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**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**Washington,        D.C. 20549**

**_____________________**

**FORM        10-Q**

**FOR        THE QUARTERLY PERIOD ENDED MARCH 31, 2007**

**TXU        Corp.**

| Texas                                                               |   | 75-2669310                                             |
|---------------------------------------------------------------------|--------|--------------------------------------------------------|
| (State                  of Incorporation)                           |   | (I.R.S.                  Employer Identification No.)  |
|                                                                |   |                                                   |
| 1601                  Bryan Street, Dallas, TX 75201-3411           |   | (214)                  812-4600                        |
| (Address                  of Principal Executive Offices)(Zip Code) |   | (Registrant’s                  Telephone Number) |

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| **TABLE                  OF CONTENTS**                                                                                                                                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                   | **Page**** ** |
| **Glossary**                                                                                                                                                                      | ii |
| **Part                  I.** F**inancial                  information**                                                                                                      |   |
|  **Item                  1. Financial Statements**Condensed                  Statements of Consolidated Income -Three                  Months Ended March 31, 2007 and 2006  | 1 |
|                                                                                                                                                                                   |   |
| Condensed                  Statements of Consolidated Comprehensive Income -Three                  Months Ended March 31, 2007 and 2006                                           | 2 |
|                                                                                                                                                                                   |   |
| Condensed                  Statements of Consolidated Cash Flows -Three                  Months Ended March 31, 2007 and 2006                                                     | 3 |
|                                                                                                                                                                                   |   |
| Condensed                  Consolidated Balance Sheets -March                  31, 2007 and December 31, 2006                                                                     | 4 |
|                                                                                                                                                                                   |   |
| Notes                  to Condensed Consolidated Financial Statements                                                                                                             | 5 |
|                                                                                                                                                                                   |   |
| Report                  of Independent Registered Public Accounting Firm                                                                                                          | 33 |
|  **Item                  2.** **Management’s                  Discussion and Analysis of Financial Condition****and                  Results of Operations**      | 34 |
|  **Item                  3.** **Quantitative                  and Qualitative Disclosures About Market Risk**                                                           | 65 |
|  **Item                  4.** **Controls                  and Procedures**                                                                                              | 71 |
|  **Part                  II.** **Other Information**                                                                                                                         |   |
|  **Item                  1.** **Legal                  Proceedings**                                                                                                    | 72 |
|  **Item                  1A.** **Risk                  Factors**                                                                                                        | 72 |
|  **Item                  2.** **Unregistered                  Sales of Equity Securities and Use of Proceeds**                                                          | 75 |
|  **Item                  4.** **Submission                  of Matters to a Vote of Security Holders**                                                                  | 75 |
|  **Item                  6.** **Exhibits**                                                                                                                              | 76 |
|  **Signature**                                                                                                                                                               | 78 |

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**GLOSSARY**

| **1999                  Restructuring Legislation** | legislation                  that restructured the electric utility industry in Texas to provide                  for                  retail competition                                                                                                                                                                                                               |
|-----------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2006                  Form 10-K**                 | TXU                  Corp.’s Annual Report on Form 10-K for the year ended December 31,                  2006                                                                                                                                                                                                                                                     |
| **Capgemini**                                       | Capgemini                  Energy LP, a subsidiary of Cap Gemini North America Inc. that provides                  business support services to TXU Corp. and its                  subsidiaries                                                                                                                                                                         |
| **Commission**                                      | Public                  Utility Commission of Texas                                                                                                                                                                                                                                                                                                                     |
| **EPA**                                             | US                  Environmental Protection Agency                                                                                                                                                                                                                                                                                                                     |
| **EPC**                                             | engineering,                  procurement and construction                                                                                                                                                                                                                                                                                                              |
| **ERCOT**                                           | Electric                  Reliability Council of Texas, the Independent System Operator and                  the                  regional coordinator of the various electricity systems within                  Texas                                                                                                                                                 |
| **ERISA**                                           | Employee                  Retirement Income Security Act                                                                                                                                                                                                                                                                                                                |
| **FASB**                                            | Financial                  Accounting Standards Board, the designated organization in the                  private                  sector for establishing standards for financial accounting and                  reporting                                                                                                                                           |
| **FERC**                                            | US                  Federal Energy Regulatory Commission                                                                                                                                                                                                                                                                                                                |
| **FIN**                                             | Financial                  Accounting Standards Board Interpretation                                                                                                                                                                                                                                                                                                    |
| **FIN                  45**                         | FIN                  No. 45, “Guarantor’s Accounting and Disclosure Requirements for                  Guarantees, Including Indirect Guarantees of Indebtedness of Others                  - An                  Interpretation of FASB Statements No. 5, 57, and 107 and Rescission                  of                  FASB Interpretation No. 34” |
| **FIN                  48**                         | FIN                  No. 48, “Accounting for Uncertainty in Income Taxes”                                                                                                                                                                                                                                                                                   |
| **Fitch**                                           | Fitch                  Ratings, Ltd. (a credit rating agency)                                                                                                                                                                                                                                                                                                           |
| **GAAP**                                            | generally                  accepted accounting principles                                                                                                                                                                                                                                                                                                               |
| **GWh**                                             | gigawatt-hours                                                                                                                                                                                                                                                                                                                                                          |

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| **historical                  service territory** | the                  territory, largely in north Texas, being served by TXU Corp.’s regulated                  electric utility subsidiary at the time of entering retail competition                  on                  January 1, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **IRS**                                           | US                  Internal Revenue Service                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **kWh**                                           | kilowatt-hours                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **market                  heat rate**             | Heat                  rate is a measure of the efficiency of converting a fuel source                  to                  electricity. The market heat rate is based on the price offer of                  the                  marginal supplier in Texas (generally natural gas plants) in generating                  electricity and is calculated by dividing the wholesale market                  price                  of electricity by the market price of natural gas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **Merger                  Agreement**             | Agreement                  and Plan of Merger, dated February 25, 2007, under which an investor                  group                  led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group would                  acquire TXU Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **MMBtu**                                         | million                  British thermal units                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **Moody’s**                                 | Moody’s                  Investors Services, Inc. (a credit rating agency)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **MW**                                            | megawatts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **MWh**                                           | megawatt-hours                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **NRC**                                           | US                  Nuclear Regulatory Commission                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **Oncor                  Electric Delivery**      | Refers                  to Oncor Electric Delivery Company (formerly TXU Electric Delivery                  Company), a subsidiary of TXU Corp., and/or its consolidated bankruptcy                  remote financing subsidiary, Oncor Electric Delivery Transition                  Bond                  Company LLC (formerly TXU Electric Delivery Transition Bond Company                  LLC),                  depending on context. This Form 10-Q and other SEC filings of TXU                  Corp.                  and its subsidiaries occasionally make references to TXU Corp.,                  TXU Energy                  Company or Oncor Electric Delivery when describing actions, rights                  or                  obligations of their respective subsidiaries. These references                  reflect the                  fact that the subsidiaries are consolidated with their respective                  parent                  companies for financial reporting purposes. However, these references                  should not be interpreted to imply that the parent company is actually                  undertaking the action or has the rights or obligations of the                  relevant                  subsidiary company or that the subsidiary company is undertaking                  an action                  or has the rights or obligations of its parent company or of any                  other                  affiliate. |
| **price-to-beat                  rate**           | residential                  and small business customer electricity rates established by the                  Commission that (i) were required to be charged in a REP’s historical                  service territories until the earlier of January 1, 2005 or the                  date when                  40% of the electricity consumed by such customer classes was supplied                  by                  competing REPs, adjusted periodically for changes in fuel costs,                  and (ii)                  were required to be made available to those customers until January                  1,                  2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **PURA**                                          | Texas                  Public Utility Regulatory Act                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **REP**                                           | retail                  electric provider                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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| **RRC**                               | Railroad                  Commission of Texas, which has oversight of lignite mining                  activity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **S&P**                           | Standard                  & Poor’s Ratings Services, a division of the McGraw Hill Companies                  Inc. (a credit rating agency)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **SEC**                               | US                  Securities and Exchange Commission                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| **SFAS**                              | Statement                  of Financial Accounting Standards issued by the FASB                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **SFAS                  109**         | SFAS                  No. 109, “Accounting for Income Taxes”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **SFAS                  133**         | SFAS                  No. 133, “Accounting for Derivative Instruments and Hedging Activities” as                  amended and interpreted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **SFAS                  140**         | SFAS                  No. 140, “Accounting for Transfers and Servicing of Financial Assets and                  Extinguishments of Liabilities, a replacement of FASB Statement                  125”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **SFAS                  144**         | SFAS                  No. 144, "Accounting for the Impairment or Disposal of Long-Lived                  Assets"                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **SFAS                  146**         | SFAS                  No. 146, "Accounting for Costs Associated with Exit or Disposal                  Activities"                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **SFAS                  158**         | SFAS                  No. 158, “Accounting for Defined Benefit Pension and Other Postretirement                  Plans”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **SG&A**                          | selling,                  general and administrative                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **Short-cut                  method** | refers                  to the short-cut method under SFAS 133 that allows entities to                  assume no                  hedge ineffectiveness in a hedging relationship of interest rate                  risk if                  certain conditions are met                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **TCEQ**                              | Texas                  Commission on Environmental Quality                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **TXU                  Corp.**        | Refers                  to TXU Corp., a holding company, and/or its subsidiaries, depending                  on                  context. This Form 10-Q and other SEC filings of TXU Corp. and                  its                  subsidiaries occasionally make references to TXU Corp., TXU Energy                  Company                  or Oncor Electric Delivery when describing actions, rights or obligations                  of their respective subsidiaries. These references reflect the                  fact that                  the subsidiaries are consolidated with their respective parent                  companies                  for financial reporting purposes. However, these references should                  not be                  interpreted to imply that the parent company is actually undertaking                  the                  action or has the rights or obligations of the relevant subsidiary                  company                  or that the subsidiary company is undertaking an action or has                  the rights                  or obligations of its parent company or of any other                  affiliate. |
| **TXU                  DevCo**        | Refers                  to subsidiaries of TXU Corp. that have been established for the                  purpose of                  developing new lignite/coal-fueled generation facilities. The TXU                  DevCo                  subsidiaries are currently not subsidiaries of TXU Energy                  Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

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| **TXU                  Energy Company**       | Refers                  to TXU Energy Company LLC, a subsidiary of TXU Corp., and/or its                  subsidiaries, depending on context, engaged in electricity generation                  and                  wholesale and retail energy markets activities. This Form 10-Q                  and other                  SEC filings of TXU Corp. and its subsidiaries occasionally make                  references                  to TXU Corp., TXU Energy Company or Oncor Electric Delivery when                  describing actions, rights or obligations of their respective                  subsidiaries. These references reflect the fact that the subsidiaries                  are                  consolidated with their respective parent companies for financial                  reporting purposes. However, these references should not be interpreted                  to                  imply that the parent company is actually undertaking the action                  or has                  the rights or obligations of the relevant subsidiary company or                  that the                  subsidiary company is undertaking an action or has the rights or                  obligations of its parent company or of any other                  affiliate. |
|-----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **TXU                  Energy Holdings**      | Refers                  to the TXU Corp. business segment that includes TXU Energy Company,                  TXU                  DevCo and activity of a lease trust holding certain combustion                  turbines.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **TXU                  Energy Retail**        | Refers                  to TXU Energy Retail Company LP, a subsidiary of TXU Energy Company                  engaged in the retail sale of power to residential and business                  customers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **TXU                  Europe**               | TXU                  Europe Limited, a former subsidiary of TXU Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **TXU                  Gas**                  | TXU                  Gas Company, a former subsidiary of TXU Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **TXU                  Portfolio Management** | TXU                  Portfolio Management Company LP, a subsidiary of TXU Energy                  Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **US**                                        | United                  States of America                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **US                  Holdings**              | TXU                  US Holdings Company, a subsidiary of TXU                  Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

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**PART        I. FINANCIAL INFORMATION**

**Item        1. FINANCIAL STATEMENTS**

**TXU        CORP. AND SUBSIDIARIES**

**CONDENSED        STATEMENTS OF CONSOLIDATED INCOME**

**(Unaudited)**

|                                                                                |   | **Three                  Months Ended**                                                  |    |
|-------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|---------|
|                                                                                |   | **March                  31,**                                                           |    |
|                                                                                |   | **2007**                                                                                 |    | **2006** |   |
|                                                                                |   | **(millions                  of dollars,****except                  per share amounts)** |    |
|                                                                                |   |                                                                                     |    |   |   |
| **Operating                  revenues**                                        |   | $                                                                                        | 1,669   |   | $ | 2,304 |   |
|                                                                                |   |                                                                                     |    |   |   |   |   |
| Costs                  and expenses:                                                |   |                                                                                     |    |   |   |   |   |
| Fuel,                  purchased power costs and delivery fees                      |   |                                                                                     | 665     |   |   | 521 |   |
| Operating                  costs                                               |   |                                                                                     | 344     |   |   | 344 |   |
| Depreciation                  and amortization                                      |   |                                                                                     | 204     |   |   | 205 |   |
| Selling,                  general and administrative expenses                       |   |                                                                                     | 219     |   |   | 192 |   |
| Franchise                  and revenue-based taxes                                  |   |                                                                                     | 87      |   |   | 86 |   |
| Other                  income (Note 5)                                              |   |                                                                                     | (29     | ) |   | (14 | ) |
| Other                  deductions (Note 5)                                          |   |                                                                                     | 769     |   |   | (1 | ) |
| Interest                  income                                                    |   |                                                                                     | (17     | ) |   | (9 | ) |
| Interest                  expense and related charges (Note 14)                     |   |                                                                                     | 197     |   |   | 213 |   |
| Total                  costs and expenses                                           |   |                                                                                     | 2,439   |   |   | 1,537 |   |
|                                                                                |   |                                                                                     |    |   |   |   |   |
| Income                  (loss) from continuing operations before income taxes  |   |                                                                                     | (770    | ) |   | 767 |   |
|                                                                                |   |                                                                                     |    |   |   |   |   |
| Income                  tax expense (benefit)                                  |   |                                                                                     | (273    | ) |   | 251 |   |
|                                                                                |   |                                                                                     |    |   |   |   |   |
| **Income                  (loss) from continuing operations**                  |   |                                                                                     | (497    | ) |   | 516 |   |
|                                                                                |   |                                                                                     |    |   |   |   |   |
| Income                  from discontinued operations, net of tax effect        |   |                                                                                     | ─ |   |   | 60 |   |
|                                                                                |   |                                                                                     |    |   |   |   |   |
| **Net                  income (loss)**                                         |   | $                                                                                        | (497    | ) | $ | 576 |   |
|                                                                                |   |                                                                                     |    |   |   |   |   |
| Average                  shares of common stock outstanding (millions):             |   |                                                                                     |    |   |   |   |   |
| Basic                                                                          |   |                                                                                     | 458     |   |   | 464 |   |
| Diluted                                                                        |   |                                                                                     | 458     |   |   | 474 |   |
|                                                                                |   |                                                                                     |    |   |   |   |   |
| Per                  share of common stock - Basic:                                 |   |                                                                                     |    |   |   |   |   |
| Net                  income (loss) from continuing operations                  |   | $                                                                                        | (1.09   | ) | $ | 1.11 |   |
| Income                  from discontinued operations, net of tax effect        |   |                                                                                     | ─ |   |   | 0.13 |   |
| Net                  income (loss)                                             |   | $                                                                                        | (1.09   | ) | $ | 1.24 |   |
|                                                                                |   |                                                                                     |    |   |   |   |   |
| Per                  share of common stock - Diluted:                               |   |                                                                                     |    |   |   |   |   |
| Net                  income (loss) from continuing operations                  |   | $                                                                                        | (1.09   | ) | $ | 1.09 |   |
| Income                  from discontinued operations, net of tax effect        |   |                                                                                     | ─ |   |   | 0.13 |   |
| Net                  income (loss)                                             |   | $                                                                                        | (1.09   | ) | $ | 1.22 |   |
|                                                                                |   |                                                                                     |    |   |   |   |   |
| Dividends                  declared                                       |   | $                                                                                        | 0.433   |   | $ | 0.413 |   |

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**TXU        CORP. AND SUBSIDIARIES**

**CONDENSED        STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME**

**(Unaudited)**

|                                                                                                                                                                                           |   | **Three                  Months Ended**    |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                                                                                                                                                           |   | **March                  31,**             |    |
|                                                                                                                                                                                           |   | **2007**                                   |    | **2006** |   |
|                                                                                                                                                                                           |   | **(millions                  of dollars)** |    |
|                                                                                                                                                                                           |   |                                       |    |   |   |
| Components                  related to continuing operations:                                                                                                                                  |   |                                       |    |   |   |
|                                                                                                                                                                                           |   |                                       |    |   |   |
| Income                  (loss) from continuing operations                                                                                                                                 |   | $                                          | (497    | ) | $ | 516 |   |
|                                                                                                                                                                                           |   |                                       |    |   |   |   |   |
| Other                  comprehensive income (loss), net of tax effects:                                                                                                                        |   |                                       |    |   |   |   |   |
|                                                                                                                                                                                           |   |                                       |    |   |   |   |   |
| Reclassification                  of pension and other retirement benefit costs                                                                                                                |   |                                       |    |   |   |   |   |
| (net                  of tax expense of $3 and $─) (Note 12)                                                                                                                        |   |                                       | 4       |   |   | ─ |   |
|                                                                                                                                                                                           |   |                                       |    |   |   |   |   |
| Cash                  flow hedges:                                                                                                                                                             |   |                                       |    |   |   |   |   |
| Net                  increase (decrease) in fair value of derivatives held at end of                  period                  (net of tax benefit(expense)                  of $170 and $(60)) |   |                                       | (316    | ) |   | 113 |   |
| Derivative                  value net gains related to hedged transactions settled during the                  period                  and                                                     |   |                                       |    |   |   |   |   |
| reported                  in net income (net of tax expense of $40 and $─)                                                                                                               |   |                                       | (74     | ) |   | (1 | ) |
| Total                  effect of cash flow hedges                                                                                                                                              |   |                                       | (390    | ) |   | 112 |   |
|                                                                                                                                                                                           |   |                                       |    |   |   |   |   |
| Total                  adjustments to net income (loss) from continuing operations                                                                                                        |   |                                       | (386    | ) |   | 112 |   |
|                                                                                                                                                                                           |   |                                       |    |   |   |   |   |
| Comprehensive                  income (loss) from continuing operations                                                                                                                   |   |                                       | (883    | ) |   | 628 |   |
|                                                                                                                                                                                           |   |                                       |    |   |   |   |   |
| Comprehensive                  income from discontinued operations                                                                                                                        |   |                                       | ─ |   |   | 60 |   |
|                                                                                                                                                                                           |   |                                       |    |   |   |   |   |
| Comprehensive                  income (loss)                                                                                                                                              |   | $                                          | (883    | ) | $ | 688 |   |

