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**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**Washington,        D.C.  20549**

**FORM        10-Q**

**FOR        THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007**

**Energy        Future Holdings Corp.**

**(formerly        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                    and Nine Months Ended                    September 30, 2007 and                    2006                                                                                                                | 1 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Condensed                    Statements of                    Consolidated Comprehensive Income –Three                    and Nine Months Ended                    September 30, 2007 and                    2006                                                                                                                                                                                                                 | 2 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Condensed                    Statements of                    Consolidated Cash Flows –Nine                    Months Ended September 30,                    2007 and                    2006                                                                                                                                                                                                                                     | 3 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Condensed                    Consolidated Balance                    Sheets –September                    30, 2007 and December                    31,                    2006                                                                                                                                                                                                                                                    | 5 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Notes                    to Condensed Consolidated                    Financial                    Statements                                                                                                                                                                                                                                                                                                                           | 6 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Report                    of Independent                    Registered Public Accounting                    Firm                                                                                                                                                                                                                                                                                                                        | 59 |
|  **Item                    2.     Management’s Discussion and Analysis of                    Financial Condition****and                    Results of                    Operations                                                                                                     **                                                                                                                                                            | 60 |
|  **Item                    3.     Quantitative and Qualitative Disclosures                    About Market Risk**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 112 |
|  **Item                    4.     Controls and                    Procedures                                                                                                     **                                                                                                                                                                                                                                                                         | 119 |
|  **PART                    II. OTHER INFORMATION**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|  **Item                    1.     Legal                    Proceedings                                                                                                     **                                                                                                                                                                                                                                                                               | 120 |
|  **Item                    1A.  Risk                    Factors                                                                                                **                                                                                                                                                                                                                                                                                                                                   | 120 |
|  **Item                    2.     Unregistered Sales of Equity Securities and Use                    of Proceeds**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 139 |
|  **Item                    4.     Submission of Matters to a Vote of Security                    Holders**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 140 |
|                    **Item                    5.     Other Disclosure**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  141 |
|  **Item                    6.     Exhibits**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 142 |
|  **SIGNATURE                                                                                                                          **                                                                                                                                                                                                                                    | 144 |

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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**                 | EFH                  Corp.'s Annual Report on Form 10-K for the year ended December                  31,                  2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **Adjusted                  EBITDA**                | Adjusted                  EBITDA means EBITDA adjusted to exclude non-cash items, unusual                  items and                  other adjustments allowable under certain debt arrangements for                  purposes                  of covenant compliance under those debt arrangements.  EBITDA                  means net income adjusted to exclude the effects of income taxes,                  interest                  expense and depreciation and amortization.  Adjusted EBITDA and                  EBITDA are not recognized terms under GAAP and, thus, are non-GAAP                  financial measures.  EFH Corp. is providing Adjusted EBITDA in                  this Form 10-Q (as well as EBITDA in the reconciliation in Exhibit                  99.2)                  solely because of the important role that Adjusted EBITDA plays                  in respect                  of the certain covenants contained in the debt                  arrangements.  EFH Corp. does not intend for Adjusted EBITDA (or                  EBITDA) to be an alternative to net income as a measure of operating                  performance or an alternative to cash flows from operating activities                  as a                  measure of liquidity or an alternative to any other measure of                  financial                  performance presented in accordance with GAAP.  Additionally,                  EFH Corp. does not intend for Adjusted EBITDA (or EBITDA) to be                  used as a                  measure of free cash flow available for management’s discretionary use, as                  the measure excludes certain cash requirements such as interest                  payments,                  tax payments and other debt service requirements.  Because not                  all companies use identical calculations, EFH Corp.’s presentation of                  Adjusted EBITDA (and EBITDA) may not be comparable to similarly                  titled                  measures of other companies. |
| **Capgemini**                                       | Capgemini                  Energy LP, a subsidiary of Cap Gemini North America Inc. that provides                  business support services to EFH Corp. and its                  subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **Competitive                  Electric segment**   | Refers                  to the EFH Corp. business segment, formerly referred to as the                  TXU Energy                  Holdings segment, which includes TCEH, equipment salvage and resale                  activities related to the eight canceled coal-fueled generation                  units and                  the activities of a lease trust holding certain combustion                  turbines.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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| **EFC                  Holdings**                 | Refers                  to Energy Future Competitive Holdings Company (formerly TXU US                  Holdings                  Company), a subsidiary of EFH Corp. and the parent of                  TCEH.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **EFH                  Corp.**                    | Refers                  to Energy Future Holdings Corp. (formerly TXU Corp.), a holding                  company,                  and/or its subsidiaries, depending on context.  This Form 10-Q                  and other SEC filings of EFH Corp. and its subsidiaries occasionally                  make                  references to EFH Corp., TCEH or Oncor 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. |
| **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 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **FSP**                                           | FASB                  Staff Position                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **GAAP**                                          | generally                  accepted accounting principles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **GWh**                                           | gigawatt-hours                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **historical                  service territory** | the                  territory, largely in north Texas, being served by EFH Corp.'s                  regulated                  electric utility subsidiary at the time of entering retail competition                  on                  January 1, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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| **Intermediate                  Holding**  | Refers                  to Energy Future Intermediate Holding Company LLC, a wholly-owned                  subsidiary of EFH Corp. established in connection with the closing                  of the                  Merger to own 100% of Oncor Holdings.                                                                                                                                                                                                                                                                     |
|--------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **IRS**                                    | US                  Internal Revenue Service                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **kWh**                                    | kilowatt-hours                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **LIBOR**                                  | London                  Interbank Offered Rate.  An interest rate at which banks can                  borrow funds, in marketable size, from other banks in the London                  interbank                  market.                                                                                                                                                                                                                                                                                             |
| **Luminant                  Construction** | Refers                  to subsidiaries (formerly referred to as TXU DevCo) of TCEH established                  for the purpose of developing and constructing new generation                  facilities.  In connection with the Merger, certain of these                  subsidiaries that were subsidiaries of EFH Corp. became subsidiaries                  of                  TCEH, and certain assets of EFH Corp. subsidiaries were transferred                  to                  subsidiaries of TCEH. |
| **Luminant                  Energy**       | Luminant                  Energy Company LLC (formerly TXU Portfolio Management Company LP),                  a                  subsidiary of TCEH that engages in certain wholesale markets                  activities                                                                                                                                                                                                                                                                                                        |
|  **Luminant                entities** |  Refers                to wholly-owned subsidiaries of TCEH engaged in competitive market                activities consisting of electricity generation, development and                construction of new generation facilities, wholesale energy sales                and                purchases as well as commodity risk management and trading activities,                all                largely in Texas.                                                                                                |
| **Luminant                  Power**        | Refers                  to subsidiaries of TCEH engaged in electricity generation                  activities                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **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**                                 | The                  transaction referred to in "Merger Agreement" immediately below                  that was                  completed on October 10, 2007.                                                                                                                                                                                                                                                                                                                                                                   |
| **Merger                  Agreement**      | Agreement                  and Plan of Merger, dated February 25, 2007, under which Texas                  Holdings                  agreed to acquire EFH Corp.                                                                                                                                                                                                                                                                                                                                                                 |
| **Merger                  Sub**            | Texas                  Energy Future Merger Sub Corp, a Texas corporation and a wholly-owned                  subsidiary of Texas Holdings that was merged into EFH Corp. on                  October 10,                  2007                                                                                                                                                                                                                                                                                                  |
| **MMBtu**                                  | million                  British thermal units                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **Moody’s**                          | Moody’s                  Investors Services, Inc. (a credit rating agency)                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **MW**                                     | megawatts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **MWh**                                    | megawatt-hours                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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| **NRC**                                         | US                  Nuclear Regulatory Commission                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Oncor**                                       | Refers                  to Oncor Electric Delivery Company LLC, a wholly-owned subsidiary                  of Oncor                  Holdings, and/or its consolidated bankruptcy remote financing subsidiary,                  Oncor Electric Delivery Transition Bond Company LLC, depending                  on                  context.  This Form 10-Q and other SEC filings of EFH Corp. and                  its subsidiaries occasionally make references to EFH Corp., TCEH,                  or Oncor                  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. |
| **Oncor                  Holdings**             | Refers                  to Oncor Electric Delivery Holdings Company LLC, a wholly-owned                  subsidiary                  of Intermediate Holding and the parent of Oncor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **Oncor                  Ring-Fenced Entities** | Refers                  to Oncor Holdings and its subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **price-to-beat                  rate**         | residential                  and small business customer electricity rates established by the                  PUCT 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **PUCT**                                        | Public                  Utility Commission of Texas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **PURA**                                        | Texas                  Public Utility Regulatory Act                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **Regulated                  Delivery segment** | Refers                  to the EFH Corp. business segment, formerly referred to as the                  TXU                  Electric Delivery segment, which consists primarily of the activities                  of                  Oncor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **REP**                                         | retail                  electric provider                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **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”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

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| **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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **Sponsor                  Group**        | Collectively,                  the investment funds affiliated with Kohlberg Kravis Roberts & Co.                  L.P., TPG Capital, L.P. and Goldman Sachs & Co.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **TCEH**                                  | Refers                  to Texas Competitive Electric Holdings Company LLC (formerly TXU                  Energy                  Company LLC), a direct subsidiary of EFC Holdings and an indirect                  subsidiary of EFH Corp., and/or its subsidiaries, depending on                  context,                  engaged in electricity generation, wholesale and retail energy                  markets and                  development and construction activities.  This Form 10-Q and                  other SEC filings of EFH Corp. and its subsidiaries occasionally                  make                  references to EFH Corp., TCEH or Oncor 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. |
| **TCEH                  Finance**         | Refers                  to TCEH Finance, Inc., a wholly-owned subsidiary of                  TCEH,  formed for the sole purpose of serving as co-issuer with                  TCEH of certain debt securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **TCEQ**                                  | Texas                  Commission on Environmental Quality                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **Texas                  Holdings**       | Refers                  to Texas Energy Future Holdings Limited Partnership, a Delaware                  limited                  partnership controlled by the Sponsor Group that is the parent of EFH                  Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **Texas                  Holdings Group** | Refers                  to Texas Holdings and its direct and indirect subsidiaries other                  than the                  Oncor Ring-Fenced Entities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

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| **TXU                  Energy**                 | Refers                  to TXU Energy Retail Company LLC, a subsidiary of TCEH engaged                  in the                  retail sale of power to residential and business                  customers.                                                                                                                                             |
|-------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **TXU                  Europe**                 | TXU                  Europe Limited, a former subsidiary of EFH Corp.                                                                                                                                                                                                                                                                                    |
| **TXU                  Fuel**                   | TXU                  Fuel Company, a former subsidiary of TCEH                                                                                                                                                                                                                                                                                           |
| **TXU                  Gas**                    | TXU                  Gas Company, a former subsidiary of EFH Corp.                                                                                                                                                                                                                                                                                       |
| **TXU                  Generation Development** | Refers                  to TXU Generation Development Company LLC, a direct, wholly-owned                  subsidiary of EFH Corp. established for the purpose of developing                  new                  generation facilities.  This subsidiary did not become a                  subsidiary of TCEH in connection with the Merger. |
| **US**                                          | United                  States of America                                                                                                                                                                                                                                                                                                                |

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|   | **PART                  I.  FINANCIAL                  INFORMATION** |
|--------|--------------------------------------------------------------------------------|

**Item        1.  FINANCIAL STATEMENTS**

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**CONDENSED        STATEMENTS OF CONSOLIDATED INCOME**

**(Unaudited)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **Three                    Months Ended****September                    30,** |   |   | **Nine                    Months Ended****September                    30,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **2007**                                                                      |   |   | **2006**                                                                     |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **(millions                  of dollars, except per share amounts)**          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |
| **Operating                  revenues                                                                              **                                                  |   | $                                                                             | 3,445  |   |                                                                         | $      | 3,510 |   |   | $ | 7,136 |   |   | $ | 8,481 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                  purchased power costs and                  delivery                  fees                                                                                      |   |                                                                          | 882    |   |                                                                         |   | 1,002 |   |   |   | 2,286 |   |   |   | 2,182 |   |
| Operating                  costs                                                                                                                                                      |   |                                                                          | 350    |   |                                                                         |   | 334 |   |   |   | 1,065 |   |   |   | 1,018 |   |
| Depreciation                  and                  amortization                                                                                                                       |   |                                                                          | 209    |   |                                                                         |   | 216 |   |   |   | 612 |   |   |   | 628 |   |
| Selling,                  general and                  administrative                  expenses                                                                                       |   |                                                                          | 229    |   |                                                                         |   | 211 |   |   |   | 674 |   |   |   | 582 |   |
| Franchise                  and revenue-based                  taxes                                                                                                                   |   |                                                                          | 93     |   |                                                                         |   | 102 |   |   |   | 269 |   |   |   | 276 |   |
| Other                  income (Note                  6)                                                                                                                               |   |                                                                          | (20    | )      |                                                                         |   | (36 | ) |   |   | (65 | ) |   |   | (91 | ) |
| Other                  deductions (Note                  6)                                                                                                                           |   |                                                                          | 10     |   |                                                                         |   | 23 |   |   |   | 901 |   |   |   | 244 |   |
| Interest                  income                                                                                                                                                      |   |                                                                          | (19    | )      |                                                                         |   | (10 | ) |   |   | (53 | ) |   |   | (30 | ) |
| Interest                  expense and related                  charges (Note                  15)                                                                                     |   |                                                                          | 226    |   |                                                                         |   | 209 |   |   |   | 644 |   |   |   | 640 |   |
| Total                  costs and                  expenses                                                                                                                                                     |   |                                                                          | 1,960  |   |                                                                         |   | 2,051 |   |   |   | 6,333 |   |   |   | 5,449 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations before income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                          | 1,485  |   |                                                                         |   | 1,459 |   |   |   | 803 |   |   |   | 3,032 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax                  expense                                                                                                                   |   |                                                                          | 506    |   |                                                                         |   | 475 |   |   |   | 212 |   |   |   | 1,036 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  from continuing operations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                          | 979    |   |                                                                         |   | 984 |   |   |   | 591 |   |   |   | 1,996 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from discontinued operations, net of tax                  effect                                                                               |   |                                                                          | 13     |   |                                                                         |   | 20 |   |   |   | 24 |   |   |   | 81 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  income                                                                              **                                                          |   | $                                                                             | 992    |   |                                                                         | $      | 1,004 |   |   | $ | 615 |   |   | $ | 2,077 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Average                  shares of common stock outstanding (millions):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                                                 |   |                                                                          | 460    |   |                                                                         |   | 459 |   |   |   | 459 |   |   |   | 460 |   |
| Diluted                                                                                                                                                                               |   |                                                                          | 465    |   |                                                                         |   | 466 |   |   |   | 464 |   |   |   | 469 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Per                  share of common stock - Basic:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income from continuing                  operations                                                                                                                              |   | $                                                                             | 2.12   |   |                                                                         | $      | 2.15 |   |   | $ | 1.29 |   |   | $ | 4.33 |   |
| Income                  from discontinued                  operations, net of tax                  effect                                                                                            |   |                                                                          | 0.03   |   |                                                                         |   | 0.04 |   |   |   | 0.05 |   |   |   | 0.18 |   |
| Net                  income                                                                                                                                                                          |   | $                                                                             | 2.15   |   |                                                                         | $      | 2.19 |   |   | $ | 1.34 |   |   | $ | 4.51 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Per                  share of common stock – Diluted:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income from continuing                  operations                                                                                                                              |   | $                                                                             | 2.10   |   |                                                                         | $      | 2.11 |   |   | $ | 1.28 |   |   | $ | 4.26 |   |
| Income                  from discontinued                  operations, net of tax                  effect                                                                                            |   |                                                                          | 0.03   |   |                                                                         |   | 0.04 |   |   |   | 0.05 |   |   |   | 0.17 |   |
| Net                  income                                                                                                                                                                          |   | $                                                                             | 2.13   |   |                                                                         | $      | 2.15 |   |   | $ | 1.33 |   |   | $ | 4.43 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                  declared                                                                                                                                                   |   | $                                                                             | 0.433  |   |                                                                         | $      | 0.413 |   |   | $ | 1.298 |   |   | $ | 1.239 |   |

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**CONDENSED        STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME**

**(Unaudited)**

|                                                                                                                                                                                                                                                                                       |   | **Three                  Months Ended****September                    30,** |   |   | **Nine                  Months Ended****September                    30,** |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                       |   | **2007**                                                                    |   |   | **2006**                                                                   |    |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                       |   | **(millions                  of dollars)**                                  |   |
|                                                                                                                                                                                                                                                                                       |   |                                                                        |   |   |                                                                       |    |   |   |   |   |   |   |
| Components                  related to continuing operations:                                                                                                                                                                                                                              |   |                                                                        |   |   |                                                                       |    |   |   |   |   |   |   |
| Income                  from continuing operations                                                                                                                                                                                                                                         |   | $                                                                           | 979    |   |                                                                       | $       | 984 |   |   | $ | 591 |   |   | $ | 1,996 |   |
|                                                                                                                                                                                                                                                                                       |   |                                                                        |   |   |                                                                       |    |   |   |   |   |   |   |   |   |   |   |
| Other                  comprehensive income (loss):                                                                                                                                                                                                                                        |   |                                                                        |   |   |                                                                       |    |   |   |   |   |   |   |   |   |   |   |
| Reclassification                  of pension and                  other retirement benefit costs(net                  of tax expense of $─, $─, $3                  and $─) (Note 13)                                                                                    |   |                                                                        | 1      |   |                                                                       | ─ |   |   |   | 6 |   |   | ─ |   |
|                                                                                                                                                                                                                                                                                       |   |                                                                        |   |   |                                                                       |    |   |   |   |   |   |   |   |   |   |   |
| Cash                  flow hedges:                                                                                                                                                                                                                                                         |   |                                                                        |   |   |                                                                       |    |   |   |   |   |   |   |   |   |   |   |
| Net                  increase (decrease) in fair                  value of derivatives held at end of period (net of tax (expense)                  benefit                  of $(5), $(216), $146 and $(232))                                                                             |   |                                                                        | 9      |   |                                                                       |    | 401 |   |   |   | (272 | ) |   |   | 431 |   |
| Derivative                  value net (gains)                  losses related to hedged transactions recognized during the period                  and                  reported in net income (net of tax (expense) benefit of $(6), $6,                  $(55)                  and $12) |   |                                                                        | (12    | )      |                                                                       |    | 11 |   |   |   | (103 | ) |   |   | 22 |   |
| Total                  effect of cash flow                  hedges                                                                                                                                                                                                                         |   |                                                                        | (3     | )      |                                                                       |    | 412 |   |   |   | (375 | ) |   |   | 453 |   |
|                                                                                                                                                                                                                                                                                       |   |                                                                        |   |   |                                                                       |    |   |   |   |   |   |   |   |   |   |   |
| Total                  adjustments to net income                  from continuing operations                                                                                                                                                                                               |   |                                                                        | (2     | )      |                                                                       |    | 412 |   |   |   | (369 | ) |   |   | 453 |   |
|                                                                                                                                                                                                                                                                                       |   |                                                                        |   |   |                                                                       |    |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                  income from continuing operations                                                                                                                                                                                                                           |   |                                                                        | 977    |   |                                                                       |    | 1,396 |   |   |   | 222 |   |   |   | 2,449 |   |
|                                                                                                                                                                                                                                                                                       |   |                                                                        |   |   |                                                                       |    |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                  income from discontinued operations                                                                                                                                                                                                                         |   |                                                                        | 13     |   |                                                                       |    | 20 |   |   |   | 24 |   |   |   | 81 |   |
|                                                                                                                                                                                                                                                                                       |   |                                                                        |   |   |                                                                       |    |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                  income                                                                                                                                                                                                                                                      |   | $                                                                           | 990    |   |                                                                       | $       | 1,416 |   |   | $ | 246 |   |   | $ | 2,530 |   |

