies Across All
Horizons
Horizon 4
Strategic Technologies
growth commercially
horizons viable in more
Horizon 3
than 25 years
Solar
Technologies
Hydrogen
commercially
Horizon 2 viable in 15-25 Fusion
years
Technologies
Next generation
commercially
nuclear
Horizon 1 viable in 5-15
years
Ultra-supercritical
Technologies
coal
commercially
Supercritical
viable today
retrofits
Supercritical coal
IGCC
Sub-critical coal
Wind, Hydro
Steam turbine
technologies
17
18. The TXU Model Provides A Distinct Competitive Advantage
Breakeven power price
06; $/MWh
7
60-63
4
1
48-51
Capital cost Build schedule Operational TXU
Typical
advantage advantage advantage reference
competitor
plant
build
($1,450 $1,150) (6 yrs 4 yrs) (CF 90% 94%)
The TXU model provides more than a $12/MWh all in
The TXU model provides more than a $12/MWh all in
cost advantage over the typical builder
cost advantage over the typical builder
18
19. Texas Has One Of The Cleanest Generating Fleets In The
Country
Average NOx emission rates for 10 most populous states
04; Lbs/MMBtu
0.42
0.30
0.30
0.29
0.28
0.27
0.25
0.24
0.18
0.12
0.02
CA TX NY GA NJ IL FL US avg PA MI OH
Improvements in coal will continue to increase efficiency of the Texas
Improvements in coal will continue to increase efficiency of the Texas
portfolio and reduce its emissions profile
portfolio and reduce its emissions profile
Source: TCEQ 19
20. Mobile Sources Account For The Overwhelming Majority Of
NOx Emissions And Ozone In North Texas
Contribution to peak ozone days1
NOx emissions within DFW area
05; percent Aug 09E; percent
100% = 520 tons/day 100% = 95 ppb peak ozone (8 day average)
Electric generation units2
Electric generation units
Area sources Background
2
3 On-road
8 per EPA
DFW
mobile model
Point area
11
sources man-
40
40 made
51
27
Off-road
mobile 5 13
Non-DFW
Biogenic
man-made
The expectation is that electric generation units will remain a minimal
The expectation is that electric generation units will remain a minimal
contributor to North Texas NOx emissions and DFW ozone
contributor to North Texas NOx emissions and DFW ozone
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
20
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.
Hg emissions
NOx emissions
SO2 emissions
Millionths of lbs/MMBtu
Lbs/MMBtu
Lbs/MMBtu
1
TXU1 C 2.39
TXU 0.31 0.05
TXU 1
0.47 0.10 2.98
A B
3.08
B 0.49 G 0.20 F
3.12
0.66 0.24 P
C F
I 3.33
D 0.73 K 0.29
0.76 0.30 Q 3.38
E N
3.46
A
F 0.88 H 0.30
3.79
0.95 0.32 D
G E
K 3.89
H 0.98 J 0.33
J 3.98
0.98 0.34
I L
4.43
G
J 1.05 R 0.34
E 4.55
K 1.05 C 0.35
H 4.91
L 1.23 P 0.35
O 5.08
M 1.26 D 0.35
5.11
L
N 1.27 Q 0.36
N 5.12
O 1.29 O 0.39
R 5.41
P 1.34 I 0.40
M 5.98
Q 1.61 A 0.41
6.31
1.67 0.42 B
R M
The combination of investment in the newest emissions control technology and
The combination of investment in the newest emissions control technology and
an innovative voluntary retrofit program will make TXU’s coal fleet the
an innovative voluntary retrofit program will make TXU’s coal fleet the
cleanest large-scale fleet in the nation
cleanest large-scale fleet in the nation
1 TXU after new power generation development program and retrofits
21
Source: EPA
22. Benefits Of The Power Generation Program
Provide 5 years worth of urgently needed supplies
Increase reserve margins back to safe levels, averting
Better reliability
Better reliability
blackouts, scarcity pricing, limits to economic growth
Lower wholesale electricity costs by $1.7 billion
Enable long-term wholesale offers up to 20% off short-term
Lower costs
Lower costs
Reduce Texas’ over-reliance on high-priced natural gas
Reduce key emission totals by 20%, rates by nearly 70%
Invest $2.5 billion in latest environmental technology
Cleaner air
Cleaner air
Protect air quality, including urban non-attainment areas
Create jobs: 40,000 during construction, 21,000 ongoing
Stronger
Stronger Drive a $14 billion increase in annual gross state product