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**TXU        CORP. AND SUBSIDIARIES**

**CONDENSED        STATEMENTS OF CONSOLIDATED CASH FLOWS**

**(Unaudited)**

|                                                                                                                                                      |   | **Three                  Months Ended**    |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                                                                                                                      |   | **March                  31,**             |    |
|                                                                                                                                                      |   | **2007**                                   |    | **2006** |   |
|                                                                                                                                                      |   | **(millions                  of dollars)** |    |
| Cash                  flows - operating activities:                                                                              |   |                                       |    |   |   |
| Net                  income (loss)                                                                                                                   |   | $                                          | (497    | ) | $ | 576 |   |
| Income                  from discontinued operations, net of tax effect                                                                              |   |                                       | ─ |   |   | (60 | ) |
| Income                  (loss) from continuing operations                                                                                            |   |                                       | (497    | ) |   | 516 |   |
| Adjustments                  to reconcile income (loss) from continuing operations to cash provided                  by                  (used in)        |   |                                       |    |   |   |   |   |
| operating                  activities:                                                                                                                    |   |                                       |    |   |   |   |   |
| Depreciation                  and amortization                                                                                                       |   |                                       | 217     |   |   | 220 |   |
| Deferred                  income tax expense (benefit), including utilization of net operating                  loss                  carryforwards  |   |                                       | (362    | ) |   | 229 |   |
| Charge                  related to suspended development of generation facilities (Note                  2)                                          |   |                                       | 713     |   |   | ─ |   |
| Write-off                  of deferred transaction costs (Note 5)                                                                                    |   |                                       | 30      |   |   | ─ |   |
| Net                  gains on sale of assets                                                                                                         |   |                                       | (16     | ) |   | (12 | ) |
| Net                  effect of unrealized mark-to-market valuations                                                                                  |   |                                       | 764     |   |   | (5 | ) |
| Bad                  debt expense                                                                                                                    |   |                                       | 11      |   |   | 12 |   |
| Stock-based                  incentive compensation expense                                                                                          |   |                                       | 8       |   |   | 3 |   |
| Credit                  related to coal contract counterparty claim                                                                                  |   |                                       | ─ |   |   | (12 | ) |
| Changes                  in operating assets and liabilities                                                                                         |   |                                       | (956    | ) |   | 95 |   |
| Cash (used                  in) provided by operating activities from continuing                  operations                                         |   |                                       | (88     | ) |   | 1,046 |   |
|                                                                                                                                                      |   |                                       |    |   |   |   |   |
| Cash                  flows - financing activities:                                                                                                       |   |                                       |    |   |   |   |   |
| Issuances                  of securities:                                                                                                                 |   |                                       |    |   |   |   |   |
| Long-term                  debt                                                                                                                      |   |                                       | 1,800   |   |   | 100 |   |
| Common                  stock                                                                                                                        |   |                                       | ─ |   |   | 1 |   |
| Retirements/repurchases                  of securities:                                                                                                   |   |                                       |    |   |   |   |   |
| Other                  long-term debt                                                                                                                |   |                                       | (37     | ) |   | (434 | ) |
| Common                  stock                                                                                                                        |   |                                       | ─ |   |   | (507 | ) |
| Change                  in short-term borrowings:                                                                                                         |   |                                       |    |   |   |   |   |
| Commercial                  paper                                                                                                                    |   |                                       | (1,126  | ) |   | 878 |   |
| Banks                                                                                                                                                |   |                                       | 950     |   |   | (395 | ) |
| Common                  stock dividends paid                                                                                                         |   |                                       | (198    | ) |   | (194 | ) |
| Debt                  premium, discount, financing and reacquisition expenses                                                                        |   |                                       | (18     | ) |   | (10 | ) |
| Cash                  provided by (used in) financing activities from continuing                  operations                                              |   |                                       | 1,371   |   |   | (561 | ) |
|                                                                                                                                                      |   |                                       |    |   |   |   |   |
| Cash                  flows - investing activities:                                                                                                       |   |                                       |    |   |   |   |   |
| Capital                  expenditures                                                                                                                |   |                                       | (830    | ) |   | (309 | ) |
| Nuclear                  fuel                                                                                                                        |   |                                       | (6      | ) |   | (14 | ) |
| Purchase                  of lease trust                                                                                                             |   |                                       | ─ |   |   | (69 | ) |
| Proceeds                  from sales of nuclear decommissioning trust fund securities                                                                |   |                                       | 22      |   |   | 44 |   |
| Investments                  in nuclear decommissioning trust fund securities                                                                        |   |                                       | (26     | ) |   | (48 | ) |
| Proceeds                  from pollution control revenue bonds deposited with trustee                                                                |   |                                       | ─ |   |   | (99 | ) |
| Cost                  to remove retired property                                                                                                     |   |                                       | (8      | ) |   | (12 | ) |
| Other                                                                                                                                                |   |                                       | (2      | ) |   | 3 |   |
| Cash                  used in investing activities from continuing operations                                                                             |   |                                       | (850    | ) |   | (504 | ) |
|                                                                                                                                                      |   |                                       |    |   |   |   |   |
| Discontinued                  operations:                                                                                                                 |   |                                       |    |   |   |   |   |
| Cash                  provided by (used in) operating activities                                                                                     |   |                                       | 11      |   |   | (1 | ) |
| Cash                  used in financing activities                                                                                                   |   |                                       | ─ |   |   | ─ |   |
| Cash                  used in investing activities                                                                                                   |   |                                       | ─ |   |   | ─ |   |
| Cash                  provided by (used in) discontinued operations                                                                                  |   |                                       | 11      |   |   | (1 | ) |
|                                                                                                                                                      |   |                                       |    |   |   |   |   |
| Net                  change in cash and cash equivalents                                                                                             |   |                                       | 444     |   |   | (20 | ) |
| Cash                  and cash equivalents - beginning balance                                                                                       |   |                                       | 25      |   |   | 37 |   |
| Cash                  and cash equivalents - ending balance                                                                                          |   | $                                          | 469     |   | $ | 17 |   |

----

**TXU        CORP. AND SUBSIDIARIES**

**CONDENSED        CONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

|                                                                                    |   | **March                  31,**             |   | **December                  31,** |   |
|-----------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|-----------------------------------|--------|
|                                                                                    |   | **2007**                                   |   | **2006**                          |   |
| **ASSETS**                                                                              |   | **(millions                  of dollars)** |   |
| Current                  assets:                                                   |   |                                       |   |                              |   |
| Cash                  and cash equivalents                                         |   | $                                          | 469    |                              | $      | 25 |   |
| Restricted                  cash                                                   |   |                                       | 203    |                              |   | 58 |   |
| Trade                  accounts receivable - net (Note 6)                          |   |                                       | 793    |                              |   | 959 |   |
| Inventories                                                                        |   |                                       | 386    |                              |   | 383 |   |
| Commodity                  and other derivative contractual assets (Note 11)       |   |                                       | 346    |                              |   | 950 |   |
| Accumulated                  deferred income taxes (Note 3)                        |   |                                       | 585    |                              |   | 253 |   |
| Margin                  deposits related to commodity positions                    |   |                                       | 190    |                              |   | 7 |   |
| Other                  current assets                                              |   |                                       | 215    |                              |   | 177 |   |
| Total                  current assets                                                   |   |                                       | 3,187  |                              |   | 2,812 |   |
|                                                                                    |   |                                       |   |                              |   |   |   |
| Restricted                  cash                                                   |   |                                       | 117    |                              |   | 258 |   |
| Investments                                                                        |   |                                       | 726    |                              |   | 712 |   |
| Property,                  plant and equipment — net                         |   |                                       | 18,771 |                              |   | 18,756 |   |
| Goodwill                                                                           |   |                                       | 542    |                              |   | 542 |   |
| Regulatory                  assets — net                                     |   |                                       | 1,979  |                              |   | 2,028 |   |
| Commodity                  and other derivative contractual assets (Note 11)       |   |                                       | 243    |                              |   | 345 |   |
| Other                  noncurrent assets                                           |   |                                       | 352    |                              |   | 380 |   |
|                                                                                    |   |                                       |   |                              |   |   |   |
| Total                  assets                                                           |   | $                                          | 25,917 |                              | $      | 25,833 |   |
|                                                                                    |
| **LIABILITIES                  AND SHAREHOLDERS’ EQUITY**                         |
| Current                  liabilities:                                                   |   |                                       |   |                              |   |   |   |
| Short-term                  borrowings (Note 7)                                    |   | $                                          | 1,316  |                              | $      | 1,491 |   |
| Long-term                  debt due currently (Note 8)                             |   |                                       | 940    |                              |   | 485 |   |
| Trade                  accounts payable                                            |   |                                       | 1,123  |                              |   | 1,093 |   |
| Commodity                  and other derivative contractual liabilities (Note 11)  |   |                                       | 388    |                              |   | 293 |   |
| Margin                  deposits related to commodity positions                    |   |                                       | 54     |                              |   | 681 |   |
| Other                  current liabilities                                         |   |                                       | 932    |                              |   | 1,040 |   |
| Total                  current liabilities                                              |   |                                       | 4,753  |                              |   | 5,083 |   |
|                                                                                    |   |                                       |   |                              |   |   |   |
| Accumulated                  deferred income taxes (Note 3)                        |   |                                       | 3,112  |                              |   | 4,238 |   |
| Investment                  tax credits                                            |   |                                       | 358    |                              |   | 363 |   |
| Commodity                  and other derivative contractual liabilities (Note 11)  |   |                                       | 581    |                              |   | 191 |   |
| Long-term                  debt, less amounts due currently (Note 8)               |   |                                       | 11,940 |                              |   | 10,631 |   |
| Other                  noncurrent liabilities and deferred credits                 |   |                                       | 4,069  |                              |   | 3,187 |   |
| Total                  liabilities                                                      |   |                                       | 24,813 |                              |   | 23,693 |   |
|                                                                                    |   |                                       |   |                              |   |   |   |
| Commitments                  and Contingencies (Note 9)                                 |   |                                       |   |                              |   |   |   |
|                                                                                    |   |                                       |   |                              |   |   |   |
| Shareholders’                  equity (Note 10):                                  |   |                                       |   |                              |   |   |   |
| Common                  stock without par value: Authorized shares: 1,000,000,000       |   |                                       |   |                              |   |   |   |
| Outstanding                  shares: 459,269,419 and 459,244,523                   |   |                                       | 5      |                              |   | 5 |   |
| Additional                  paid-in capital                                        |   |                                       | 1,116  |                              |   | 1,104 |   |
| Retained                  earnings (deficit)                                       |   |                                       | (40    | )                                 |   | 622 |   |
| Accumulated                  other comprehensive income                            |   |                                       | 23     |                              |   | 409 |   |
| Total                  shareholders’ equity                                  |   |                                       | 1,104  |                              |   | 2,140 |   |
| Total                  liabilities and shareholders’ equity                       |   | $                                          | 25,917 |                              | $      | 25,833 |   |

----

**TXU        CORP. AND SUBSIDIARIES**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**1.**
**SIGNIFICANT        ACCOUNTING POLICIES AND BUSINESS**

***Description        of Business***

***Basis        of Presentation***

***Discontinued        Businesses***

***Use        of Estimates***

----

***Earnings        Per Share***

***Changes        in Accounting Standards***

----

**2.**
**CHARGE        RELATED TO SUSPENDED DEVELOPMENT OF COAL-FUELED **
**GENERATION        FACILITIES**

----

**3.**
**ADOPTION        OF NEW INCOME TAX ACCOUNTING RULES (FIN 48)**

----

**4.        EARNINGS PER SHARE**

|                                                           |   | **For                  the Three Months****Ended                  March 31, 2007** |    | **For                  the Three Months****Ended                  March 31, 2006** |   |
|----------------------------------------------------------------|--------|------------------------------------------------------------------------------------|---------|------------------------------------------------------------------------------------|--------|
|                                                           |   |                                                                               |    |                                                                               |   | **Per** |   |   |   |   |   | **Per** |   |
|                                                           |   | **Income**                                                                         |    |                                                                               |   | **Share** |   |   |   |   |   | **Share** |   |
|                                                           |   | **(Loss)**                                                                         |    | **Shares**                                                                         |   | **Amount** |   | **Income** |   | **Shares** |   | **Amount** |   |
|                                                           |   |                                                                               |    |                                                                               |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                                                               |    |                                                                               |   |   |   |   |   |   |   |   |   |
| **Income                  (loss) from continuing operations**  |   |                                                                               |    |                                                                               |   |   |   |   |   |   |   |   |   |
| **-Basic**                                                |   | $                                                                                  | (497    | )                                                                                  |   | 457.7 |   | $ | (1.09 | ) | $ | 576 |   |   | 464.3 |   | $ | 1.24 |   |
|                                                           |   |                                                                               |    |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Dilutive                  securities/other adjustments:**    |   |                                                                               |    |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                                                               |    |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Convertible                  senior notes                 |   |                                                                               | ― |                                                                               |   | 1.5 |   |   |   |   |   | ― |   |   | 1.5 |   |   |   |   |
|                                                           |   |                                                                               |    |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity-linked                  debt securities            |   |                                                                               | ― |                                                                               |   | ─ |   |   |   |   |   | ― |   |   | 2.1 |   |   |   |   |
|                                                           |   |                                                                               |    |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based                  incentive compensation plan  |   |                                                                               | ― |                                                                               |   | 5.3 |   |   |   |   |   | ― |   |   | 6.2 |   |   |   |   |
|                                                           |   |                                                                               |    |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  (loss) from continuing operations**  |   |                                                                               |    |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **-Diluted**                                              |   | $                                                                                  | (497    | )                                                                                  |   | 457.7                  (a | ) | $ | (1.09)                  (a | ) | $ | 576 |   |   | 474.1 |   | $ | 1.22 |   |

|   | (a) | For                  the three months ended March 31, 2007, diluted results per share                  equaled                  basic results per share because of the loss position and antidilution                  accounting rules. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**5.**
**OTHER        INCOME AND DEDUCTIONS**

|                                                                                                                      |   | **Three                  Months Ended** |    |
|---------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                                                                                      |   | **March                  31,**          |    |
|                                                                                                                      |   | **2007**                                |    | **2006** |   |
| Other                  income:                                                                                            |   |                                    |    |   |   |   |   |
| Amortization                  of gain on sale of TXU Fuel business                                                   |   | $                                       | 12      |   | $ | 12 |   |
| Net                  gain on sale of assets                                                                          |   |                                    | 4       |   |   | ─ |   |
| Adjustments                  to insurance reserves related to discontinued operations                                |   |                                    | 5       |   |   | ─ |   |
| Penalty                  received for nonperformance under a coal transportation                  agreement          |   |                                    | 3       |   |   | ─ |   |
| Mineral                  rights royalty income                                                                       |   |                                    | 3       |   |   | ─ |   |
| Other                                                                                                                |   |                                    | 2       |   |   | 2 |   |
| Total                  other income                                                                                       |   | $                                       | 29      |   | $ | 14 |   |
| Other                  deductions:                                                                                        |   |                                    |    |   |   |   |   |
| Charge                  related to suspended development of generation facilities (Note                  2)          |   | $                                       | 713     |   | $ | ─ |   |
| Writeoff                  of deferred costs related to previously anticipated transactions                  (a)      |   |                                    | 30      |   |   | ─ |   |
| Transaction                  costs related to Merger Agreement                                                       |   |                                    | 14      |   |   | ─ |   |
| Credit                  related to counterparty claim (b)                                                            |   |                                    | ─ |   |   | (12 | ) |
| Cost                  related to 2006 cities rate settlement                                                         |   |                                    | 6       |   |   | ─ |   |
| Pension                  and other postretirement benefit costs related to discontinued                  businesses  |   |                                    | 3       |   |   | 5 |   |
| Charge                  related to impaired leases                                                                   |   |                                    | ─ |   |   | 2 |   |
| Transition                  costs related to InfrastruX Energy Services joint venture                                |   |                                    | 1       |   |   | ─ |   |
| Other                                                                                                                |   |                                    | 2       |   |   | 4 |   |
| Total                  other deductions                                                                                   |   | $                                       | 769     |   | $ | (1 | ) |

|   | (a) | Represents                  costs incurred and previously deferred, consisting primarily of                  professional fees for tax, legal and other advisory services, in                  connection with certain previously anticipated strategic transactions                  (including expected financings) that are no longer expected to                  be                  consummated as a result of the Merger Agreement. Amount reported                  in Corp.                  and Other activities. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) | Represents                  settlement of nonperformance by a coal contract counterparty. A                  charge of                  an equal amount was recorded as an “other deduction” in the first quarter                  of 2005. Amount reported in the TXU Energy Holdings                  segment.                                                                                                                                                                                                |