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**CONDENSED        STATEMENTS OF CONSOLIDATED CASH FLOWS**

**(Unaudited)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **Nine                    Months Ended****September                    30,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **2007**                                                                     |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **(millions                  of dollars)**                                   |   |
| Cash                  flows – operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                         |   |   |   |   |
| Net                  income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                                                                            | 615    |   |   | $ | 2,077 |   |
| Income                  from discontinued                  operations, net of tax effect                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                         | (24    | ) |   |   | (81 | ) |
| Income                  from continuing                  operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                         | 591    |   |   |   | 1,996 |   |
| Adjustments                  to reconcile income                  from continuing operations to cash provided by operating                  activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                         |   |   |   |   |   |   |
| Depreciation                  and                  amortization                                                                                                                                                                                   |   |                                                                         | 660    |   |   |   | 676 |   |
| Deferred                  income tax expense                  (benefit) –                  net                                                                                                                                              |   |                                                                         | (230   | ) |   |   | 712 |   |
| Impairment                  of natural                  gas-fueled generation                  plants                                                                                                                                             |   | ─                                                                      |   |   |   | 198 |   |
| Inventory                  write-off related to                  natural gas-fueled generation                  plants                                                                                                                            |   | ─                                                                      |   |   |   | 3 |   |
| Net                  charges related to canceled                  development of generation facilities (Note 2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                         | 733    |   |   | ─ |   |
| Write-off                  of deferred                  transaction costs (Note                  6)                                                                                                                                               |   |                                                                         | 38     |   |   | ─ |   |
| Charge                  (credit) related to                  impaired leases (Note                  6)                                                                                                                                            |   |                                                                         | (48    | ) |   |   | 2 |   |
| Net                  gains on sale of                  assets                                                                                                                                                                                     |   |                                                                         | (39    | ) |   |   | (46 | ) |
| Net                  effect of unrealized                  mark-to-market valuations – losses                  (gains)                                                                                                                      |   |                                                                         | 703    |   |   |   | (214 | ) |
| Gain                  on contract                  settlement                                                                                                                                                                                     |   | ─                                                                      |   |   |   | (15 | ) |
| Bad                  debt                  expense                                                                                                                                                                                                |   |                                                                         | 44     |   |   |   | 53 |   |
| Stock-based                  incentive                  compensation                  expense                                                                                                                                                     |   |                                                                         | 26     |   |   |   | 17 |   |
| Other,                  net                                                                                                                                                                                                                       |   |                                                                         | 25     |   |   |   | 23 |   |
| Changes                  in operating assets and                  liabilities                                                                                                                                                      |   |                                                                         | (948   | ) |   |   | 640 |   |
| Cash                  provided by operating                  activities from continuing                  operations                                                                                                                                                             |   |                                                                         | 1,555  |   |   |   | 4,045 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                         |   |   |   |   |   |   |
| Cash                  flows – financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                         |   |   |   |   |   |   |
| Issuances                  of                  securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                         |   |   |   |   |   |   |
| Long-term                  debt                                                                                                                                                                                                                   |   |                                                                         | 1,800  |   |   |   | 100 |   |
| Common                  stock                                                                                                                                                                                                                     |   |                                                                         | 1      |   |   |   | 180 |   |
| Retirements/repurchases                  of                  securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                         |   |   |   |   |   |   |
| Equity-linked                  debt                                                                                                                                                                                                               |   | ─                                                                      |   |   |   | (179 | ) |
| Pollution                  control revenue                  bonds                                                                                                                                                                                 |   |                                                                         | (143   | ) |   |   | (203 | ) |
| Other                  long-term                  debt                                                                                                                                                                                            |   |                                                                         | (302   | ) |   |   | (1,165 | ) |
| Common                  stock                                                                                                                                                                                                                     |   |                                                                         | (13    | ) |   |   | (953 | ) |
| Increase                  (decrease) in                  short-term borrowings:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                         |   |   |   |   |   |   |
| Commercial                  paper                                                                                                                                                                                                                 |   |                                                                         | (1,296 | ) |   |   | 617 |   |
| Bank                  borrowings                                                                                                                                                                                                                  |   |                                                                         | 1,980  |   |   |   | (145 | ) |
| Common                  stock dividends                  paid                                                                                                                                                                      |   |                                                                         | (594   | ) |   |   | (575 | ) |
| Settlements                  of minimum                  withholding tax liabilities under stock-based compensation                  plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                         | (93    | ) |   |   | (59 | ) |
| Excess                  tax benefit on                  stock-based                  compensation                                                                                                                                  |   | ─                                                                      |   |   |   | 47 |   |
| Debt                  premium, discount,                  financing and reacquisition expenses –                  net                                                                                                        |   |                                                                         | (17    | ) |   |   | (17 | ) |
| Cash                  provided by (used in)                  financing activities from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                         | 1,323  |   |   |   | (2,352 | ) |

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**CONDENSED        STATEMENTS OF CONSOLIDATED CASH FLOWS (cont.)**

**(Unaudited)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **Nine                    Months Ended****September                    30,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **2007**                                                                     |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **(millions                  of dollars)**                                   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                         |   |   |   |   |
| Cash                  flows – investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                         |   |   |   |   |
| Capital                  expenditures                                                                                                                                                                                          |   |  $                                                                      | (2,274 | ) |   |  $ | (1,409 | ) |
| Nuclear                  fuel                                                                                                                                                                                                  |   |                                                                         | (54    | ) |   |   | (77 | ) |
| Purchase                  of mining-related                  assets                                                                                                                                                            |   |                                                                         | (122   | ) |   | ─ |   |
| Proceeds                  from sale of                  assets                                                                                                                                                                 |   |                                                                         | 6      |   |   |   | 15 |   |
| Purchase                  of lease                  trust                                                                                                                                                                      |   | ─                                                                      |   |   |   | (69 | ) |
| Reduction                  of restricted                  cash                                                                                                                                                                 |   |                                                                         | 197    |   |   | ─ |   |
| Proceeds                  from sales of nuclear                  decommissioning trust fund                  securities                                                                                                        |   |                                                                         | 402    |   |   |   | 165 |   |
| Investments                  in nuclear                  decommissioning trust fund                  securities                                                                                                                |   |                                                                         | (413   | ) |   |   | (177 | ) |
| Proceeds                  from pollution control                  revenue bonds deposited with                  trustee                                                                                                        |   | ─                                                                      |   |   |   | (99 | ) |
| Cost                  to remove retired                  property                                                                                                                                                              |   |                                                                         | (24    | ) |   |   | (33 | ) |
| Investment                  in unconsolidated                  affiliate                                                                                                                                                       |   | ─                                                                      |   |   |   | (15 | ) |
| Other                                                                                                                                                                                                                          |   |                                                                         | (3     | ) |   |   | (6 | ) |
| Cash                  used in investing                  activities from continuing                  operations                                                                                                                                                             |   |                                                                         | (2,285 | ) |   |   | (1,705 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                         |   |   |   |   |   |   |
| Discontinued                  operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                         |   |   |   |   |   |   |
| Cash                  provided by (used in)                  operating                  activities                                                                                                                             |   |                                                                         | 28     |   |   |   | (1 | ) |
| Cash                  used in financing                  activities                                                                                                                                                            |   | ─                                                                      |   |   | ─ |   |
| Cash                  used in investing                  activities                                                                                                                                                            |   | ─                                                                      |   |   | ─ |   |
| Cash                  provided by (used in)                  discontinued                  operations                                                                                                                                         |   |                                                                         | 28     |   |   |   | (1 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                         |   |   |   |   |   |   |
| Net                  change in cash and cash                  equivalents                                                                                                                                            |   |                                                                         | 621    |   |   |   | (13 | ) |
| Cash                  and cash equivalents – beginning                  balance                                                                                                                                |   |                                                                         | 25     |   |   |   | 37 |   |
| Cash                  and cash equivalents – ending                  balance                                                                                                                                   |   | $                                                                            | 646    |   |   | $ | 24 |   |

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**CONDENSED        CONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

|                                                                                                                                      |   | **September                    30,****2007** |   |   | **December                    31,****2006** |    |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|---------------------------------------------|---------|
| **ASSETS**                                                                                                                                |   | **(millions                  of dollars)**   |   |
| Current                  assets:                                                                                                          |   |                                         |   |   |                                        |    |
| Cash                  and cash                  equivalents                                                                               |   | $                                            | 646    |   |                                        | $       | 25 |   |
| Restricted                  cash                                                                                                          |   |                                         | 66     |   |                                        |    | 58 |   |
| Trade                  accounts receivable – net                  (Note7)                                                           |   |                                         | 959    |   |                                        |    | 959 |   |
| Inventories                                                                                                                               |   |                                         | 396    |   |                                        |    | 383 |   |
| Commodity                  and other derivative                  contractual assets (Note 12)                                             |   |                                         | 415    |   |                                        |    | 950 |   |
| Accumulated                  deferred income                  taxes (Note 3)                                                              |   |                                         | 328    |   |                                        |    | 253 |   |
| Margin                  deposits related to                  commodity positions                                                          |   |                                         | 211    |   |                                        |    | 7 |   |
| Other                  current                  assets                                                                                    |   |                                         | 146    |   |                                        |    | 177 |   |
| Total                  current                  assets                                                                                    |   |                                         | 3,167  |   |                                        |    | 2,812 |   |
|                                                                                                                                      |   |                                         |   |   |                                        |    |   |   |
| Restricted                  cash                                                                                                          |   |                                         | 66     |   |                                        |    | 258 |   |
| Investments                                                                                                                               |   |                                         | 764    |   |                                        |    | 712 |   |
| Property,                  plant and equipment — net                                                                                |   |                                         | 20,240 |   |                                        |    | 18,756 |   |
| Goodwill                                                                                                                                  |   |                                         | 542    |   |                                        |    | 542 |   |
| Regulatory                  assets — net                                                                                            |   |                                         | 1,904  |   |                                        |    | 2,028 |   |
| Commodity                  and other derivative contractual assets (Note 12)                                                              |   |                                         | 90     |   |                                        |    | 345 |   |
| Other                  noncurrent assets                                                                                                  |   |                                         | 365    |   |                                        |    | 380 |   |
| Assets                  held for sale (Note 2)                                                                                            |   |                                         | 103    |   |                                        | ─ |   |
|                                                                                                                                      |   |                                         |   |   |                                        |    |   |   |
| Total                  assets                                                                                                             |   | $                                            | 27,241 |   |                                        | $       | 25,833 |   |
|                                                                                                                                      |   |
| **LIABILITIES                  AND SHAREHOLDERS’ EQUITY**                                                                           |   |
| Current                  liabilities:                                                                                                     |   |                                         |   |   |                                        |    |   |   |
| Short-term                  borrowings (Note                  8)                                                                          |   | $                                            | 2,175  |   |                                        | $       | 1,491 |   |
| Long-term                  debt due currently                  (Note 9)                                                                   |   |                                         | 2,388  |   |                                        |    | 485 |   |
| Trade                  accounts                  payable                                                                                  |   |                                         | 919    |   |                                        |    | 1,093 |   |
| Commodity                  and other derivative                  contractual liabilities (Note 12)                                        |   |                                         | 171    |   |                                        |    | 293 |   |
| Margin                  deposits related to                  commodity positions                                                          |   |                                         | 116    |   |                                        |    | 681 |   |
| Other                  current                  liabilities                                                                               |   |                                         | 1,006  |   |                                        |    | 1,040 |   |
| Total                  current                  liabilities                                                                               |   |                                         | 6,775  |   |                                        |    | 5,083 |   |
|                                                                                                                                      |   |                                         |   |   |                                        |    |   |   |
| Accumulated                  deferred income taxes                                                                                        |   |                                         | 3,135  |   |                                        |    | 4,238 |   |
| Investment                  tax credits                                                                                                   |   |                                         | 348    |   |                                        |    | 363 |   |
| Commodity                  and other derivative contractual liabilities (Note 12)                                                         |   |                                         | 876    |   |                                        |    | 191 |   |
| Long-term                  debt, less amounts due currently (Note 9)                                                                      |   |                                         | 10,217 |   |                                        |    | 10,631 |   |
| Other                  noncurrent liabilities and deferred credits                                                                        |   |                                         | 4,043  |   |                                        |    | 3,187 |   |
| Total                  liabilities                                                                                                        |   |                                         | 25,394 |   |                                        |    | 23,693 |   |
|                                                                                                                                      |   |                                         |   |   |                                        |    |   |   |
| Commitments                  and Contingencies (Note 10)                                                                                  |   |                                         |   |   |                                        |    |   |   |
|                                                                                                                                      |   |                                         |   |   |                                        |    |   |   |
| Shareholders’                  equity (Note 11):                                                                                    |   |                                         |   |   |                                        |    |   |   |
| Common                  stock without par                  value:  Authorized                  shares:  1,000,000,000 |   |                                         |   |   |                                        |    |   |   |
| Outstanding                  shares: 461,152,009                  and 459,244,523                                                         |   |                                         | 5      |   |                                        |    | 5 |   |
| Additional                  paid-in                  capital                                                                              |   |                                         | 1,126  |   |                                        |    | 1,104 |   |
| Retained                  earnings                                                                                                        |   |                                         | 676    |   |                                        |    | 622 |   |
| Accumulated                  other comprehensive                  income                                                                  |   |                                         | 40     |   |                                        |    | 409 |   |
| Total                  shareholders’                  equity                                                                        |   |                                         | 1,847  |   |                                        |    | 2,140 |   |
| Total                  liabilities and                  shareholders’ equity                                                        |   | $                                            | 27,241 |   |                                        | $       | 25,833 |   |

----

**ENERGY        FUTURE HOLDINGS 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.           CHARGES        RELATED TO CANCELED (PREVIOUSLY SUSPENDED) DEVELOPMENT OF COAL-FUELED        GENERATION**

**               FACILITIES**

----

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

----

**4.           TEXAS        MARGIN TAX**

----

**5.           EARNINGS          PER SHARE**

|                                                                                                                                                                                                                                                                                                                                                        |   | **For                        the Three Months****Ended                        September 30, 2007** |   |   | **For                        the Three Months****Ended                        September 30, 2006** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                        |   | **Income**                                                                                         |   |   | **Shares**                                                                                         |   |   | **Per****Share****Amount** |   |   | **Income** |   |   | **Shares** |   |   | **Per****Share****Amount** |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                               |   |   |                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                      from continuing operations****-Basic                                           **                      |   | $                                                                                                  | 979    |   |                                                                                               |   | 460.4 |   |   | $ | 2.12 |   |   | $ | 984 |   |   |   | 459.1 |   |   | $ | 2.15 |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                               |   |   |                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Dilutive                      securities/other adjustments:**                                                                                                                                                                                                                                                                                             |   |                                                                                               |   |   |                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                               |   |   |                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Convertible                      senior                      notes                                                    |   | ─                                                                                            |   |   |                                                                                               | 1.5    |   |   |   |   |   |   | ─ |   |   |   | 1.5 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                               |   |   |                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity-linked                      debt                      securities                                               |   | ─                                                                                            |   |   | ─                                                                                            |   |   |   |   |   |   | ─ |   |   |   | ― |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                               |   |   |                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based                      incentive compensation plan                                                                                                                                                                                                                                                                                                |   | ─                                                                                            |   |   |                                                                                               | 3.1    |   |   |   |   |   |   | ─ |   |   |   | 5.7 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                               |   |   |                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                      from continuing operations****-Diluted                                           **                    |   | $                                                                                                  | 979    |   |                                                                                               |   | 465.0 |   |   | $ | 2.10 |   |   | $ | 984 |   |   |   | 466.3 |   |   | $ | 2.11 |   |

|                                                                                                                                                                                                                                                                                                                                                        |   | **For                        the Nine Months****Ended                        September 30, 2007** |   |   | **For                        the Nine Months****Ended                        September 30, 2006** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                        |   | **Income**                                                                                        |   |   | **Shares**                                                                                        |   |   | **Per****Share****Amount** |   |   | **Income** |   |   | **Shares** |   |   | **Per****Share****Amount** |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                              |   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                      from continuing operations****-Basic                                           **                      |   | $                                                                                                 | 591    |   |                                                                                              |   | 459.0 |   |   | $ | 1.29 |   |   | $ | 1,996 |   |   |   | 460.4 |   |   | $ | 4.33 |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                              |   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Dilutive                      securities/other adjustments:**                                                                                                                                                                                                                                                                                             |   |                                                                                              |   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                              |   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Convertible                      senior                      notes                                                    |   |                                                                                              | 1      |   |                                                                                              |   | 1.5 |   |   |   |   |   |   |   | 1 |   |   |   | 1.5 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                              |   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity-linked                      debt                      securities                                               |   | ─                                                                                           |   |   | ─                                                                                           |   |   |   |   |   |   | ─ |   |   |   | 1.0 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                              |   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based                      incentive compensation plan                                                                                                                                                                                                                                                                                                |   | ─                                                                                           |   |   |                                                                                              | 3.9    |   |   |   |   |   |   | ─ |   |   |   | 5.7 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                              |   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                              |   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                      from continuing operations****-Diluted                                           **                    |   | $                                                                                                 | 592    |   |                                                                                              |   | 464.4 |   |   | $ | 1.28 |   |   | $ | 1,997 |   |   |   | 468.6 |   |   | $ | 4.26 |   |
| _________________                                                                                                                                                                                                                                                                                                                                           |   |                                                                                              |   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**6.           OTHER            INCOME AND DEDUCTIONS**

|                                                                                                                                                                  |   | **Three                          Months Ended****September                          30,** |    |   | **Nine                          Months Ended****September                          30,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|---------|--------|------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                  |   | **2007**                                                                                  |    |   | **2006**                                                                                 |   |   | **2007** |   |   | **2006** |   |
| Other                        income:                                                                                                                                  |   |                                                                                      |    |   |                                                                                     |   |   |   |   |   |   |   |
| Gain                        on contract settlement                        (a)                                                                                         |   | $                                                                                         | ― |   |                                                                                     | $      | ― |   |   | $ | ― |   |   | $ | 26 |   |
| Amortization                        of gain on sale of                        TXU Fuel                                                                                |   |                                                                                      | 12      |   |                                                                                     |   | 12 |   |   |   | 35 |   |   |   | 35 |   |
| Net                        gain on sale of other                        properties                                                                                    |   |                                                                                      | ― |   |                                                                                     |   | 11 |   |   |   | 4 |   |   |   | 11 |   |
| Insurance                        recovery of                        litigation settlement                                                                             |   |                                                                                      | ― |   |                                                                                     |   | 15 |   |   |   | ― |   |   |   | 15 |   |
| Reduction                        of insurance reserves                        unrelated to ongoing operations                                                         |   |                                                                                      | ― |   |                                                                                     |   | ― |   |   |   | 7 |   |   |   | ― |   |
| Settlement                        penalty for coal                        tonnage delivery deficiency                                                                 |   |                                                                                      | 3       |   |                                                                                     |   | ― |   |   |   | 6 |   |   |   | ― |   |
| Royalty                        income from lignite and                        natural gas leases                                                                      |   |                                                                                      | 3       |   |                                                                                     |   | ― |   |   |   | 8 |   |   |   | ― |   |
| Other                                                                                                                                                                 |   |                                                                                      | 2       |   |                                                                                     |   | (2 | ) |   |   | 5 |   |   |   | 4 |   |
| Total                        other                        income                                                                                                      |   | $                                                                                         | 20      |   |                                                                                     | $      | 36 |   |   | $ | 65 |   |   | $ | 91 |   |
| Other                        deductions:                                                                                                                              |   |                                                                                      |    |   |                                                                                     |   |   |   |   |   |   |   |   |   |   |   |
|                            Net charges related to canceled development of generation                        facilities (Note                        2) |   | $                                                                                         | 17      |   |                                                                                     | $      | ― |   |   | $ | 812 |   |   | $ | ― |   |
| Charge                        related to termination                        of rail car lease (b)                                                                     |   |                                                                                      | 10      |   |                                                                                     |   | ― |   |   |   | 10 |   |   |   | ― |   |
| Writeoff                        of deferred                        transaction costs (c)                                                                              |   |                                                                                      | ― |   |                                                                                     |   | ― |   |   |   | 30 |   |   |   | ― |   |
| Transaction                        costs related to                        Merger                                                                                     |   |                                                                                      | 18      |   |                                                                                     |   | ― |   |   |   | 38 |   |   |   | ― |   |
| Expenses                        related to InfrastruX                        Energy Services joint venture (d)                                                        |   |                                                                                      | ― |   |                                                                                     |   | 3 |   |   |   | 12 |   |   |   | 3 |   |
| Charge                        for impairment of                        natural gas-fueled generation plants                                                           |   |                                                                                      | ― |   |                                                                                     |   | ― |   |   |   | ― |   |   |   | 198 |   |
| Inventory                        write-off related to                        natural gas-fueled generation plants                                                     |   |                                                                                      | ― |   |                                                                                     |   | ― |   |   |   | ― |   |   |   | 3 |   |
| Other                        asset                        writedowns                                                                                                  |   |                                                                                      | 4       |   |                                                                                     |   | 3 |   |   |   | 4 |   |   |   | 3 |   |
| Charge                        (credit) related to                        impaired leases (e)                                                                          |   |                                                                                      | (48     | )      |                                                                                     |   | (1 | ) |   |   | (48 | ) |   |   | 4 |   |
| Credit                        related to coal contract                        counterparty claim (f)                                                                  |   | ─                                                                                   |    |   | ─                                                                                  |   |   | ─ |   |   |   | (12 | ) |
| Costs                        related to 2006 cities                        rate settlement                                                                            |   |                                                                                      | 6       |   |                                                                                     |   | 6 |   |   |   | 19 |   |   |   | 6 |   |
| Charge                        for settlement of a                        retail matter with the PUCT                                                                  |   | ─                                                                                   |    |   | ─                                                                                  |   |   |   | 5 |   |   | ─ |   |
| Pension                        and other                        postretirement benefit costs related to discontinued                        businesses                |   |                                                                                      | 1       |   |                                                                                     |   | 8 |   |   |   | 10 |   |   |   | 18 |   |
| Equity                        losses ─ unconsolidated                        affiliates                                                                         |   | ─                                                                                   |    |   |                                                                                     | 3      |   |   |   | 1 |   |   |   | 10 |   |
| Other                                                                                                                                                                 |   |                                                                                      | 2       |   |                                                                                     |   | 1 |   |   |   | 8 |   |   |   | 11 |   |
| Total                        other                        deductions                                                                                                  |   | $                                                                                         | 10      |   |                                                                                     | $      | 23 |   |   | $ | 901 |   |   | $ | 244 |   |

|   | (a) | In                      the second quarter of 2006, EFH Corp. recorded income of $26                      million upon                      settlement of a contract dispute related to antenna site rentals                      by a                      telecommunication company (reported in Corporate and Other                      nonsegment                      results).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) |  Represents                    costs associated with termination and refinancing of a rail car                    lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | (c) | Represents                      previously deferred costs, 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 (reported in Corporate and Other nonsegment                      results).                                                                                                                                                                                                                                                                                                                                |
|   | (d) | Consists                      of previously deferred costs, consisting primarily of professional                      fees                      that were written-off due to suspension of the agreement.  Of                      these amounts, $8 million was reported in the Corporate and                      Other                      nonsegment results and the balance was reported in the Regulated                      Delivery                      segment results.                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | (e) | In                      2004, EFH Corp. recorded a liability of $157 million for leases                      of certain                      natural gas-fueled combustion turbines, net of estimated sublease                      revenues, that are no longer operated for its own benefit.  In                      the third quarter of 2007, a reduction in the liability was                      recorded to                      reflect new subleases entered into in October 2007 (reported                      in the                      Competitive Electric segment results).  The balance of the                      liability at September 30, 2007, net of adjustments recorded                      in prior                      years, totals $59 million, of which $4 million is classified                      as                      current. |
|   | (f) | In                      the first quarter of 2006, EFH Corp. recorded income of $12                      million upon                      the settlement of a claim against a counterparty for nonperformance                      under                      a coal contract.  A charge in the same amount was recorded in                      the first quarter of 2005 for losses due to the nonperformance                      (reported                      in the Competitive Electric segment                      results).                                                                                                                                                                                                                                                                                                                                              |

