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.
1
3. Today’s Agenda
Operational &
Operational & C. John Wilder
Clean Coal Investment
Clean Coal Investment Chairman & CEO
Highlights
Highlights
Jonathan Siegler
Clean Coal Investment
Clean Coal Investment Vice President
Drivers
Drivers Strategy, Mergers & Acquisitions
David Campbell
Financial & Risk
Financial & Risk Executive Vice President &
Management Overview
Management Overview Acting CFO
Q&A
Q&A
2
4. TXU’s Operational Earnings Improved Substantially
Reported earnings per share Operational earnings per share
Q1 05 vs. Q1 06; $ per diluted share Q1 05 vs. Q1 06; $ per diluted share
1.22
1.09
114%
114%
0.51
(0.10)
Q1 05 Q1 06
Q1 05 Q1 06
Reported earnings Operational earnings
Q1 05 vs. Q1 06; $ millions Q1 05 vs. Q1 06; $ millions
576
516
416
38% 110%
38% 110%
246
Q1 05 Q1 06 Q1 05 Q1 06
3
5. TXU Power Achieved Record Production Levels…
Lignite Units Nuclear Units
Production Production
Q1 05 vs. Q1 06; GWh Q1 05 vs. Q1 06; GWh
5,080
4,797
10,874
10,520
3.4% 5.9%
3.4% 5.9%
Q1 05 Q1 06 Q1 05 Q1 06
Capacity factor1 Capacity factor1
Q1 05 vs. Q1 06; Percent Q1 05 vs. Q1 06; Percent
102.7
97.5 100.1
96.0
1.6% 2.6%
1.6% 2.6%
Q1 05 Q1 06 Q1 05 Q1 06
Improved production added ~ $27 million of contribution margin for the quarter
Improved production added ~ $27 million of contribution margin for the quarter
1 Excludes planned outages and economic back-down. 4
6. …TXU Energy Has Introduced An Innovative Suite Of New
Offerings In North Texas…
Avg. Annual
Price (¢/kWh)1
Product Description
Provides price protection for the duration of 2006, while allowing
Freedom Plan 14.6
customers to change plans at any time without penalty.
PriceGuarantee24SM Features two years of price protection due to rising fuel costs; 14.5
priced below the current price-to-beat (PTB).
SummerSavings 24SM Provides customers with savings year-round, with significant 14.1
discounts during the summer. Includes a 2-year term.
(available May 19,
2006)
SureValueSM (available Provides up to 10% off current PTB rates for a 5-year term. 13.2
June 1, 2006)
MarketTracker+SM A 2-year plan that provides an immediate discount off the current 12.4-15.7
PTB rates and the opportunity for further savings if natural gas
prices continue to trend lower; includes additional price protection
features such as a maximum and minimum price.
EarthWiseSM, 100% 3 new plans that allow customers to contribute to the environment, 14.5-15.7
featuring either 100% or 10% renewable energy on a month-to-
EarthWiseSM, and
month basis and an 18-month term option.
EarthWise 18SM
Empowers customers to use electricity wisely while saving as
Time-of-Use Plan 10-13 off;
much as 20% during off-peak times over a 2-year term.
(available July 2006) 25-35 peak
Provides a 10% discount for low-income customers who
Low Income 13.2
previously received this discount as part of a discontinued state
Assistance Plan
program.