----

**6.**
**TRADE        ACCOUNTS RECEIVABLE AND SALE OF RECEIVABLES PROGRAM**

***Sale        of Receivables***

----

|                                                                                |   | **Three                  Months Ended March 31,** |   |
|-------------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                                                                |   | **2007**                                          |   | **2006** |   |
|                                                                                |   |                                              |   |   |   |
| Cash                  collections on accounts receivable                       |   | $                                                 | 2,297  |   | $ | 1,835 |   |
| Face                  amount of new receivables purchased                      |   |                                              | (2,370 | ) |   | (1,845 | ) |
| Discount                  from face amount of purchased receivables            |   |                                              | 11     |   |   | 10 |   |
| Program                  fees paid                                             |   |                                              | (10    | ) |   | (9 | ) |
| Servicing                  fees paid                                           |   |                                              | (1     | ) |   | (1 | ) |
| Increase                  in subordinated notes payable                        |   |                                              | 53     |   |   | 1 |   |
| Operating                  cash flows provided to TXU Corp. under the program  |   | $                                                 | (20    | ) | $ | (9 | ) |

***Contingencies        Related to Sale of Receivables Program***
* *

|   | 1) | all                      of the originators cease to maintain their required fixed charge                      coverage                      ratio and debt to capital (leverage) ratio; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 2) | the                      delinquency ratio (delinquent for 31 days) for the sold receivables,                      the                      default ratio (delinquent for 91 days or deemed uncollectible),                      the                      dilution ratio (reductions for discounts, disputes and other                      allowances)                      or the days collection outstanding ratio exceed stated thresholds                      and the                      financial institutions do not waive such event of termination.                      The                      thresholds apply to the entire portfolio of sold receivables,                      not                      separately to the receivables of each                      originator. |

***Trade        Accounts Receivable -***

|                                                                                                                         |   | **March                  31,** |   | **December                  31,** |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|-----------------------------------|--------|
|                                                                                                                         |   | **2007**                       |   | **2006**                          |   |
| Gross                  trade accounts receivable                                                                        |   | $                              | 1,453  |                              | $      | 1,599 |   |
| Undivided                  interests in accounts receivable sold by TXUReceivables                  Company                  |   |                           | (647   | )                                 |   | (627 | ) |
| Allowance                  for uncollectible accounts related to undivided interests inreceivables                  retained |   |                           | (13    | )                                 |   | (13 | ) |
| Trade                  accounts receivable ― reported in balance sheet                                            |   | $                              | 793    |                              | $      | 959 |   |

----

***Allowance        for Uncollectible Accounts Receivable -***

|                                                                                   |   | **2007** |    | **2006** |   |
|----------------------------------------------------------------------------------------|--------|----------|---------|----------|--------|
|                                                                                   |   |     |    |     |   |
| Allowance                  for uncollectible accounts receivable as of January 1  |   | $        | 13      |     | $      | 36 |   |
| Increase                  for bad debt expense                                         |   |     | 11      |     |   | 12 |   |
| Decrease                  for account write-offs                                       |   |     | (19     | )        |   | (28 | ) |
| Changes                  related to receivables sold                                   |   |     | 8       |     |   | 7 |   |
| Other                  (a)                                                             |   |     | ─ |     |   | (15 | ) |
| Allowance                  for uncollectible accounts receivable as of March 31   |   | $        | 13      |     | $      | 12 |   |

|   | (a) | The                  2006 amount includes an allowance established in 2005 for a coal                  contract                  dispute that was reversed upon settlement in 2006. See Note                  5. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**7.**
**SHORT-TERM        FINANCING**

***Short-term        Borrowings***

|                              |   | **At                  March 31, 2007**  |   | **At                  December 31, 2006** |   |
|-----------------------------------|--------|-----------------------------------------|--------|-------------------------------------------|--------|
|                              |   | **Outstanding                  Amount** |   | **Interest****Rate                  (a)** |   | **Outstanding                  Amount** |   | **Interest****Rate                  (a)** |   |
| Bank                  borrowings  |   | $                                       | 1,145  |                                      |   | 6.37 | % | $ | 195 |   |   | 5.97 | % |
| Commercial                  paper |   |                                    | 171    |                                      |   | 5.51 | % |   | 1,296 |   |   | 5.53 | % |
| Total                             |   | $                                       | 1,316  |                                      |   |   |   | $ | 1,491 |   |   |   |   |

|   | (a) | Weighted                  average interest rate at the end of the                  period. |
|--------|-----|--------------------------------------------------------------------------------------------|

***Credit        Facilities***
** **

|                                                         |   |         |                           | **At                  March 31, 2007** |   |
|--------------------------------------------------------------|--------|--------------|--------------------------------|----------------------------------------|--------|
| **Authorized**                                               |   | **Maturity** |                           | **Facility**                           |   | **Letters                  of** |   | **Cash** |   |   |   |
| **Borrowers**                                                |   | **Date**     |                           | **Limit**                              |   | **Credit** |   | **Borrowings** |   | **Availability** |   |
| TXU                  Energy Company                          |   |         | February                  2008 |                                   | $      | 1,500 |   | $ | ― |   | $ | ― |   | $ | 1,500 |   |
| TXU                  Energy Company, Oncor Electric Delivery |   |         | June                  2008     |                                   |   | 1,400 |   |   | 503 |   |   | ― |   |   | 897 |   |
| TXU                  Energy Company, Oncor Electric Delivery |   |         | August                  2008   |                                   |   | 1,000 |   |   | ― |   |   | 495 |   |   | 505 |   |
| TXU                  Energy Company, Oncor Electric Delivery |   |         | March                  2010    |                                   |   | 1,600 |   |   | 88 |   |   | 375 |   |   | 1,137 |   |
| TXU                  Energy Company, Oncor Electric Delivery |   |         | June                  2010     |                                   |   | 500 |   |   | 5 |   |   | 230 |   |   | 265 |   |
| TXU                  Energy Company                          |   |         | December                  2009 |                                   |   | 500 |   |   | 455 |   |   | 45 |   |   | ― |   |
| Total                                                        |   |         |                           |                                   | $      | 6,500 |   | $ | 1,051 |   | $ | 1,145 |   | $ | 4,304 |   |

----

**8.**
**LONG-TERM        DEBT**

***Long-term        debt***

|                                                                                                                                       |   | **March                  31,** |   | **December                  31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|-----------------------------------|--------|
|                                                                                                                                       |   | **2007**                       |   | **2006**                          |   |
| TXU                  Energy Company                                                                                                        |   |                           |   |                              |   |
| Pollution                  Control Revenue Bonds:                                                                                          |   |                           |   |                              |   |
| Brazos                  River Authority:                                                                                                   |   |                           |   |                              |   |
| 5.400%                  Fixed Series 1994A due May 1, 2029                                                                                 |   | $                              | 39     |                              | $      | 39 |   |
| 7.700%                  Fixed Series 1999A due April 1, 2033                                                                               |   |                           | 111    |                              |   | 111 |   |
| 6.750%                  Fixed Series 1999B due September 1, 2034, remarketing date April                  1, 2013                  (a)     |   |                           | 16     |                              |   | 16 |   |
| 7.700%                  Fixed Series 1999C due March 1, 2032                                                                               |   |                           | 50     |                              |   | 50 |   |
| 3.750%                  Floating Series 2001A due October 1, 2030 (b)                                                                      |   |                           | 71     |                              |   | 71 |   |
| 5.750%                  Fixed Series 2001C due May 1, 2036, remarketing date November 1,                  2011                  (a)        |   |                           | 217    |                              |   | 217 |   |
| 3.700%                  Floating Series 2001D due May 1, 2033 (b)                                                                          |   |                           | 268    |                              |   | 268 |   |
| 5.320%                  Floating Taxable Series 2001I due December 1, 2036 (b)                                                             |   |                           | 62     |                              |   | 62 |   |
| 3.750%                  Floating Series 2002A due May 1, 2037 (b)                                                                          |   |                           | 45     |                              |   | 45 |   |
| 6.750%                  Fixed Series 2003A due April 1, 2038, remarketing date April 1,                  2013                  (a)         |   |                           | 44     |                              |   | 44 |   |
| 6.300%                  Fixed Series 2003B due July 1, 2032                                                                                |   |                           | 39     |                              |   | 39 |   |
| 6.750%                  Fixed Series 2003C due October 1, 2038                                                                             |   |                           | 52     |                              |   | 52 |   |
| 5.400%                  Fixed Series 2003D due October 1, 2029, remarketing date October                  1, 2014                  (a)     |   |                           | 31     |                              |   | 31 |   |
| 5.000%                  Fixed Series 2006 due March 1, 2041                                                                                |   |                           | 100    |                              |   | 100 |   |
|                                                                                                                                       |   |                           |   |                              |   |   |   |
| Sabine                  River Authority of Texas:                                                                                          |   |                           |   |                              |   |   |   |
| 6.450%                  Fixed Series 2000A due June 1, 2021                                                                                |   |                           | 51     |                              |   | 51 |   |
| 5.500%                  Fixed Series 2001A due May 1, 2022, remarketing date November 1,                  2011                  (a)        |   |                           | 91     |                              |   | 91 |   |
| 5.750%                  Fixed Series 2001B due May 1, 2030, remarketing date November 1,                  2011                  (a)        |   |                           | 107    |                              |   | 107 |   |
| 5.200%                  Fixed Series 2001C due May 1, 2028                                                                                 |   |                           | 70     |                              |   | 70 |   |
| 5.800%                  Fixed Series 2003A due July 1, 2022                                                                                |   |                           | 12     |                              |   | 12 |   |
| 6.150%                  Fixed Series 2003B due August 1, 2022                                                                              |   |                           | 45     |                              |   | 45 |   |
| 3.850%                  Floating Series 2006A due November 1, 2041, remarketing date May                  9, 2007                  (c) (d) |   |                           | 47     |                              |   | 47 |   |
| 3.850%                  Floating Series 2006B due November 1, 2041, remarketing date May                  9, 2007                  (c) (d) |   |                           | 46     |                              |   | 46 |   |
|                                                                                                                                       |   |                           |   |                              |   |   |   |
| Trinity                  River Authority of Texas:                                                                                         |   |                           |   |                              |   |   |   |
| 6.250%                  Fixed Series 2000A due May 1, 2028                                                                                 |   |                           | 14     |                              |   | 14 |   |
| 3.850%                  Floating Series 2006 due November 1, 2041, remarketing date May                  9, 2007                  (c) (d)  |   |                           | 50     |                              |   | 50 |   |
|                                                                                                                                       |   |                           |   |                              |   |   |   |
| Other:                                                                                                                                     |   |                           |   |                              |   |   |   |
| 6.125%                  Fixed Senior Notes due March 15, 2008 (e)                                                                          |   |                           | 250    |                              |   | 250 |   |
| 7.000%                  Fixed Senior Notes due March 15, 2013                                                                              |   |                           | 1,000  |                              |   | 1,000 |   |
| 5.850%                  Floating Senior Notes due September 16, 2008 (f)                                                                   |   |                           | 1,000  |                              |   | ― |   |
| Capital                  lease obligations                                                                                                 |   |                           | 95     |                              |   | 98 |   |
| Fair                  value adjustments related to interest rate swaps                                                                     |   |                           | 11     |                              |   | 10 |   |
| Total                  TXU Energy Company                                                                                                  |   | $                              | 4,034  |                              | $      | 3,036 |   |

----

|                                                                                                                                       |   | **March                  31,** |    | **December                  31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|-----------------------------------|--------|
|                                                                                                                                       |   | **2007**                       |    | **2006**                          |   |
| Oncor                  Electric Delivery                                                                                                   |   |                           |    |                              |   |
| 6.375%                  Fixed Senior Notes due May 1, 2012                                                                                 |   | $                              | 700     |                              | $      | 700 |   |
| 7.000%                  Fixed Senior Notes due May 1, 2032                                                                                 |   |                           | 500     |                              |   | 500 |   |
| 6.375%                  Fixed Senior Notes due January 15, 2015                                                                            |   |                           | 500     |                              |   | 500 |   |
| 7.250%                  Fixed Senior Notes due January 15, 2033                                                                            |   |                           | 350     |                              |   | 350 |   |
| 5.000%                  Fixed Debentures due September 1, 2007 (e)                                                                         |   |                           | 200     |                              |   | 200 |   |
| 7.000%                  Fixed Debentures due September 1, 2022                                                                             |   |                           | 800     |                              |   | 800 |   |
| 5.725%                  Floating Senior Notes due September 16, 2008 (f)                                                                   |   |                           | 800     |                              |   | ― |   |
| Unamortized                  discount                                                                                                      |   |                           | (16     | )                                 |   | (16 | ) |
| Total                  Oncor Electric Delivery                                                                                             |   |                           | 3,834   |                              |   | 3,034 |   |
|                                                                                                                                       |   |                           |    |                              |   |   |   |
| Oncor                  Electric Delivery Transition Bond Company LLC (g)                                                                   |   |                           |    |                              |   |   |   |
| 2.260%                  Fixed Series 2003 Bonds due in semiannual installments through                  February                  15, 2007 |   |                           | ― |                              |   | 8 |   |
| 4.030%                  Fixed Series 2003 Bonds due in semiannual installments through                  February                  15, 2010 |   |                           | 109     |                              |   | 122 |   |
| 4.950%                  Fixed Series 2003 Bonds due in semiannual installments through                  February                  15, 2013 |   |                           | 130     |                              |   | 130 |   |
| 5.420%                  Fixed Series 2003 Bonds due in semiannual installments through                  August 15,                  2015   |   |                           | 145     |                              |   | 145 |   |
| 3.520%                  Fixed Series 2004 Bonds due in semiannual installments through                  November                  15, 2009 |   |                           | 158     |                              |   | 158 |   |
| 4.810%                  Fixed Series 2004 Bonds due in semiannual installments through                  November                  15, 2012 |   |                           | 221     |                              |   | 221 |   |
| 5.290%                  Fixed Series 2004 Bonds due in semiannual installments through                  May 15,                  2016      |   |                           | 290     |                              |   | 290 |   |
| Total                  Oncor Electric Delivery Transition Bond Company LLC                                                                 |   |                           | 1,053   |                              |   | 1,074 |   |
| Total                  Oncor Electric Delivery Consolidated                                                                                |   |                           | 4,887   |                              |   | 4,108 |   |
|                                                                                                                                       |   |                           |    |                              |   |   |   |
| US                  Holdings                                                                                                               |   |                           |    |                              |   |   |   |
| 7.170%                  Fixed Senior Debentures due August 1, 2007                                                                         |   |                           | 10      |                              |   | 10 |   |
| 7.460%                  Fixed Secured Facility Bonds with amortizing payments through January                  2015                        |   |                           | 78      |                              |   | 85 |   |
| 9.580%                  Fixed Notes due in semiannual installments through December 4,                  2019                               |   |                           | 62      |                              |   | 62 |   |
| 8.254%                  Fixed Notes due in quarterly installments through December 31,                  2021                               |   |                           | 59      |                              |   | 59 |   |
| 6.160%                  Floating Rate Junior Subordinated Debentures, Series D due January                  30,                  2037 (c)  |   |                           | 1       |                              |   | 1 |   |
| 8.175%                  Fixed Junior Subordinated Debentures, Series E due January 30,                  2037                               |   |                           | 8       |                              |   | 8 |   |
| Unamortized                  premium                                                                                                       |   |                           | 4       |                              |   | 5 |   |
| Total                  US Holdings                                                                                                         |   |                           | 222     |                              |   | 230 |   |
|                                                                                                                                       |   |                           |    |                              |   |   |   |
| TXU                  Corp.                                                                                                                 |   |                           |    |                              |   |   |   |
| 6.375%                  Fixed Senior Notes Series C due January 1, 2008 (e)                                                                |   |                           | 200     |                              |   | 200 |   |
| 4.800%                  Fixed Senior Notes Series O due November 15, 2009                                                                  |   |                           | 1,000   |                              |   | 1,000 |   |
| 5.550%                  Fixed Senior Notes Series P due November 15, 2014                                                                  |   |                           | 1,000   |                              |   | 1,000 |   |
| 6.500%                  Fixed Senior Notes Series Q due November 15, 2024                                                                  |   |                           | 750     |                              |   | 750 |   |
| 6.550%                  Fixed Senior Notes Series R due November 15, 2034                                                                  |   |                           | 750     |                              |   | 750 |   |
| 8.820%                  Building Financing due semiannually through February 11, 2022                  (h)                                 |   |                           | 93      |                              |   | 99 |   |
| 6.860%                  Floating Convertible Senior Notes due July 15, 2033 (c)                                                            |   |                           | 25      |                              |   | 25 |   |
| Fair                  value adjustments related to interest rate swaps                                                                     |   |                           | (73     | )                                 |   | (73 | ) |
| Unamortized                  discount                                                                                                      |   |                           | (8      | )                                 |   | (9 | ) |
| Total                  TXU Corp.                                                                                                           |   |                           | 3,737   |                              |   | 3,742 |   |
|                                                                                                                                       |   |                           |    |                              |   |   |   |
| Total                  TXU Corp. consolidated                                                                                              |   |                           | 12,880  |                              |   | 11,116 |   |
| Less                  amount due currently                                                                                                 |   |                           | (940    | )                                 |   | (485 | ) |
| Total                  long-term debt                                                                                                      |   | $                              | 11,940  |                              | $      | 10,631 |   |

| (a) | These                  series are in the multiannual interest rate mode and are subject                  to                  mandatory tender prior to maturity on the mandatory remarketing                  date. On                  such date, the interest rate and interest rate period will be reset                  for                  the bonds.                                                                                                                            |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Interest                  rates in effect at March 31, 2007. These series are in a weekly                  interest                  rate mode and are classified as long-term as they are supported                  by                  long-term irrevocable letters of credit.                                                                                                                                                                                                      |
| (c) | Interest                  rates in effect at March 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (d) | These                  series are in a weekly interest rate mode and are subject to mandatory                  tender prior to maturity on the mandatory remarketing date. On                  such date,                  the interest rate period will be reset for the bonds. These series                  were                  redeemed on May 8, 2007 as a result of the suspension of development                  of                  eight coal-fueled generation facilities. |
| (e) | Interest                  rates swapped to variable on entire principal amount at March 31,                  2007.                                                                                                                                                                                                                                                                                                                                                                      |
| (f) | Interest                  rates in effect at March 31, 2007. These series are subject to                  mandatory                  redemption upon a change in control of TXU Corp., including the                  Proposed                  Merger and are subject to optional redemption on or after September                  16,                  2007.                                                                                                                         |
| (g) | These                  bonds are nonrecourse to Oncor Electric Delivery and were issued                  to securitize a regulatory asset.                                                                                                                                                                                                                                                                                                                                         |
| (h) | This                  financing is also guaranteed by TXU Energy                  Company.                                                                                                                                                                                                                                                                                                                                                                                              |