----

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

***Sale      of Receivables***

|                                                                                                                                                                                                                                                      |   | **Three                  Months Ended****September                  30,** |   |   | **Nine                  Months Ended****September                  30,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                      |   | **2007**                                                                  |   |   | **2006**                                                                 |   |   | **2007** |   |   | **2006** |   |
| Program                fees                                      |   | $                                                                         | 10     |   |                                                                     | $      | 11 |   |   | $ | 30 |   |   | $ | 29 |   |
| Program                fees as a percentage of average funding (annualized)                                                                                                                                                                               |   |                                                                      | 6.0    | %      |                                                                     |   | 5.6 | % |   |   | 6.3 | % |   |   | 5.7 | % |
| Servicing                fees                                                                                                                                                                                                                             |   | $                                                                         | 1      |   |                                                                     | $      | 1 |   |   | $ | 3 |   |   | $ | 3 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **Nine                    Months Ended September 30,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **2007**                                               |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                   |   |   |   |   |
| Cash                  collections on accounts                  receivable                                                                                        |   | $                                                      | 6,066  |   |   | $ | 6,150 |   |
| Face                  amount of new receivables                  purchased                                                                                       |   |                                                   | (6,446 | ) |   |   | (6,642 | ) |
| Discount                  from face amount of purchased                  receivables                                                                             |   |                                                   | 33     |   |   |   | 32 |   |
| Program                  fees                  paid                                                                                                              |   |                                                   | (30    | ) |   |   | (29 | ) |
| Servicing                  fees                  paid                                                                                                            |   |                                                   | (3     | ) |   |   | (3 | ) |
| Increase                  in subordinated notes                  payable                                                                                         |   |                                                   | 307    |   |   |   | 463 |   |
| Operating                  cash flows provided to EFH Corp. under the program                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $                                                      | (73    | ) |   | $ | (29 | ) |

|   | 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 applied to the entire portfolio of                sold receivables, not separately to the receivables of each                originator. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Trade      Accounts Receivable -***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **September                    30,****2007** |   |   | **December                    31,****2006** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|---------------------------------------------|--------|
| Gross                  trade accounts                  receivable                                                                                                    |   | $                                            | 1,682  |   |                                        | $      | 1,599 |   |
| Undivided                  interests in accounts receivable sold by TXUReceivables                  Company                                                                                   |   |                                         | (700   | )      |                                        |   | (627 | ) |
| Allowance                  for uncollectible accounts related to undivided interests inreceivables                  retained                                                                  |   |                                         | (23    | )      |                                        |   | (13 | ) |
| Trade                  accounts receivable ― reported in balance sheet                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                                            | 959    |   |                                        | $      | 959 |   |

----

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **2007** |   |   | **2006** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |     |   |   |     |   |
| Allowance                  for uncollectible accounts receivable as of January 1                                                                                                                                                                                                                                                                                                                                                                                      |   | $        | 13     |   |     | $      | 36 |   |
| Increase                  for bad debt                  expense                                                                       |   |     | 44     |   |     |   | 53 |   |
| Decrease                  for account                  write-offs                                                                     |   |     | (45    | )      |     |   | (55 | ) |
| Changes                  related to receivables                  sold                                                                 |   |     | 11     |   |     |   | 13 |   |
| Other                  (a)                                                                                                            |   | ─  |   |   |     | (15    | ) |
| Allowance                  for uncollectible accounts receivable as of September 30                                                                                                                                                                                                                                                                                                                                                                                   |   | $        | 23     |   |     | $      | 32 |   |

|   | (a) | Represents                  an allowance established in 2005 for a coal contract dispute that                  was                  reversed upon settlement in 2006.  See Note                  6. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**8.           SHORT-TERM      FINANCING**

***Short-term      Borrowings***

|                                                                                                                                                                                                                                                     |   | **At                    September 30, 2007** |    |   | **At                    December 31, 2006** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|--------|---------------------------------------------|--------|
|                                                                                                                                                                                                                                                     |   | **Outstanding****Amount**                    |    |   | **Interest****Rate                    (a)** |   |   | **Outstanding****Amount** |   |   | **Interest****Rate                    (a)** |   |
| Bank                  borrowings                                     |   | $                                            | 2,175   |   |                                        |   | 6.48 | % |   | $ | 195 |   |   |   | 5.97 | % |
| Commercial                  paper                                                                                                                                                                                                                        |   |                                         | ― |   |                                        |   | ― |   |   |   | 1,296 |   |   |   | 5.53 | % |
| Total                                                                                                                                                                                                                                                    |   | $                                            | 2,175   |   |                                        |   |   |   |   | $ | 1,491 |   |   |   |   |   |

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

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

|                         |   |                           |   | **At                  September 30, 2007** |   |
|------------------------------|--------|--------------------------------|--------|--------------------------------------------|--------|
| **Authorized****Borrowers**  |   | **Maturity****Date**           |   | **Facility****Limit**                      |   |   | **Letters                    of****Credit** |   |   | **Cash****Borrowings** |   |   | **Availability** |   |
| TCEH                         |   | February                  2008 |   | $                                          | 1,500  |   |   | $ | ― |   |   | $ | ― |   |   | $ | 1,500 |   |
| TCEH,                  Oncor |   | June                  2008     |   |                                       | 1,400  |   |   |   | 444 |   |   |   | 665 |   |   |   | 291 |   |
| TCEH,                  Oncor |   | August                  2008   |   |                                       | 1,000  |   |   |   | ― |   |   |   | 495 |   |   |   | 505 |   |
| TCEH,                  Oncor |   | March                  2010    |   |                                       | 1,600  |   |   |   | 386 |   |   |   | 730 |   |   |   | 484 |   |
| TCEH,                  Oncor |   | June                  2010     |   |                                       | 500    |   |   |   | 28 |   |   |   | 240 |   |   |   | 232 |   |
| TCEH                         |   | December                  2009 |   |                                       | 500    |   |   |   | 455 |   |   |   | 45 |   |   |   | ― |   |
| Total                        |   |                           |   | $                                          | 6,500  |   |   | $ | 1,313 |   |   | $ | 2,175 |   |   | $ | 3,012 |   |

----

**9.           LONG-TERM      DEBT**

***Long-term      debt***

|                                                                                                                                                 |   | **September                  30,** |    |   | **December                  31,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|---------|--------|-----------------------------------|--------|
|                                                                                                                                                 |   | **2007**                           |    |   | **2006**                          |   |
| TCEH                                                                                                                                                 |   |                               |    |   |                              |   |
|                    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 |   |
| 3.990%                  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 |   |
| 3.900%                  Floating Series 2001D due May 1, 2033 (b)                                                                                    |   |                               | 268     |   |                              |   | 268 |   |
| 5.150%                  Floating Taxable Series 2001I due December 1, 2036 (b)                                                                       |   |                               | 62      |   |                              |   | 62 |   |
| 3.990%                  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 (interest rate in effect                  at                  March 31, 2007) (c) |   |                               | ― |   |                              |   | 47 |   |
| 3.850%                  Floating Series 2006B due November 1, 2041 (interest rate in effect                  at                  March 31, 2007) (c) |   |                               | ― |   |                              |   | 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 (interest rate in effect                  at                  March 31, 2007) (c)  |   |                               | ― |   |                              |   | 50 |   |
|                                                                                                                                                 |   |                               |    |   |                              |   |   |   |
|                     Other:                                                                                                                 |   |                               |    |   |                              |   |   |   |
| 6.125%                  Fixed Senior Notes due March 15, 2008 (d)                                                                                    |   |                               | 250     |   |                              |   | 250 |   |
| 7.000%                  Fixed Senior Notes due March 15, 2013                                                                                        |   |                               | 1,000   |   |                              |   | 1,000 |   |
| 6.194%                  Floating Senior Notes due September 16, 2008 (e)                                                                             |   |                               | 1,000   |   |                              |   | ― |   |
| 7.100%                  Promissory Note due January 5, 2009                                                                                          |   |                               | 65      |   |                              |   | ― |   |
| Capital                  lease obligations                                                                                                           |   |                               | 149     |   |                              |   | 98 |   |
| Fair                  value adjustments related to interest rate swaps                                                                               |   |                               | 13      |   |                              |   | 10 |   |
|                         Total TCEH                                                                                     |   | $                                  | 4,012   |   |                              | $      | 3,036 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **September                    30,****2007** |    |   | **December                    31,****2006** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|--------|---------------------------------------------|--------|
| EFC                  Holdings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                         |    |   |                                        |   |
| 7.170%                  Fixed Senior Debentures due August 1,                  2007                                                                                                                                 |   | $                                            | ― |   |                                        | $      | 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                                                                                                        |   |                                         | 57      |   |                                        |   | 59 |   |
| 6.156%                  Floating Rate Junior Subordinated Debentures, Series D due January                  30,                  2037 (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                         | 1       |   |                                        |   | 1 |   |
| 8.175%                  Fixed Junior Subordinated Debentures, Series E due January 30,                  2037                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                         | 8       |   |                                        |   | 8 |   |
| Unamortized                  premium                                                                                                                                                                                |   |                                         | 4       |   |                                        |   | 5 |   |
| Total                  EFC                  Holdings                                                                                                                                                                                    |   |                                         | 210     |   |                                        |   | 230 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                         |    |   |                                        |   |   |   |
| EFH                  Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                         |    |   |                                        |   |   |   |
| 6.375%                  Fixed Senior Notes Series C due January 1, 2008                  (d)                                                                                                                        |   |                                         | 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                  (f)                                                                                                          |   |                                         | 88      |   |                                        |   | 99 |   |
| 6.860%                  Floating Convertible Senior Notes due July 15, 2033                  (e)                                                                                                                    |   |                                         | 25      |   |                                        |   | 25 |   |
| Fair                  value adjustments related to interest rate                  swaps                                                                                                                             |   |                                         | (66     | )      |                                        |   | (73 | ) |
| Unamortized                  discount                                                                                                                                                                               |   |                                         | (8      | )      |                                        |   | (9 | ) |
| Total                  EFH                  Corp.                                                                                                                                                                                       |   |                                         | 3,739   |   |                                        |   | 3,742 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                         |    |   |                                        |   |   |   |
| Oncor                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                         |    |   |                                        |   |   |   |
| 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                                                                                                                                     |   |                                         | ― |   |                                        |   | 200 |   |
| 7.000%                  Fixed Debentures due September 1,                  2022                                                                                                                                     |   |                                         | 800     |   |                                        |   | 800 |   |
| 6.069%                  Floating Senior Notes due September 16, 2008                  (e)                                                                                                                           |   |                                         | 800     |   |                                        |   | ― |   |
| Unamortized                  discount                                                                                                                                                                               |   |                                         | (16     | )      |                                        |   | (16 | ) |
| Total                  Oncor                                                                                                                                                                                                            |   |                                         | 3,634   |   |                                        |   | 3,034 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                         |    |   |                                        |   |   |   |
|                    Oncor 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                         | 93      |   |                                        |   | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                         | 131     |   |                                        |   | 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 Transition Bond Company                  LLC                                                                                                                                                               |   |                                         | 1,010   |   |                                        |   | 1,074 |   |
| Total                  Oncor                  Consolidated                                                                                                                                                                              |   |                                         | 4,644   |   |                                        |   | 4,108 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                         |    |   |                                        |   |   |   |
| Total                  EFH Corp.                  consolidated                                                                                                                                  |   |                                         | 12,605  |   |                                        |   | 11,116 |   |
| Less                  amount due                  currently                                                                                                                                     |   |                                         | (2,388  | )      |                                        |   | (485 | ) |
| Total                  long-term                  debt                                                                                                                                          |   | $                                            | 10,217  |   |                                        | $      | 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 September 30, 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) | These                  series were redeemed on May 8, 2007 as a result of the suspension                  of                  development of eight coal-fueled generation facilities.                                                                                                                                                 |
| (d) | Interest                  rates swapped to variable on entire principal amount at September                  30,                  2007.                                                                                                                                                                                               |
| (e) | Interest                  rates in effect at September 30, 2007.                                                                                                                                                                                                                                                                      |
| (f) | EFH                  Corp. and TCEH replaced their guarantees of this financing with                  a $144                  million letter of credit in June 2007, which has since been reduced                  to                  $135 million.                                                                                  |
| (g) | These                  bonds are nonrecourse to Oncor and were issued to securitize a                  regulatory                  asset.                                                                                                                                                                                             |

----

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

----

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

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | **Nine                      months Ended****September                      30, 2007** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|
| Long-term                    debt fair value adjustments related to interest rate swaps at                    beginning of                    period―                    net reduction in debt carrying value                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $                                                                                     | (63    | ) |
| Fair                    value adjustments during the                    period                                                                                                             |   |                                                                                  | 5      |   |
| Recognition                    of net gains on settled fair value hedges                    (a)                                                                                            |   |                                                                                  | (2     | ) |
| Recognition                    of net losses on dedesignated fair value hedges                    (b)                                                                                      |   |                                                                                  | 7      |   |
| Long-term                    debt fair value adjustments at end of period ― net reduction in                    debt carrying value (net out-of-the-money value of swaps)                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                                                                                     | (53    | ) |

| (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. |

----

**10.           COMMITMENTS            AND CONTINGENCIES**

***Generation              Development***

***Litigation***

----

----

----

----

***Regulatory            Investigations***

----

***Other            Proceedings***

***Guarantees***

***Overview            —***

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

* *

----

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

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

***Letters            of Credit***

***Security            Interest***

----

**11.           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 |   |
| Common                        stock                        issuances                                                                                                                                                                                                                                                                                                                                                                         |   | ─             |   |   |                                 | 1      |   |                                  | ─ |   |                                                                                | ─ |    |                                       |   | 1 |   |
| Common                        stock                        repurchases                                                                                                                                                                                                                                                                                                                                                                       |   | ─             |   |   |                                 | (13    | )      |                                  | ─ |   |                                                                                | ─ |    |                                       |   | (13 | ) |
| Net                        effects of cash flow                        hedges                                                                                                                                                                                                                                                                                                                                                                |   | ─             |   |   | ─                              |   |   | ─                               |    |   |                                                                                | (375    | )       |                                       |   | (375 | ) |
| Reclassification                        of pension and                        other retirement benefit costs                                                                                                                                                                                                                                                                                                                                 |   | ─             |   |   | ─                              |   |   | ─                               |    |   |                                                                                | 6       |    |                                       |   | 6 |   |
| Dividends                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | ─             |   |   | ─                              |   |   |                                  | (596    | )      |                                                                                | ─ |    |                                       |   | (596 | ) |
| Net                        income                                                                                                                                                                                                                                                                                                                                                                                                            |   | ─             |   |   | ─                              |   |   |                                  | 615     |   |                                                                                | ─ |    |                                       |   | 615 |   |
| Effect                        of adoption of FIN                        48                                                                                                                                                                                                                                                                                                                                                                   |   | ─             |   |   | ─                              |   |   |                                  | 33      |   |                                                                                | ─ |    |                                       |   | 33 |   |
| Effects                        of stock-based incentive                        compensation plans (a)                                                                                                                                                                                                                                                                                                                                        |   | ─             |   |   |                                 | (66    | )      |                                  | ─ |   |                                                                                | ─ |    |                                       |   | (66 | ) |
| Excess                        tax benefit on stock-based                        compensation                                                                                                                                                                                                                                                                                                                                                 |   | ─             |   |   |                                 | 82     |   |                                  | ─ |   |                                                                                | ─ |    |                                       |   | 82 |   |
| Cost                        of Thrift Plan shares issued                        by LESOP trustee                                                                                                                                                                                                                                                                                                                                             |   | ─             |   |   |                                 | 8      |   |                                  | ─ |   |                                                                                | ─ |    |                                       |   | 8 |   |
| Effects                        of executive deferred                        compensation plan                                                                                                                                                                                                                                                                                                                                                |   | ─             |   |   |                                 | 11     |   |                                  | ─ |   |                                                                                | ─ |    |                                       |   | 11 |   |
| Other                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | ─             |   |   |                                 | (1     | )      |                                  |    | 2      |                                                                                |    | ─ |                                       |   |   | 1 |   |
| Balance                        at September 30, 2007                                                                                                                                                                                                                                                                                                                                                                                         |   | $                   | 5      |   |                                 | $      | 1,126  |                                  |    | $      | 676                                                                                 |    |    | $                                          | 40     |   |   | $ | 1,847 |   |
| _______________                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                |   |   |                                 |   |   |                                  |    |   |                                                                                |    |    |                                       |   |   |   |   |   |   |

| (a) | Includes                        $93 million in settlements of minimum withholding tax                        liabilities. |
|-----|---------------------------------------------------------------------------------------------------------------------------|

----

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

|                                                                       |   | **September                            30, 2007** |   |
|----------------------------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                                                       |   | **Commodity****contracts**                        |   |   | **Cash                            flow hedges****and                            other derivatives** |   |   | **Netting****adjustments                            (a)** |   |   | **Total** |   |
|                                                                       |   |                                              |   |   |   |   |   |   |   |   |   |   |
| Assets:                                                                    |   |                                              |   |   |   |   |   |   |   |   |   |   |
| Current                          assets                                    |   | $                                                 | 249    |   |   | $ | 350 |   |   | $ | (184 | ) |   | $ | 415 |   |
| Noncurrent                          assets                                 |   |                                              | 46     |   |   |   | 113 |   |   |   | (69 | ) |   |   | 90 |   |
| Total                                                                      |   | $                                                 | 295    |   |   | $ | 463 |   |   | $ | (253 | ) |   | $ | 505 |   |
|                                                                       |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                               |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                          liabilities                               |   | $                                                 | 338    |   |   | $ | 17 |   |   | $ | (184 | ) |   | $ | 171 |   |
| Noncurrent                          liabilities                            |   |                                              | 864    |   |   |   | 81 |   |   |   | (69 | ) |   |   | 876 |   |
| Total                                                                      |   | $                                                 | 1,202  |   |   | $ | 98 |   |   | $ | (253 | ) |   | $ | 1,047 |   |
|                                                                       |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                          assets                          (liabilities) |   | $                                                 | (907   | ) |   | $ | 365 |   |   | $                                                     ─ |   |   | $ | (542 | ) |
|                                                                       |   |                                              |   |
|                                                                       |   |                                              |   |
|                                                                       |   | **December                            31, 2006**  |   |
|                                                                       |   | **Commodity****contracts**                        |   |   | **Cash                            flow hedges****and                            other derivatives** |   |   | **Netting****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***
* *

|                                                                                                                                                                                                                                                                                                                                                                                         |   | **September                              30,****2007** |   |   | **December                              31,****2006** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|--------|-------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                   |   |   |                                                  |   |
| Current                            and noncurrent assets:                                                                                                                                                                                                                                                                                                                                    |   |                                                   |   |   |                                                  |   |
| Commodity-related                            cash flow                            hedges                                                                                                                                                                                                                                                                                                     |   | $                                                      | 433    |   |                                                  | $      | 933 |   |
| Debt-related                            interest rate                            swaps                                                  |   |                                                   | 15     |   |                                                  |   | 4 |   |
| Other                                                                                                                                   |   |                                                   | 15     |   |                                                  |   | 9 |   |
| Total                                                                                                                                             |   | $                                                      | 463    |   |                                                  | $      | 946 |   |
|                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                   |   |   |                                                  |   |   |   |
| Current                            and noncurrent liabilities:                                                                                                                                                                                                                                                                                                                               |   |                                                   |   |   |                                                  |   |   |   |
| Commodity-related                            cash flow                            hedges                                                                                                                                                                                                                                                                                                     |   | $                                                      | 15     |   |                                                  | $      | 23 |   |
| Debt-related                            interest rate                            swaps                                                  |   |                                                   | 83     |   |                                                  |   | 89 |   |
| Total                                                                                                                                             |   | $                                                      | 98     |   |                                                  | $      | 112 |   |