economy
economy Add tens of millions of dollars in local property taxes
22
23. Today’s Agenda
Operational &
Operational & C. John Wilder
Power Generation Program
Power Generation Program Chairman & CEO
Highlights
Highlights
Jonathan Siegler
Power Generation Program
Power Generation Program Vice President
Strategic Scenarios
Strategic Scenarios Strategy, Mergers & Acquisitions
David Campbell
Financial & Risk
Financial & Risk Executive Vice President &
Management Overview
Management Overview Acting CFO
Q&A
Q&A
23
24. Coal Generation Has Made Impressive Efficiency Gains Over
The Last 40 Years And The Trend Is Expected To Continue
Maximum coal plant thermal efficiency
65-15E; percent
33%
50-55
48
43
39
37
36
65 75 85 95 05 15E
Improvements in coal will continue to increase efficiency and
Improvements in coal will continue to increase efficiency and
reduce its emissions profile
reduce its emissions profile
24
25. Estimated Costs Of Green House Gas Mitigation
Cost to mitigate green house gas emissions
$/ton
0.50-1
HFC-23 destruction
1-4
Landfill gas capture/flaring
3-6
Manure management
5-10
Steam system improvements
5-10
Compressor pump efficiency
10-15
Water waste treatment
IGCC w/CO2 capture and storage1 15-50
30-40
Renewable power (non-biomass)
45-65
Supercritical coal retrofit
TXU expects the cost of supercritical retrofits to be drastically
TXU expects the cost of supercritical retrofits to be drastically
reduced over the next 15 years
reduced over the next 15 years
1Includes 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
25
Source: Boston Consulting Group, IPCC Special Report – Carbon Dioxide Capture and Storage; MIT; EPA
26. Today’s Agenda
Operational &
Operational & C. John Wilder
Power Generation Program
Power Generation Program Chairman & CEO
Highlights
Highlights
Jonathan Siegler
Power Generation Program
Power Generation Program Vice President
Strategic Scenarios
Strategic Scenarios Strategy, Mergers & Acquisitions
David Campbell
Financial & Risk
Financial & Risk Executive Vice President &
Management Overview
Management Overview Acting CFO
Q&A
Q&A
26
27. TXU Corp. And Energy Holdings Showed Strong Growth
During The Quarter…
Operational earnings contribution by segment
Q2 05 vs. Q2 06; $ per diluted share
TXU Energy Holdings
1.51
0.71 113%
113%
TXU Corp. Consolidated
1.59
Q2 05 Q2 06
0.78 104%
104%
TXU Electric Delivery
Q2 05 Q2 06
0.18 0.18
Q2 05 Q2 06
27
28. …As Well As Year-To-Date…
Operational earnings contribution by segment
YTD 05 vs. YTD 06; $ per diluted share
TXU Energy Holdings
2.61
129%
129%
1.14
TXU Corp. Consolidated
2.67
YTD 05 YTD 06
1.29
107%
107%
TXU Electric Delivery
YTD 05 YTD 06
0.32 0.32
YTD 05 YTD 06
28
29. …At The Same Time, The Business Continues To Drive Cost
Leadership
TXU Energy Holdings and TXU Corp TXU Energy Holdings and TXU Corp
Total operating costs and SG&A expense1 Total operating costs and SG&A expense1
Q2 05 vs. Q2 06; $ millions YTD 05 vs. YTD 06; $ millions
312 592 577
285
9% 3%
9% 3%
YTD 05 YTD 06
Q2 05 Q2 06
1 Excludes TXU Electric Delivery
29
31. …Reaching Top Quartile Levels In The Sector…
Financial metrics for peer group1 (n=25)
03-062; various measures
2nd Quartile
Median Top
4th Quartile 3rd Quartile
TXU 03 TXU 04 TXU 05 TXU LTM2
5.8
4.9
3.0 4.0
#6
EBITDA/interest
(X)
2.3 3.6 4.5 6.7
5.5
2.5
3.1
5.1 4.2
#2
Total debt/EBITDA
(X)
6.0 4.2 3.5 2.8 1.7
31.8
34.2
64.8 42.7
#3
Total debt/
enterprise value
(%) 47.3 42.1 20.6
71.7 39.1
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.
31
32. …And Significantly Reduced Natural Gas Price Exposure…
Natural gas position Heat rate position
07E-09E; million MMBtu 07E-09E; million MWh
07E 08E 09E 07E 08E 09E
Total “generation
Total “generation
long” position1 60 62 63
long” position 470 480 480
Retail and wholesale
Retail and wholesale
activity2 (36) (31) (30)
activity2 (370) (330) (310)
Natural gas hedges n.a. n.a. n.a.