1 Based on average monthly usage of 1,500 kWh over a 12 month period. Estimated savings based on current PTB as of April 2006. 5
7. …Establishing TXU As The Clear Leader Among Texas
Incumbents
TXU Energy
Annualized Residential single family prices from incumbents Other incumbents
(cents/kWh) Price-to-Beat
*
20.0
*
19.0
Average Undiscounted PTB 16.4 cents/kWh
18.0
*
17.0
*
16.0
15.0
*
*
14.0
13.0
12.0
Market Tracker+
Freedom Plan
SummerSavings 24
Easy Price
PriceGuarantee 24
Discounted Price to
Discounted Price to
EarthWise 18
EarthWise
Price to Beat
Price to Beat
100% EarthWise
Price to Beat
Price to Beat
Price to Beat
Heat Relief
Simple Solutions
Simple Solutions
Low Income (on
Low Income
Low Income
Low Income
SureValue
Renewable
Offer
PTB)
Flex
Beat
Beat
Provider t t t t FC t t t t t CPL FC t WTU RRI CPL RRI RRI RRI RRI CPL WTU WTU
Residential customers also have competitive offers available from new entrants
Residential customers also have competitive offers available from new entrants
For Residential customers with an average usage of 1,500 kWh per month (average for single family). Shows all offers by incumbent providers in their traditional
service areas including renewable products as of April 20, 2006. TXU Energy low income discount funded by TXU Energy. 6
8. Attractive Returns Of TXU’s Clean Coal Investment Program
Driven By Six Factors
Factor Description
<80% of the cost and 30% less time than
1 Step Change In Capital Efficiency typical competitor
90% capacity factors and O&M of
2 High Performance Operations
~$3.70/MWh
Fuel strategy combining TXU lignite, other
3 Long-Term Fuel Partnerships Texas lignite, and PRB coal reserves to
ensure low-cost, stable supply
Annual Texas electric demand growth
4 Expanding Power Needs In Texas
forecasted at nearly 2%, or >1 GW/year
Non-recourse project debt financing
5 Risk/Return Optimization Significant commodity hedging
Potential sale of project equity
Advantaged business model to replicate
Advantaged Platform In Other
6 scaled 5-8 GW build ex-ERCOT
Markets
Site selection advisors engaged
7
9. Hedging Protects A Portion Of The Value While Retaining
Asymmetric Upside To Commodity Moves
Incremental
$0.6 B
Scenario 1: Power and/or gas prices fall
3.6
0
0.6
significantly (-$1.00/MMBtu) 3.0
• Opportunity to monetize hedge gains Expected Hedge Expansion Total
value of value of new captured
new builds build value
program
Incremental
$1.3 B
Scenario 2: Power and/or gas prices rise
(+$1.00/MMBtu) from forward curve or 2.0 7.3
0.7
6.0
drop in interest rates
• Hedge losses offset portion of asset
appreciation Expected Hedge Expansion Total
value of value of new captured
• TXU realizes additional gains through new builds build value
program
additional builds in ERCOT or other
markets
The combination of hedging and the option to further expand the strategy
The combination of hedging and the option to further expand the strategy
provide TXU with asymmetric upside
provide TXU with asymmetric upside
8
10. Today’s Agenda
Operational &
Operational & C. John Wilder
Clean Coal Investment
Clean Coal Investment Chairman & CEO
Highlights
Highlights
Jonathan Siegler
Clean Coal Investment
Clean Coal Investment Vice President
Drivers
Drivers Strategy, Mergers & Acquisitions
David Campbell
Financial & Risk
Financial & Risk Executive Vice President &
Management Overview
Management Overview Acting CFO
Q&A
Q&A
9
11. TXU Has Been Able To Reduce The Typical Build Schedule
By Nearly 30%...
March 1,
2006
10 20 30 40 50 60
Months 0
Commissioning
and testing
Wetlands permit Site construction
••Every month saved
Every month saved
24
34
adds ~$20/KW of value
adds ~$20/KW of value
Air permit
Original 4 63
17
critical path
••Across the entire new
5
Across the entire new
6 6 18 24
build strategy the lean
build strategy the lean
schedule adds almost
Critical Critical
schedule adds almost
Permit Engineering components component
$3.0 billion
prep Sourcing lead time
$3.0 billion
construction
18
months
13
28
Revised 3 45
14 9
critical path
2 14 20
Pre-permit
site prep
10
12. …While Reducing Costs By Almost 20%
Cost to construct reference plants including access to dual rail
06; $/KW
1,450 205
60 50 35 1,100
Typical build Design Lean TXU all-in cost
Scale Overhead
estimate improvements procurement construction
scale
and existing site savings
advantages
TXU continues to focus on driving down the all-in cost of construction