----

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

----

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **Three                                Months Ended****September                                30,** |   |   | **Nine                                Months Ended****September                                30,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **2007**                                                                                              |   |   | **2006**                                                                                             |   |   | **2007** |   |   | **2006** |   |
| Components                              of net pension costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                  |   |   |                                                                                                 |   |   |   |   |   |   |   |
| Service                              cost                                                                                                                  |   | $                                                                                                     | 10     |   |                                                                                                 | $      | 10 |   |   | $ | 30 |   |   | $ | 31 |   |
| Interest                              cost                                                                                                                 |   |                                                                                                  | 36     |   |                                                                                                 |   | 34 |   |   |   | 107 |   |   |   | 102 |   |
| Expected                              return on                              assets                                                                        |   |                                                                                                  | (39    | )      |                                                                                                 |   | (37 | ) |   |   | (118 | ) |   |   | (110 | ) |
| Prior                              service                              cost                                                                               |   | ─                                                                                               |   |   |                                                                                                 | 1      |   |   |   | 1 |   |   |   | 2 |   |
| Net                              loss                                                                                                                      |   |                                                                                                  | 5      |   |                                                                                                 |   | 8 |   |   |   | 15 |   |   |   | 24 |   |
| Net                              pension                              cost                                                                                                |   |                                                                                                  | 12     |   |                                                                                                 |   | 16 |   |   |   | 35 |   |   |   | 49 |   |
| Components                              of net OPEB costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                  |   |   |                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Service                              cost                                                                                                                  |   |                                                                                                  | 3      |   |                                                                                                 |   | 4 |   |   |   | 9 |   |   |   | 10 |   |
| Interest                              cost                                                                                                                 |   |                                                                                                  | 14     |   |                                                                                                 |   | 15 |   |   |   | 41 |   |   |   | 45 |   |
| Expected                              return on                              assets                                                                        |   |                                                                                                  | (5     | )      |                                                                                                 |   | (6 | ) |   |   | (15 | ) |   |   | (16 | ) |
| Net                              transition                              obligation                                                                        |   | ─                                                                                               |   |   | ─                                                                                              |   |   |   | 1 |   |   |   | 1 |   |
| Prior                              service                              cost                                                                               |   | ─                                                                                               |   |   |                                                                                                 | (1     | ) |   |   | (2 | ) |   |   | (3 | ) |
| Net                              loss                                                                                                                      |   |                                                                                                  | 3      |   |                                                                                                 |   | 8 |   |   |   | 16 |   |   |   | 23 |   |
| Net                              OPEB                              costs                                                                                                  |   |                                                                                                  | 15     |   |                                                                                                 |   | 20 |   |   |   | 50 |   |   |   | 60 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                  |   |   |                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net                              pension and OPEB costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                  | 27     |   |                                                                                                 |   | 36 |   |   |   | 85 |   |   |   | 109 |   |
| Less                              amounts deferred principally as a regulatory asset                              or                              property                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                  | (15    | )      |                                                                                                 |   | (20 | ) |   |   | (44 | ) |   |   | (61 | ) |
| Net                              amounts recognized as                              expense                                                                               |   | $                                                                                                     | 12     |   |                                                                                                 | $      | 16 |   |   | $ | 41 |   |   | $ | 48 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                               |   |   |                                                                                                                                                                                             |                                                                                                                                                                                             |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **Three                                    Months Ended****September                                    30, 2007**                                                                                                                 |   |   | **Nine                                    Months Ended****September                                    30, 2007**                                                                                |                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **Pension****Plan**                                                                                                                                                                                                                |   |   | **OPEB****Plan**                                                                                                                                                                                 |                                                                                                                                                                                             |   | **Total** |   |   | **Pension****Plan** |   |   | **OPEB****Plan** |   |   | **Total** |   |
|                                          Net transition                                  obligation                                                        |   |  $                                                                                            ─ |   |   | $                                                           ─ |                                                                                                                                                                                             |   | $                                                           ─ |   |   | $                                                            ─ |   |   | $ | 1 |   |   | $ | 1 |   |
| Prior                                  service                                  cost                                                                                                          |   | ─                                                                                                                                                                                                                            |   |   | ─                                                                                                                                                                                          |                                                                                                                                                                                             |   | ─ |   |   |   | 1 |   |   |   | (2 | ) |   |   | (1 | ) |
| Net                                  loss                                                                                                                                                     |   |                                                                                                                                                                                                                               | 5      |   |                                                                                                                                                                                             |                                                                                                                                                                                             | 3 |   |   |   | 8 |   |   |   | 15 |   |   |   | 16 |   |   |   | 31 |   |
| Total                                                                                                                                                                                                        |   |                                                                                                                                                                                                                               | 5      |   |                                                                                                                                                                                             |                                                                                                                                                                                             | 3 |   |   |   | 8 |   |   |   | 16 |   |   |   | 15 |   |   |   | 31 |   |
| Less                                  amounts related to a regulatory asset                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                                                                                                                                                                                               | (4     | )      |                                                                                                                                                                                             |                                                                                                                                                                                             | (3 | ) |   |   | (7 | ) |   |   | (12 | ) |   |   | (10 | ) |   |   | (22 | ) |
| Net                                  pretax amounts reclassified from AOCI                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                                                                                                                                                                                                                                  | 1      |   |                                                                                                                                                                                             | $                                                           ─ |   |   | $ | 1 |   |   | $ | 4 |   |   | $ | 5 |   |   | $ | 9 |   |

----

**14.           SEGMENT      INFORMATION**

|                                                                 |   | **Three                    Months Ended****September                    30,**                                                                                                          |   |   | **Nine                    Months Ended****September                    30,**                                                                                                                 |   |
|----------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                 |   | **2007**                                                                                                                                                                               |   |   | **2006**                                                                                                                                                                                     |   |   | **2007** |   |   | **2006** |   |
| Operating                  revenues:                                 |   |                                                                                                                                                                                   |   |   |                                                                                                                                                                                         |   |   |   |   |   |   |   |
| Competitive                  Electric                                |   | $                                                                                                                                                                                      | 3,034  |   |                                                                                                                                                                                         | $      | 3,148 |   |   | $ | 6,017 |   |   | $ | 7,507 |   |
| Regulated                  Delivery                                  |   |                                                                                                                                                                                   | 712    |   |                                                                                                                                                                                         |   | 708 |   |   |   | 1,919 |   |   |   | 1,874 |   |
| Corporate                  and                  Other                |   |                                                                                                                                                                                   | 13     |   |                                                                                                                                                                                         |   | 13 |   |   |   | 35 |   |   |   | 35 |   |
| Eliminations                                                         |   |                                                                                                                                                                                   | (314   | )      |                                                                                                                                                                                         |   | (359 | ) |   |   | (835 | ) |   |   | (935 | ) |
| Consolidated                                                         |   | $                                                                                                                                                                                      | 3,445  |   |                                                                                                                                                                                         | $      | 3,510 |   |   | $ | 7,136 |   |   | $ | 8,481 |   |
|                                                                 |   |                                                                                                                                                                                   |   |   |                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Regulated                  revenues included in operating revenues:  |   |                                                                                                                                                                                   |   |   |                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Competitive                  Electric                                |   | $                                            ─ |   |   | $                                             ─ |   |   | $                                             ─ |   |   | $                                             ─ |   |
| Regulated                  Delivery                                  |   |                                                                                                                                                                                   | 712    |   |                                                                                                                                                                                         |   | 708 |   |   |   | 1,919 |   |   |   | 1,874 |   |
| Corporate                  and                  Other                |   | ─                                                                                                                                                                                |   |   | ─                                                                                                                                                                                      |   |   | ─ |   |   | ─ |   |
| Eliminations                                                         |   |                                                                                                                                                                                   | (300   | )      |                                                                                                                                                                                         |   | (344 | ) |   |   | (797 | ) |   |   | (894 | ) |
| Consolidated                                                         |   | $                                                                                                                                                                                      | 412    |   |                                                                                                                                                                                         | $      | 364 |   |   | $ | 1,122 |   |   | $ | 980 |   |
|                                                                 |   |                                                                                                                                                                                   |   |   |                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Affiliated                  revenues included in operating revenues: |   |                                                                                                                                                                                   |   |   |                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Competitive                  Electric                                |   | $                                                                                                                                                                                      | 3      |   |                                                                                                                                                                                         | $      | 3 |   |   | $ | 5 |   |   | $ | 6 |   |
| Regulated                  Delivery                                  |   |                                                                                                                                                                                   | 300    |   |                                                                                                                                                                                         |   | 344 |   |   |   | 797 |   |   |   | 894 |   |
| Corporate                  and                  Other                |   |                                                                                                                                                                                   | 11     |   |                                                                                                                                                                                         |   | 12 |   |   |   | 33 |   |   |   | 35 |   |
| Eliminations                                                         |   |                                                                                                                                                                                   | (314   | )      |                                                                                                                                                                                         |   | (359 | ) |   |   | (835 | ) |   |   | (935 | ) |
| Consolidated                                                         |   | $                                            ─ |   |   | $                                             ─ |   |   | $                                             ─ |   |   | $                                             ─ |   |
|                                                                 |   |                                                                                                                                                                                   |   |   |                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) from continuing operations:           |   |                                                                                                                                                                                   |   |   |                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Competitive                  Electric                                |   | $                                                                                                                                                                                      | 946    |   |                                                                                                                                                                                         | $      | 900 |   |   | $ | 604 |   |   | $ | 1,879 |   |
| Regulated                  Delivery                                  |   |                                                                                                                                                                                   | 124    |   |                                                                                                                                                                                         |   | 131 |   |   |   | 264 |   |   |   | 282 |   |
| Corporate                  and                  Other                |   |                                                                                                                                                                                   | (91    | )      |                                                                                                                                                                                         |   | (47 | ) |   |   | (277 | ) |   |   | (165 | ) |
| Consolidated                                                         |   | $                                                                                                                                                                                      | 979    |   |                                                                                                                                                                                         | $      | 984 |   |   | $ | 591 |   |   | $ | 1,996 |   |

----

**15.           SUPPLEMENTARY      FINANCIAL INFORMATION**

***Regulated      Versus Unregulated Operations***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **Three                    Months Ended****September                    30,** |   |   | **Nine                    Months Ended****September                    30,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **2007**                                                                      |   |   | **2006**                                                                     |   |   | **2007** |   |   | **2006** |   |
| Operating                  revenues:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |
| Regulated                                                                                                                                                                        |   | $                                                                             | 712    |   |                                                                         | $      | 708 |   |   | $ | 1,919 |   |   | $ | 1,874 |   |
| Unregulated                                                                                                                                                                      |   |                                                                          | 3,047  |   |                                                                         |   | 3,161 |   |   |   | 6,052 |   |   |   | 7,542 |   |
| Intercompany                  sales                  eliminations –                  regulated                                                                             |   |                                                                          | (300   | )      |                                                                         |   | (344 | ) |   |   | (797 | ) |   |   | (894 | ) |
| Intercompany                  sales                  eliminations –                  unregulated                                                                           |   |                                                                          | (14    | )      |                                                                         |   | (15 | ) |   |   | (38 | ) |   |   | (41 | ) |
| Total                  operating                  revenues                                                                                                                                                               |   |                                                                          | 3,445  |   |                                                                         |   | 3,510 |   |   |   | 7,136 |   |   |   | 8,481 |   |
| Costs                  and operating expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                  purchased power costs                  and delivery fees – unregulated (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                          | 882    |   |                                                                         |   | 1,002 |   |   |   | 2,286 |   |   |   | 2,182 |   |
| Operating                  costs –                  regulated                                                                                                              |   |                                                                          | 214    |   |                                                                         |   | 194 |   |   |   | 616 |   |   |   | 579 |   |
| Operating                  costs –                  unregulated                                                                                                            |   |                                                                          | 136    |   |                                                                         |   | 140 |   |   |   | 449 |   |   |   | 439 |   |
| Depreciation                  and amortization                  –                  regulated                                                                               |   |                                                                          | 119    |   |                                                                         |   | 128 |   |   |   | 353 |   |   |   | 359 |   |
| Depreciation                  and amortization                  –                  unregulated                                                                             |   |                                                                          | 90     |   |                                                                         |   | 88 |   |   |   | 259 |   |   |   | 269 |   |
| Selling,                  general and                  administrative expenses – regulated                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                          | 43     |   |                                                                         |   | 43 |   |   |   | 131 |   |   |   | 132 |   |
| Selling,                  general and                  administrative expenses – unregulated                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                          | 186    |   |                                                                         |   | 168 |   |   |   | 543 |   |   |   | 450 |   |
| Franchise                  and revenue-based                  taxes –                  regulated                                                                           |   |                                                                          | 69     |   |                                                                         |   | 71 |   |   |   | 190 |   |   |   | 189 |   |
| Franchise                  and revenue-based                  taxes –                  unregulated                                                                         |   |                                                                          | 24     |   |                                                                         |   | 31 |   |   |   | 79 |   |   |   | 87 |   |
| Other                  income                                                                                                                                                    |   |                                                                          | (20    | )      |                                                                         |   | (36 | ) |   |   | (65 | ) |   |   | (91 | ) |
| Other                  deductions                                                                                                                                                |   |                                                                          | 10     |   |                                                                         |   | 23 |   |   |   | 901 |   |   |   | 244 |   |
| Interest                  income                                                                                                                                                 |   |                                                                          | (19    | )      |                                                                         |   | (10 | ) |   |   | (53 | ) |   |   | (30 | ) |
| Interest                  expense and related                  charges                                                                                                           |   |                                                                          | 226    |   |                                                                         |   | 209 |   |   |   | 644 |   |   |   | 640 |   |
| Total                  costs and operating                  expenses                                                                                                                                                     |   |                                                                          | 1,960  |   |                                                                         |   | 2,051 |   |   |   | 6,333 |   |   |   | 5,449 |   |
| Income                  from continuing operations before income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                                                                             | 1,485  |   |                                                                         | $      | 1,459 |   |   | $ | 803 |   |   | $ | 3,032 |   |

|   | (a) | Includes                  unregulated cost of fuel consumed of $358 million and $317 million                  for the                  three months ended September 30, 2007 and 2006, respectively, and                  $835                  million and $732 million for the nine months ended September 30,                  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****September                      30,** |   |   | **Nine                      Months Ended****September                      30,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **2007**                                                                          |   |   | **2006**                                                                         |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                              |   |   |                                                                             |   |   |   |   |   |   |   |
| Interest                                                                                                                                        |   | $                                                                                 | 249    |   |                                                                             | $      | 217 |   |   | $ | 701 |   |   | $ | 655 |   |
| Amortization                    of debt discounts, premiums and issuance costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                              | 6      |   |                                                                             |   | 4 |   |   |   | 18 |   |   |   | 12 |   |
| Capitalized                    interest, including debt portion of allowance for borrowed funds                    used                    during construction                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                              | (29    | )      |                                                                             |   | (12 | ) |   |   | (75 | ) |   |   | (27 | ) |
| Total                    interest expense and                    related                    charges                                                                           |   | $                                                                                 | 226    |   |                                                                             | $      | 209 |   |   | $ | 644 |   |   | $ | 640 |   |

***Restricted          Cash***

|                                                                                                                                                                                                                                                                                                                                                                                                               |   | **Balance                        Sheet Classification**                                                                                                                                    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                               |   | **At                        September 30, 2007**                                                                                                                                           |   |   | **At                        December 31, 2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                               |   | **Current****Assets**                                                                                                                                                                      |   |   | **Noncurrent****Assets** |   |   | **Current****Assets** |   |   | **Noncurrent****Assets** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| Pollution                      control revenue bond funds held by trustee (See Note 9)                                                                                                                                                                                                                                                                                                                             |   | $                                                ─ |   |   | $ | 49 |   |   | $                                                ─ |   |   | $ | 241 |   |
| Amounts                      related to securitization (transition) bonds                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                       | 66     |   |   |   | 17 |   |   |   | 55 |   |   |   | 17 |   |
| All                      other                                                               |   | ─                                                                                                                                                                                    |   |   | ─ |   |   |   | 3 |   |   | ─ |   |
| Total                      restricted                      cash                                                                 |   | $                                                                                                                                                                                          | 66     |   |   | $ | 66 |   |   | $ | 58 |   |   | $ | 258 |   |

----

***Inventories      by Major Category***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **September                    30,****2007** |   |   | **December                    31,****2006** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|---------------------------------------------|--------|
| Materials                  and                  supplies                                                                                                                        |   | $                                            | 187    |   |                                        | $      | 189 |   |
| Fuel                  stock                                                                                                                                                     |   |                                         | 96     |   |                                        |   | 94 |   |
| Natural                  gas in                  storage                                                                                                                        |   |                                         | 67     |   |                                        |   | 75 |   |
| Environmental                  energy credits and emission                  allowances                                                                                          |   |                                         | 46     |   |                                        |   | 25 |   |
| Total                  inventories                                                                                                                                                                            |   | $                                            | 396    |   |                                        | $      | 383 |   |

***Investments        ─***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | **September                    30,****2007** |   |   | **December                    31,****2006** |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|---------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                         |   |   |                                        |    |
| Nuclear                  decommissioning                  trust                                                                                                   |   | $                                            | 487    |   |                                        | $       | 447 |   |
| Assets                  related to employee benefit plans, principally employee savings                  programs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                         | 208    |   |                                        |    | 197 |   |
| Land                                                                                                                                                              |   |                                         | 36     |   |                                        |    | 36 |   |
| Note                  receivable from                  Capgemini                                                                                                  |   |                                         | 25     |   |                                        |    | 25 |   |
| Investment                  in unconsolidated                  affiliates                                                                                         |   |                                         | 2      |   |                                        |    | 3 |   |
| Wind                  investment                  project                                                                                                         |   |                                         | 3      |   |                                        | ─ |   |
| Miscellaneous                  other                                                                                                                              |   |                                         | 3      |   |                                        |    | 4 |   |
| Total                  investments                                                                                                                                                    |   | $                                            | 764    |   |                                        | $       | 712 |   |

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

***Asset        Retirement Obligations***

| Asset                    retirement liability at December 31,                    2006                                                                      |   | $      | 585    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| Additions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |
| Accretion                                                                                                                                                                 |   |   | 28     |   |
| Reductions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Mining                    reclamation cost                    adjustments                                                                                                 |   |   | (2     | )      |
| Mining                    reclamation                    payments                                                                                                         |   |   | (18    | )      |
| Asset                    retirement liability at September 30,                    2007                                                                     |   | $      | 593    |   |

----

***Intangible      Assets***

|                                                                                                                                                                                                                                                                                  |   | **As                    of September 30, 2007** |   |   | **As                    of December 31, 2006** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|--------|------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                  |   | **Gross****Carrying****Amount**                 |   |   | **Accumulated****Amortization**                |   |   | **Net** |   |   | **Gross****Carrying****Amount** |   |   | **Accumulated****Amortization** |   |   | **Net** |   |
|                                                                                                                                                                                                                                                                                  |   |                                            |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intangible                  assets subject to amortization included in property, plant and                  equipment:                                                                                                                                                                |   |                                            |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capitalized                  software placed in                  service                                                                                                                                                                                                              |   | $                                               | 443    |   |                                           | $      | 360 |   |   | $ | 83 |   |   | $ | 423 |   |   | $ | 339 |   |   | $ | 84 |   |
| Land                  easements                                          |   |                                            | 181    |   |                                           |   | 67 |   |   |   | 114 |   |   |   | 180 |   |   |   | 65 |   |   |   | 115 |   |
| Total                                                                                                  |   | $                                               | 624    |   |                                           | $      | 427 |   |   | $ | 197 |   |   | $ | 603 |   |   | $ | 404 |   |   | $ | 199 |   |

| **Year**                                                                                                                                                                     |   | **Amortization****Expense** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                                                                                                                                         |   |                        |   |
| 2007                             |   | $                           | 35     |   |
| 2008                             |   |                        | 34     |   |
| 2009                             |   |                        | 22     |   |
| 2010                             |   |                        | 12     |   |
| 2011                             |   |                        | 7      |   |

----

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

|                                                                                  |   | **September                    30,****2007** |   |   | **December                    31,****2006** |   |
|---------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|---------------------------------------------|--------|
| **Regulatory                  assets**                                                |   |                                         |   |   |                                        |   |
| Generation-related                  regulatory assets securitized by transition bonds |   | $                                            | 1,208  |   |                                        | $      | 1,316 |   |
| Employee                  retirement costs                                            |   |                                         | 452    |   |                                        |   | 461 |   |
| Storm-related                  service recovery (self-insurance reserve) costs        |   |                                         | 154    |   |                                        |   | 138 |   |
| Securities                  reacquisition costs                                       |   |                                         | 106    |   |                                        |   | 112 |   |
| Recoverable                  deferred income taxes — net                        |   |                                         | 86     |   |                                        |   | 90 |   |
| Employee                  severance costs                                             |   |                                         | 44     |   |                                        |   | 44 |   |
| Total                  regulatory                  assets                             |   |                                         | 2,050  |   |                                        |   | 2,161 |   |
|                                                                                  |   |                                         |   |   |                                        |   |   |   |
| **Regulatory                  liabilities**                                           |   |                                         |   |   |                                        |   |   |   |
| Investment                  tax credit and protected excess deferred taxes            |   |                                         | 56     |   |                                        |   | 63 |   |
| Over-collection                  of securitization (transition) bond revenues         |   |                                         | 38     |   |                                        |   | 34 |   |
| Nuclear                  decommissioning cost over-recovery                           |   |                                         | 31     |   |                                        |   | 17 |   |
| Other                  regulatory liabilities                                         |   |                                         | 21     |   |                                        |   | 19 |   |
| Total                  regulatory                  liabilities                        |   |                                         | 146    |   |                                        |   | 133 |   |
|                                                                                  |   |                                         |   |   |                                        |   |   |   |
| **Net                  regulatory assets**                                            |   | $                                            | 1,904  |   |                                        | $      | 2,028 |   |

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | **Nine                      Months Ended****September                      30,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | **2007**                                                                         |   |   | **2006** |   |
| Cash                    payments related to continuing operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                             |   |   |   |   |
| Interest                    (net of amounts                    capitalized)                                                                         |   | $                                                                                | 575    |   |   | $ | 608 |   |
| Income                    taxes                                                                                                                     |   | $                                                                                | 270    |   |   | $ | 50 |   |
| Noncash                    investing and financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                             |   |   |   |   |   |   |
| Out-of-the-money                    values of power                    sales agreements (see Note 12)                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                                                                                | 264    |   |   | $ | ― |   |
| Noncash                    construction                    activity                                                                                 |   | $                                                                                | 206    |   |   | $ | 165 |   |
| Promissory                    note issued in                    conjunction with acquisition of                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                             |   |   |   |   |   |   |
| mining-related                    assets                                                                                                                      |   | $                                                                                | 65     |   |   | $ | ― |   |
| Capital                    lease related to                    railcars                                                                             |   | $                                                                                | 52     |   |   | $ | ― |   |

----

**16.           SUBSEQUENT      EVENTS**

***Overview***

***TCEH      Senior Secured Facilities***

***Overview***

|   | · | a                senior secured                initial term loan facility in an aggregate principal amount of $16.45                billion                (the TCEH                Initial Term Loan Facility); |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a                senior secured                delayed draw term loan facility in an aggregate principal amount                of $4.1                billion, of which $2.15 billion was drawn at the closing of the                Merger (the                TCEH Delayed                Draw Term Loan Facility); |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a                senior secured                letter of credit facility in an aggregate principal amount of $1.25                billion (the TCEH Letter of Credit                Facility); |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a                senior secured                revolving credit facility in an aggregate principal amount of $2.7                billion, which includes capacity available for letters of credit                and for                borrowings on same-day notice (the                TCEH                Revolving Facility); and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a                senior secured                cash posting credit facility  that is expected to fund the cash                posting requirements for a significant portion of TCEH’s long-term hedging                program that is not otherwise secured by means of a first lien under                the                security arrangements described below (the                TCEH                Commodity Collateral Posting Facility).  The amount drawn on                the                TCEH Commodity Collateral Posting                Facility on                October 10, 2007 was $382                million. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***Interest      Rates and Fees***