----

***Debt-related        Activity in 2007***

***Fair        Value Hedges***
*** ***

***Long-term        debt fair value adjustments***

|                                                                                                                                                                                               |   | **Three                  Months Ended****March                  31, 2007** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|
| Long-term                  debt fair value adjustments related to interest rate swaps atbeginning                  of period ― net reduction in debt carrying value                          |   | $                                                                          | (63    | ) |
| Recognition                  of net gains on settled fair value hedges (a)                                                                                                                    |   |                                                                       | (1     | ) |
| Recognition                  of net losses on dedesignated fair value hedges (b)                                                                                                                   |   |                                                                       | 2      |   |
| Long-term                  debt fair value adjustments at end of period ― net reduction in                  debt                  carrying value (net out-of-the-money value of swaps)  |   | $                                                                          | (62    | ) |

| (a) | Net                  value of settled in-the-money fixed-to-variable swaps recognized                  in net                  income when the hedged transactions are recognized. Amount                  is pretax.          |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Net                  value of dedesignated out-of-the money fixed-to-variable swaps                  recognized                  in net income when the hedged transactions are recognized. Amount                  is pretax. |

----

**9.**
**COMMITMENTS        AND CONTINGENCIES**

***Generation        Development Program***

***Litigation***

----

----

----

***Regulatory        Investigations***

***Other        Proceedings***

----

***Guarantees***

***Overview        —***

***Disposed        TXU Gas operations***
*—        *

* *

***Residual        value guarantees in operating leases***
** **

***Indebtedness        guarantee***
*—        *
* *
* *

----

***Letters        of Credit***

***Security        Interest***

----

**10.**
**SHAREHOLDERS’        EQUITY**

***Declaration        of Dividend***

***Dividend        Restrictions***

***Common        Stock Repurchase***

***Shareholders’        Equity***

|                                                                            |   | **Common                  Stock** |    | **Additional                  Paid-in Capital** |   | **Retained                  Earnings (Deficit)** |   | **Accumulated                  Other Comprehensive Income (Loss)** |    | **Total                  Shareholders’ Equity** |   |
|---------------------------------------------------------------------------------|--------|-----------------------------------|---------|-------------------------------------------------|--------|--------------------------------------------------|--------|--------------------------------------------------------------------|---------|-------------------------------------------------------|--------|
|                                                                            |   |                              |    |                                            |   |                                             |   |                                                               |    |                                                  |   |
| Balance                  at December 31, 2006                              |   | $                                 | 5       |                                            | $      | 1,104                                            |   | $                                                                  | 622     |                                                  | $      | 409 |   | $ | 2,140 |   |
| Net                  effects of cash flow hedges                                |   |                              | ─ |                                            |   | ─                                          |   |                                                               | ─ |                                                  |   | (390 | ) |   | (390 | ) |
| Reclassification                  of pension and other retirement benefit costs |   |                              | ─ |                                            |   | ─                                          |   |                                                               | ─ |                                                  |   | 4 |   |   | 4 |   |
| Dividends                                                                       |   |                              | ─ |                                            |   | ─                                          |   |                                                               | (199    | )                                                     |   | ─ |   |   | (199 | ) |
| Net                  loss                                                       |   |                              | ─ |                                            |   | ─                                          |   |                                                               | (497    | )                                                     |   | ─ |   |   | (497 | ) |
| Effect                  of adoption of FIN 48                                   |   |                              | ─ |                                            |   | ─                                          |   |                                                               | 33      |                                                  |   | ─ |   |   | 33 |   |
| Effects                  of stock-based incentive compensation plans            |   |                              | ─ |                                            |   | 8                                                |   |                                                               | ─ |                                                  |   | ─ |   |   | 8 |   |
| Cost                  of Thrift Plan shares issued by LESOP trustee             |   |                              | ─ |                                            |   | 3                                                |   |                                                               | ─ |                                                  |   | ─ |   |   | 3 |   |
| Effects                  of executive deferred compensation plan                |   |                              | ─ |                                            |   | 1                                                |   |                                                               | ─ |                                                  |   | ─ |   |   | 1 |   |
| Other                                                                           |   |                              | ─ |                                            |   | ─                                          |   |                                                               | 1       |                                                  |   | ─ |   |   | 1 |   |
| Balance                  at March 31, 2007                                 |   | $                                 | 5       |                                            | $      | 1,116                                            |   | $                                                                  | (40     | )                                                     | $      | 23 |   | $ | 1,104 |   |

----

**11.**
**COMMODITY        AND OTHER DERIVATIVE CONTRACTUAL ASSETS AND LIABILITIES**

|                                            |   | **March                  31, 2007** |   |
|-------------------------------------------------|--------|-------------------------------------|--------|
|                                            |   | **Commodity**                       |   | **Cash                  flow hedges** |   | **Netting** |   |   |   |
|                                            |   | **contracts**                       |   | **and                  other derivatives** |   | **adjustments                  (a)** |   | **Total** |   |
|                                            |   |                                |   |   |   |   |   |   |   |
| Assets:                                         |   |                                |   |   |   |   |   |   |   |
| Current                  assets                 |   | $                                   | 282    |   | $ | 349 |   | $ | (285 | ) | $ | 346 |   |
| Noncurrent                  assets              |   |                                | 138    |   |   | 174 |   |   | (69 | ) |   | 243 |   |
| Total                                      |   | $                                   | 420    |   | $ | 523 |   | $ | (354 | ) | $ | 589 |   |
|                                            |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Current                  liabilities            |   | $                                   | 634    |   | $ | 39 |   | $ | (285 | ) | $ | 388 |   |
| Noncurrent                  liabilities         |   |                                | 501    |   |   | 149 |   |   | (69 | ) |   | 581 |   |
| Total                                      |   | $                                   | 1,135  |   | $ | 188 |   | $ | (354 | ) | $ | 969 |   |
|                                            |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Net                  assets (liabilities)  |   | $                                   | (715   | ) | $ | 335 |   | $ | ─ |   | $ | (380 | ) |
|                                            |   |                                |

|                                            |   |                                         |
|-------------------------------------------------|--------|----------------------------------------------|
|                                                 |   | **December                  31, 2006**  |
|                                            |   |                                         | **Commodity**  |   |   | **Cash                  flow hedges** |   |   | **Netting** |   |   |   |   |
|                                            |   |                                         | **contracts**  |   |   | **and                  other derivatives** |   |   | **adjustments                  (a)** |   |   | **Total** |   |
|                                            |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Assets:                                         |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Current                  assets                 |   | $                                            | 276 |   | $ | 698 |   | $ | (24 | ) | $ | 950 |   |
| Noncurrent                  assets              |   |                                         | 162 |   |   | 248 |   |   | (65 | ) |   | 345 |   |
| Total                                      |   | $                                            | 438 |   | $ | 946 |   | $ | (89 | ) | $ | 1,295 |   |
|                                            |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Current                  liabilities            |   | $                                            | 278 |   | $ | 39 |   | $ | (24 | ) | $ | 293 |   |
| Noncurrent                  liabilities         |   |                                         | 183 |   |   | 73 |   |   | (65 | ) |   | 191 |   |
| Total                                      |   | $                                            | 461 |   | $ | 112 |   | $ | (89 | ) | $ | 484 |   |
|                                            |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net                  assets (liabilities)  |   | $                                            | (23 | ) | $ | 834 |   | $ | ─ |   | $ | 811 |   |

|   | (a) | Represents                  the effects of netting assets and liabilities at the counterparty                  agreement level. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------|

***Commodity        Contract Assets and Liabilities***
* *

----

***Cash        Flow Hedge and Other Derivative Assets and Liabilities***
* *

|                                                 |   | **March                  31,** |   | **December                  31,** |   |
|------------------------------------------------------|--------|--------------------------------|--------|-----------------------------------|--------|
|                                                 |   | **2007**                       |   | **2006**                          |   |
|                                                 |   |                           |   |                              |   |
| Current                  and noncurrent assets:      |   |                           |   |                              |   |
| Commodity-related                  cash flow hedges  |   | $                              | 428    |                              | $      | 933 |   |
| Debt-related                  fair value hedges      |   |                           | 79     |                              |   | 4 |   |
| Other                                                |   |                           | 16     |                              |   | 9 |   |
| Total                                           |   | $                              | 523    |                              | $      | 946 |   |
|                                                 |   |                           |   |                              |   |   |   |
| Current                  and noncurrent liabilities: |   |                           |   |                              |   |   |   |
| Commodity-related                  cash flow hedges  |   | $                              | 24     |                              | $      | 23 |   |
| Debt-related                  fair value hedges      |   |                           | 164    |                              |   | 89 |   |
| Total                                           |   | $                              | 188    |                              | $      | 112 |   |

***Other        Cash Flow Hedge Information***
* *

----

**12**
**.**
**PENSION        AND OTHER POSTRETIREMENT EMPLOYEE BENEFITS (OPEB) COSTS**

|                                                                                       |   | **Three                  Months Ended March 31,** |   |
|--------------------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                                                                       |   |
|                                                                                       |   | **2007**                                          |   | **2006** |   |
| Components                  of net pension costs:                                          |   |                                              |   |   |   |
| Service                  cost                                                         |   | $                                                 | 11     |   | $ | 10 |   |
| Interest                  cost                                                        |   |                                              | 35     |   |   | 34 |   |
| Expected                  return on assets                                            |   |                                              | (41    | ) |   | (37 | ) |
| Prior                  service cost                                                   |   |                                              | 1      |   |   | 1 |   |
| Net                  loss                                                             |   |                                              | 4      |   |   | 8 |   |
| Net                  pension cost                                                     |   |                                              | 10     |   |   | 16 |   |
| Components                  of net OPEB costs:                                             |   |                                              |   |   |   |   |   |
| Service                  cost                                                         |   |                                              | 2      |   |   | 3 |   |
| Interest                  cost                                                        |   |                                              | 13     |   |   | 15 |   |
| Expected                  return on assets                                            |   |                                              | (5     | ) |   | (5 | ) |
| Prior                  service cost                                                   |   |                                              | (1     | ) |   | (1 | ) |
| Net                  loss                                                             |   |                                              | 10     |   |   | 8 |   |
| Net                  OPEB costs                                                       |   |                                              | 19     |   |   | 20 |   |
|                                                                                       |   |                                              |   |   |   |   |   |
| Net                  pension and OPEB costs                                           |   |                                              | 29     |   |   | 36 |   |
| Less                  amounts deferred principally as a regulatory asset or property  |   |                                              | (12    | ) |   | (20 | ) |
| Net                  amounts recognized as expense                                    |   | $                                                 | 17     |   | $ | 16 |   |

|                                                              |   | **Pension                  Plan** |   | **OPEB                  Plan** |   |  **Total** |   |
|-------------------------------------------------------------------|--------|-----------------------------------|--------|--------------------------------|--------|-----------------|--------|
| Prior                  service cost                          |   | $                                 | 1      |                           | $      | (1              | )      | $ | ─ |   |
| Net                  loss                                    |   |                              | 4      |                           |   | 10              |   |   | 14 |   |
| Total                                                        |   |                              | 5      |                           |   | 9               |   |   | 14 |   |
| Less                  amounts related to a regulatory asset  |   |                              | (4     | )                              |   | (3              | )      |   | (7 | ) |
| Net                  amounts reclassified from OCI           |   | $                                 | 1      |                           | $      | 6               |   | $ | 7 |   |

----

**13.**
**SEGMENT        INFORMATION**

|                                                                 |   | **Three                  Months Ended** |    |
|----------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                                 |   | **March                  31,**          |    |
|                                                                 |   | **2007**                                |    | **2006** |   |
| Operating                  revenues:                                 |   |                                    |    |   |   |
| TXU                  Energy Holdings                            |   | $                                       | 1,316   |   | $ | 2,010 |   |
| Oncor                  Electric Delivery                        |   |                                    | 619     |   |   | 562 |   |
| Corporate                  and Other                            |   |                                    | 11      |   |   | 13 |   |
| Eliminations                                                    |   |                                    | (277    | ) |   | (281 | ) |
| Consolidated                                                         |   | $                                       | 1,669   |   | $ | 2,304 |   |
|                                                                 |   |                                    |    |   |   |   |   |
| Regulated                  revenues included in operating revenues:  |   |                                    |    |   |   |   |   |
| TXU                  Energy Holdings                            |   | $                                       | ─ |   | $ | ─ |   |
| Oncor                  Electric Delivery                        |   |                                    | 619     |   |   | 562 |   |
| Corporate                  and Other                            |   |                                    | ─ |   |   | ─ |   |
| Eliminations                                                    |   |                                    | (265    | ) |   | (267 | ) |
| Consolidated                                                         |   | $                                       | 354     |   | $ | 295 |   |
|                                                                 |   |                                    |    |   |   |   |   |
| Affiliated                  revenues included in operating revenues: |   |                                    |    |   |   |   |   |
| TXU                  Energy Holdings                            |   | $                                       | 1       |   | $ | 1 |   |
| Oncor                  Electric Delivery                        |   |                                    | 265     |   |   | 267 |   |
| Corporate                  and Other                            |   |                                    | 11      |   |   | 13 |   |
| Eliminations                                                    |   |                                    | (277    | ) |   | (281 | ) |
| Consolidated                                                         |   | $                                       | ─ |   | $ | ─ |   |
|                                                                 |   |                                    |    |   |   |   |   |
| Income                  (loss) from continuing operations:           |   |                                    |    |   |   |   |   |
| TXU                  Energy Holdings                            |   | $                                       | (471    | ) | $ | 520 |   |
| Oncor                  Electric Delivery                        |   |                                    | 86      |   |   | 65 |   |
| Corporate                  and Other                            |   |                                    | (112    | ) |   | (69 | ) |
| Consolidated                                                         |   | $                                       | (497    | ) | $ | 516 |   |

----

**14.**
**SUPPLEMENTARY        FINANCIAL INFORMATION**

***Regulated        Versus Unregulated Operations***

|                                                                                        |   | **Three                  Months Ended** |   |
|----------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                                   |   | **March                  31,**          |   |
|                                                                                   |   | **2007**                                |   | **2006** |   |
| Operating                  revenues:                                                   |   |                                    |   |   |   |
| Regulated                                                                         |   | $                                       | 619    |   | $ | 562 |   |
| Unregulated                                                                       |   |                                    | 1,327  |   |   | 2,023 |   |
| Intercompany                  sales eliminations - regulated                      |   |                                    | (265   | ) |   | (267 | ) |
| Intercompany                  sales eliminations - unregulated                    |   |                                    | (12    | ) |   | (14 | ) |
| Total                  operating revenues                                              |   |                                    | 1,669  |   |   | 2,304 |   |
| Costs                  and operating expenses:                                         |   |                                    |   |   |   |   |   |
| Fuel,                  purchased power costs and delivery fees - unregulated (a)  |   |                                    | 665    |   |   | 521 |   |
| Operating                  costs - regulated                                      |   |                                    | 196    |   |   | 192 |   |
| Operating                  costs - unregulated                                    |   |                                    | 148    |   |   | 152 |   |
| Depreciation                  and amortization - regulated                        |   |                                    | 119    |   |   | 113 |   |
| Depreciation                  and amortization - unregulated                      |   |                                    | 85     |   |   | 92 |   |
| Selling,                  general and administrative expenses - regulated         |   |                                    | 41     |   |   | 47 |   |
| Selling,                  general and administrative expenses - unregulated       |   |                                    | 178    |   |   | 145 |   |
| Franchise                  and revenue-based taxes - regulated                    |   |                                    | 61     |   |   | 59 |   |
| Franchise                  and revenue-based taxes - unregulated                  |   |                                    | 26     |   |   | 27 |   |
| Other                  income                                                     |   |                                    | (29    | ) |   | (14 | ) |
| Other                  deductions                                                 |   |                                    | 769    |   |   | (1 | ) |
| Interest                  income                                                  |   |                                    | (17    | ) |   | (9 | ) |
| Interest                  expense and related charges                             |   |                                    | 197    |   |   | 213 |   |
| Total                  costs and operating expenses                                    |   |                                    | 2,439  |   |   | 1,537 |   |
| Income                  (loss) from continuing operations before income taxes     |   | $                                       | (770   | ) | $ | 767 |   |

|   | (a) | Includes                  unregulated cost of fuel consumed of $232 million and $166 million                  for the                  three months ended March 31, 2007 and 2006, respectively. The balance                  represents energy purchased for resale and delivery fees net of                  intercompany eliminations. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Interest        Expense and Related Charges***

|                                                                                                           |   | **Three                  Months Ended** |   |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                                                           |   | **March                  31,**          |   |
|                                                                                                           |   | **2007**                                |   | **2006** |   |
|                                                                                                           |   |                                    |   |   |   |
| Interest                                                                                                  |   | $                                       | 215    |   | $ | 214 |   |
| Amortization                  of debt discounts, premiums and issuance costs                              |   |                                    | 4      |   |   | 4 |   |
| Capitalized                  interest, including debt portion of allowance for borrowed                  funds |   |                                    |   |   |   |   |   |
| used                  during construction                                                                 |   |                                    | (22    | ) |   | (5 | ) |
| Total                  interest expense and related charges                                               |   | $                                       | 197    |   | $ | 213 |   |