TXU continues to focus on driving down the all-in cost of construction
11
13. TXU’s Construction Strategy Has Limited Cost Variability
To Less Than $75/KW
Cost to construct reference plant Variability in costs
$/KW $/KW
1,100
Labor, fee &
425
contingency
Balance of
340
plant
15
Major
50
335
equipment & 75
engineering
10
The combination of turnkey deals, competitive sourcing and superior construction
The combination of turnkey deals, competitive sourcing and superior construction
expertise has limited the potential increase in cost to <$75/KW or 7%
expertise has limited the potential increase in cost to <$75/KW or 7%
12
14. The New Build Program Will Ensure The Market Remains
Efficient
05 supply curve
ERCOT generation portfolio: Average variable cost1
10 supply curve2
05-10; $/MWh
150
New coal
125 2
plants
1
100
3
75
05 peak
50
10 peak
demand
demand
25
0
0 10 20 30 40 50 60 70 80 90
Cumulative Capacity
GW
After the new capacity comes on line, the combination of strong demand growth and aa
After the new capacity comes on line, the combination of strong demand growth and
relatively flat supply curve will help maintain 7X24 heat rates at current levels of ~8
relatively flat supply curve will help maintain 7X24 heat rates at current levels of ~8
MMBtu/MWh
MMBtu/MWh
Each additional 11GW of capacity impacts the 7X24 heat rate by ~0.1MMBtu/MWh
Each additional GW of capacity impacts the 7X24 heat rate by ~0.1MMBtu/MWh
1 Based on gas price of $8/MMBtu
2 Assumes 10 GW of coal capacity brought on line 13
15. TXU’s Build Program Can Deliver Attractive Returns
800 MW reference plant pro forma1
10E; $/MWh, $ millions
Component $/MWh $ Millions
Revenue 63 400
Fuel cost 16 100
Emissions expense 1.3 10
O&M expense 3.9 25
Property taxes and insurance 2.2 15
EBITDA 39.6 250
Depreciation 2.7 20
EBIT 36.9 230
On average, each 800 MW plant will have a PV/I of 1.5 and will return
On average, each 800 MW plant will have a PV/I of 1.5 and will return
45% of cash in the first 5 years
45% of cash in the first 5 years
1 Pro forma for reference plants with a full year of operation in 2010
14
16. Today’s Agenda
Operational &
Operational & C. John Wilder
Clean Coal Investment
Clean Coal Investment Chairman & CEO
Highlights
Highlights
Jonathan Siegler
Clean Coal Investment
Clean Coal Investment Vice President
Drivers
Drivers Strategy, Mergers & Acquisitions
David Campbell
Financial & Risk
Financial & Risk
Executive Vice President &
Management Overview
Management Overview
Acting CFO
Q&A
Q&A
15
17. Impact Of One-Time Costs, Weather And Hedge
Ineffectiveness On Q1 06 Operational Earnings
Impact of one-time costs on operational EPS
Q1 06; $ per share
Component $ Per Share
One-time severance and transition costs (0.02)
Impact of mild weather relative to normal (0.05)
Impact of hedge ineffectiveness related to long-term hedge program (0.02)
Total impact on Q1 06 (included in operational earnings) (0.09)
16
18. Growth Driven By TXU Energy Holdings Performance
Operational earnings contribution by segment
Q1 05 vs. Q1 06; $ per diluted share
TXU Energy Holdings
1.10
TXU Corp. Consolidated
0.42 162%
162%
1.09
0.51 Q1 05 Q1 06
114%
114%
TXU Electric Delivery
Q1 05 Q1 06
0.15 0.14 7%
7%
Q1 05 Q1 06
17
20. TXU Has Significantly Reduced Its 3-Year Natural Gas Price
Exposure…
Natural gas position Heat rate position
Balance of 06E-08E; Million MMBtu Balance of 06E-08E; Million MWh
Bal 06E 07E 08E Bal 06E 07E 08E
Total “generation 336 444 452 Total “generation 47 66 67
long” position long” position1
Retail “short” (36) (47) (42)
Retail “short” (301) (340) (322)
position2
position2
Forward power and (3) 4 2
Forward power and (44) (111) (135)
gas sales
gas sales
Expected underlying ~8 ~23 ~27
Expected underlying (10)-0 (10)-0 (10)-0
position
position
Percentage hedged ~83 ~65 ~59
Percentage hedged >95 >95 >95
TXU has mitigated over 95% of its estimated natural gas exposure from 06-08 while
TXU has mitigated over 95% of its estimated natural gas exposure from 06-08 while
maintaining the majority of its long-term heat rate exposure. Since November 2005, TXU
maintaining the majority of its long-term heat rate exposure. Since November 2005, TXU
has also reduced its 2009-2011 natural gas exposure by aacumulative 340 million MMBtu
has also reduced its 2009-2011 natural gas exposure by cumulative 340 million 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%.