Natural gas hedges (110) (150) (170)
Expected underlying
Expected underlying
position ~24 ~31 ~33
position ~(10)-0 ~0-10 ~0-10
Percentage hedged ~60 ~50 ~48
Percentage hedged ~99 ~99 ~99
TXU has mitigated almost 100% of its estimated natural gas exposure from 07-09 while
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
maintaining the majority of its long-term heat rate exposure. Since October 2005, TXU
has also reduced its 2009-2011 natural gas exposure by aacumulative 11billion MMBtu
has also reduced its 2009-2011 natural gas exposure by cumulative 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%.
32
33. …Resulting In Low Exposure To Near Term Commodity And
Heat Rate Movements
EBITDA impact of $1/MMBtu EBITDA impact of 0.2 MMBtu/MWh
change in natural gas1 change in market heat rate1
07E-09E; $ millions 07E-09E; $ millions
~55
~55
~40
~0-10 ~0-10 ~0-10
07E 08E 09E 07E 08E 09E
Change in
EBITDA (%) <1% <1% <1% <1% <1% ~1%
As aaresult of the commodity hedging program, TXU has aarelatively low sensitivity
As result of the commodity hedging program, TXU has relatively low sensitivity
to natural gas price and heat rate changes over the next three years
to natural gas price and heat rate changes over the next three years
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.
33
34. Hedging And Project Financing Provide An Efficient Vehicle
For The Power Generation Program
Indicative sensitivity of the power generation program to TXU relative to natural gas price
Jul 06; percent1
Case 1 Case 2 Case 3
No hedging/ Hedging/ Hedging/
Shift in the natural gas no project no project project
curve ($/MMBtu) financing financing financing
+20 percent 179% 154% 154%
0 percent (as of July 21) 100% 96% 96%
-20 percent 21% 37% 37%
-30 percent -19% 8% 8%
-35 percent -39% -7% 0%
-50 percent -98% -51% 0%
1 Percent of Case 1 baseline value using current forward curve as of July 21, 2006.
34
35. Today’s Agenda
Operational &
Operational & C. John Wilder
Power Generation Program
Power Generation Program Chairman & CEO
Highlights
Highlights
Jonathan Siegler
Power Generation Program
Power Generation Program Vice President
Strategic Scenarios
Strategic Scenarios Strategy, Mergers & Acquisitions
David Campbell
Financial & Risk
Financial & Risk Executive Vice President &
Management Overview
Management Overview Acting CFO
Q&A
Q&A
35
37. Financial Definitions
Measure Definition
Cap ex Capital expenditures.
Cash Interest Expense Interest expense and related charges less amortization of discount and reacquired debt expense plus
(non-GAAP) capitalized interest. Cash interest expense is a measure used by TXU to assess credit quality.
Contribution Margin Operating revenues (GAAP) less fuel and purchased power costs and delivery fees (GAAP).
Debt Total debt less transition bonds and debt-related restricted cash.
Debt/EBITDA (non-GAAP) 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.
EBITDA (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/Interest (non-GAAP) EBITDA divided by cash interest expense is a measure used by TXU to assess credit quality.
Free Cash Flow Cash from operating activities, less capital expenditures and nuclear fuel. Used by TXU
(non-GAAP) predominantly as a forecasting tool to estimate cash available for dividends, debt reduction, and
other investments.
Operating Cash Flow (GAAP) Cash provided by operating activities.
Operational Earnings Income from continuing operations net of preference stock dividends, excluding special items. TXU
(non-GAAP) 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.
37
38. Financial Definitions – cont.
Measure Definition
Operational Earnings per Per share (diluted) income from continuing operations net of preference stock dividends, excluding
Share (non-GAAP) 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.
Reported Earnings per Share Per share (diluted) net income available to common shareholders.
(GAAP)
Return on Invested Capital Operational earnings (non-GAAP) plus preference stock dividends plus after-tax interest expense and
(ROIC) - (non-GAAP) 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.
Special Items (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.
Total Debt (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.