***Restricted        Cash***

|                                                                                               |   | **Balance                  Sheet Classification** |    |
|----------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|---------|
|                                                                                               |   | **At                  March 31, 2007**            |    | **At                  December 31, 2006** |   |
|                                                                                               |   | **Current****Assets**                             |    | **Noncurrent****Assets** |   | **Current                  Assets** |   | **Noncurrent****Assets** |   |
|                                                                                               |   |                                              |    |   |   |   |   |   |   |
| Pollution                  control revenue bond funds heldby                  trustee (See Note 8) |   | $                                                 | 143     |   | $ | 100 |   | $ | ─ |   | $ | 241 |   |
| Amounts                  related to securitization (transition) bonds                              |   |                                              | 60      |   |   | 17 |   |   | 55 |   |   | 17 |   |
| All                  other                                                                    |   |                                              | ─ |   |   | ─ |   |   | 3 |   |   | ─ |   |
| Total                  restricted cash                                                             |   | $                                                 | 203     |   | $ | 117 |   | $ | 58 |   | $ | 258 |   |

----

***Inventories        by Major Category***

|                                                                        |   | **March                  31,** |   | **December                  31,** |   |
|-----------------------------------------------------------------------------|--------|--------------------------------|--------|-----------------------------------|--------|
|                                                                        |   | **2007**                       |   | **2006**                          |   |
| Materials                  and supplies                                |   | $                              | 193    |                              | $      | 189 |   |
| Fuel                  stock                                            |   |                           | 92     |                              |   | 94 |   |
| Natural                  gas in storage                                |   |                           | 74     |                              |   | 75 |   |
| Environmental                  energy credits and emission allowances  |   |                           | 27     |                              |   | 25 |   |
| Total                  inventories                                          |   | $                              | 386    |                              | $      | 383 |   |

***Investments        ─***

|                                                                                                                    |   | **March                  31,** |   | **December                  31,** |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|-----------------------------------|--------|
|                                                                                                                    |   | **2007**                       |   | **2006**                          |   |
|                                                                                                                    |   |                           |   |                              |   |
| Nuclear                  decommissioning trust                                                                     |   | $                              | 455    |                              | $      | 447 |   |
| Assets                  related to employee benefit plans, principally employee savings                  programs  |   |                           | 202    |                              |   | 197 |   |
| Land                                                                                                               |   |                           | 36     |                              |   | 36 |   |
| Note                  receivable from Capgemini                                                                    |   |                           | 25     |                              |   | 25 |   |
| Investment                  in unconsolidated affiliates                                                           |   |                           | 3      |                              |   | 3 |   |
| Miscellaneous                  other                                                                               |   |                           | 5      |                              |   | 4 |   |
| Total                  investments                                                                                      |   | $                              | 726    |                              | $      | 712 |   |

***Property,        Plant and Equipment***
*** ***

***Asset        Retirement Obligations***

| Asset                  retirement liability at December 31, 2006  |   | $      | 585    |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|
| Additions:                                                             |   |   |   |   |
| Accretion                                                         |   |   | 9      |   |
| Reductions:                                                            |   |   |   |   |
| Mining                  reclamation cost adjustments              |   |   | (2     | )      |
| Mining                  reclamation payments                      |   |   | (5     | )      |
| Asset                  retirement liability at March 31, 2007     |   | $      | 587    |   |

----

***Intangible        Assets***

|                                                                                                                   |   | **As                  of March 31, 2007** |   | **As                  of December 31, 2006** |   |
|------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|----------------------------------------------|--------|
|                                                                                                                   |   | **Gross**                                 |   |                                         |   |   |   | **Gross** |   |   |   |   |   |
|                                                                                                                   |   | **Carrying**                              |   | **Accumulated**                              |   |   |   | **Carrying** |   | **Accumulated** |   |   |   |
|                                                                                                                   |   | **Amount**                                |   | **Amortization**                             |   | **Net** |   | **Amount** |   | **Amortization** |   | **Net** |   |
| Intangible                  assets subject to amortization included in property, plant                  and equipment: |   |                                      |   |                                         |   |   |   |   |   |   |   |   |   |
| Capitalized                  software placed in service                                                                |   | $                                         | 425    |                                         | $      | 345 |   | $ | 80 |   | $ | 423 |   | $ | 339 |   | $ | 84 |   |
| Land                  easements                                                                                        |   |                                      | 180    |                                         |   | 66 |   |   | 114 |   |   | 180 |   |   | 65 |   |   | 115 |   |
| Total                                                                                                                  |   | $                                         | 605    |                                         | $      | 411 |   | $ | 194 |   | $ | 603 |   | $ | 404 |   | $ | 199 |   |

| **Year** |   |   |   |
|----------|--------|--------|--------|
|     |   |   |   |
| 2007     |   | $      | 28     |   |
| 2008     |   |   | 26     |   |
| 2009     |   |   | 21     |   |
| 2010     |   |   | 10     |   |
| 2011     |   |   | 7      |   |

----

***Regulatory        Assets and Liabilities***
* *

|                                                                                        |   | **March                  31,****2007** |   | **December                  31,****2006** |   |
|---------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|-------------------------------------------|--------|
| **Regulatory                  assets**                                                      |   |                                   |   |                                      |   |
| Generation-related                  regulatory assets securitized by transition bonds  |   | $                                      | 1,281  |                                      | $      | 1,316 |   |
| Employee                  retirement costs                                             |   |                                   | 451    |                                      |   | 461 |   |
| Storm-related                  service recovery costs                                  |   |                                   | 137    |                                      |   | 138 |   |
| Securities                  reacquisition costs                                        |   |                                   | 110    |                                      |   | 112 |   |
| Recoverable                  deferred income taxes — net                         |   |                                   | 90     |                                      |   | 90 |   |
| Employee                  severance costs                                              |   |                                   | 44     |                                      |   | 44 |   |
| Total                  regulatory assets                                                    |   |                                   | 2,113  |                                      |   | 2,161 |   |
|                                                                                        |   |                                   |   |                                      |   |   |   |
| **Regulatory                  liabilities**                                                 |   |                                   |   |                                      |   |   |   |
| Investment                  tax credit and protected excess deferred taxes             |   |                                   | 62     |                                      |   | 63 |   |
| Over-collection                  of securitization (transition) bond revenues          |   |                                   | 36     |                                      |   | 34 |   |
| Nuclear                  decommissioning cost over-recovery                            |   |                                   | 15     |                                      |   | 17 |   |
| Other                  regulatory liabilities                                          |   |                                   | 21     |                                      |   | 19 |   |
| Total                  regulatory liabilities                                               |   |                                   | 134    |                                      |   | 133 |   |
|                                                                                        |   |                                   |   |                                      |   |   |   |
| **Net                  regulatory assets**                                             |   | $                                      | 1,979  |                                      | $      | 2,028 |   |

***Supplemental        Cash Flow Information***
* *

|                                                                        |   | **Three                  Months Ended** |   |
|-----------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                        |   | **March                  31,**          |   |
|                                                                        |   | **2007**                                |   | **2006** |   |
| Cash                  payments (receipts) related to continuing operations: |   |                                    |   |   |   |
| Interest                  (net of amounts capitalized)                 |   | $                                       | 157    |   | $ | 175 |   |
| Income                  taxes                                          |   | $                                       | 81     |   | $ | (9 | ) |
| Noncash                  investing and financing activities:                |   |                                    |   |   |   |   |   |
| Noncash                  construction expenditures                     |   | $                                       | 263    |   | $ | 62 |   |

----

**REPORT        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

----

**MANAGEMENT’S        DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF        OPERATIONS**

**Business**

**Operating        Segments**

**Recent        Developments**

***Proposed        Merger***

----

***Texas        Generation Facilities Development Program ─***
** **

***Nuclear        Generation Development***

***Integrated        Gasification Combined Cycle (IGCC) Demonstration Plants***

----

***Utility        Services Joint Venture***

***Long-term        Hedging Program***

----

***Retail        Pricing***

|   | · | an                  additional 4% price reduction upon closing of the Proposed                  Merger; |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | protection                  against price increases due to changing energy market conditions                  for bills                  based on meter readings through September 30, 2008 (excluding increases                  in                  response to a change in law or regulatory                  charges); |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | protection                  against price increases above the rates prior to the 6% discount                  described                  above for bills based on meter readings ending between October                  1, 2008 and                  December 31, 2009 (excluding increases in response to a change                  in law or                  regulatory charges); and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | two                  remaining customer appreciation bonus payments of $25 each applied                  to                  customers' bills in May and August 2007, in addition to the $25                  payments                  made in each of November 2006 and February 2007 (for customers                  who were                  enrolled as of October 29,                  2006). |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**RESULTS        OF OPERATIONS**

**TXU        Corp. Consolidated**

***Three        Months Ended March 31, 2007 Compared to Three Months Ended March 31,        2006***

|   | · | Operating                    revenues in the TXU Energy Holdings segment decreased $694 million,                    or                    35%, to $1.3 billion. The decrease was driven by unrealized                    mark-to-market net losses of $697 million related to positions                    in the                    long-term hedging program. The losses reflected higher forward                    market                    prices of natural gas, with higher prices in all future periods                    of the                    hedges. Also, see discussion above under "Long-term Hedging                    Program". |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Operating                    revenues in the Oncor Electric Delivery segment increased $57                    million, or                    10%, to $619 million. The revenue increase reflected an 8% increase                    in                    delivered volumes driven by colder (more normal) weather and                    growth in                    points of delivery and higher transmission and distribution                    tariffs. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Gross        Margin*

|                                                           |   |
|----------------------------------------------------------------|--------|
|                                                           |   | **Three                  Months Ended March 31,** |   |
|                                                           |   | **2007** |   | **%                  of Revenue** |   | **2006** |   | **%                  of Revenue** |   |
|                                                           |   |   |   |   |   |   |   |   |   |
| Operating                  revenues                       |   | $ | 1,669 |   |   | 100 | % | $ | 2,304 |   |   | 100 | % |
| Costs                  and expenses:                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                  purchased power costs and delivery fees |   |   | 665 |   |   | 40 |   |   | 521 |   |   | 22 |   |
| Operating                  costs                               |   |   | 344 |   |   | 21 |   |   | 344 |   |   | 15 |   |
| Depreciation                  and amortization                 |   |   | 200 |   |   | 12 |   |   | 201 |   |   | 9 |   |
| Gross                  margin                             |   | $ | 460 |   |   | 27 | % | $ | 1,238 |   |   | 54 | % |

|   | · | The                    TXU Energy Holdings segment’s gross margin decreased $825 million, or 84%,                    to $157 million. The gross margin decrease reflected the mark-to-market                    net losses on positions in the long-term hedging program, as                    well as                    higher purchased power volumes due to a scheduled outage of a                    nuclear                    generation unit and lower production volumes at the lignite/coal-fueled                    generation plants. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                    Oncor Electric Delivery segment’s gross margin increased $47 million, or                    18%, to $304 million driven by the higher                    revenues. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Results                    in the TXU Energy Holdings segment decreased $991 million to                    a loss of                    $471 million driven by the decrease in gross margin and the charge                    related                    to the suspension of the development of eight lignite/coal-fueled                    generation units. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Earnings                    in the Oncor Electric Delivery segment increased $21 million,                    or 32%, to                    $86 million primarily driven by higher revenues from an increase                    in                    delivered volumes due to colder (more normal)                    weather. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Corporate                    and other net expenses totaled $112 million in 2007 and $69 million                    in                    2006. The amounts in 2007 and 2006 consist principally of recurring                    interest expense on outstanding debt and affiliate borrowings                    at the TXU                    Corp. parent, as well as corporate general and administrative                    expenses.                    The increase of $43 million primarily reflects the write-off                    of $20                    million after-tax in previously deferred costs related to anticipated                    strategic transactions (including expected financings) that are                    no longer                    expected to be completed as a result of the Proposed Merger,                    an $16                    million after-tax increase in net interest expense, primarily                    related to                    affiliate borrowings, and $9 million after-tax in financial advisory,                    legal and other professional fees incurred during the quarter                    directly                    related to the Proposed Merger. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Energy-Related        Commodity Contracts and Mark-to-Market Activities**

|                                                                                                          |   | **Three                  Months**   |   |
|---------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|--------|
|                                                                                                          |   | **Ended**                           |   |
|                                                                                                          |   | **March                  31, 2007** |   |
|                                                                                                          |   |                                |   |
| Net                  commodity contract liability at beginning of period                                      |   | $                                   | (23    | ) |
|                                                                                                          |   |                                |   |   |
| Settlements                  of positions included in the opening balance (1)                                 |   |                                | 24     |   |
|                                                                                                          |   |                                |   |   |
| Unrealized                  mark-to-market valuations of positions held at end of period                  (2) |   |                                | (887   | ) |
|                                                                                                          |   |                                |   |   |
| Other                  activity (3)                                                                           |   |                                | 171    |   |
|                                                                                                          |   |                                |   |   |
| Net                  commodity contract liability at end of period                                            |   | $                                   | (715   | ) |

|   | (1) | Represents                  reversals of unrealized mark-to-market valuations of these positions                  recognized in net income prior to the beginning of the period,                  to offset                  gains and losses realized upon settlement of the positions in the                  current                  period. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Includes                  mark-to-market effects of positions dedesignated as cash flow hedges                  (see                  discussion above under "Long-term Hedging Program"). Also includes                  $97                  million in losses recorded at contract inception dates (see Note                  11 to                  Financial Statements). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | These                  amounts have not been recognized in prior and current year mark-to-market                  earnings. Includes initial values of positions involving the receipt                  or                  payment of cash or other consideration such as option premiums                  paid and                  received. Activity in 2007 included payments of $71 million related                  to                  natural gas physical swap transactions and a $102 million premium                  paid in                  2007 related to a structured economic hedge transaction in the                  long-term                  hedging program. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                     |   | **Three                    Months Ended**March                    31, |   |
|------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|
|                                                                                     |   | **2007**                                                              |   | **2006** |   |
|                                                                                     |   |                                                                  |   |   |   |
| Unrealized                  gains/(losses) related to commodity contract positions  |   | $                                                                     | (863   | ) | $ | 6 |   |
|                                                                                     |   |                                                                  |   |   |   |   |   |
| Ineffectiveness                  gains/(losses) related to cash flow hedges (a)     |   |                                                                  | 99     |   |   | (1 | ) |
|                                                                                     |   |                                                                  |   |   |   |   |   |
| Total                  unrealized gains (losses) related to commodity contracts     |   | $                                                                     | (764   | ) | $ | 5 |   |

|   | (a) | See                  Note 11 to Financial Statements. |
|--------|-----|-------------------------------------------------------|

----

***Maturity        Table***

|                                                    |   | **Maturity                    dates of unrealized net commodity contract liabilities at March                    31,                    2007** |   |
|---------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **Source                    of fair value**        |   | **Less                    than****1                    year**                                                                                  |   | **1-3                    years** |   | **4-5                    years** |   | **Excess                    of****5                    years** |   | **Total** |   |
| Prices                    actively quoted          |   | $                                                                                                                                              | (34    | ) | $ | (142 | ) | $ | (83 | ) | $ | (22 | ) | $ | (281 | ) |
| Prices                    provided by other             |   |                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| external                    sources (a)                 |   |                                                                                                                                           | (79    | ) |   | (193 | ) |   | (178 | ) |   | (19 | ) |   | (469 | ) |
| Prices                    based on models          |   |                                                                                                                                           | (18    | ) |   | (22 | ) |   | ─ |   |   | ─ |   |   | (40 | ) |
| Total                                                   |   | $                                                                                                                                              | (131   | ) | $ | (357 | ) | $ | (261 | ) | $ | (41 | ) | $ | (790 | ) |
| Percentage                    of total fair value  |   |                                                                                                                                           | 17     | % |   | 45 | % |   | 33 | % |   | 5 | % |   | 100 | % |