19
21. …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
06E-08E; $ millions 06E-08E; $ millions
~50
~45
~15
~0-10 ~0-10 ~0-10
06E 07E 08E 06E 07E 08E
Change in <1% <1% <1% <1% <1% ~1%
EBITDA (%)
Over the next three years, TXU has aarelatively low sensitivity
Over the next three years, TXU has relatively low sensitivity
to natural gas price and heat rate changes
to natural gas price and heat rate changes
1 Based on NYMEX natural gas prices as of 3/31/06; based on estimated natural gas and heat rate exposure as described in position tables.
20
22. TXU’s Hedging Philosophy Reflects Three Screens
2 3
1
Hedge
Point of
Yes No
Yes
Ensure
TXU growth
view on
financial
commodity invest-
hedges
exposure flexibility
ments
TXU
hedge
Meet debt obligations, Ensure investment Management point of
Meet debt obligations, Ensure investment Management point of strategy
base business capex requirement of 25- view on hedge pricing
base business capex requirement of 25- view on hedge pricing
needs and preserve 35% cash returned and effectiveness
needs and preserve 35% cash returned and effectiveness
flexibility for dividends in <5 years is met Commodity pricing
flexibility for dividends in <5 years is met Commodity pricing
in 2 sigma (2%) and volatility
in 2 sigma (2%) and volatility
downside commodity Cost/liquidity
downside commodity Cost/liquidity
scenario
scenario
Yes
No No
Optimize Optimize
risk-return risk-return
trade-offs trade-offs
Forward sales
Forward sales
Financial hedges
Financial hedges
Capital structure
Capital structure
Third party equity
21
23. 5-Year Growth Estimates Including Only The Oak Grove
And Sandow New Build Projects
TXU estimated long-term growth – as of April 19, 2006
06E-10E; $ per share, percent
Performance Driver 06E-10E
06E operational EPS 5.50-5.75
06E-10E commodity impacts and retail churn1 (1.35)
Performance improvements 0.60
Retail market penetration, T&D system growth 0.30
Oak Grove and Sandow 5 1.15
Debt repurchases and share repurchases 0.85
10E operational EPS 7.05 – 7.30
06E-10E annual growth rate (percent CAGR) 5.5% – 6.5%
EPS change with +/-$1/MMBtu in 2010 natural gas1 + / - 0.40
06E-10E CAGR with +/- $1/MMBtu in 2010 natural gas (%) 4.5% – 8.5%
Prior five-year estimates included only the Oak Grove and Sandow new builds. With
Prior five-year estimates included only the Oak Grove and Sandow new builds. With
these projects, TXU’s estimated 5-year annual growth estimate is 5.5% to 6.5%
these projects, TXU’s estimated 5-year annual growth estimate is 5.5% to 6.5%
1 Based on forward natural gas prices as of April 19, 2006; includes impact of Sandow and Oak Grove in estimate of natural gas exposure and assumes
that retail mass market load acts as a short position while net margin remains at or below sustainable range of 5% to 10%. 22
24. The Clean Coal Program Will Drive Significant Growth
Indicative Texas clean coal investment pro forma – all plants1
10E; Mixed measures
Component $ Millions
Revenue 4,250
Fuel cost (920)
Emissions expense (120)
O&M and SG&A expense (285)
Property taxes and insurance (155)
EBITDA 2,770
Depreciation & amortization (185)
Interest (660)
Taxes (680)
Net income 1,245
By 2010, all plants in the clean coal investment program are expected to be on-line,
By 2010, all plants in the clean coal investment program are expected to be on-line,
generating more than $1 billion of incremental earnings
generating more than $1 billion of incremental earnings
1 Indicative pro forma for 2010, including Oak Grove and Sandow. Assumes that Oak Grove, Sandow, and 4 reference plants are in operation for the full year, while 4
additional reference plants come into operation by early 2010. The indicative pro forma will change as financing, hedging, and equity sell-down and other key terms