** **

***Interest      Rate      Swaps***

***Guarantees      and Security***
*-*
*** ***
*Guarantees*

*Security*

----

***Covenants***

|   | · | incurring                additional debt; |
|--------|--------|-------------------------------------------|

|   | · | incurring                additional liens; |
|--------|--------|--------------------------------------------|

|   | · | entering                into                mergers and consolidations; |
|--------|--------|-------------------------------------------------------------------------|

|   | · | selling                or                otherwise disposing ofassets; |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | making                dividends,                redemptions or other distributions in respect of capital                stock; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | making                acquisitions,                investments, loans and advances;                and |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | paying                or                modifying                certain                subordinated and other material                debt. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

***Maturity      and Amortization***

***Events      of Default***

----

***Senior      Unsecured Interim Facilities – TCEH***

***Overview***

|   | · | $5.0                billion                senior unsecured cash-pay term loan facility with a term of eight                years                (the TCEH Initial Cash-Pay Loans);                and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $1.75                billion                senior unsecured toggle term loan facility with a term of nine years                (the                TCEH Initial Toggle Loans). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Interest      Rate***

----

***Prepayments      and Redemptions***

***Guarantee***

***Certain        Covenants and Events of Default***

|   | · | incur                  additional                  indebtedness; |
|--------|--------|------------------------------------------------------------------|

|   | · | create                  liens; |
|--------|--------|--------------------------------|

|   | · | engage                  in mergers or                  consolidations; |
|--------|--------|------------------------------------------------------------------------|

|   | · | sell                  or transfer assets and                  subsidiary stock; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | pay                  dividends and distributions or                  repurchase their capital                  stock; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | make                  certain investments, loans or                  advances; |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | prepay                  certain                  indebtedness; |
|--------|--------|----------------------------------------------------------------|

|   | · | enter                  into agreements that                  restrict the payment of dividends by subsidiaries or the repayment                  of                  intercompany loans and advances;                  and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | engage                  in certain transactions                  with affiliates. |
|--------|--------|-----------------------------------------------------------------------------------|

----

***Issuance      of TCEH Notes***

|   | · | make                restricted payments; |
|--------|--------|------------------------------------------|

|   | · | incur                debt and issue preferred stock; |
|--------|--------|------------------------------------------------------|

|   | · | create                liens; |
|--------|--------|------------------------------|

|   | · | engage                in mergers or consolidations; |
|--------|--------|-----------------------------------------------------|

|   | · | permit                dividend and other payment restrictions on restricted subsidiaries;                and |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | engage                in certain transactions with                affiliates. |
|--------|--------|-------------------------------------------------------------------------------|

----

***Senior      Unsecured Interim Facility – EFH Corp.***

***Overview***

***EFH      Corp. Notes***

----

|   | · | make                restricted payments; |
|--------|--------|------------------------------------------|

|   | · | incur                debt and issue preferred stock; |
|--------|--------|------------------------------------------------------|

|   | · | create                liens; |
|--------|--------|------------------------------|

|   | · | engage                in mergers or consolidations; |
|--------|--------|-----------------------------------------------------|

|   | · | permit                dividend and other payment restrictions on restricted subsidiaries;                and |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | engage                in certain transactions with                affiliates. |
|--------|--------|-------------------------------------------------------------------------------|

----

***Intercreditor      Agreement***

***Revolving      Credit Facility – Oncor***

***Overview***

***Interest        Rates and Fees***

----

***Covenants      -***

|   | · | incurring                additional liens; |
|--------|--------|--------------------------------------------|

|   | · | entering                into mergers and consolidations; |
|--------|--------|----------------------------------------------------------|

|   | · | selling                assets; and |
|--------|--------|------------------------------------|

|   | · | making                acquisitions and investments in                subsidiaries. |
|--------|--------|------------------------------------------------------------------------------------|

***Maturity      -***

***Events      of Default  -***

***TXU      Receivables Program***

***Contribution        of Certain Assets and Liabilities of Luminant        Construction***

***Repayment      of Existing Credit Facilities and Other Indebtedness***

----

***Tender      Offers and Consent Solicitations***

***Management      Agreement***

***Tax      Sharing Agreement***

***Oncor      Limited Liability Company Agreement***

----

***Oncor      Agreement in Principle with Stakeholders and PUCT      Staff***

|   | · | Oncor                will agree to a one-time $72 million credit, which is intended for                all                retail customers in its service territory.  While the credit                will be given to REPs, the intent of the parties to the agreement                is that                the credit will be passed through to end-use consumers, and only                those                REPs that agree to do so will receive their portion of the                credit. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                PUCT will dismiss Oncor’s pending rate case.  Consistent with                the 2006 cities rate settlement, Oncor will file a system-wide rate                case                no later than July 1, 2008 based on a test-year ended December 31,                2007. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Oncor                will write-off regulatory assets of approximately $56 million related                to                self insurance reserve costs and 2002 restructuring                expenses. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                dividends paid by Oncor will be limited through December 31, 2012,                to an                amount not to exceed Oncor’s net income (determined in accordance with                GAAP), subject to certain defined                adjustments. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Oncor                will commit to minimum capital spending of $3.6 billion over the                five-year                period ending December 31, 2012, subject to certain defined                conditions. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Oncor                will commit to $100 million in spending over the five-year period                ending                December 31, 2012 on demand side management or other energy efficiency                initiatives.  This spending will not be recoverable in                rates. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**17.           SUPPLEMENTAL      GUARANTOR CONDENSED FINANCIAL INFORMATION**

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**Condensed        Consolidating Statements of Income**

**Three        Months Ended September 30, 2007**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **(millions                  of dollars)**                                                                                                                                             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Parent/Issuer                                                                                                                                                                          |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated |   |
| Operating                  revenues                                                                                                                                   |   | $                                            ─ |   |   | $                                             ─ |   |   | $ | 3,876 |   |   | $ | (431 | ) |   | $ | 3,445 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                  purchased power costs and                  delivery fees                                                                                                                                                                                                                                                                                                                                                                          |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 1,219 |   |   |   | (337 | ) |   |   | 882 |   |
| Operating                  costs                                                                                                                  |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 402 |   |   |   | (52 | ) |   |   | 350 |   |
| Depreciation                  and                  amortization                                                                                   |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 209 |   |   | ─ |   |   |   | 209 |   |
| Selling,                  general and                  administrative expenses                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                   | 21     |   |   | ─ |   |   |   | 252 |   |   |   | (44 | ) |   |   | 229 |   |
| Franchise                  and revenue-based                  taxes                                                                               |   |                                                                                                                                                                                   | (1     | ) |   | ─ |   |   |   | 94 |   |   | ─ |   |   |   | 93 |   |
| Other                  income                                                                                                                     |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | (20 | ) |   | ─ |   |   |   | (20 | ) |
| Other                  deductions                                                                                                                 |   |                                                                                                                                                                                   | 23     |   |   | ─ |   |   |   | (13 | ) |   | ─ |   |   |   | 10 |   |
| Interest                  income                                                                                                                  |   |                                                                                                                                                                                   | (51    | ) |   |   | (76 | ) |   |   | (121 | ) |   |   | 229 |   |   |   | (19 | ) |
| Interest                  expense and related                  charges                                                                            |   |                                                                                                                                                                                   | 197    |   |   |   | 70 |   |   |   | 187 |   |   |   | (228 | ) |   |   | 226 |   |
| Total                  costs and                  expenses                                                                                                                 |   |                                                                                                                                                                                   | 189    |   |   |   | (6 | ) |   |   | 2,209 |   |   |   | (432 | ) |   |   | 1,960 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) from continuing operations before income taxes                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                   | (189   | ) |   |   | 6 |   |   |   | 1,667 |   |   |   | 1 |   |   |   | 1,485 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax expense                  (benefit)                                                                |   |                                                                                                                                                                                   | (73    | ) |   |   | 1 |   |   |   | 578 |   |   | ─ |   |   |   | 506 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  earnings of                  subsidiaries                                                                  |   |                                                                                                                                                                                   | 1,106  |   |   |   | 892 |   |   |   | 231 |   |   |   | (2,229 | ) |   | ─ |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                   | 990    |   |   |   | 897 |   |   |   | 1,320 |   |   |   | (2,228 | ) |   |   | 979 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from discontinued operations, net of tax effect                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                                                                                                                                   | 2      |   |   | ─ |   |   |   | 11 |   |   | ─ |   |   |   | 13 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                                                        |   | $                                                                                                                                                                                      | 992    |   |   | $ | 897 |   |   | $ | 1,331 |   |   | $ | (2,228 | ) |   | $ | 992 |   |

----

**ENERGY      FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**Condensed      Consolidating Statements of Income**

**Three      Months Ended September 30, 2006**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **(millions                    of dollars)**                                                                                                                                           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Parent/Issuer                                                                                                                                                                          |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated |   |
| Operating                  revenues                                                                                                                                   |   | $                                            ─ |   |   | $                                             ─ |   |   | $ | 3,874 |   |   | $ | (364 | ) |   | $ | 3,510 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                  purchased power costs and                  delivery fees                                                                                                                                                                                                                                                                                                                                                                          |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 1,349 |   |   |   | (347 | ) |   |   | 1,002 |   |
| Operating                  costs                                                                                                                  |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 337 |   |   |   | (3 | ) |   |   | 334 |   |
| Depreciation                  and                  amortization                                                                                   |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 216 |   |   | ─ |   |   |   | 216 |   |
| Selling,                  general and                  administrative expenses                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                   | 16     |   |   | ─ |   |   |   | 209 |   |   |   | (14 | ) |   |   | 211 |   |
| Franchise                  and revenue-based                  taxes                                                                               |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 102 |   |   | ─ |   |   |   | 102 |   |
| Other                  income                                                                                                                     |   |                                                                                                                                                                                   | (15    | ) |   | ─ |   |   |   | (21 | ) |   | ─ |   |   |   | (36 | ) |
| Other                  deductions                                                                                                                 |   |                                                                                                                                                                                   | (1     | ) |   | ─ |   |   |   | 25 |   |   |   | (1 | ) |   |   | 23 |   |
| Interest                  income                                                                                                                  |   |                                                                                                                                                                                   | (20    | ) |   |   | (66 | ) |   |   | (102 | ) |   |   | 178 |   |   |   | (10 | ) |
| Interest                  expense and related                  charges                                                                            |   |                                                                                                                                                                                   | 158    |   |   |   | 44 |   |   |   | 184 |   |   |   | (177 | ) |   |   | 209 |   |
| Total                  costs and                  expenses                                                                                                                 |   |                                                                                                                                                                                   | 138    |   |   |   | (22 | ) |   |   | 2,299 |   |   |   | (364 | ) |   |   | 2,051 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) from continuing operations before income taxes                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                   | (138   | ) |   |   | 22 |   |   |   | 1,575 |   |   | ─ |   |   |   | 1,459 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax expense                  (benefit)                                                                |   |                                                                                                                                                                                   | (59    | ) |   |   | 11 |   |   |   | 523 |   |   | ─ |   |   |   | 475 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  earnings of                  subsidiaries                                                                  |   |                                                                                                                                                                                   | 1,083  |   |   |   | 897 |   |   |   | 290 |   |   |   | (2,270 | ) |   | ─ |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                   | 1,004  |   |   |   | 908 |   |   |   | 1,342 |   |   |   | (2,270 | ) |   |   | 984 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from discontinued operations, net of tax effect                                                                                                                                                                                                                                                                                                                                                                                  |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 20 |   |   | ─ |   |   |   | 20 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                                                        |   | $                                                                                                                                                                                      | 1,004  |   |   | $ | 908 |   |   | $ | 1,362 |   |   | $ | (2,270 | ) |   | $ | 1,004 |   |

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**Condensed        Consolidating Statements of Income**

**Nine        Months Ended September 30, 2007**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **(millions                    of dollars)**                                                                                                                                           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Parent/Issuer                                                                                                                                                                          |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated |   |
| Operating                  revenues                                                                                                                                   |   | $                                            ─ |   |   | $                                            ─ |   |   | $ | 8,362 |   |   | $ | (1,226 | ) |   | $ | 7,136 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                  purchased power costs and                  delivery fees                                                                                                                                                                                                                                                                                                                                                                          |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 3,196 |   |   |   | (910 | ) |   |   | 2,286 |   |
| Operating                  costs                                                                                                                  |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 1,246 |   |   |   | (181 | ) |   |   | 1,065 |   |
| Depreciation                  and                  amortization                                                                                   |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 611 |   |   |   | 1 |   |   |   | 612 |   |
| Selling,                  general and                  administrative expenses                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                   | 61     |   |   | ─ |   |   |   | 754 |   |   |   | (141 | ) |   |   | 674 |   |
| Franchise                  and revenue-based                  taxes                                                                               |   |                                                                                                                                                                                   | (1     | ) |   |   | 1 |   |   |   | 270 |   |   |   | (1 | ) |   |   | 269 |   |
| Other                  income                                                                                                                     |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | (65 | ) |   | ─ |   |   |   | (65 | ) |
| Other                  deductions                                                                                                                 |   |                                                                                                                                                                                   | 107    |   |   | ─ |   |   |   | 794 |   |   | ─ |   |   |   | 901 |   |
| Interest                  income                                                                                                                  |   |                                                                                                                                                                                   | (128   | ) |   |   | (202 | ) |   |   | (344 | ) |   |   | 621 |   |   |   | (53 | ) |
| Interest                  expense and related                  charges                                                                            |   |                                                                                                                                                                                   | 546    |   |   |   | 184 |   |   |   | 531 |   |   |   | (617 | ) |   |   | 644 |   |
| Total                  costs and                  expenses                                                                                                                 |   |                                                                                                                                                                                   | 585    |   |   |   | (17 | ) |   |   | 6,993 |   |   |   | (1,228 | ) |   |   | 6,333 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) from continuing operations before income taxes                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                   | (585   | ) |   |   | 17 |   |   |   | 1,369 |   |   |   | 2 |   |   |   | 803 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax expense                  (benefit)                                                                |   |                                                                                                                                                                                   | (225   | ) |   |   | 6 |   |   |   | 430 |   |   |   | 1 |   |   |   | 212 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  earnings of                  subsidiaries                                                                  |   |                                                                                                                                                                                   | 973    |   |   |   | 1,395 |   |   |   | 1,217 |   |   |   | (3,585 | ) |   | ─ |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                   | 613    |   |   |   | 1,406 |   |   |   | 2,156 |   |   |   | (3,584 | ) |   |   | 591 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from discontinued operations, net of tax effect                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                                                                                                                                   | 2      |   |   | ─ |   |   |   | 22 |   |   | ─ |   |   |   | 24 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                                                        |   | $                                                                                                                                                                                      | 615    |   |   | $ | 1,406 |   |   | $ | 2,178 |   |   | $ | (3,584 | ) |   | $ | 615 |   |

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**Condensed        Consolidating Statements of Income**

**Nine        Months Ended September 30, 2006**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **(millions                    of dollars)**                                                                                                                                           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Parent/Issuer                                                                                                                                                                          |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated |   |
| Operating                  revenues                                                                                                                                   |   | $                                            ─ |   |   | $                                             ─ |   |   | $ | 9,431 |   |   | $ | (950 | ) |   | $ | 8,481 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                  purchased power costs and                  delivery fees                                                                                                                                                                                                                                                                                                                                                                          |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 3,082 |   |   |   | (900 | ) |   |   | 2,182 |   |
| Operating                  costs                                                                                                                  |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 1,027 |   |   |   | (9 | ) |   |   | 1,018 |   |
| Depreciation                  and                  amortization                                                                                   |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 628 |   |   | ─ |   |   |   | 628 |   |
| Selling,                  general and                  administrative expenses                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                   | 51     |   |   | ─ |   |   |   | 572 |   |   |   | (41 | ) |   |   | 582 |   |
| Franchise                  and revenue-based                  taxes                                                                               |   | ─                                                                                                                                                                                |   |   |   | 1 |   |   |   | 276 |   |   |   | (1 | ) |   |   | 276 |   |
| Other                  income                                                                                                                     |   |                                                                                                                                                                                   | (15    | ) |   | ─ |   |   |   | (77 | ) |   |   | 1 |   |   |   | (91 | ) |
| Other                  deductions                                                                                                                 |   |                                                                                                                                                                                   | 4      |   |   | ─ |   |   |   | 239 |   |   |   | 1 |   |   |   | 244 |   |
| Interest                  income                                                                                                                  |   |                                                                                                                                                                                   | (51    | ) |   |   | (155 | ) |   |   | (261 | ) |   |   | 437 |   |   |   | (30 | ) |
| Interest                  expense and related                  charges                                                                            |   |                                                                                                                                                                                   | 449    |   |   |   | 90 |   |   |   | 538 |   |   |   | (437 | ) |   |   | 640 |   |
| Total                  costs and                  expenses                                                                                                                 |   |                                                                                                                                                                                   | 438    |   |   |   | (64 | ) |   |   | 6,024 |   |   |   | (949 | ) |   |   | 5,449 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) from continuing operations before income taxes                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                   | (438   | ) |   |   | 64 |   |   |   | 3,407 |   |   |   | (1 | ) |   |   | 3,032 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax expense                  (benefit)                                                                |   |                                                                                                                                                                                   | (169   | ) |   |   | 24 |   |   |   | 1,182 |   |   |   | (1 | ) |   |   | 1,036 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  earnings of                  subsidiaries                                                                  |   |                                                                                                                                                                                   | 2,346  |   |   |   | 1,983 |   |   |   | 773 |   |   |   | (5,102 | ) |   | ─ |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                   | 2,077  |   |   |   | 2,023 |   |   |   | 2,998 |   |   |   | (5,102 | ) |   |   | 1,996 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from discontinued operations, net of tax effect                                                                                                                                                                                                                                                                                                                                                                                  |   | ─                                                                                                                                                                                |   |   | ─ |   |   |   | 81 |   |   | ─ |   |   |   | 81 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                                                        |   | $                                                                                                                                                                                      | 2,077  |   |   | $ | 2,023 |   |   | $ | 3,079 |   |   | $ | (5,102 | ) |   | $ | 2,077 |   |

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**Condensed        Consolidating Statements of Cash Flows**

**Nine        Months Ended September 30, 2007**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                              ****(millions                of dollars)****           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Parent/Issuer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated |   |
| Cash                  flows – operating activities:Net                  income                                                                            |   | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 615        |   |   |  $ | 1,406 |   |   |  $ | 2,178 |   |   |  $ | (3,584 | ) |   |  $ | 615 |   |
| Income                  from discontinued                  operations, net of tax                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (2         | ) |   | ─ |   |   |   | (22 | ) |   | ─ |   |   |   | (24 | ) |
| Income                  from continuing                  operations                                                                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 613        |   |   |   | 1,406 |   |   |   | 2,156 |   |   |   | (3,584 | ) |   |   | 591 |   |
| Adjustments                  to reconcile income                  from continuing operationsto                  cash                          provided by operating activities:                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  in earnings of                  subsidiaries                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (973       | ) |   |   | (1,395 | ) |   |   | (1,217 | ) |   |   | 3,585 |   |   | ─ |   |
| Depreciation                  and                  amortization                                                                                                                          |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | 660 |   |   | ─ |   |   |   | 660 |   |
| Deferred                  income tax expense                  (benefit) - net                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (8         | ) |   |   | 2 |   |   |   | (224 | ) |   | ─ |   |   |   | (230 | ) |
| Impairments                  and other asset                  writedown charges                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 68         |   |   | ─ |   |   |   | 703 |   |   | ─ |   |   |   | 771 |   |
| Net                  gains from unrealized                  mark-to-market valuations                                                                                                                                                                                                                                                                                                                                                                                  |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | 703 |   |   | ─ |   |   |   | 703 |   |
| Other                  net                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 19         |   |   | ─ |   |   |   | (11 | ) |   | ─ |   |   |   | 8 |   |
| Changes                  in operating assets and                  liabilities                                                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 1,192      |   |   |   | 845 |   |   |   | (1,035 | ) |   |   | (1,950 | ) |   |   | (948 | ) |
| Cash                  provided by operating                  activities of continuing operations                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 911        |   |   |   | 858 |   |   |   | 1,735 |   |   |   | (1,949 | ) |   |   | 1,555 |   |
| Cash                  flows - financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of                  securities:                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                  debt                                                                                                                                                          |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | 1,800 |   |   | ─ |   |   |   | 1,800 |   |
| Common                  stock                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 1          |   |   | ─ |   |   | ─ |   |   | ─ |   |   |   | 1 |   |
| Retirements/repurchase                  of                  securities:                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                  debt                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (1         | ) |   |   | (12 | ) |   |   | (432 | ) |   | ─ |   |   |   | (445 | ) |
| Common                  stock                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (13        | ) |   | ─ |   |   | ─ |   |   | ─ |   |   |   | (13 | ) |
| Change                  in short term                  borrowings                                                                                               |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | 684 |   |   | ─ |   |   |   | 684 |   |
| Cash                  dividends                  paid                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (594       | ) |   |   | (851 | ) |   |   | (1,102 | ) |   |   | 1,953 |   |   |   | (594 | ) |
| Change                  in advances –                  affiliates                                                                                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (155       | ) |   | ─ |   |   |   | (704 | ) |   |   | 859 |   |   | ─ |   |
| Other,                  net                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (93        | ) |   | ─ |   |   |   | (17 | ) |   | ─ |   |   |   | (110 | ) |
|                     Cash                provided by (used in) financing activities of continuing                operations                                                                                                                                                                                                                                                                                                                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (855  | )  |   | (863  | )  |   |   | 229  |   |   | 2,812  |   |   |   | 1,323  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows - investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital                  expenditures and nuclear                  fuel                                                                                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (55        | ) |   | ─ |   |   |   | (2,273 | ) |   | ─ |   |   |   | (2,328 | ) |
| Purchase                  of mining-related                  assets                                                                                             |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | (122 | ) |   | ─ |   |   |   | (122 | ) |
| Reduction                  of restricted                  cash                                                                                                  |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | 197 |   |   | ─ |   |   |   | 197 |   |
|                       Proceeds from sales of nuclear decommissioning trust fund                  securities                                                                                                                                                                                                                                                                                                                                        |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | 402 |   |   | ─ |   |   |   | 402 |   |
| Investments                  in nuclear                  decommissioning trust fund securities                                                                                                                                                                                                                                                                                                                                                                         |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | (413 | ) |   | ─ |   |   |   | (413 | ) |
| Change                  in advances to                  affiliates                                                                                              |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   |   | 5 |   |   |   | 858 |   |   |   | (863 | ) |   | ─ |   |
| Other,                  net                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (1         | ) |   | ─ |   |   |   | (20 | ) |   | ─ |   |   |   | (21 | ) |
|      Cash                  provided by (used in) investing activities of continuing                  operations                                                                                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (56        | ) |   |   | 5 |   |   |   | (1,371 | ) |   |   | (863 | ) |   |   | (2,285 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  Flows – discontinued operations:                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  activities                                                                                                                           |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | 28 |   |   | ─ |   |   |   | 28 |   |
| Financing                  activities                                                                                                                           |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   | ─ |   |   | ─ |   |   | ─ |   |
| Investing                  activities                                                                                                                           |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   | ─ |   |   | ─ |   |   | ─ |   |
| Cash                  provided by discontinued                  operations                                                                                      |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | 28 |   |   | ─ |   |   |   | 28 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  change in cash and                  equivalents                                                                             |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | 621 |   |   | ─ |   |   |   | 621 |   |
| Cash                  and cash equivalents – beginning balance                                                                                                                                                                                                                                                                                                                                                                                                   |   | ─                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       |   | ─ |   |   |   | 25 |   |   | ─ |   |   |   | 25 |   |
| Cash                  and cash equivalents – ending                  balance                                                               |   | $                          ─                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   | $                                           ─ |   |   | $ | 646 |   |   | $                                            ─ |   |   | $ | 646 |   |