----

**TXU        Energy Holdings Segment**

***Financial        Results***

|                                                           |   | **Three                  Months Ended** |   |
|----------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                           |   | **March                  31,**          |   |
|                                                           |   | **2007**                                |   | **2006** |   |
|                                                           |   |                                    |   |   |   |
| Operating                  revenues                       |   | $                                       | 1,316  |   | $ | 2,010 |   |
|                                                           |   |                                    |   |   |   |   |   |
| Costs                  and expenses:                           |   |                                    |   |   |   |   |   |
|                                                           |   |                                    |   |   |   |   |   |
| Fuel,                  purchased power costs and delivery fees |   |                                    | 931    |   |   | 790 |   |
|                                                           |   |                                    |   |   |   |   |   |
| Operating                  costs                               |   |                                    | 150    |   |   | 155 |   |
|                                                           |   |                                    |   |   |   |   |   |
| Depreciation                  and amortization                 |   |                                    | 79     |   |   | 84 |   |
|                                                           |   |                                    |   |   |   |   |   |
| Selling,                  general and administrative expenses  |   |                                    | 157    |   |   | 121 |   |
|                                                           |   |                                    |   |   |   |   |   |
| Franchise                  and revenue-based taxes             |   |                                    | 26     |   |   | 27 |   |
|                                                           |   |                                    |   |   |   |   |   |
| Other                  income                                  |   |                                    | (10    | ) |   | ─ |   |
|                                                           |   |                                    |   |   |   |   |   |
| Other                  deductions                              |   |                                    | 716    |   |   | (10 | ) |
|                                                           |   |                                    |   |   |   |   |   |
| Interest                  income                               |   |                                    | (77    | ) |   | (31 | ) |
|                                                           |   |                                    |   |   |   |   |   |
| Interest                  expense and related charges          |   |                                    | 89     |   |   | 101 |   |
|                                                           |   |                                    |   |   |   |   |   |
| Total                  costs and expenses                      |   |                                    | 2,061  |   |   | 1,237 |   |
|                                                           |   |                                    |   |   |   |   |   |
| Income                  (loss) before income taxes        |   |                                    | (745   | ) |   | 773 |   |
|                                                           |   |                                    |   |   |   |   |   |
| Income                  tax expense (benefit)             |   |                                    | (274   | ) |   | 253 |   |
|                                                           |   |                                    |   |   |   |   |   |
| Net                  income (loss)                        |   | $                                       | (471   | ) | $ | 520 |   |
|                                                           |   |                                    |   |   |   |   |   |

----

**TXU        Energy Holdings Segment**

***Sales        Volume Data***

|                                                                                                   |   | **Three                    Months Ended****March                    31,** |   |
|--------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
|                                                                                                   |   |
|                                                                                                   |   | **2007**                                                                  |   | **2006** |   | **Change                    %** |   |
|                                                                                                   |   |                                                                      |   |   |   |   |   |
| **Sales                    volumes:**                                                                  |   |                                                                      |   |   |   |   |   |
|                                                                                                   |   |                                                                      |   |   |   |   |   |
| Retail                    electricity sales volumes (GWh):                                             |   |                                                                      |   |   |   |   |   |
| Historical                    service territory:                                                       |   |                                                                      |   |   |   |   |   |
| Residential                                                                                       |   |                                                                      | 5,647  |   |   | 5,232 |   |   | 7.9 |   |
| Small                    business (a)                                                             |   |                                                                      | 1,643  |   |   | 1,727 |   |   | (4.9 | ) |
| Total                    historical service territory                                                  |   |                                                                      | 7,290  |   |   | 6,959 |   |   | 4.8 |   |
| Other                    territories:                                                                  |   |                                                                      |   |   |   |   |   |   |   |   |
| Residential                                                                                       |   |                                                                      | 738    |   |   | 611 |   |   | 20.8 |   |
| Small                    business (a)                                                             |   |                                                                      | 164    |   |   | 132 |   |   | 24.2 |   |
| Total                    other territories                                                             |   |                                                                      | 902    |   |   | 743 |   |   | 21.4 |   |
| Large                    business and other customers                                             |   |                                                                      | 3,390  |   |   | 3,233 |   |   | 4.9 |   |
| Total                    retail electricity                                                            |   |                                                                      | 11,582 |   |   | 10,935 |   |   | 5.9 |   |
| Wholesale                    electricity sales volumes                                            |   |                                                                      | 8,514  |   |   | 7,854 |   |   | 8.4 |   |
| Net                    sales of balancing electricity to ERCOT                                    |   |                                                                      | 324    |   |   | 1,431 |   |   | (77.4 | ) |
| Total                    sales volumes                                                                 |   |                                                                      | 20,420 |   |   | 20,220 |   |   | 1.0 |   |
|                                                                                                   |   |                                                                      |   |   |   |   |   |   |   |   |
| **Average                    volume (kWh) per retail customer (b):**                                   |   |                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                   |   |                                                                      |   |   |   |   |   |   |   |   |
| Residential                                                                                       |   |                                                                      | 3,427  |   |   | 2,959 |   |   | 15.8 |   |
| Small                    business                                                                 |   |                                                                      | 6,836  |   |   | 6,528 |   |   | 4.7 |   |
| Large                    business and other customers                                             |   |                                                                      | 84,333 |   |   | 60,718 |   |   | 38.9 |   |
|                                                                                                   |   |                                                                      |   |   |   |   |   |   |   |   |
| **Weather                    (service territory average) - percent of normal                    (c):** |   |                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                   |   |                                                                      |   |   |   |   |   |   |   |   |
| Percent                    of normal:                                                                  |   |                                                                      |   |   |   |   |   |   |   |   |
| Heating                    degree days                                                                 |   |                                                                      | 102.2  | % |   | 75.1 | % |   |   |   |

|   | (a) | Customers                  with demand of less than 1 MW                  annually. |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (b) | Calculated                  using average number of customers for                  period. |
|--------|-----|--------------------------------------------------------------------------------------------|

|   | (c) | Weather                  data is obtained from Weatherbank, Inc., an independent company                  that                  collects and archives weather data from reporting stations of the                  National                  Oceanic and Atmospheric Administration (a federal agency under                  the US                  Department of Commerce). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**TXU        Energy Holdings Segment**

***Customer        Count Data***

|                                                                                                 |   | **March                  31,** |   |
|------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                                                 |   | **2007**                       |   | **2006** |   | **Change                  %** |   |
| **Customer                  counts:**                                                                |   |                           |   |   |   |   |   |
|                                                                                                 |   |                           |   |   |   |   |   |
| Retail                  electricity customers (end of period and in thousands)                  (a): |   |                           |   |   |   |   |   |
| Historical                  service territory:                                                       |   |                           |   |   |   |   |   |
| Residential                                                                                     |   |                           | 1,596  |   |   | 1,750 |   |   | (8.8 | ) |
| Small                  business (b)                                                             |   |                           | 252    |   |   | 274 |   |   | (8.0 | ) |
| Total                  historical service territory                                                  |   |                           | 1,848  |   |   | 2,024 |   |   | (8.7 | ) |
|                                                                                                 |   |                           |   |   |   |   |   |   |   |   |
| Other                  territories:                                                                  |   |                           |   |   |   |   |   |   |   |   |
| Residential                                                                                     |   |                           | 258    |   |   | 218 |   |   | 18.3 |   |
| Small                  business (b)                                                             |   |                           | 10     |   |   | 7 |   |   | 42.9 |   |
| Total                  other territories                                                             |   |                           | 268    |   |   | 225 |   |   | 19.1 |   |
|                                                                                                 |   |                           |   |   |   |   |   |   |   |   |
| All                  territories:                                                                    |   |                           |   |   |   |   |   |   |   |   |
| Residential                                                                                     |   |                           | 1,854  |   |   | 1,968 |   |   | (5.8 | ) |
| Small                  business (b)                                                             |   |                           | 262    |   |   | 281 |   |   | (6.8 | ) |
| Total                  all territories                                                               |   |                           | 2,116  |   |   | 2,249 |   |   | (5.9 | ) |
|                                                                                                 |   |                           |   |   |   |   |   |   |   |   |
| Large                  business and other customers                                             |   |                           | 37     |   |   | 52 |   |   | (28.8 | ) |
| Total                  retail electricity customers                                                  |   |                           | 2,153  |   |   | 2,301 |   |   | (6.4 | ) |

|   | (a) | Based                  on number of meters. |
|--------|-----|---------------------------------------------|

|   | (b) | Customers                  with demand of less than 1MW                  annually. |
|--------|-----|------------------------------------------------------------------------------------|

----

**TXU        Energy Holdings Segment**

***Revenue        and Market Share Data***

|                                                                                                           |   | **Three                  Months Ended****March                  31,** |   |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|
|                                                                                                           |   |
|                                                                                                           |   | **2007**                                                              |   | **2006** |   | **Change                  %** |   |
| **Operating                  revenues:**                                                                       |   |                                                                  |   |   |   |   |   |
| Retail                  electricity revenues:                                                                  |   |                                                                  |   |   |   |   |   |
| Historical                  service territory:                                                                 |   |                                                                  |   |   |   |   |   |
| Residential                                                                                               |   | $                                                                     | 784    |   | $ | 746 |   |   | 5.1 |   |
| Small                  business (a)                                                                       |   |                                                                  | 238    |   |   | 257 |   |   | (7.4 | ) |
| Total                  historical service territory                                                            |   |                                                                  | 1,022  |   |   | 1,003 |   |   | 1.9 |   |
|                                                                                                           |   |                                                                  |   |   |   |   |   |   |   |   |
| Other                  territories:                                                                            |   |                                                                  |   |   |   |   |   |   |   |   |
| Residential                                                                                               |   |                                                                  | 108    |   |   | 89 |   |   | 21.3 |   |
| Small                  business (a)                                                                       |   |                                                                  | 20     |   |   | 15 |   |   | 33.3 |   |
| Total                  other territories                                                                       |   |                                                                  | 128    |   |   | 104 |   |   | 23.1 |   |
|                                                                                                           |   |                                                                  |   |   |   |   |   |   |   |   |
| Large                  business and other customers                                                       |   |                                                                  | 314    |   |   | 316 |   |   | (0.6 | ) |
| Total                  retail electricity revenues                                                        |   |                                                                  | 1,464  |   |   | 1,423 |   |   | 2.9 |   |
| Wholesale                  electricity revenues                                                           |   |                                                                  | 447    |   |   | 476 |   |   | (6.1 | ) |
| Net                  sales of balancing electricity to ERCOT                                              |   |                                                                  | 9      |   |   | 58 |   |   | ─ |   |
| Net                  losses from risk management and trading activities                                   |   |                                                                  | (686   | ) |   | (44 | ) |   | ─ |   |
| Other                  operating revenues                                                                 |   |                                                                  | 82     |   |   | 97 |   |   | (15.5 | ) |
| Total                  operating revenues                                                                      |   | $                                                                     | 1,316  |   | $ | 2,010 |   |   | (34.5 | ) |
|                                                                                                           |   |                                                                  |   |   |   |   |   |   |   |   |
| **Risk                  management and trading activities:**                                                   |   |                                                                  |   |   |   |   |   |   |   |   |
| Realized                  net gains (losses) on settled positions (b)                                     |   | $                                                                     | 78     |   | $ | (48 | ) |   |   |   |
| Reversal                  of prior periods’ unrealized net losses on positions                           |   |                                                                  |   |   |   |   |   |   |   |   |
| settled                  in current period                                                                     |   |                                                                  | 8      |   |   | 36 |   |   |   |   |
| Other                  unrealized net losses, including cash flow hedge                  ineffectiveness  |   |                                                                  | (772   | ) |   | (32 | ) |   |   |   |
| Total                  net losses                                                                              |   | $                                                                     | (686   | ) | $ | (44 | ) |   |   |   |
|                                                                                                           |   |                                                                  |   |   |   |   |   |   |   |   |
| **Average                  revenues per MWh:**                                                                 |   |                                                                  |   |   |   |   |   |   |   |   |
| Residential                                                                                               |   | $                                                                     | 139.63 |   | $ | 142.71 |   |   | (2.2 | ) |
|                                                                                                           |   |                                                                  |   |   |   |   |   |   |   |   |
| **Estimated                  share of ERCOT retail markets (c):**                                              |   |                                                                  |   |   |   |   |   |   |   |   |
| Historical                  service territory:                                                                 |   |                                                                  |   |   |   |   |   |   |   |   |
| Residential                                                                                               |   |                                                                  | 64     | % |   | 71 | % |   |   |   |
| Small                  business                                                                           |   |                                                                  | 63     | % |   | 69 | % |   |   |   |
| Total                  ERCOT:                                                                                  |   |                                                                  |   |   |   |   |   |   |   |   |
| Residential                                                                                               |   |                                                                  | 36     | % |   | 39 | % |   |   |   |
| Small                  business                                                                           |   |                                                                  | 26     | % |   | 28 | % |   |   |   |
| Large                  business and other customers                                                       |   |                                                                  | 11     | % |   | 18 | % |   |   |   |

|   | (a) | Customers                  with demand of less than 1 MW                  annually. |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (b) | Includes                  physical commodity trading activity not subject to mark-to-market                  accounting of $1 million and $10 million in net losses in 2007                  and 2006,                  respectively. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Based                  on number of meters. Estimated market share is based on the number                  of                  customers that have choice. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**TXU        Energy Holdings Segment**

***Production,        Purchased Power and Delivery Cost Data***

|                                                                                                  |   | **Three                  Months Ended****March                  31,** |   |
|-------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|
|                                                                                                  |   |
|                                                                                                  |   | **2007**                                                              |   | **2006** |   | **Change                  %** |   |
|                                                                                                  |   |                                                                  |   |   |   |   |   |
| **Fuel,                  purchased power costs and delivery fees ($                  millions):**     |   |                                                                  |   |   |   |   |   |
| Nuclear                  fuel                                                                    |   | $                                                                     | 18     |   | $ | 21 |   |   | (14.3 | ) |
| Lignite/coal                                                                                     |   |                                                                  | 138    |   |   | 117 |   |   | 17.9 |   |
| Total                  baseload fuel                                                                  |   |                                                                  | 156    |   |   | 138 |   |   | 13.0 |   |
| Natural                  gas fuel and purchased power                                            |   |                                                                  | 384    |   |   | 268 |   |   | 43.3 |   |
| Other                  costs                                                                     |   |                                                                  | 74     |   |   | 71 |   |   | 4.2 |   |
| Fuel                  and purchased power costs                                                       |   |                                                                  | 614    |   |   | 477 |   |   | 28.7 |   |
| Delivery                  fees (a)                                                               |   |                                                                  | 317    |   |   | 313 |   |   | 1.3 |   |
| Total                                                                                                 |   | $                                                                     | 931    |   | $ | 790 |   |   | 17.8 |   |
|                                                                                                  |   |                                                                  |   |   |   |   |   |   |   |   |
| **Fuel                  and purchased power costs (which excludes generation                  plant** |   |                                                                  |   |   |   |   |   |   |   |   |
| **operating                  costs) per MWh:**                                                        |   |                                                                  |   |   |   |   |   |   |   |   |
| Nuclear                  fuel                                                                    |   | $                                                                     | 4.45   |   | $ | 4.22 |   |   | 5.5 |   |
| Lignite/coal                  (b)                                                                |   | $                                                                     | 15.09  |   | $ | 12.01 |   |   | 25.6 |   |
| Natural                  gas fuel and purchased power                                            |   | $                                                                     | 59.76  |   | $ | 59.35 |   |   | 0.7 |   |
|                                                                                                  |   |                                                                  |   |   |   |   |   |   |   |   |
| **Delivery                  fees per MWh**                                                       |   | $                                                                     | 26.97  |   | $ | 28.26 |   |   | (4.6 | ) |
|                                                                                                  |   |                                                                  |   |   |   |   |   |   |   |   |
| **Production                  and purchased power volumes (GWh):**                                    |   |                                                                  |   |   |   |   |   |   |   |   |
| Nuclear                                                                                          |   |                                                                  | 4,063  |   |   | 5,080 |   |   | (20.0 | ) |
| Lignite/coal                                                                                     |   |                                                                  | 9,986  |   |   | 10,874 |   |   | (8.2 | ) |
| Total                  baseload generation                                                            |   |                                                                  | 14,049 |   |   | 15,954 |   |   | (11.9 | ) |
| Natural                  gas fueled generation                                                   |   |                                                                  | 750    |   |   | 189 |   |   | ─ |   |
| Purchased                  power                                                                 |   |                                                                  | 5,669  |   |   | 4,326 |   |   | 31.0 |   |
| Total                  energy supply                                                                  |   |                                                                  | 20,468 |   |   | 20,469 |   |   | ─ |   |
| Less                  line loss and power imbalances                                             |   |                                                                  | 48     |   |   | 249 |   |   | (80.7 | ) |
| Net                  energy supply volumes                                                            |   |                                                                  | 20,420 |   |   | 20,220 |   |   | 1.0 |   |
|                                                                                                  |   |                                                                  |   |   |   |   |   |   |   |   |
| **Baseload                  capacity factors (%):**                                                   |   |                                                                  |   |   |   |   |   |   |   |   |
| Nuclear                                                                                          |   |                                                                  | 82.0   | % |   | 102.7 | % |   | (20.2 | ) |
| Lignite/coal                                                                                     |   |                                                                  | 87.2   | % |   | 90.4 | % |   | (3.5 | ) |
| Total                  baseload                                                                       |   |                                                                  | 85.7   | % |   | 93.9 | % |   | (8.7 | ) |

|   | (a) | Includes                  delivery fee charges from Oncor Electric Delivery that are eliminated                  in                  consolidation. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Includes                  depreciation and amortization of lignite mining assets, which is                  reported                  in the depreciation and amortization expense line item, but is                  part of                  overall fuel costs. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**TXU        Energy Holdings Segment**