38
39. Table 1: TXU Corp. Operational Earnings Reconciliation
Quarter Ended June 30, 2006 and 2005
$ millions and $ per share after tax
Q2 06 Q2 06 Q2 05 Q2 05
Net income available for common 497 1.07 375 0.70
Discontinued operations - - 4 0.01
Preference stock dividends - - 4 0.01
Income from continuing operations 497 1.07 383 0.72
Effect of share repurchase dilution - - - 0.07
Preference stock dividends - - (4) (0.01)
Special items 242 0.52 2 -
Operational earnings 739 1.59 381 0.78
39
40. Table 2: TXU Corp. Operational Earnings Reconciliation
Year-to-Date June 30, 2006 and 2005
$ millions and $ per share after tax
YTD 06 YTD 06 YTD 05 YTD 05
Net income available for common 1,073 2.29 791 0.60
Discontinued operations (60) (0.13) (11) (0.02)
Preference stock dividends - - 10 0.02
Income from continuing operations 1,013 2.16 790 0.60
Effect of share repurchase dilution - - - 1.02
Preference stock dividends - - (10) (0.02)
Special items 242 0.51 (152) (0.31)
Operational earnings 1,255 2.67 628 1.29
40
41. Table 3: TXU Energy Holdings Operational Earnings Reconciliation
Quarter Ended June 30, 2006 and 2005
$ millions and $ per share after tax
Q2 06 Q2 06 Q2 05 Q2 05
Net income available for common 461 0.99 344 0.71
Discontinued operations - - 1 -
Income from continuing operations 461 0.99 345 0.71
Special items 243 0.52 2 -
Operational earnings 704 1.51 347 0.71
41
42. Table 4: TXU Energy Holdings Operational Earnings Reconciliation
Year-to-Date June 30, 2006 and 2005
$ millions and $ per share after tax
YTD 06 YTD 06 YTD 05 YTD 05
Net income available for common 981 2.09 544 1.12
Discontinued operations - - 4 0.01
Income from continuing operations 981 2.09 548 1.13
Special items 243 0.51 4 0.01
Operational earnings 1,224 2.61 552 1.14
42
43. Table 5: TXU Electric Delivery Operational Earnings Reconciliation
Quarter Ended June 30, 2006 and 2005
$ millions and $ per share after tax
Q2 06 Q2 06 Q2 05 Q2 05
Income from continuing operations 86 0.18 86 0.18
Special items - - - -
Operational earnings 86 0.18 86 0.18
43
44. Table 6: TXU Electric Delivery Operational Earnings Reconciliation
Year-to-Date June 30, 2006 and 2005
$ millions and $ per share after tax
YTD 06 YTD 06 YTD 05 YTD 05
Income from continuing operations 151 0.32 157 0.32
Special items - - 1 -
Operational earnings 151 0.32 158 0.32
44
45. Table 7: TXU Corp. Operating Cash Flow and Free Cash Flow
Year-to-Date June 30, 2006 and 2005
$ millions, unless otherwise noted
YTD 06 YTD 05
Reported cash provided by operating activities 1,904 594
Capital expenditures (825) (507)
Nuclear fuel (30) (26)
Free cash flow 1,049 61
45
46. Table 8: TXU Corp. Total Debt
As of June 30, 2006 and 2005
$ millions
6/30/06 6/30/05
Debt
Notes payable:
Commercial paper 1,263 -
Banks 1,240 1,320
Long-term debt due currently 169 1,313
All other long-term debt, less due currently 10,872 11,325
Preferred securities of subsidiaries - 38
Total debt 13, 544 13,996
46
47. Table 9: TXU Corp. Interest and Debt Coverage Ratios
Twelve Months Ended June 30, 2006 and 2005
$ millions unless otherwise noted 6/30/06 6/30/05 12/31/05 12/31/04 12/31/03 Ref
Cash provided by operating activities 4,103 1,865 2,793 1,758 2,413 A
Reconciling adjustments from cash flow statement (2,105) (1,034) (1,775) (1,677) (1,847) B
Income from continuing operations before extraordinary items and
1,998 831 1,018 81 566
cumulative effect of changes in accounting principles
Income tax expense 1,038 293 632 42 252
Interest expense and related charges 849 721 802 695 784
Interest income (49) (41) (48) (28) (36)
Depreciation and amortization 811 769 776 760 724
EBITDA 4,647 2,573 3,937 1,550 2,290
Special Items 314 647 (18) 1,190 -
EBITDA (excluding special items) 4,961 3,220 3,919 2,740 2,290 C
Interest expense and related charges 849 721 802 695 784
Amortization of discount and reacquired debt expense (14) (25) (18) (27) (31)
Capitalized interest 24 16 17 12 12
Cash interest expense 859 712 801 680 765 D
Total debt 13,544 13,996 13,380 12,889 12,591 E
Transition bonds (1,120) (1,212) (1,167) (1,258) (500)
Debt-related restricted cash (100) - - - (525)
Total debt less transition bonds and debt-related restricted cash 12,324 12,784 12,213 11,631 11,566 F
EBITDA/interest – ratio (C/D) 5.8 4.5 4.9 4.0 3.0
Debt/EBITDA – ratio (F/C) 2.5 4.0 3.1 4.2 5.1
Cash provided by operating activities + cash interest expense/cash interest
5.8 3.6 4.5 3.6 4.2
expense–ratio (A+D/D)
47
Total debt/cash flow from operating activities – ratio (E/A) 3.3 7.5 4.8 7.3 5.2
48. 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
YTD
2006 2005 2004 2003
Debt
Notes 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 capitalization
Shares 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
48