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**Condensed        Consolidating Statements of Cash Flows**

**Nine        Months Ended September 30, 2006**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |               |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |  ****(millions                  of dollars)****                           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | Parent/Issuer                                                                  |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated |   |
| Cash                  flows – operating activities:Net                  income                                                                                        |   | $                                                                              | 2,077  |   |   | $ | 2,023 |   |   | $ | 3,079 |   |   | $ | (5,102 | ) |   | $ | 2,077 |   |
| Income                  from discontinued                  operations, net of tax                                                                                                                                                                                                                                                                                                                                                                                                  |   | ─                                                                        |   |   | ─ |   |   |   | (81 | ) |   | ─ |   |   |   | (81 | ) |
| Income                  from continuing                  operations                                                                                                         |   |                                                                           | 2,077  |   |   |   | 2,023 |   |   |   | 2,998 |   |   |   | (5,102 | ) |   |   | 1,996 |   |
| Adjustments                  to reconcile income                  from continuing operationsto                  cash provided by operating                  activities:                                                                                                                                                                                                                                                                                                            |   |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  in earnings of                  subsidiaries                                                                                                                                 |   |                                                                           | (2,346 | ) |   |   | (1,983 | ) |   |   | (773 | ) |   |   | 5,102 |   |   | ─ |   |
| Depreciation                  and                  amortization                                                                                                                                      |   | ─                                                                        |   |   | ─ |   |   |   | 676 |   |   | ─ |   |   |   | 676 |   |
| Deferred                  income tax expense                  (benefit) - net                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                                           | 668    |   |   |   | (2 | ) |   |   | 46 |   |   | ─ |   |   |   | 712 |   |
| Impairments                  and other asset                  writedown charges                                                                                                                                                                                                                                                                                                                                                                                                    |   | ─                                                                        |   |   | ─ |   |   |   | 201 |   |   | ─ |   |   |   | 201 |   |
| Net                  gains from unrealized                  mark-to-market valuations                                                                                                                                                                                                                                                                                                                                                                                              |   | ─                                                                        |   |   | ─ |   |   |   | (214 | ) |   | ─ |   |   |   | (214 | ) |
| Other                  net                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                           | (12    | ) |   | ─ |   |   |   | 46 |   |   | ─ |   |   |   | 34 |   |
|    Changes                  in                  operating assets and                  liabilities                                                            |   |                                                                           | (350   | ) |   |   | 909 |   |   |   | 1,789 |   |   |   | (1,708 | ) |   |   | 640 |   |
|    Cash                  provided                  by operating activities of continuing operations                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                           | 37     |   |   |   | 947 |   |   |   | 4,769 |   |   |   | (1,708 | ) |   |   | 4,045 |   |
| Cash                  flows - financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of                  securities:                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                  debt                                                                                                                                                                      |   | ─                                                                        |   |   | ─ |   |   |   | 100 |   |   | ─ |   |   |   | 100 |   |
| Common                  stock                                                                                                                                                                        |   |                                                                           | 180    |   |   | ─ |   |   | ─ |   |   | ─ |   |   |   | 180 |   |
| Retirements/repurchase                  of                  securities:                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                  debt                                                                                                                                                                      |   |                                                                           | (861   | ) |   |   | (2 | ) |   |   | (684 | ) |   | ─ |   |   |   | (1,547 | ) |
| Common                  stock                                                                                                                                                                        |   |                                                                           | (953   | ) |   | ─ |   |   | ─ |   |   | ─ |   |   |   | (953 | ) |
| Change                  in short term                  borrowings                                                                                                           |   | ─                                                                        |   |   | ─ |   |   |   | 472 |   |   | ─ |   |   |   | 472 |   |
| Cash                  dividends                  paid                                                                                                                       |   |                                                                           | (575   | ) |   |   | (572 | ) |   |   | (1,113 | ) |   |   | 1,685 |   |   |   | (575 | ) |
| Change                  in advances –                  affiliates                                                                                                     |   |                                                                           | 1,666  |   |   | ─ |   |   |   | 698 |   |   |   | (2,364 | ) |   | ─ |   |
| Other,                  net                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                           | (13    | ) |   | ─ |   |   |   | (16 | ) |   | ─ |   |   |   | (29 | ) |
| Cash                  provided by (used in)                  financing activities of continuing operations                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                           | (556   | ) |   |   | (574 | ) |   |   | (543 | ) |   |   | (679 | ) |   |   | (2,352 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows - investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                      Capital expenditures and nuclear                  fuel                                                                                  |   | ─                                                                        |   |   | ─ |   |   |   | (1,486 | ) |   | ─ |   |   |   | (1,486 | ) |
|   Proceeds                  from sales                  of nuclear decommissioning trust fund securities                                                                                                                                                                                                                                                                                                                                                                 |   | ─                                                                        |   |   | ─ |   |   |   | 165 |   |   | ─ |   |   |   | 165 |   |
|   Investments                  in                  nuclear decommissioning trust fund securities                                                                                                                                                                                                                                                                                                                                                                         |   | ─                                                                        |   |   | ─ |   |   |   | (177 | ) |   | ─ |   |   |   | (177 | ) |
|                      Change in advances to                  affiliates                                                                                       |   | ─                                                                        |   |   |   | (304 | ) |   |   | (2,083 | ) |   |   | 2,387 |   |   | ─ |   |
|                      Investment in collateral                  trust                                                                                         |   |                                                                           | 533    |   |   | ─ |   |   |   | (533 | ) |   | ─ |   |   | ─ |   |
|                      Other                  net                                                                                                              |   |                                                                           | (12    | ) |   |   | (69 | ) |   |   | (126 | ) |   | ─ |   |   |   | (207 | ) |
| Cash                  provided by (used in)                  investing activities of continuing operations                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                           | 521    |   |   |   | (373 | ) |   |   | (4,240 | ) |   |   | 2,387 |   |   |   | (1,705 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  Flows – discontinued operations:                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  activities                                                                                                                                       |   | ─                                                                        |   |   | ─ |   |   |   | (1 | ) |   | ─ |   |   |   | (1 | ) |
| Financing                  activities                                                                                                                                       |   | ─                                                                        |   |   | ─ |   |   | ─ |   |   | ─ |   |   | ─ |   |
| Investing                  activities                                                                                                                                       |   | ─                                                                        |   |   | ─ |   |   | ─ |   |   | ─ |   |   | ─ |   |
| Cash                  provided by discontinued                  operations                                                                                                  |   | ─                                                                        |   |   | ─ |   |   |   | (1 | ) |   | ─ |   |   |   | (1 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  change in cash and                  equivalents                                                                                         |   |                                                                           | 2      |   |   | ─ |   |   |   | (15 | ) |   | ─ |   |   |   | (13 | ) |
| Cash                  and cash equivalents – beginning balance                                                                                                                                                                                                                                                                                                                                                                                                               |   | ─                                                                        |   |   | ─ |   |   |   | 37 |   |   | ─ |   |   |   | 37 |   |
| Cash                  and cash equivalents – ending                  balance                                                                           |   | $                                                                              | 2      |   |   | $                                            ─ |   |   | $ | 22 |   |   | $                                            ─ |   |   | $ | 24 |   |

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**Condensed        Consolidating Balance Sheets**

**at        September 30, 2007**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **(millions                      of dollars)**                                                                                                                                           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Parent/Issuer                                                                                                                                                                            |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated |   |
| **ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                    assets:                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                    and cash                    equivalents                                                                                                           |   | $                                              ─ |   |   | $                                              ─ |   |   | $ | 646 |   |   | $                                              ─ |   |   | $ | 646 |   |
| Restricted                    cash                                                                                                                                        |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 66 |   |   | ─ |   |   |   | 66 |   |
| Advances                    to                    parent                                                                                                                  |   | ─                                                                                                                                                                                  |   |   |   | 579 |   |   |   | 2,384 |   |   |   | (2,963 | ) |   | ─ |   |
| Trade                    accounts receivable –                    net                                                                                               |   |                                                                                                                                                                                     | 8      |   |   | ─ |   |   |   | 1,470 |   |   |   | (519 | ) |   |   | 959 |   |
| Income                    taxes                    receivable                                                                                                             |   |                                                                                                                                                                                     | 94     |   |   | ─ |   |   | ─ |   |   |   | (94 | ) |   | ─ |   |
| Accounts                    receivable from                    affiliates                                                                                                 |   | ─                                                                                                                                                                                  |   |   |   | 142 |   |   | ─ |   |   |   | (142 | ) |   | ─ |   |
| Notes                    receivable from                    affiliates                                                                                                    |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 1,534 |   |   |   | (1,534 | ) |   | ─ |   |
| Inventories                                                                                                                                                               |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 396 |   |   | ─ |   |   |   | 396 |   |
| Commodity                    and other derivative                    contractual assets                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                     | 8      |   |   | ─ |   |   |   | 407 |   |   | ─ |   |   |   | 415 |   |
| Accumulated                    deferred income                    taxes                                                                                                   |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 334 |   |   |   | (6 | ) |   |   | 328 |   |
| Margin                    deposits related to                    commodity positions                                                                                                                                                                                                                                                                                                                                                                                             |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 211 |   |   | ─ |   |   |   | 211 |   |
| Other                    current                    assets                                                                                                                |   |                                                                                                                                                                                     | 1      |   |   |   | 1 |   |   |   | 166 |   |   |   | (22 | ) |   |   | 146 |   |
| Total                    current                    assets                                                                                                                                         |   |                                                                                                                                                                                     | 111    |   |   |   | 722 |   |   |   | 7,614 |   |   |   | (5,280 | ) |   |   | 3,167 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restricted                    cash                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 66 |   |   | ─ |   |   |   | 66 |   |
| Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                                                                                                                                                     | 12,062 |   |   |   | 7,192 |   |   |   | 3,860 |   |   |   | (22,350 | ) |   |   | 764 |   |
| Property,                    plant and equipment – net                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                     | 66     |   |   | ─ |   |   |   | 20,173 |   |   |   | 1 |   |   |   | 20,240 |   |
| Notes                    receivable from affiliates                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                     | 12     |   |   | ─ |   |   |   | 2,353 |   |   |   | (2,365 | ) |   | ─ |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 542 |   |   | ─ |   |   |   | 542 |   |
| Regulatory                    assets - net                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 1,904 |   |   | ─ |   |   |   | 1,904 |   |
| Commodity                    and other derivative contractual assets                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     | 22     |   |   | ─ |   |   |   | 69 |   |   |   | (1 | ) |   |   | 90 |   |
| Accumulated                    deferred income taxes                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     | 129    |   |   |   | 388 |   |   | ─ |   |   |   | (517 | ) |   | ─ |   |
| Other                    noncurrent                    assets                                                                                              |   |                                                                                                                                                                                     | 146    |   |   |   | 18 |   |   |   | 248 |   |   |   | (47 | ) |   |   | 365 |   |
| Assets                    held for                    sale                                                                                                 |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 103 |   |   | ─ |   |   |   | 103 |   |
| Total                    assets                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                                                                                                                                                                                        | 12,548 |   |   | $ | 8,320 |   |   | $ | 36,932 |   |   | $ | (30,559 | ) |   | $ | 27,241 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LIABILITIES                    AND SHAREHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term                    borrowings                                                                                                                                  |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 2,175 |   |   | ─ |   |   |   | 2,175 |   |
| Advances                    from                    affiliates                                                                                                            |   |                                                                                                                                                                                     | 2,963  |   |   | ─ |   |   | ─ |   |   |   | (2,963 | ) |   | ─ |   |
| Long-term                    debt due                    currently                                                                                                        |   |                                                                                                                                                                                     | 199    |   |   |   | 7 |   |   |   | 2,182 |   |   | ─ |   |   |   | 2,388 |   |
| Trade                    accounts payable –                    nonaffiliates                                                                                        |   |                                                                                                                                                                                     | 11     |   |   | ─ |   |   |   | 1,426 |   |   |   | (518 | ) |   |   | 919 |   |
| Accounts                    payable to affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                     | 36     |   |   | ─ |   |   |   | 107 |   |   |   | (143 | ) |   | ─ |   |
| Notes                    payable to                    affiliates                                                                                                         |   |                                                                                                                                                                                     | 1,500  |   |   | ─ |   |   |   | 34 |   |   |   | (1,534 | ) |   | ─ |   |
| Commodity                    and other derivative contractual liabilities                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                     | 9      |   |   | ─ |   |   |   | 162 |   |   | ─ |   |   |   | 171 |   |
| Margin                    deposits related to commodity positions                                                                                                                                                                                                                                                                                                                                                                                                                |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 116 |   |   | ─ |   |   |   | 116 |   |
| Accumulated                    deferred income taxes                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     | 6      |   |   | ─ |   |   | ─ |   |   |   | (6 | ) |   | ─ |   |
| Other                    current                    liabilities                                                                                                           |   |                                                                                                                                                                                     | 287    |   |   |   | 30 |   |   |   | 799 |   |   |   | (110 | ) |   |   | 1,006 |   |
| Total                    current                    liabilities                                                                                                                                    |   |                                                                                                                                                                                     | 5,011  |   |   |   | 37 |   |   |   | 7,001 |   |   |   | (5,274 | ) |   |   | 6,775 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accumulated                    deferred income                    taxes                                                                                    |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 3,658 |   |   |   | (523 | ) |   |   | 3,135 |   |
| Investment                    tax                    credits                                                                                               |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 348 |   |   | ─ |   |   |   | 348 |   |
| Commodity                    and other derivative contractual liabilities                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                     | 73     |   |   | ─ |   |   |   | 804 |   |   |   | (1 | ) |   |   | 876 |   |
| Notes                    or other liabilities due                    affiliates                                                                            |   |                                                                                                                                                                                     | 2,047  |   |   | ─ |   |   |   | 317 |   |   |   | (2,364 | ) |   | ─ |   |
|  Long-term                    debt, less amounts due                    currently                                                                |   |                                                                                                                                                                                     | 3,451  |   |   |   | 122 |   |   |   | 6,644 |   |   | ─ |   |   |   | 10,217 |   |
| Other                    noncurrent liabilities and deferred credits                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     | 119    |   |   | ─ |   |   |   | 3,972 |   |   |   | (48 | ) |   |   | 4,043 |   |
| Total                    liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     | 10,701 |   |   |   | 159 |   |   |   | 22,744 |   |   |   | (8,210 | ) |   |   | 25,394 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders’                    equity                                                                                                              |   |                                                                                                                                                                                     | 1,847  |   |   |   | 8,161 |   |   |   | 14,188 |   |   |   | (22,349 | ) |   |   | 1,847 |   |
| Total                    liabilities and                    shareholders’ equity                                                                                                                                                                                                                                                                                                                                                                                           |   | $                                                                                                                                                                                        | 12,548 |   |   | $ | 8,320 |   |   | $ | 36,932 |   |   | $ | (30,559 | ) |   | $ | 27,241 |   |

----

**ENERGY        FUTURE HOLDINGS CORP. AND SUBSIDIARIES**

**Condensed        Consolidating Balance Sheets**

**at        December 31, 2006**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                     |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | **(millions                      of dollars)**                                                                                                                                           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Parent/Issuer                                                                                                                                                                            |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated |   |
| **ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                    assets:                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                    and cash                    equivalents                                                                                                     |   | $                                              ─ |   |   | $                                               ─ |   |   | $ | 25 |   |   | $                                              ─ |   |   | $ | 25 |   |
| Restricted                    cash                                                                                                                                  |   |   ─                                                                                                                                                                      |   |   | ─ |   |   |   | 58 |   |   | ─ |   |   |   | 58 |   |
| Advances                    to                    parent                                                                                                            |   | ─                                                                                                                                                                                  |   |   |   | 584 |   |   |   | 1,821 |   |   |   | (2,405 | ) |   | ─ |   |
| Trade                    accounts receivable –                    net                                                                                         |   |                                                                                                                                                                                     | 5      |   |   |   | 1 |   |   |   | 1,165 |   |   |   | (212 | ) |   |   | 959 |   |
| Income                    taxes                    receivable                                                                                                       |   |                                                                                                                                                                                     | 165    |   |   | ─ |   |   | ─ |   |   |   | (165 | ) |   | ─ |   |
| Accounts                    receivable from                    affiliates                                                                                           |   | ─                                                                                                                                                                                  |   |   |   | 146 |   |   | ─ |   |   |   | (146 | ) |   | ─ |   |
| Notes                    receivable from                    affiliates                                                                                              |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 1,533 |   |   |   | (1,533 | ) |   | ─ |   |
| Inventories                                                                                                                                                         |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 383 |   |   | ─ |   |   |   | 383 |   |
| Commodity                    and other derivative                    contractual assets                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                     | 2      |   |   | ─ |   |   |   | 948 |   |   | ─ |   |   |   | 950 |   |
| Accumulated                    deferred income                    taxes                                                                                             |   | ─                                                                                                                                                                                  |   |   |   | 5 |   |   |   | 253 |   |   |   | (5 | ) |   |   | 253 |   |
| Margin                    deposits related to                    commodity positions                                                                                                                                                                                                                                                                                                                                                                                       |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 7 |   |   | ─ |   |   |   | 7 |   |
| Other                    current                    assets                                                                                                          |   |                                                                                                                                                                                     | 8      |   |   | ─ |   |   |   | 176 |   |   |   | (7 | ) |   |   | 177 |   |
| Total                    current                    assets                                                                                                                                   |   |                                                                                                                                                                                     | 180    |   |   |   | 736 |   |   |   | 6,369 |   |   |   | (4,473 | ) |   |   | 2,812 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restricted                    cash                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 258 |   |   | ─ |   |   |   | 258 |   |
| Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                     | 12,457 |   |   |   | 6,902 |   |   |   | 1,682 |   |   |   | (20,329 | ) |   |   | 712 |   |
| Property,                    plant and equipment – net                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                     | 33     |   |   | ─ |   |   |   | 18,723 |   |   | ─ |   |   |   | 18,756 |   |
| Notes                    receivable from affiliates                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                     | 12     |   |   |   | 700 |   |   |   | 3,073 |   |   |   | (3,785 | ) |   | ─ |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 542 |   |   | ─ |   |   |   | 542 |   |
| Regulatory                    assets - net                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 2,028 |   |   | ─ |   |   |   | 2,028 |   |
| Commodity                    and other derivative contractual assets                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                     | 11     |   |   | ─ |   |   |   | 334 |   |   | ─ |   |   |   | 345 |   |
| Accumulated                    deferred income taxes                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                     | 118    |   |   |   | 391 |   |   | ─ |   |   |   | (509 | ) |   | ─ |   |
| Other                    noncurrent                    assets                                                                                        |   |                                                                                                                                                                                     | 150    |   |   | ─ |   |   |   | 245 |   |   |   | (15 | ) |   |   | 380 |   |
| Total                    assets                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $                                                                                                                                                                                        | 12,961 |   |   | $ | 8,729 |   |   | $ | 33,254 |   |   | $ | (29,111 | ) |   | $ | 25,833 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LIABILITIES                    AND SHAREHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term                    borrowings                                                                                                                            |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 1,491 |   |   | ─ |   |   |   | 1,491 |   |
| Advances                    from                    affiliates                                                                                                      |   |                                                                                                                                                                                     | 2,402  |   |   | ─ |   |   | ─ |   |   |   | (2,402 | ) |   | ─ |   |
| Long-term                    debt due                    currently                                                                                                  |   | ─                                                                                                                                                                                  |   |   |   | 17 |   |   |   | 468 |   |   | ─ |   |   |   | 485 |   |
| Trade                    accounts payable –                    nonaffiliates                                                                                  |   |                                                                                                                                                                                     | 18     |   |   | ─ |   |   |   | 1,286 |   |   |   | (211 | ) |   |   | 1,093 |   |
|    Accounts                    payable to affiliates                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                     | 102    |   |   | ─ |   |   |   | 47 |   |   |   | (149 | ) |   | ─ |   |
| Notes                    payable to                    affiliates                                                                                                   |   |                                                                                                                                                                                     | 1,500  |   |   | ─ |   |   |   | 33 |   |   |   | (1,533 | ) |   | ─ |   |
|    Commodity                    and                    other derivative contractual liabilities                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     | 21     |   |   | ─ |   |   |   | 272 |   |   | ─ |   |   |   | 293 |   |
| Margin                    deposits related to                    commodity positions                                                                                                                                                                                                                                                                                                                                                                                       |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 681 |   |   | ─ |   |   |   | 681 |   |
|    Accumulated                    deferred income taxes                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                     | 5      |   |   | ─ |   |   | ─ |   |   |   | (5 | ) |   | ─ |   |
| Other                    current                    liabilities                                                                                                     |   |                                                                                                                                                                                     | 236    |   |   |   | 21 |   |   |   | 955 |   |   |   | (172 | ) |   |   | 1,040 |   |
| Total                    current                    liabilities                                                                                                                              |   |                                                                                                                                                                                     | 4,284  |   |   |   | 38 |   |   |   | 5,233 |   |   |   | (4,472 | ) |   |   | 5,083 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accumulated                    deferred income                    taxes                                                                              |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 4,747 |   |   |   | (509 | ) |   |   | 4,238 |   |
| Investment                    tax                    credits                                                                                         |   | ─                                                                                                                                                                                  |   |   | ─ |   |   |   | 363 |   |   | ─ |   |   |   | 363 |   |
| Commodity                    and other derivative contractual liabilities                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                                                                                                                                     | 63     |   |   | ─ |   |   |   | 128 |   |   | ─ |   |   |   | 191 |   |
| Notes                    or other liabilities due                    affiliates                                                                      |   |                                                                                                                                                                                     | 2,714  |   |   |   | 700 |   |   |   | 371 |   |   |   | (3,785 | ) |   | ─ |   |
| Long-term                    debt, less amounts due                    currently                                                                |   |                                                                                                                                                                                     | 3,643  |   |   |   | 124 |   |   |   | 6,864 |   |   | ─ |   |   |   | 10,631 |   |
| Other                    noncurrent liabilities and deferred credits                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                     | 117    |   |   | ─ |   |   |   | 3,086 |   |   |   | (16 | ) |   |   | 3,187 |   |
| Total                    liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                     | 10,821 |   |   |   | 862 |   |   |   | 20,792 |   |   |   | (8,782 | ) |   |   | 23,693 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders’                    equity                                                                                                        |   |                                                                                                                                                                                     | 2,140  |   |   |   | 7,867 |   |   |   | 12,462 |   |   |   | (20,329 | ) |   |   | 2,140 |   |
| Total                    liabilities and                    shareholders’ equity                                                                                                                                                                                                                                                                                                                                                                                     |   | $                                                                                                                                                                                        | 12,961 |   |   | $ | 8,729 |   |   | $ | 33,254 |   |   | $ | (29,111 | ) |   | $ | 25,833 |   |