***Three        Months Ended March 31, 2007 Compared to Three Months Ended March 31,        2006***

|                                                                          |   | **Three                  Months Ended March 31,** |   |           |   |
|-------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|----------------|--------|
|                                                                          |   |  **2007**                                    |   |  **2006** |   | **Increase****(Decrease)** |   |
| Retail                  electricity revenues                             |   | $                                                 | 1,464  |           | $      | 1,423 |   | $ | 41 |   |
| Wholesale                  electricity revenues                          |   |                                              | 447    |           |   | 476 |   |   | (29 | ) |
| Wholesale                  balancing activities                          |   |                                              | 9      |           |   | 58 |   |   | (49 | ) |
| Net                  losses from risk management and trading activities  |   |                                              | (686   | )              |   | (44 | ) |   | (642 | ) |
| Other                  operating revenues                                |   |                                              | 82     |           |   | 97 |   |   | (15 | ) |
| Total                  operating revenues                                     |   | $                                                 | 1,316  |           | $      | 2,010 |   | $ | (694 | ) |

|   | · | Higher                  retail volumes contributed $84 million to the revenue increase.                  Residential and small business volumes increased 6% reflecting                  colder                  (more normal) weather that largely drove a 16% increase in average                  consumption per residential customer, partially offset by the effects                  of a                  net loss of customers due to competitive activity. Large business                  market                  volumes increased 5% reflecting a change in customer                  mix. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  effect of higher volumes on revenues was partially offset by $43                  million                  in lower average pricing. Lower average retail pricing reflected                  new                  competitive product offerings and the effect of a six percent price                  discount effective with meter reads on March 27, 2007 to those                  residential customers in the historical service territory that                  have                  month-to-month service plans with a rate equivalent to the former                  price-to-beat rate. Average prices in the business markets decreased                  2% to                  5% reflecting a decline in natural gas                  prices. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Retail                  electricity customer counts at March 31, 2007 declined 6% from                  March 31,                  2006. Total residential and small business customer counts in the                  historical service territory declined 9% and in all combined territories                  declined 6%. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | $699                  million in unrealized mark-to-market net losses, which includes                  $744                  million in net losses on unsettled positions and $45 million in                  net gains                  that represent reversals of previously recorded unrealized net                  losses on                  positions settled in the current                  period; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $99                  million in unrealized cash flow hedge ineffectiveness net gains,                  which                  includes $114 million in net gains on unsettled positions and $15                  million                  in net losses that represent reversals of previously recorded unrealized                  net gains on positions settled in the current                  period; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $97                  million in unrealized "day one" losses (see Note 11 to Financial                  Statements); and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | $59                  million in realized net gains on positions accounted for as cash                  flow                  hedges to offset hedged electricity revenues recognized in the                  current                  period. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $35                  million in unrealized net losses on economic hedge                  positions; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | $36                  million in unrealized net losses on commodity trading                  positions; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | $11                  million in realized net losses on settlement of economic hedge                  positions                  that offset hedged electricity revenues recognized in the current                  period;                  and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $32                  million in realized net gains on settlement of commodity trading                  positions. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

----

*Gross        Margin*

|                                                           |   |
|----------------------------------------------------------------|--------|
|                                                           |   | **Three                  Months Ended March 31,** |   |
|                                                           |   | **2007** |   | **%                  of Revenue** |   | **2006** |   | **%                  of Revenue** |   |
|                                                           |   |   |   |   |   |   |   |   |   |
| Operating                  revenues                       |   | $ | 1,316 |   |   | 100 | % | $ | 2,010 |   |   | 100 | % |
| Costs                  and expenses:                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                  purchased power costs and delivery fees |   |   | 931 |   |   | 71 |   |   | 790 |   |   | 39 |   |
| Generation                  plant operating costs              |   |   | 150 |   |   | 11 |   |   | 155 |   |   | 8 |   |
| Depreciation                  and amortization                 |   |   | 78 |   |   | 6 |   |   | 83 |   |   | 4 |   |
| Gross                  margin                             |   | $ | 157 |   |   | 12 | % | $ | 982 |   |   | 49 | % |

|   | · | the                  effect of net unrealized mark-to-market losses on positions in                  the                  long-term hedging program (32 percentage point margin decrease);                  and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                  combined effect of decreased baseload generation production volumes                  and                  the increased need for purchased electricity volumes (five percentage                  point margin decrease). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $7                  million in lower employee-related expenses on reduced headcounts                  due in                  part to generation outsourcing services agreements entered into                  in May                  2006; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $5                  million in lower property taxes reflecting lower valuations;                  and |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | $3                  million in lower insurance costs primarily due to                  timing, |
|--------|--------|------------------------------------------------------------------------------------------------|

----

|   | · | $20                  million in costs associated with the generation development program,                  principally salaries and consulting                  expenses; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $6                  million in increased retail marketing                  expenses; |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | $6                  million in higher costs due to reallocation of Capgemini outsourcing                  fees;                  and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $6                  million in higher consulting charges primarily for retail billing                  systems                  enhancements, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

----

**Oncor        Electric Delivery Segment**

***Financial        Results***

|                                                          |   | **Three                  Months Ended** |   |
|---------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                          |   | **March                  31,**          |   |
|                                                          |   | **2007**                                |   | **2006** |   |
|                                                          |   |                                    |   |   |   |
| Operating                  revenues                      |   | $                                       | 619    |   | $ | 562 |   |
|                                                          |   |                                    |   |   |   |   |   |
| Costs                  and expenses:                          |   |                                    |   |   |   |   |   |
|                                                          |   |                                    |   |   |   |   |   |
| Operating                  costs                              |   |                                    | 196    |   |   | 192 |   |
|                                                          |   |                                    |   |   |   |   |   |
| Depreciation                  and amortization                |   |                                    | 119    |   |   | 113 |   |
|                                                          |   |                                    |   |   |   |   |   |
| Selling,                  general and administrative expenses |   |                                    | 43     |   |   | 48 |   |
|                                                          |   |                                    |   |   |   |   |   |
| Franchise                  and revenue-based taxes            |   |                                    | 61     |   |   | 59 |   |
|                                                          |   |                                    |   |   |   |   |   |
| Other                  income                                 |   |                                    | (2     | ) |   | ― |   |
|                                                          |   |                                    |   |   |   |   |   |
| Other                  deductions                             |   |                                    | 9      |   |   | 2 |   |
|                                                          |   |                                    |   |   |   |   |   |
| Interest                  income                              |   |                                    | (15    | ) |   | (14 | ) |
|                                                          |   |                                    |   |   |   |   |   |
| Interest                  expense and related charges         |   |                                    | 76     |   |   | 68 |   |
|                                                          |   |                                    |   |   |   |   |   |
| Total                  costs and expenses                     |   |                                    | 487    |   |   | 468 |   |
|                                                          |   |                                    |   |   |   |   |   |
| Income                  before income taxes                   |   |                                    | 132    |   |   | 94 |   |
|                                                          |   |                                    |   |   |   |   |   |
| Income                  tax expense                      |   |                                    | 46     |   |   | 29 |   |
|                                                          |   |                                    |   |   |   |   |   |
| Net                  income                              |   | $                                       | 86     |   | $ | 65 |   |
|                                                          |   |                                    |   |   |   |   |   |

----

**Oncor        Electric Delivery Segment**

***Operating        Data***

|                                                                                                   |   | **Three                  Months Ended March 31,** |   |     |   |
|--------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|----------|--------|
|                                                                                                   |   | **2007**                                          |   | **2006** |   | **%                  Change** |   |
| **Operating                  statistics - volumes:**                                                   |   |                                              |   |     |   |   |   |
| Electric                  energy delivered (GWh)                                                  |   |                                              | 24,994 |     |   | 23,131 |   |   | 8.1 |   |
|                                                                                                   |   |                                              |   |     |   |   |   |   |   |   |
| **Reliability                  statistics (a):**                                                       |   |                                              |   |     |   |   |   |   |   |   |
| System                  Average Interruption Duration Index (SAIDI) (nonstorm)                    |   |                                              | 74.70  |     |   | 79.32 |   |   | (5.8 | ) |
| System                  Average Interruption Frequency Index (SAIFI) (nonstorm)                   |   |                                              | 1.11   |     |   | 1.18 |   |   | (5.9 | ) |
| Customer                  Average Interruption Duration Index (CAIDI) (nonstorm)                  |   |                                              | 67.37  |     |   | 67.14 |   |   | 0.3 |   |
|                                                                                                   |   |                                              |   |     |   |   |   |   |   |   |
| **Electricity                  points of delivery (end of period and in                  thousands):** |   |                                              |   |     |   |   |   |   |   |   |
| Electricity                  distribution points of delivery (based on number of meters)(b)       |   |                                              | 3,067  |     |   | 3,025 |   |   | 1.4 |   |
|                                                                                                   |   |                                              |   |     |   |   |   |   |   |   |
| **Operating                  Revenues:**                                                               |   |                                              |   |     |   |   |   |   |   |   |
| Electricity                  distribution revenues (c):                                                |   |                                              |   |     |   |   |   |   |   |   |
| Affiliated                  (TXU Energy Company)                                                  |   | $                                                 | 264    |     | $      | 267 |   |   | (1.1 | ) |
| Nonaffiliated                                                                                     |   |                                              | 280    |     |   | 231 |   |   | 21.2 |   |
| Total                  distribution revenues                                                           |   |                                              | 544    |     |   | 498 |   |   | 9.2 |   |
| Third-party                  transmission revenues                                                |   |                                              | 61     |     |   | 57 |   |   | 7.0 |   |
| Other                  miscellaneous revenues                                                     |   |                                              | 14     |     |   | 7 |   |   | 100.0 |   |
| Total                  operating revenues                                                              |   | $                                                 | 619    |     | $      | 562 |   |   | 10.1 |   |

**__________________________**

|   | (a) | SAIDI                  is the average number of electric service outage minutes per customer                  in a                  year. SAIFI is the average number of electric service interruptions                  per                  customer in a year. CAIDI is the average duration in minutes of                  interruptions to electric service in a year. The statistics presented                  are                  based on the preceding twelve months’ data. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) | Includes                  lighting sites, primarily guard lights, for which TXU Energy Company                  is                  the REP but are not included in TXU Energy Company’s customer count. Such                  sites totaled 81,449 and 85,477 at March 31, 2007 and 2006,                  respectively.                                                                                                                                                              |
|   | (c) | Includes                  transition charge revenue associated with the issuance of securitization                  bonds totaling $37 million and $36 million for the three months                  ended                  March 31, 2007 and 2006, respectively. Also includes disconnect/reconnect                  fees and other discretionary revenues for services requested by                  REPs.                                                                                |

----

**Oncor        Electric Delivery Segment**

***Three        Months Ended March 31, 2007 Compared to Three Months Ended March 31,        2006***

|   | · | an                  estimated $32 million in higher revenues due to increased delivered                  volumes primarily reflecting the effects of colder (more normal)                  weather; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $6                  million from increased distribution tariffs to recover higher transmission                  costs; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | $6                  million due to growth in points of                  delivery; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | $6                  million for installation services related to equipment to support                  the                  broadband-over-power-lines                  initiative; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $4                  million in higher transmission revenues primarily due to rate increases                  approved in 2006 to recover ongoing investment in the transmission                  system;                  and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $1                  million in higher securitization transition revenues (offset by                  higher                  amortization of the related regulatory asset). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Gross        Margin*

|                                           |   |
|------------------------------------------------|--------|
|                                           |   | **Three                    Months Ended March                    31,** |   |
|                                           |   | **2007** |   | **%                  of Revenue** |   | **2006** |   | **%                  of Revenue** |   |
|                                           |   |   |   |   |   |   |   |   |   |
| Operating                  revenues       |   | $ | 619 |   |   | 100 | % | $ | 562 |   |   | 100 | % |
| Costs                  and expenses:           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  costs               |   |   | 196 |   |   | 32 |   |   | 192 |   |   | 34 |   |
| Depreciation                  and amortization |   |   | 119 |   |   | 19 |   |   | 113 |   |   | 20 |   |
| Gross                  margin             |   | $ | 304 |   |   | 49 | % | $ | 257 |   |   | 46 | % |

----

|   | · | $6                  million in costs as a result of the 2006 cities rate                  settlement; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | $1                  million in transition costs related to the InfrastruX Energy Services                  joint venture; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | $1                  million in equity losses (representing amortization expense) related                  to                  the ownership interest in the TXU Corp. subsidiary holding the                  capitalized                  software licensed to Capgemini; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $1                  million of litigation-related                  charges. |
|--------|--------|-----------------------------------------------------------------------------|

----

**COMPREHENSIVE        INCOME - Continuing Operations**

|                                                                                                                                                         |   |                                                                   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|
|                                                                                                                                                         |   | **Three                    Months Ended March                    31,** |   |
|                                                                                                                                                         |   | **2007**                                                               |   | **2006** |   |
|                                                                                                                                                         |   |                                                                   |   |   |   |
| Net                    increase (decrease) in fair value of cash flow hedges (all                    commodity-related) held at end of period           |   | $                                                                      | (316   | ) | $ | 113 |   |
| Derivative                  value net losses (gains) reported in net income that relate to                  hedged                                           |   |                                                                   |   |   |   |   |   |
| transactions                  recognized in the period:                                                                                                      |   |                                                                   |   |   |   |   |   |
| Commodities                                                                                                                                             |   |                                                                   | (76    | ) |   | (3 | ) |
| Financing                  - interest rate swaps (a)                                                                                                    |   |                                                                   | 2      |   |   | 2 |   |
|                                                                                                                                                         |   |                                                                   | (74    | ) |   | (1 | ) |
|                                                                                                                                                         |   |                                                                   |   |   |   |   |   |
| Total                    income (loss) effect of cash flow hedges reported in other comprehensive                    income from continuing operations  |   | $                                                                      | (390   | ) | $ | 112 |   |

| (a) | Represents                  recognition of net losses on settled                  swaps. |
|-----|------------------------------------------------------------------------------------------|

----

**FINANCIAL        CONDITION**

***LIQUIDITY        AND CAPITAL RESOURCES***

***Cash          Flows —***

|   | · | an unfavorable change of $778 million in net margin                deposits due to the effect of higher forward natural gas prices on                hedge                positions; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | a                  $102 million premium paid in 2007 related to a structured natural                  gas                  related option transaction entered into as part of the long-term                  hedging                  program (see Note 11 to Financial Statements);                  and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an                  unfavorable change in working capital (accounts receivable, accounts                  payable and inventories) balances of $84                  million. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                           |   | **Three                  Months Ended March 31,** |    |
|--------------------------------------------------------------------------------|--------|---------------------------------------------------|---------|
|                                                                           |   | **2007**                                          |    | **2006** |   |
| Net                  repayments, repurchases and issuances of borrowings  |   | $                                                 | 1,569   |   | $ | 139 |   |
| Net                  repurchases and issuances of common stock            |   |                                              | ─ |   |   | (506 | ) |
| Common                  stock dividends paid                              |   |                                              | (198    | ) |   | (194 | ) |
| Total                                                                          |   | $                                                 | 1,371   |   | $ | (561 | ) |

|                                                                                        |   | **Three                  Months Ended March 31,** |    |
|---------------------------------------------------------------------------------------------|--------|---------------------------------------------------|---------|
|                                                                                        |   | **2007**                                          |    | **2006** |   |
|                                                                                        |   |                                              |    |   |   |
| Capital                  expenditures, including nuclear fuel                     |   | $                                                 | (836    | ) | $ | (323 | ) |
| Purchase                  of lease trust                                               |   |                                              | ─ |   |   | (69 | ) |
| Proceeds                  from pollution control revenue bonds deposited with trustee  |   |                                              | ─ |   |   | (99 | ) |
| Net                  investments in nuclear decommissioning trust fund securities      |   |                                              | (4      | ) |   | (4 | ) |
| Property                  removal costs                                                |   |                                              | (8      | ) |   | (12 | ) |
| Other                                                                                  |   |                                              | (2      | ) |   | 3 |   |
| Total                                                                                       |   | $                                                 | (850    | ) | $ | (504 | ) |

----

***Long-term        Debt Activity***
*—*
*** ***

|                                        |   |   **Issuances** |    | **Repayments                  and**** ****Repurchases** |   |
|---------------------------------------------|--------|---------------------------|---------|--------------------------------------------------------------|--------|
| TXU                  Corp.:                 |   |                      |    |                                                         |   |
| Other                  long-term debt       |   | $                         | ― |                                                         | $      | (6 | ) |
|                                        |   |                      |    |                                                         |   |   |   |
| TXU                  Energy Company:        |   |                      |    |                                                         |   |   |   |
| Floating                  rate senior notes |   |                      | 1,000   |                                                         |   | ― |   |
| Other                  long-term debt       |   |                      | ― |                                                         |   | (3 | ) |
|                                        |   |                      |    |                                                         |   |   |   |
| Oncor                  Electric Delivery:   |   |                      |    |                                                         |   |   |   |
| Floating                  rate senior notes |   |                      | 800     |                                                         |   | ― |   |
| Transition                  bonds           |   |                      | ― |                                                         |   | (21 | ) |
|                                        |   |                      |    |                                                         |   |   |   |
| US                  Holdings           |   |                      | ― |                                                         |   | (7 | ) |
|                                        |   |                      |    |                                                         |   |   |   |
| Total                                       |   | $                         | 1,800   |                                                         | $      | (37 | ) |

***Credit        Facilities/Commercial Paper***
*—*

***Short-term        Borrowings***
*—*
*** ***

***Pension        Plan Funding***
*—*
*** ***

***Income        Tax Payments***
*—*
*** ***

----

***Declaration        of Dividend***

***Common        Stock Repurchases***
*—        *

***Sales        of Accounts Receivable***

***Liquidity        Effects of Risk Management and Trading Activities***
** **

|   | · | $46                  million in cash has been received as of March 31, 2007 related                  to daily                  margin settled transactions primarily associated with positions                  in the                  long-term hedging program, as compared to $672 million received                  as of                  December 31, 2006; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $9                  million in cash has been received from counterparties as collateral                  as of                  both March 31, 2007 and December 31,                  2006; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $190                  million in cash has been posted with counterparties as collateral                  as of                  March 31, 2007, as compared to $7 million posted as of December                  31, 2006;                  and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $483                  million in letters of credit have been posted with counterparties                  as                  collateral as compared to $455 million posted as of December 31,                  2006. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***Financial        Covenants, Credit Rating Provisions and Cross Default        Provisions***