are finalized and as the permitting and construction process unfolds. Reflects forward natural gas and power curves as of April 19, 2006. 23
25. TXU’s Sources And Uses Analysis And Capital Allocation
Framework Focus At The Corporate/Parent Level…
Focus of “sources and uses”
analysis and TXU’s capital
TXU Corp
TXU Corp
allocation framework
(the “cash scrubber”)
Energy Texas New
Electric Energy Texas New
Electric
Holdings LLC Generation Co
Delivery Holdings LLC Generation Co
Delivery
06E Interest 4X+ 11 X + N/A
Coverage
While the cash scrubber is used for capital allocation decisions at the consolidated
While the cash scrubber is used for capital allocation decisions at the consolidated
level, TXU operating entities are capitalized according to their risk profile
level, TXU operating entities are capitalized according to their risk profile
24
26. …Over The Next Five Years, TXU Corp. Will Have Significant
Cash Flow For Investment Or Distribution…
Sources of cash Uses of cash
06E-10E (indicative); $ billions 06E-10E (indicative); $ billions
21 - 23 21 - 23
Electric
2.0
Delivery debt
Cash for investment/
9.5
distribution
2.0 Corp/Energy LLC debt
20.0
OCF 4.0 Dividends
Core portfolio capex
6.5
06E-10E
06E-10E
Through its current business operations, TXU Corp. expects to generate nearly $10
Through its current business operations, TXU Corp. expects to generate nearly $10
billion of discretionary FCF over the next five years for investment/distribution
billion of discretionary FCF over the next five years for investment/distribution
25
27. …And Will Deploy Cash Flow And Manage Risk By Applying
The “Cash Scrubber”
Retained for
Investment
Cash
TXU Business
Flow
from Excess Excess
Excess
Units
Oper- “Customer” Growth Financial Dividend
ations Capital capital Flexibility Payout
and
Asset
Yes Yes, if Yes
Sales Yes
PV/Investment Payout 30-40%
Quality service EBITDA/Interest:
PV/Investment Payout 30-40%
Quality service EBITDA/Interest: Repurchases
threshold of 1.3 of operational
Production >5.0
threshold of 1.3 of operational
Production >5.0 or Distributions
25-35% cash earnings
reliability Debt/EBITDA:
25-35% cash earnings
reliability Debt/EBITDA:
returned <5 yrs in <2.5
returned <5 yrs in <2.5
competitive Debt/MEV: 30%
competitive Debt/MEV: 30%
markets to 50%
markets to 50%
Equity
Debt
Holders
Holders
The cash scrubber will govern the allocation of operating
The cash scrubber will govern the allocation of operating
cash flow and the deployment of growth capital at the TXU Corp. level
cash flow and the deployment of growth capital at the TXU Corp. level
26
28. TXU’s Clean Coal Investment Program Enables Strong
Five-Year Growth
TXU estimated long-term growth including indicative clean coal pro forma
06E-10E; $ per share, percent
Performance Driver 06E-10E
06E operational EPS outlook range 5.50-5.75
Commodity impacts, operational improvements, retail
and T&D growth1 (0.45)
Debt repurchases and share repurchases1 1.25
10E operational EPS – existing businesses 6.30 – 6.55
06E-10E annual growth rate (percent CAGR) 3% – 4%
Earnings from clean coal project project company2 3.45
10E operational EPS including indicative clean coal pro forma 9.75 – 10.00
06E-10E annual growth rate (percent CAGR) 14% - 16%
Including the impact of the clean coal investment program,
Including the impact of the clean coal investment program,
TXU’s estimated 5-year annual growth rate ranges from 14-16%
TXU’s estimated 5-year annual growth rate ranges from 14-16%
1 Reflects performance drivers discussed on slide 22 plus an additional $0.40 per share relating to share repurchases resulting from free cash flows not deployed for
Oak Grove and Sandow.