----

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

----

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

**Business**

**Operating      Segments**

----

**Significant      Developments**

***Merger***

----

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

***Nuclear      Generation Development***

***Investment      in Cleaner Coal-Fueled Generation Technologies***

----

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

***Long-term      Hedging Program***

***Retail      Pricing***
** **

***Termination      of New Utility Services Joint Venture***

----

***Oncor      Matters Pending With the PUCT***

***Management      Agreement***

----

**RESULTS      OF OPERATIONS**

**EFH      Corp. Consolidated**

***Three      Months Ended September 30, 2007 Compared to Three Months Ended September 30,      2006***

|   | · | Operating                revenues in the Competitive Electric segment decreased $114 million,                or                4%, to $3.0 billion.  The decrease was driven by a $360 million                decline in retail electricity revenues and a $91 million decline                in                wholesale electricity revenues, partially offset by $344 million                in                increased net gains from risk management and trading                activities.  The decrease in retail electricity revenues                reflected lower average consumption per customer due in part to cooler,                below normal weather and a net loss of customers due to competitive                activity.  The retail revenue decrease also reflected                residential price discount actions.  The decrease in wholesale                electricity revenues was primarily driven by lower average wholesale                prices reflecting lower natural gas prices.  The increased gains                from risk management and trading activities reflected unrealized                mark-to-market gains on positions in the long-term hedging program                due to                a decrease in forward market prices of natural gas.  Also see                discussion above under "Long-term Hedging                Program". |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Operating                revenues in the Regulated Delivery segment increased $4 million,                or 1%, to                $712 million.  The revenue increase reflected higher                transmission and delivery tariffs, customer growth and revenues in                2007                for equipment installation services to support the                broadband-over-powerlines initiative, largely offset by the effect                of a                decline in delivered volumes driven by an estimated $25 million impact                of                lower average consumption. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                decrease in the net intercompany sales elimination of $45 million                primarily reflected lower sales by Oncor to REP subsidiaries of TCEH,                while its sales to nonaffiliated REPs                increased. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Gross      Margin*

|                                                                                                                                                                                                                                                                                                                                                      |   | **Three                    Months Ended September 30,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                      |   | **2007**                                                |   |   | **%                    of Revenue** |   |   | **2006** |   |   | **%                    of Revenue** |   |
|                                                                                                                                                                                                                                                                                                                                                      |   |                                                    |   |   |   |   |   |   |   |   |   |   |
| Operating                  revenues                                                        |   | $                                                       | 3,445  |   |   |   | 100 | % |   | $ | 3,510 |   |   |   | 100 | % |
| Costs                  and expenses:                                                                                                                                                                                                                                                                                                                      |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                  purchased power costs and                  delivery fees                                                                                                                                                                                                                                                                           |   |                                                    | 882    |   |   |   | 26 |   |   |   | 1,002 |   |   |   | 29 |   |
| Operating                  costs                                                                               |   |                                                    | 350    |   |   |   | 10 |   |   |   | 334 |   |   |   | 9 |   |
| Depreciation                  and                  amortization                                                |   |                                                    | 204    |   |   |   | 6 |   |   |   | 211 |   |   |   | 6 |   |
| Gross                  margin                                                              |   | $                                                       | 2,009  |   |   |   | 58 | % |   | $ | 1,963 |   |   |   | 56 | % |

|   | · | The                  Competitive Electric segment’s gross margin increased $52 million, or 3%,                  to $1.6 billion.  The gross margin increase reflected higher net                  gains from risk management and trading activities and lower purchased                  power costs reflecting lower volumes purchased (due in part to                  cooler,                  below normal weather) and lower wholesale power prices driven by                  lower                  natural gas prices.  These benefits were partially offset by the                  effects of a 16% decrease in residential and small business volumes                  in the                  historical service territory and lower average retail electricity                  pricing                  driven by residential price                  discounts. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  Regulated Delivery segment’s gross margin decreased $7 million, or 2%, to                  $379 million driven by the effect of lower average consumption                  on                  operating revenues. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  Competitive Electric segment’s operating costs decreased $4 million, or                  3%, primarily reflecting maintenance costs for scheduled baseload                  generation unit outages in the fall of 2006, largely offset by                  costs in                  2007 for utilization of sulfur-dioxide emission credits for the                  lignite/coal-fueled generation                  plants. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  Regulated Delivery segment’s operating costs increased $20 million, or                  10%, primarily reflecting fees to other transmission entities,                  equipment                  installation costs related to the broadband-over-powerlines initiative,                  storm-driven costs for restoration of service and increased vegetation                  management expenses. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | $10                  million in increased retail marketing                  expenses; |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | $6                  million in higher incentive compensation                  expense; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | $5                  million in higher professional fees primarily for marketing/strategic                  projects and retail billing and customer care systems enhancements;                  and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $4                  million in higher salary and benefit costs primarily driven by                  an increase                  in staffing in retail operations, |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $5                  million in lower bad debt expense driven by a decrease in delinquencies                  and lower accounts receivable balances;                  and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $4                  million in lower expenses related to development of new generation                  facilities. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

----

|   | · | Earnings                  in the Competitive Electric segment increased $46 million, or 5%,                  to $946                  million driven by the improvement in gross margin and the credit                  to reduce                  the liability for impaired leases related to gas-fueled combustion                  turbines. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Earnings                  in the Regulated Delivery segment decreased $7 million, or 5%,                  to $124                  million driven by the effect of lower average consumption on operating                  revenues. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Corporate                  and Other net expenses totaled $91 million in 2007 and $47 million                  in                  2006.  The amounts in 2007 and 2006 include recurring interest                  expense on outstanding debt and advances from subsidiaries, as                  well as                  corporate general and administrative expenses.  The increase of                  $44 million primarily reflects: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $12                  million after-tax in financial advisory, legal and other professional                  fees                  in 2007 directly related to the                  Merger; |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $11                  million after-tax increase in net interest expense related to advances                  from subsidiaries reflecting higher balances and interest                  rates; |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $8                  million after-tax in higher SG&A expenses driven by higher                  compensation and consulting                  expenses; |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $10                  million after-tax insurance recovery of a litigation settlement                  in 2006;                  and |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $6                  million after-tax gain in 2006 on the sale of mineral                  rights. |
|--------|---|----------------------------------------------------------------------------------------------------|

----

**EFH        Corp. Consolidated**

***Nine        Months Ended September 30, 2007 Compared to Nine Months Ended September 30,        2006***

|   | · | Operating                  revenues in the Competitive Electric segment decreased $1.5 billion,                  or                  20%, to $6.0 billion.  The decrease was driven by a $715 million                  decrease in retail electricity revenues and a $668 million unfavorable                  change in results from risk management and trading                  activities.  The decrease in retail electricity revenues                  reflected lower volumes driven by the effects of a net loss of                  customers                  due to competitive activity and lower average consumption per customer                  due                  in part to cooler, below normal weather.  The retail revenue                  decrease also reflected residential price discount actions.  The                  change in results from risk management and trading activities reflected                  unrealized mark-to-market losses on positions in the long-term                  hedging                  program due to an increase in forward market prices of natural                  gas.  Also see discussion above under "Long-term Hedging                  Program". |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Operating                  revenues in the Regulated Delivery segment increased $45 million,                  or 2%,                  to $1.9 billion.  The revenue increase reflected revenues in                  2007 for equipment installation services to support the                  broadband-over-powerlines initiative and higher distribution and                  transmission tariffs, partially offset by the effect of a decline                  in                  delivered volumes driven by an estimated $32 million impact of                  lower                  average consumption. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                  decrease in the net intercompany sales elimination of $100 million                  reflected lower sales by Oncor to REP subsidiaries of TCEH, while                  its                  sales to nonaffiliated REPs                  increased. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Gross        Margin*

|                                                                                                                                                                                                                                                                                                                                                          |   | **Nine                      Months Ended September 30,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                          |   | **2007**                                                 |   |   | **%                      of Revenue** |   |   | **2006** |   |   | **%                      of Revenue** |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |                                                     |   |   |   |   |   |   |   |   |   |   |
| Operating                    revenues                                                          |   | $                                                        | 7,136  |   |   |   | 100 | % |   | $ | 8,481 |   |   |   | 100 | % |
| Costs                    and expenses:                                                                                                                                                                                                                                                                                                                        |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                    purchased power costs and                    delivery fees                                                                                                                                                                                                                                                                           |   |                                                     | 2,286  |   |   |   | 32 |   |   |   | 2,182 |   |   |   | 26 |   |
| Operating                    costs                                                                                 |   |                                                     | 1,065  |   |   |   | 15 |   |   |   | 1,018 |   |   |   | 12 |   |
| Depreciation                    and                    amortization                                                |   |                                                     | 599    |   |   |   | 8 |   |   |   | 615 |   |   |   | 7 |   |
| Gross                    margin                                                                |   | $                                                        | 3,186  |   |   |   | 45 | % |   | $ | 4,666 |   |   |   | 55 | % |

|   | · | The                Competitive Electric segment’s gross margin decreased $1.5 billion, or                40%, to $2.2 billion.  The gross margin decrease reflected an                unfavorable change in results from risk management and trading activities,                lower average retail electricity pricing and a decrease in residential                and                small business volumes in the historical service                territory.  Gross margin performance also reflected the effects                of a scheduled nuclear generation unit outage in early 2007 and increased                lignite mining costs due to inefficiencies caused by significantly                above-normal rainfall. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Regulated Delivery segment’s gross margin increased $14 million, or 1%, to                $951 million driven by higher operating revenues as increased                transmission-related rates more than offset the effect of lower delivered                volumes. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Competitive Electric segment’s operating costs increased $10 million, or                2%, reflecting higher maintenance costs largely due to the scheduled                nuclear generation unit outage and the utilization in 2007 of generation                plant emission credits, partially offset by lower costs in 2007 resulting                from generation technical support outsourcing service                agreements. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Regulated Delivery segment’s operating costs increased $37 million, or 6%,                reflecting higher third-party transmission fees, costs in 2007 for                equipment installation related to the broadband-over-powerlines initiative                and higher storm-driven service restoration costs, partially offset                by                lower vegetation management                expenses. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | $27                million in increased retail marketing                expenses; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | $22                million in higher professional fees primarily for retail billing                and                customer care systems enhancements and marketing/strategic/rebranding                projects; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $16                million in costs associated with the new generation facilities development                program, principally salaries and consulting                expenses; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $14                million in higher costs primarily due to reallocation of Capgemini                outsourcing fees; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | $12                million in higher incentive compensation                expense; |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | $5                million in higher salary and benefits primarily driven by an increase                in                staffing in retail operations, partially offset by a decrease in                staffing                in delivery operations; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $3                million in increased contributions primarily for Energy Aid (low-income                customer assistance); |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | $12                million in executive severance in 2006;                and |
|--------|--------|-------------------------------------------------------------------------------|

|   | · | $9                million in lower bad debt expense driven by a decrease in delinquencies                and lower accounts receivable                balances. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Earnings                in the Competitive Electric segment decreased $1.3 billion to $604                million                driven by the decline in gross margin and the charges related to                the                canceled development of eight coal-fueled generation                units. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Earnings                in the Regulated Delivery segment decreased $18 million, or 6%, to                $264                million driven by costs associated with the 2006 cities rate settlement                and a decline in delivered volumes due to lower average                consumption. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Corporate                and Other net expenses totaled $277 million in 2007 and $165 million                in                2006.  The amounts in 2007 and 2006 include recurring interest                expense on outstanding debt and advances from subsidiaries, as well                as                corporate general and administrative expenses.  The increase of                $112 million primarily reflects: |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $25                million after-tax in financial advisory, legal and other professional                fees                in 2007 directly related to the                Merger; |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | a                2007 write-off of $25 million after-tax in previously deferred costs                related to anticipated strategic transactions (including expected                financings) that were no longer expected to be completed in anticipation                of the Merger; |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | a                $17 million after-tax favorable settlement in 2006 of a telecommunications                contract dispute; |
|--------|---|------------------------------------------------------------------------------------------------------------------------------|

|   | o | $16                million after-tax in higher accrued interest related to uncertain                income                tax positions; |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $15                million after-tax in higher SG&A expenses driven by higher                compensation and consulting                expenses; |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $11                million after-tax increase in net interest expense related to advances                from subsidiaries reflecting higher balances and interest                rates; |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $10                million after-tax insurance recovery of a litigation settlement in                2006;                and |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------|

|   | o | $6                million after-tax gain in 2006 on the sale of mineral                rights, |
|--------|---|------------------------------------------------------------------------------------------------|

----

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **Nine                    Months****Ended****September                    30, 2007** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                 |   |
| Net                  commodity contract liability at beginning of                  period                                                                             |   | $                                                                                    | (23    | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                 |   |   |
| Settlements                  of positions included in the opening balance (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                 | 4      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                 |   |   |
| Unrealized                  mark-to-market valuations of positions held at end of period                  (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                 | (799   | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                 |   |   |
| Other                  activity                  (3)                                                                                                                  |   |                                                                                 | (89    | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                 |   |   |
| Net                  commodity contract liability at end of                  period                                                                                   |   | $                                                                                    | (907   | ) |

| (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 $222 million in losses and a $30 million gain recorded                  at                  contract inception dates (see Note 12 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 $62                  million related to natural gas physical swap transactions and $106                  million                  of premium payments which includes a $102 million premium paid                  in 2007                  related to a structured economic hedge transaction in the long-term                  hedging program.  Also includes $257 million (net of amounts                  settled of $7 million) in liabilities related to certain power                  sales                  agreements. (see Note 12 to Financial                  Statements). |

----

|                                                                             |   | **Three                    Months Ended****September                    30,** |   |   | **Nine                    Months Ended****September                    30,** |   |
|----------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------|--------|
|                                                                             |   | **2007**                                                                      |   |   | **2006**                                                                     |   |   | **2007** |   |   | **2006** |   |
|                                                                             |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |
| Unrealized                  gains (losses) related to contracts marked-to-market |   | $                                                                             | 481    |   |                                                                         | $      | 28 |   |   | $ | (795 | ) |   | $ | (87 | ) |
|                                                                             |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Ineffectiveness                  gains related to cash flow hedges (a)           |   |                                                                          | (2     | )      |                                                                         |   | 157 |   |   |   | 92 |   |   |   | 301 |   |
|                                                                             |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Total                  unrealized gains (losses) related to commodity contracts  |   | $                                                                             | 479    |   |                                                                         | $      | 185 |   |   | $ | (703 | ) |   | $ | 214 |   |

| (a) | See                    Note 12 to Financial                    Statements. |
|-----|----------------------------------------------------------------------------|

----

***Maturity        Table***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | **Amount** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |       |   |
| Net                  liability arising from mark-to-market                  accounting                                                                                                   |   | $          | (982   | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |       |   |   |
| Premiums                  paid under option                  agreements                                                                                                                  |   |       | 99     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |       |   |   |
| Net                  receipts of natural gas under physical swap                  transactions                                                                                           |   |       | (24    | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |       |   |   |
| Total                                                                                                                                                                                                                            |   | $          | (907   | ) |

|                                                           |   | **Maturity                    dates of unrealized net commodity contract liabilities at September                    30,                    2007** |   |
|----------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|  **Source                  of fair value**                |   | **Less                  than****1                    year**                                                                                        |   |   | **1-3                    years** |   |   | **4-5                    years** |   |   | **Excess                  of****5                    years** |   |   | **Total** |   |
| Prices                  actively quoted                        |   | $                                                                                                                                                  | 85     |   |   | $ | (90 | ) |   | $ | (153 | ) |   | $ | (11 | ) |   | $ | (169 | ) |
| Prices                  provided by other external sources (a) |   |                                                                                                                                               | 65     |   |   |   | (216 | ) |   |   | (257 | ) |   |   | (78 | ) |   |   | (486 | ) |
| Prices                  based on models (b)(c)                 |   |                                                                                                                                               | (63    | ) |   |   | (48 | ) |   |   | (31 | ) |   |   | (185 | ) |   |   | (327 | ) |
| Total                                                          |   | $                                                                                                                                                  | 87     |   |   | $ | (354 | ) |   | $ | (441 | ) |   | $ | (274 | ) |   | $ | (982 | ) |
| Percentage                  of total fair value                |   |                                                                                                                                               | (9     | )% |   |   | 36 | % |   |   | 45 | % |   |   | 28 | % |   |   | 100 | % |

| (a) | Includes                  “day one” losses of $195 million associated with hedge transactions and a                  "day one" gain of $30 million associated with a long-term power                  purchase                  agreement. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Includes                  "day one" loss of $27 million associated with a hedge                  transaction.                                                                                                                                          |
| (c) | Includes                  $257 million (net of amounts settled of $7 million) in liabilities                  related                  to certain power sales agreements (see Note 12 to Financial                  Statements).                       |

----

**Competitive      Electric Segment**

***Financial      Results***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **Three                    Months Ended****September                    30,** |   |   | **Nine                    Months Ended****September                    30,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **2007**                                                                      |   |   | **2006**                                                                     |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |
| Operating                  revenues                                                                                                      |   | $                                                                             | 3,034  |   |                                                                         | $      | 3,148 |   |   | $ | 6,017 |   |   | $ | 7,507 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                  purchased power costs and                  delivery                  fees                                                                  |   |                                                                          | 1,184  |   |                                                                         |   | 1,348 |   |   |   | 3,086 |   |   |   | 3,081 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  costs                                                                                                                                  |   |                                                                          | 137    |   |                                                                         |   | 141 |   |   |   | 452 |   |   |   | 442 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                  and                  amortization                                                                                                   |   |                                                                          | 84     |   |                                                                         |   | 82 |   |   |   | 245 |   |   |   | 252 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Selling,                  general and                  administrative                  expenses                                                                   |   |                                                                          | 162    |   |                                                                         |   | 153 |   |   |   | 473 |   |   |   | 403 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Franchise                  and revenue-based                  taxes                                                                                               |   |                                                                          | 25     |   |                                                                         |   | 31 |   |   |   | 78 |   |   |   | 84 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Other                  income                                                                                                                                     |   |                                                                          | (6     | )      |                                                                         |   | 2 |   |   |   | (15 | ) |   |   | (3 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Other                  deductions                                                                                                                                 |   |                                                                          | (17    | )      |                                                                         |   | 4 |   |   |   | 792 |   |   |   | 205 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  income                                                                                                                                  |   |                                                                          | (97    | )      |                                                                         |   | (61 | ) |   |   | (259 | ) |   |   | (137 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  expense and related                  charges                                                                                            |   |                                                                          | 130    |   |                                                                         |   | 109 |   |   |   | 342 |   |   |   | 316 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Total                  costs and                  expenses                                                                                                                                 |   |                                                                          | 1,602  |   |                                                                         |   | 1,809 |   |   |   | 5,194 |   |   |   | 4,643 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) before income                  taxes                                                                      |   |                                                                          | 1,432  |   |                                                                         |   | 1,339 |   |   |   | 823 |   |   |   | 2,864 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax expense                  (benefit)                                                                           |   |                                                                          | 486    |   |                                                                         |   | 439 |   |   |   | 219 |   |   |   | 985 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                  (loss)                                                                                      |   | $                                                                             | 946    |   |                                                                         | $      | 900 |   |   | $ | 604 |   |   | $ | 1,879 |   |