*Financial          Covenants*

*Credit        Ratings*

|          |   |                                |   |                                |   |                                     |   |                                |   |
|---------------|--------|-------------------------------------|--------|-------------------------------------|--------|------------------------------------------|--------|-------------------------------------|--------|
|          |   | TXU                  Corp.          |   | US                  Holdings        |   | Oncor                  Electric Delivery |   | TXU                  Energy Company |   |
|          |   | (Senior                  Unsecured) |   | (Senior                  Unsecured) |   | (Senior                  Unsecured)      |   | (Senior                  Unsecured) |   |
| S&P       |   |                                | BB-    |                                |   | BB-                                      |   |                                | BBB-   |   |   | BB |   |
| Moody’s |   |                                | Ba1    |                                |   | Baa3                                     |   |                                | Baa2   |   |   | Baa2 |   |
| Fitch         |   |                                | BB+    |                                |   | BB+                                      |   |                                | BBB    |   |   | BBB- |   |

----

*Material        Credit Rating Covenants*

----

*Material        Cross Default Provisions*

----

** **

***Guarantees***
* *
***—***
** **

**OFF        BALANCE SHEET ARRANGEMENTS**

*.*

**COMMITMENTS        AND CONTINGENCIES**

**CHANGES        IN ACCOUNTING STANDARDS**

----

**REGULATION        AND RATES**

***Regulatory        Investigations***

***2007        Texas Legislative Session***

***Report        Filed with the Commission Regarding Proposed Merger***

----

***Commission        Request for Oncor Electric Delivery Rate Filing***

***Commission        Review of InfrastruX Energy Services Joint Venture***

***Transmission        Rates***

***Summary***

----

**QUANTITATIVE        AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

***RISK        OVERSIGHT***

***COMMODITY        PRICE RISK***

----

***Long-term        Hedging Program***
** **

***VaR        Methodology***

***Trading        VaR***

|                                            |   | **Three                  Months Ended** |   | **Year                  Ended**        |   |
|-------------------------------------------------|--------|-----------------------------------------|--------|----------------------------------------|--------|
|                                            |   | **March                  31, 2007**     |   | **December                  31, 2006** |   |
| Month-end                  average Trading VaR: |   | $                                       | 9      |                                   | $      | 12 |   |
| Month-end                  high Trading VaR:    |   | $                                       | 11     |                                   | $      | 30 |   |
| Month-end                  low Trading VaR:     |   | $                                       | 7      |                                   | $      | 5 |   |

***VaR        for Energy-Related Contracts Subject to Mark-to-Market (MtM)        Accounting***

|                                        |   | **Three                  Months Ended** |   | **Year                  Ended**        |   |
|---------------------------------------------|--------|-----------------------------------------|--------|----------------------------------------|--------|
|                                        |   | **March                  31, 2007**     |   | **December                  31, 2006** |   |
| Month-end                  average MtM VaR: |   | $                                       | 521    |                                   | $      | 149 |   |
| Month-end                  high MtM VaR:    |   | $                                       | 757    |                                   | $      | 391 |   |
| Month-end                  low MtM VaR:     |   | $                                       | 322    |                                   | $      | 5 |   |

***Earnings        at Risk (EaR)***

|                                    |   | **Three                  Months Ended** |   | **Year                  Ended**        |   |
|-----------------------------------------|--------|-----------------------------------------|--------|----------------------------------------|--------|
|                                    |   | **March                  31, 2007**     |   | **December                  31, 2006** |   |
| Month-end                  average EaR: |   | $                                       | 518    |                                   | $      | 156 |   |
| Month-end                  high EaR:    |   | $                                       | 747    |                                   | $      | 387 |   |
| Month-end                  low EaR:     |   | $                                       | 318    |                                   | $      | 21 |   |

----

***CREDIT        RISK***

***Credit        Risk***
** **

***Credit        Exposure***

----

|                                       |   |                                                   |   |                                   |   |                                    |   | **Net                  Exposure by**** ****Maturity** |   |
|--------------------------------------------|--------|--------------------------------------------------------|--------|----------------------------------------|--------|-----------------------------------------|--------|------------------------------------------------------------|--------|
|                                       |   | **Exposure                  before Credit Collateral** |   | **Credit                  Collateral** |   |  **Net                  Exposure** |   | **2                  years or less**                       |   | **Between****2-5                  years** |   | **Greater                  than 5 years** |   | **Total** |   |
|                                       |   |                                                   |   |                                   |   |                                    |   |                                                       |   |   |   |   |   |   |   |
| Investment                  grade     |   | $                                                      | 1,074  |                                   | $      | 45                                      |   | $                                                          | 1,029  |   | $ | 512 |   | $ | 267 |   | $ | 250 |   | $ | 1,029 |   |
| Noninvestment                  grade  |   |                                                   | 195    |                                   |   | 37                                      |   |                                                       | 158    |   |   | 91 |   |   | 26 |   |   | 41 |   |   | 158 |   |
| Totals                                     |   | $                                                      | 1,269  |                                   | $      | 82                                      |   | $                                                          | 1,187  |   | $ | 603 |   | $ | 293 |   | $ | 291 |   | $ | 1,187 |   |
|                                       |   |                                                   |   |                                   |   |                                    |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                  grade     |   |                                                   | 85     | %                                      |   | 55                                      | %      |                                                       | 87     | % |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninvestment                  grade  |   |                                                   | 15     | %                                      |   | 45                                      | %      |                                                       | 13     | % |   |   |   |   |   |   |   |   |   |   |   |   |

----

**FORWARD-LOOKING        STATEMENTS**

|   | · | prevailing                  governmental policies and regulatory actions, including those of                  the Texas                  Legislature, the Governor of Texas, the US Congress, FERC, the                  Commission,                  the RRC, the NRC, the EPA and the TCEQ, with respect                  to: |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | allowed                  prices; |
|--------|--------|----------------------------------|

|   | · | allowed                  rates of return; |
|--------|--------|-------------------------------------------|

|   | · | industry,                  market and rate structure; |
|--------|--------|-------------------------------------------------------|

|   | · | purchased                  power and recovery of investments; |
|--------|--------|---------------------------------------------------------------|

|   | · | operations                  of nuclear generating facilities; |
|--------|--------|---------------------------------------------------------------|

|   | · | acquisitions                  and disposal of assets and                  facilities; |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | development,                  construction and operation of                  facilities; |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | decommissioning                  costs; |
|--------|--------|-----------------------------------------|

|   | · | present                  or prospective wholesale and retail                  competition; |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | changes                  in tax laws and policies; and |
|--------|--------|--------------------------------------------------------|

|   | · | changes                  in and compliance with environmental and safety laws and policies,                  including climate change                  initiatives; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | continued                  implementation of the 1999 Restructuring                  Legislation; |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | legal                  and administrative proceedings and                  settlements; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | general                  industry trends; |
|--------|--------|-------------------------------------------|

|   | · | TXU                  Corp.’s ability to attract and retain profitable                  customers; |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | TXU                  Corp.’s ability to profitably serve its customers given the announced                  price protection and price cuts; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | restrictions                  on competitive retail pricing; |
|--------|--------|--------------------------------------------------------------|

|   | · | changes                  in wholesale electricity prices or energy commodity                  prices; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | unanticipated                  changes in market heat rates in the Texas electricity                  market; |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

|   | · | TXU                  Corp.’s ability to effectively hedge against changes in commodity prices                  and market heat rates; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | weather                  conditions and other natural phenomena, and acts of sabotage, wars                  or                  terrorist activities; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | unanticipated                  population growth or decline, and changes in market demand and                  demographic                  patterns; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes                  in business strategy, development plans or vendor                  relationships; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | access                  to adequate transmission facilities to meet changing                  demands; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | unanticipated                  changes in interest rates, commodity prices, rates of inflation                  or foreign                  exchange rates; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | unanticipated                  changes in operating expenses, liquidity needs and capital                  expenditures; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

----

|   | · | commercial                  bank market and capital market                  conditions; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | competition                  for new energy development and other business                  opportunities; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | inability                  of various counterparties to meet their obligations with respect                  to TXU                  Corp.’s financial instruments; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes                  in technology used by and services offered by TXU                  Corp.; |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | significant                  changes in TXU Corp.’s relationship with its employees, including the                  availability of qualified personnel, and the potential adverse                  effects if                  labor disputes or grievances were to                  occur; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes                  in assumptions used to estimate future executive compensation                  payments; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   | · | significant                  changes in critical accounting policies material to TXU Corp.; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | actions                  by credit rating agencies; |
|--------|--------|-----------------------------------------------------|

|   | · | the                  ability of TXU Corp. to implement cost reduction                  initiatives; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | with                  respect to TXU Corp.’s lignite/coal generation development program, more                  specifically, TXU Corp.’s ability to fund such investments, delays in the                  approval of, or failure to obtain, air and other environmental                  permits for                  the program and the ability to satisfactorily resolve issues relating                  to                  any appeal to the final judgement issued with respect to the Sandow                  consent decree, 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, the ability of TXU Corp. and its contractors to attract                  and                  retain, at projected rates, skilled labor for constructing the                  new                  generating units, changes in wholesale electricity prices or energy                  commodity prices, transmission capacity and constraints, supplier                  performance risk, changes in the cost and availability of materials                  necessary for the construction program and the ability of TXU Corp.                  to                  manage the significant construction program to a timely conclusion                  with                  limited cost overruns; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | with                  respect to the proposed merger: the                  occurrence of any event, change or other circumstances, including                  the                  enactment of any new applicable legislation, that could give rise                  to the                  termination of the Merger Agreement or the proposed merger; the                  outcome of                  any legal proceedings that may be instituted against TXU Corp.                  and others                  related to the Merger Agreement; failure to obtain shareholder                  approval or                  any other failure to satisfy other conditions required to complete                  the                  proposed merger, including required regulatory approvals; risks                  that the                  proposed transaction disrupts current plans and operations and                  the                  potential difficulties in employee retention as a result of the                  proposed                  merger; the amount of the costs, fees, expenses and charges related                  to the                  proposed merger and the execution of certain financings that will                  be                  obtained to consummate the proposed merger; and the impact of the                  substantial indebtedness incurred to finance the consummation of                  the                  proposed merger. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item        4. CONTROLS AND PROCEDURES.**

----

**PART        II. OTHER INFORMATION**

**Item        1. LEGAL PROCEEDINGS.**

**Item        1A. RISK FACTORS.**

***Risks        Relating to TXU Corp.’s Businesses***

**TXU        Corp.’s businesses are subject to ongoing complex governmental regulations and        legislation that have impacted, and may in the future impact, TXU Corp.’s        business and/or results of operations.**

----

**The        litigation environment in which TXU Corp. operates poses a significant risk        to        its business.**

**The        rates of TXU Corp.’s electric delivery business are subject to regulatory        review.**

----

***Risks        Relating to the Proposed Merger***

**TXU        Corp. cannot make any assurance that the proposed merger will be        consummated.**

|   | · | management’s                  attention from TXU Corp.’s day-to-day business may be                  diverted; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|

|   | · | TXU                  Corp. may lose key employees; |
|--------|--------|----------------------------------------------------|

|   | · | TXU                  Corp.’s relationships with customers and vendors may be disrupted as                  a                  result of uncertainties with regard to its business and                  prospects; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | TXU                  Corp. may be required to pay significant transaction costs related                  to the                  proposed Merger, such as a transaction termination (break-up) fee                  of up to                  $1.0 billion; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                  market price of shares of TXU Corp. common stock may decline to                  the extent                  that the current market price of those shares reflects a market                  assumption                  that the Proposed Merger will be                  completed. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item        2. Unregistered Sales of Equity Securities and Use of        Proceeds**

**Item        4. Submission of Matters to a Vote of Security Holders**

----

**Item        6.**
**Exhibits**

|  **Exhibits** | **Previously                  Filed With File****Number***               | **As****Exhibit** |    |                                                                                                                                                                                                 |
|--------------------|--------------------------------------------------------------------------|-------------------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **(4)**            | **Instruments                  Defining the Rights of Security Holders** |
| 4(a)               |                                                                     |              | ─ | Officer’s                  Certificate, dated March 16, 2007, establishing the terms of TXU                  Energy                  Company’s Floating Rate Senior Notes due 2008.      |
| 4(b)               |                                                                     |              | ─ | Officer’s                  Certificate, dated March 16, 2007, establishing the terms of Oncor                  Electric Delivery’s Floating Rate Senior Notes due                  2008. |
| **(10)**           | **Material                  Contracts.**                                 |
| 10.1               |                                                                     |              | ─ | Revolving                  Credit Agreement, dated March 1, 2007 by and between TXU Energy                  Company                  LLC and the lender parties signatory thereto.                   |
| 10.2               |                                                                     |              | ─ | Form                  of Performance Unit Award Agreement by and between TXU Corp. and                  Participant (Unit I Award)                                                                   |
| 10.3               |                                                                     |              | ─ | Form                  of Performance Unit Award Agreement between TXU Corp. and Participant                  (Unit II Award)                                                                         |
| 10.4               |                                                                     |              | ─ | Form                  of Performance Unit Award Agreement by and between TXU Corp. and                  Participant (Unit III Award)                                                                 |
| 10.5               |                                                                     |              | ─ | Amendment                  to Field Services Agreement, dated August, 15 2006, by and between                  Oncor                  Electric Delivery and InfrastruX Group                         |
| 10.6               |                                                                     |              | ─ | Amendment                  #2 to Field Services Agreement, dated December 28, 2006, by and                  between                  Oncor Electric Delivery and InfrastruX Group                    |
| 10.7               |                                                                     |              | ─ | Amendment                  #3 to Field Services Agreement, dated January 30, 2007, by and                  between                  Oncor Electric Delivery and InfrastruX Group                     |
| 10.8               |                                                                     |              | ─ | Amendment                  #4 to Field Services Agreement, dated March 31, 2007, by and between                  Oncor                  Electric Delivery and InfrastruX Group                       |
| 10.9               |                                                                     |              | ─ | Amendment                  to Master Framework Agreement, dated August 15, 2006, by and between                  Oncor                  Electric Delivery and InfrastruX Group                       |
| 10.10              |                                                                     |              | ─ | Amendment                  #2 to Master Framework Agreement, dated December 28, 2006, by and                  between                  Oncor Electric Delivery and InfrastruX                  Group |

----

|  **Exhibits** | **Previously                    Filed With File****Number***               | **As****Exhibit** |    |                                                                                                                                                                                                                                                                                                                                                                            |
|--------------------|----------------------------------------------------------------------------|-------------------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.11              |                                                                       |              | ─ | Letter                    Amendment to Master Framework Agreement, dated January 30, 2007,                    by and                    between Oncor Electric Delivery and InfrastruX Group                                                                                                                                                                                    |
| 10.12              |                                                                       |              | ─ | Amendment                    #4 to Master Framework Agreement, dated March 31, 2007, by and                    between                    Oncor Electric Delivery and InfrastruX Group                                                                                                                                                                                          |
| 10.13              |                                                                       |              | ─ | Summary                    Employment Arrangement - R. Shapard                                                                                                                                                                                                                                                                                                                  |
| **(15)**           | **Letter                    re: Unaudited Interim Financial Information.** |
| 15                 |                                                                       |              | ─ | Letter                    from independent registered public accounting firm as to unaudited                    interim                    financial information.                                                                                                                                                                                                               |
| **31**             | **Rule                    13a - 14(a)/15d - 14 (a) Certifications.**       |
| 31(a)              |                                                                       |              | ─ | Certification                    of C. John Wilder, President and Chief Executive of TXU Corp.,                    pursuant to                    Rule 13a-14(a)/15d - 14(a) of the Securities Exchange Act of                    1934, as                    adopted pursuant to Section 302 of the Sarbanes-Oxley Act of                    2002.                             |
| 31(b)              |                                                                       |              | ─ | Certification                    of David A. Campbell, Executive Vice President and Chief Financial                    Officer                    of TXU Corp., pursuant to Rule 13a - 14(a)/15d - 14(a) of the                    Securities                    Exchange Act of 1934, as adopted pursuant to Section 302 of the                    Sarbanes-Oxley Act of 2002. |
| **(32)**           | **Section                    1350 Certifications.**                        |
| 32(a)              |                                                                       |              | ─ | Certification                    of C. John Wilder, President and Chief Executive of TXU Corp.,                    pursuant to                    18 U.S.C. Section 1350, as adopted pursuant to Section 906 of                    the                    Sarbanes-Oxley Act of 2002.                                                                                           |
| 32(b)              |                                                                       |              | ─ | Certification                    of David A. Campbell, Executive Vice President and Chief Financial                    Officer                    of TXU Corp., pursuant to 18 U.S.C. Section 1350, as adopted                    pursuant to                    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                 |
| **(99)**           | **Additional                    Exhibits.**                                |
| 99                 |                                                                       |              | ─ | Condensed                    Statements of Consolidated Income - Twelve Months Ended March                    31,                    2007.                                                                                                                                                                                                                                      |

----

**SIGNATURE**

|   |   | **TXU                  CORP.**         |   |
|--------|--------|-------------------------------------------------------|--------|
|   | By:    | /s/                  Stan Szlauderbach                |   |
|   | Name:  | Stan                  Szlauderbach                    |   |
|   | Title: | Senior                  Vice President and Controller |   |
|   |   |                                                  |   |

----