2 Indicative pro forma for 2010, including Oak Grove and Sandow. Assumes that Oak Grove, Sandow, and 4 reference plants are in operation for the full year, while 4
additional reference plants come into operation by early 2010. The indicative pro forma will change as financing, hedging, and equity sell-down and other key terms
are finalized and as the permitting and construction process unfolds. Reflects forward natural gas and power curves as of April 19, 2006. 27
29. Today’s Agenda
Operational &
Operational & C. John Wilder
Clean Coal Investment
Clean Coal Investment Chairman & CEO
Highlights
Highlights
Jonathan Siegler
Clean Coal Investment
Clean Coal Investment Vice President
Drivers
Drivers Strategy, Mergers & Acquisitions
David Campbell
Financial & Risk
Financial & Risk Executive Vice President &
Management Overview
Management Overview Acting CFO
Q&A
Q&A
28
31. 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.
30
32. 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. Special items associated with the
performance improvement program include debt extinguishment losses and costs related to severance
programs, asset impairments and facility closures.
Total Debt (GAAP) Long-term debt (including current portion), plus bank loans and commercial paper, plus preferred
securities of subsidiaries, including exchangeable preferred membership interests (EPMIs).
31
33. Table 1: TXU Corp. Operational Earnings Reconciliation
Quarter Ended March 31, 2006 and 2005
$ millions and $ per share after tax
Q1 06 Q1 06 Q1 05 Q1 05
Net income available for common 576 1.22 416 (0.10)
Discontinued operations (60) (0.13) (15) (0.03)
Preference stock dividends - - 5 0.01
Income from continuing operations 516 1.09 406 (0.12)
Effect of share repurchase dilution - - - 0.97
Effect of share dilution/rounding - - - (0.01)
Preference stock dividends - - (5) (0.01)
Special items - - (155) (0.32)
Operational earnings 516 1.09 246 0.51
32
34. Table 2: TXU Energy Holdings Operational Earnings Reconciliation
Quarter Ended March 31, 2006 and 2005
$ millions and $ per share after tax
Q1 06 Q1 06 Q1 05 Q1 05
Net income available for common 520 1.10 200 0.42
Discontinued operations - - 3 0.01
Income from continuing operations 520 1.10 203 0.43
Effect of share dilution/rounding - - 1 (0.01)
Special items - - 2 -
Operational earnings 520 1.10 206 0.42
33
35. Table 3: TXU Electric Delivery Operational Earnings Reconciliation
Quarter Ended March 31, 2006 and 2005
$ millions and $ per share after tax
Q1 06 Q1 06 Q1 05 Q1 05
Income from continuing operations 65 0.14 71 0.15
Special items - - 1 -
Operational earnings 65 0.14 72 0.15
34
36. Table 4: TXU Corp. Total Debt
As of March 31, 2006 and 2005
$ millions
3/31/06 3/31/05
Debt
Notes payable 45 395
Commercial paper 1,236 -
Long-term debt due currently 850 624
All other long-term debt, less due currently 11,327 11,970
Preferred securities of subs - 38
Total debt 13,458 13,027
35
37. Table 5: TXU Corp. Interest and Debt Coverage Ratios
Twelve Months Ended March 31, 2006 and 2005
$ millions unless otherwise noted
3/31/06 3/31/05 Ref
Cash provided by operating activities 3,642 1,617 A
Reconciling adjustments from cash flow statement (1,758) (1,259) B
Income from continuing operations before taxes and extraordinary items 1,884 358
Income tax expense 910 (45)
Interest expense and related charges 821 706
Interest income (38) (43)
Depreciation and amortization 793 757
EBITDA 4,370 1,733
Special Items 7 1,133
EBITDA (excluding special items) 4,377 2,866 C
Interest expense and related charges 821 706
Amortization of discount and reacquired debt expense (15) (27)
Capitalized interest 18 14
Cash interest expense 824 693 D
Total debt 13,458 13,027 E
Transition bonds (1,146) (1,237)
Debt-related restricted cash (99) -
Total debt less transition bonds and debt-related restricted cash 12,213 11,790 F
EBITDA/interest – ratio (C/D) 5.3 4.1
Debt/EBITDA – ratio (F/C) 2.8 4.1
Cash provided by operating activities + cash interest expense/cash interest expense–ratio
5.4 3.3
(A+D/D)
Total debt/cash flow from operating activities – ratio (E/A) 3.7 8.1
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