----

**Competitive      Electric Segment**

***Sales      Volume Data***

|                                                                                                    |   | **Three                  Months Ended****September                  30,** |    |   | **Nine                  Months Ended****September                  30,** |   |
|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|---------|--------|--------------------------------------------------------------------------|--------|
|                                                                                                    |   | **2007**                                                                  |    |   | **2006**                                                                 |   |   | **Change                  %** |   |   | **2007** |   |   | **2006** |   |   | **Change                  %** |   |
|                                                                                                    |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Sales                volumes:**                                                                       |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retail                electricity sales volumes (GWh):                                                  |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Historical                service                territory:                                             |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                                                             |   |                                                                      | 7,341   |   |                                                                     |   | 8,838 |   |   |   | (16.9 | ) |   |   | 18,061 |   |   |   | 20,896 |   |   |   | (13.6 | ) |
| Small                business (a)                                                                       |   |                                                                      | 2,066   |   |                                                                     |   | 2,408 |   |   |   | (14.2 | ) |   |   | 5,246 |   |   |   | 6,203 |   |   |   | (15.4 | ) |
| Total                historical service                territory                                        |   |                                                                      | 9,407   |   |                                                                     |   | 11,246 |   |   |   | (16.4 | ) |   |   | 23,307 |   |   |   | 27,099 |   |   |   | (14.0 | ) |
| Other                territories:                                                                       |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                                                             |   |                                                                      | 1,448   |   |                                                                     |   | 1,245 |   |   |   | 16.3 |   |   |   | 3,195 |   |   |   | 2,874 |   |   |   | 11.2 |   |
| Small                business (a)                                                                       |   |                                                                      | 247     |   |                                                                     |   | 213 |   |   |   | 16.0 |   |   |   | 615 |   |   |   | 513 |   |   |   | 19.9 |   |
| Total                other                territories                                                   |   |                                                                      | 1,695   |   |                                                                     |   | 1,458 |   |   |   | 16.3 |   |   |   | 3,810 |   |   |   | 3,387 |   |   |   | 12.5 |   |
| Large                business and other                customers                                        |   |                                                                      | 3,902   |   |                                                                     |   | 3,918 |   |   |   | (0.4 | ) |   |   | 10,946 |   |   |   | 10,703 |   |   |   | 2.3 |   |
| Total                retail                electricity                                                  |   |                                                                      | 15,004  |   |                                                                     |   | 16,622 |   |   |   | (9.7 | ) |   |   | 38,063 |   |   |   | 41,189 |   |   |   | (7.6 | ) |
|                   Wholesale electricity sales volumes                                         |   |                                                                      | 9,938   |   |                                                                     |   | 10,165 |   |   |   | (2.2 | ) |   |   | 27,914 |   |   |   | 25,870 |   |   |   | 7.9 |   |
|                   Net sales (purchases) of balancing electricity to/from                ERCOT |   |                                                                      | (4      | )      |                                                                     |   | 103 |   |   | ─ |   |   |   | 622 |   |   |   | 1,268 |   |   | ─ |   |
| Total                sales                volumes                                                       |   |                                                                      | 24,938  |   |                                                                     |   | 26,890 |   |   |   | (7.3 | ) |   |   | 66,599 |   |   |   | 68,327 |   |   |   | (2.5 | ) |
|                                                                                                    |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Average                volume (kWh) per retail customer (b):**                                        |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                                                             |   |                                                                      | 4,764   |   |                                                                     |   | 5,244 |   |   |   | (9.2 | ) |   |   | 11,399 |   |   |   | 12,235 |   |   |   | (6.8 | ) |
| Small                business                                                                           |   |                                                                      | 8,969   |   |                                                                     |   | 9,501 |   |   |   | (5.6 | ) |   |   | 22,421 |   |   |   | 23,926 |   |   |   | (6.3 | ) |
| Large                business and other                customers                                        |   |                                                                      | 109,115 |   |                                                                     |   | 81,369 |   |   |   | 34.1 |   |   |   | 276,764 |   |   |   | 210,515 |   |   |   | 31.5 |   |
|                                                                                                    |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Weather                (service territory average) – percent of normal                (c):**    |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent                of normal:                                                                       |   |                                                                      |    |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cooling                degree                days                                                       |   |                                                                      | 97.2    | %      |                                                                     |   | 109.0 | % |   |   |   |   |   |   | 94.2 | % |   |   | 118.5 | % |   |   |   |   |

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

----

**Competitive      Electric Segment**

***Customer      Count Data***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **September                  30,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **2007**                           |   |   | **2006** |   |   | **Change                  %** |   |
| **Customer                counts:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                               |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                               |   |   |   |   |   |   |   |
| Retail                electricity customers (end of period and in thousands)                (a):                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                               |   |   |   |   |   |   |   |
| Historical                service territory:                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                               |   |   |   |   |   |   |   |
| Residential                                                                                                                                        |   |                               | 1,551  |   |   |   | 1,670 |   |   |   | (7.1 | ) |
| Small                business                (b)                                                                                                   |   |                               | 243    |   |   |   | 265 |   |   |   | (8.3 | ) |
| Total                historical service                territory                                                                                                  |   |                               | 1,794  |   |   |   | 1,935 |   |   |   | (7.3 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                               |   |   |   |   |   |   |   |   |   |   |
| Other                territories:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                               |   |   |   |   |   |   |   |   |   |   |
| Residential                                                                                                                                        |   |                               | 307    |   |   |   | 234 |   |   |   | 31.2 |   |
| Small                business                (b)                                                                                                   |   |                               | 13     |   |   |   | 8 |   |   |   | 62.5 |   |
| Total                other                territories                                                                                                             |   |                               | 320    |   |   |   | 242 |   |   |   | 32.2 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                               |   |   |   |   |   |   |   |   |   |   |
| All                territories:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                               |   |   |   |   |   |   |   |   |   |   |
| Residential                                                                                                                                        |   |                               | 1,858  |   |   |   | 1,904 |   |   |   | (2.4 | ) |
| Small                business                (b)                                                                                                   |   |                               | 256    |   |   |   | 273 |   |   |   | (6.2 | ) |
| Total                all                territories                                                                                                               |   |                               | 2,114  |   |   |   | 2,177 |   |   |   | (2.9 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                               |   |   |   |   |   |   |   |   |   |   |
| Large                business and other                customers                                                                         |   |                               | 35     |   |   |   | 47 |   |   |   | (25.5 | ) |
| Total                retail electricity                customers                                                                                                  |   |                               | 2,149  |   |   |   | 2,224 |   |   |   | (3.4 | ) |

| (a) | Based                on number of meters.              |
|-----|--------------------------------------------------------|
| (b) | Customers                with demand of less than 1MW. |

----

**Competitive      Electric Segment**

***Revenue      and Market Share Data***

|                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **Three                    Months Ended****September                    30,** |   |   | **Nine                    Months Ended****September                    30,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **2007**                                                                      |   |   | **2006**                                                                     |   |   | **Change                    %** |   |   | **2007** |   |   | **2006** |   |   | **Change                    %** |   |
| **Operating                  revenues:**                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retail                  electricity revenues:                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Historical                  service                  territory:                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                                                                                             |   | $                                                                             | 1,018  |   |                                                                         | $      | 1,333 |   |   |   | (23.6 | ) |   | $ | 2,502 |   |   | $ | 3,086 |   |   |   | (18.9 | ) |
| Small                  business                  (a)                                                                                    |   |                                                                          | 304    |   |                                                                         |   | 357 |   |   |   | (14.8 | ) |   |   | 772 |   |   |   | 923 |   |   |   | (16.4 | ) |
| Total                  historical service                  territory                                                                                   |   |                                                                          | 1,322  |   |                                                                         |   | 1,690 |   |   |   | (21.8 | ) |   |   | 3,274 |   |   |   | 4,009 |   |   |   | (18.3 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  territories:                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                                                                                             |   |                                                                          | 203    |   |                                                                         |   | 194 |   |   |   | 4.6 |   |   |   | 452 |   |   |   | 442 |   |   |   | 2.3 |   |
| Small                  business                  (a)                                                                                    |   |                                                                          | 31     |   |                                                                         |   | 25 |   |   |   | 24.0 |   |   |   | 77 |   |   |   | 61 |   |   |   | 26.2 |   |
| Total                  other                  territories                                                                                              |   |                                                                          | 234    |   |                                                                         |   | 219 |   |   |   | 6.8 |   |   |   | 529 |   |   |   | 503 |   |   |   | 5.2 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Large                  business and other                  customers                                                                    |   |                                                                          | 368    |   |                                                                         |   | 375 |   |   |   | (1.9 | ) |   |   | 1,025 |   |   |   | 1,031 |   |   |   | (0.6 | ) |
| Total                  retail electricity                  revenues                                                           |   |                                                                          | 1,924  |   |                                                                         |   | 2,284 |   |   |   | (15.8 | ) |   |   | 4,828 |   |   |   | 5,543 |   |   |   | (12.9 | ) |
| Wholesale                  electricity                  revenues                                                              |   |                                                                          | 589    |   |                                                                         |   | 680 |   |   |   | (13.4 | ) |   |   | 1,571 |   |   |   | 1,635 |   |   |   | (3.9 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  sales (purchases) of balancing electricity to/from ERCOT                                                                                                                                                                                                                                                                                                                                                   |   |                                                                          | (19    | )      |                                                                         |   | (32 | ) |   | ─ |   |   |   | (11 | ) |   |   | (6 | ) |   | ─ |   |
| Income                  (loss) from risk management and trading activities                                                                                                                                                                                                                                                                                                                                                      |   |                                                                          | 462    |   |                                                                         |   | 118 |   |   | ─ |   |   |   | (607 | ) |   |   | 61 |   |   | ─ |   |
| Other                  operating                  revenues                                                                    |   |                                                                          | 78     |   |                                                                         |   | 98 |   |   |   | (20.4 | ) |   |   | 236 |   |   |   | 274 |   |   |   | (13.9 | ) |
| Total                  operating                  revenues                                                                                             |   | $                                                                             | 3,034  |   |                                                                         | $      | 3,148 |   |   |   | (3.6 | ) |   | $ | 6,017 |   |   | $ | 7,507 |   |   |   | (19.8 | ) |
| **Risk                  management and trading activities:**                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized                  net gains (losses) on                  settled positions (b)                                                                                                                                                                                                                                                                                                                                          |   | $                                                                             | (17    | )      |                                                                         | $      | (67 | ) |   |   |   |   |   | $ | 96 |   |   | $ | (153 | ) |   |   |   |   |
| Reversal                  of prior periods’                  unrealized net (gains) losses on positions settled in current                  period                                                                                                                                                                                                                                                                        |   |                                                                          | (4     | )      |                                                                         |   | (17 | ) |   |   |   |   |   |   | (17 | ) |   |   | 21 |   |   |   |   |   |
| OtOther                  unrealized net gains                  (losses), including cash flow hedge ineffectiveness                                                                                                                                                                                                                                                                                                              |   |                                                                          | 483    |   |                                                                         |   | 202 |   |   |   |   |   |   |   | (686 | ) |   |   | 193 |   |   |   |   |   |
| Total                  net                  losses                                                                                                     |   | $                                                                             | 462    |   |                                                                         | $      | 118 |   |   |   |   |   |   | $ | (607 | ) |   | $ | 61 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Average                  revenues per MWh:**                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                                                                                             |   | $                                                                             | 138.96 |   |                                                                         | $      | 151.45 |   |   |   | (8.2 | ) |   | $ | 138.99 |   |   | $ | 148.44 |   |   |   | (6.4 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |
| **Estimated                  share of ERCOT retail markets (c):**                                                                                                                                                                                                                                                                                                                                                               |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |
| Historical                  service territory:                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |
| Residential                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                          |   | 61     | %                                                                            |   |   | 67 | % |   |   |   |   |
| Small                  business                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                          |   | 61     | %                                                                            |   |   | 67 | % |   |   |   |   |
| Total                  ERCOT:                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |
| Residential                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                          |   | 36     | %                                                                            |   |   | 37 | % |   |   |   |   |
| Small                  business                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                          |   | 25     | %                                                                            |   |   | 27 | % |   |   |   |   |
| Large                  business and other                  customers                                                                                                                                                                                                                                                                                                                                                            |   |                                                                          |   | 11     | %                                                                            |   |   | 16 | % |   |   |   |   |

| (a) | Customers                  with demand of less than 1 MW.                                                                                                                                                                                                                                                                                                                                                      |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Includes                  physical commodity trading activity not subject to mark-to-market                  accounting of $7 million and $10 million in net losses in the third                  quarter of 2007 and 2006, respectively, and $14 million and $25                  million in                  net losses in the nine months ended September 30, 2007 and 2006,                  respectively. |
| (c) | Based                  on number of meters.  Estimated market share is based on the                  number of customers that have                  choice.                                                                                                                                                                                                                                          |

----

**Competitive      Electric Segment**

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

|                                                                                                                            |   | **Three                    Months Ended****September                    30,** |   |   | **Nine                    Months Ended****September                    30,** |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------|--------|
|                                                                                                                            |   | **2007**                                                                      |   |   | **2006**                                                                     |   |   | **Change****%** |   |   | **2007** |   |   | **2006** |   |   | **Change****%** |   |
|                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Fuel,                  purchased power costs and delivery fees****($                  millions):**                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nuclear                  fuel                                                                                                   |   | $                                                                             | 24     |   |                                                                         | $      | 22 |   |   |   | 9.1 |   |   | $ | 63 |   |   | $ | 65 |   |   |   | (3.1 | ) |
| Lignite/coal                                                                                                                    |   |                                                                          | 161    |   |                                                                         |   | 124 |   |   |   | 29.8 |   |   |   | 451 |   |   |   | 353 |   |   |   | 27.8 |   |
| Total                  baseload                  fuel                                                                           |   |                                                                          | 185    |   |                                                                         |   | 146 |   |   |   | 26.7 |   |   |   | 514 |   |   |   | 418 |   |   |   | 23.0 |   |
| Natural                  gas fuel and purchased                  power                                                          |   |                                                                          | 559    |   |                                                                         |   | 740 |   |   |   | (24.5 | ) |   |   | 1,377 |   |   |   | 1,429 |   |   |   | (3.6 | ) |
| Other                  costs                                                                                                    |   |                                                                          | 57     |   |                                                                         |   | 47 |   |   |   | 21.3 |   |   |   | 203 |   |   |   | 169 |   |   |   | 20.1 |   |
| Fuel                  and purchased power                  costs                                                                |   |                                                                          | 801    |   |                                                                         |   | 933 |   |   |   | (14.1 | ) |   |   | 2,094 |   |   |   | 2,016 |   |   |   | 3.9 |   |
| Delivery                  fees (a)                                                                                              |   |                                                                          | 383    |   |                                                                         |   | 415 |   |   |   | (7.7 | ) |   |   | 992 |   |   |   | 1,065 |   |   |   | (6.9 | ) |
| Total                                                                                                                           |   | $                                                                             | 1,184  |   |                                                                         | $      | 1,348 |   |   |   | (12.2 | ) |   | $ | 3,086 |   |   | $ | 3,081 |   |   |   | 0.2 |   |
|                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Fuel                  and purchased power costs (which excludes generation plant operating                  costs) per MWh:** |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nuclear                  fuel                                                                                                   |   | $                                                                             | 4.68   |   |                                                                         | $      | 4.29 |   |   |   | 9.1 |   |   | $ | 4.59 |   |   | $ | 4.25 |   |   |   | 8.0 |   |
| Lignite/coal                  (b)                                                                                               |   | $                                                                             | 14.18  |   |                                                                         | $      | 11.29 |   |   |   | 25.6 |   |   | $ | 14.31 |   |   | $ | 11.60 |   |   |   | 23.4 |   |
| Natural                  gas fuel and purchased                  power                                                          |   | $                                                                             | 63.71  |   |                                                                         | $      | 69.87 |   |   |   | (8.8 | ) |   | $ | 62.29 |   |   | $ | 65.71 |   |   |   | (5.2 | ) |
|                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Delivery                  fees per MWh**                                                                                      |   | $                                                                             | 25.09  |   |                                                                         | $      | 24.75 |   |   |   | 1.4 |   |   | $ | 25.60 |   |   | $ | 25.60 |   |   | ─ |   |
|                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Production                  and purchased power volumes (GWh):**                                                              |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nuclear                                                                                                                         |   |                                                                          | 5,110  |   |                                                                         |   | 5,115 |   |   |   | (0.1 | ) |   |   | 13,664 |   |   |   | 15,292 |   |   |   | (10.6 | ) |
| Lignite/coal                                                                                                                    |   |                                                                          | 12,353 |   |                                                                         |   | 12,348 |   |   | ─ |   |   |   | 34,297 |   |   |   | 34,252 |   |   |   | 0.1 |   |
| Total                  baseload                  generation                                                                     |   |                                                                          | 17,463 |   |                                                                         |   | 17,463 |   |   | ─ |   |   |   | 47,961 |   |   |   | 49,544 |   |   |   | (3.2 | ) |
| Natural                  gas-fueled                  generation                                                                 |   |                                                                          | 2,108  |   |                                                                         |   | 1,948 |   |   |   | 8.2 |   |   |   | 3,491 |   |   |   | 3,487 |   |   |   | 0.1 |   |
| Purchased                  power                                                                                                |   |                                                                          | 6,662  |   |                                                                         |   | 8,641 |   |   |   | (22.9 | ) |   |   | 18,619 |   |   |   | 18,258 |   |   |   | 2.0 |   |
| Total                  energy                  supply                                                                           |   |                                                                          | 26,233 |   |                                                                         |   | 28,052 |   |   |   | (6.5 | ) |   |   | 70,071 |   |   |   | 71,289 |   |   |   | (1.7 | ) |
| Less                  line loss and power                  imbalances                                                           |   |                                                                          | 1,295  |   |                                                                         |   | 1,162 |   |   |   | 11.4 |   |   |   | 3,472 |   |   |   | 2,962 |   |   |   | 17.2 |   |
| Net                  energy supply                  volumes                                                                     |   |                                                                          | 24,938 |   |                                                                         |   | 26,890 |   |   |   | (7.3 | ) |   |   | 66,599 |   |   |   | 68,327 |   |   |   | (2.5 | ) |
|                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Baseload                  capacity factors (%):**                                                                             |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                            |   |                                                                          |   |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nuclear                                                                                                                         |   |                                                                          | 100.6  | %      |                                                                         |   | 101.2 | % |   |   | (0.6 | ) |   |   | 90.8 | % |   |   | 102.0 | % |   |   | (10.9 | ) |
| Lignite/coal                                                                                                                    |   |                                                                          | 95.8   | %      |                                                                         |   | 95.8 | % |   | ─ |   |   |   | 89.7 | % |   |   | 89.5 | % |   |   | 0.2 |   |
| Total                  baseload                                                                                                 |   |                                                                          | 97.2   | %      |                                                                         |   | 97.3 | % |   |   | (0.1 | ) |   |   | 90.0 | % |   |   | 93.1 | % |   |   | (3.3 | ) |

| (a) | Includes                  delivery fee charges from Oncor 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. |

----

**Competitive      Electric Segment**

***Three      Months Ended September 30, 2007 Compared to Three Months Ended September 30,      2006***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **Three                    Months Ended September 30,** |   |   |     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **2007**                                                |   |   | **2006** |   |   | **Increase****(Decrease)** |   |
| Retail                  electricity                  revenues                                                                       |   | $                                                       | 1,924  |   |     | $      | 2,284 |   |   | $ | (360 | ) |
| Wholesale                  electricity                  revenues                                                                    |   |                                                    | 589    |   |     |   | 680 |   |   |   | (91 | ) |
| Wholesale                  balancing                  activities                                                                    |   |                                                    | (19    | )      |     |   | (32 | ) |   |   | 13 |   |
| Net                  gains from risk management                  and trading activities                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                    | 462    |   |     |   | 118 |   |   |   | 344 |   |
| Other                  operating                  revenues                                                                          |   |                                                    | 78     |   |     |   | 98 |   |   |   | (20 | ) |
| Total                  operating                  revenues                                                                                         |   | $                                                       | 3,034  |   |     | $      | 3,148 |   |   | $ | (114 | ) |

|   | · | Lower                  retail volumes contributed $222 million to the revenue                  decrease.  Residential and small business volumes in the                  historical service territory decreased 16% reflecting a decrease                  in                  average consumption per customer of 9% in the residential market                  and 6% in                  the small business market, due in part to cooler, below normal                  weather, as                  well as a net loss of customers due to competitive                  activity. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Lower                  average pricing (including customer mix effects) contributed $138                  million                  to the revenue decrease, driven by residential price                  discounts.  Lower average retail pricing reflected a six percent                  price discount, effective with meter reads on March 27, 2007, and                  an                  additional four percent price discount, effective with meter reads                  on June                  8, 2007, to those residential customers in the historical service                  territory with month-to-month service plans and a rate equivalent                  to the                  former price-to-beat rate.  Such customers received an                  additional five percent price discount upon closing of the Merger                  (effective with October 24, 2007 meter                  reads). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Total                  retail electricity customer counts at September 30, 2007 declined                  3% from                  September 30, 2006.  Total residential and small business                  customer counts in the historical service territory declined 7%                  and in all                  combined territories declined 3%. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Three        Months Ended September 30, 2007**

|   | · | $476                  million in net gains on positions in the long-term hedging program,                  which                  includes $552 million in net gains on unsettled positions, $18                  million in                  net losses that represent reversals of previously recorded unrealized                  net                  gains on positions settled in the current period and $58 million                  in a "day                  one" loss associated with a contract entered into at below-market                  prices;                  and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $7                  million in net gains on other economic hedges, which includes $9                  million                  in net losses on unsettled positions and $16 million in net gains                  that                  represent reversals of previously recorded unrealized net losses                  on                  positions settled in the current                  period. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $33                  million in net gains on settlement of positions in the long-term                  hedging                  program, which offset hedged electricity revenues recognized in                  the                  current period; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $37                  million in net losses on settlement of other economic hedge positions                  that                  offset hedged electricity revenues recognized in the current period;                  and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $13                  million in other net losses primarily related to settlement of                  trading                  positions. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

**Three        Months Ended September 30, 2006**

|   | · | $185                  million in net gains on positions in the long-term hedging program,                  which                  includes $153 million in cash flow hedge ineffectiveness net gains                  and $32                  million in net gains on unsettled                  positions. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $28                  million in net losses on settlement of positions in the long-term                  hedging                  program, which offset hedged electricity revenues recognized in                  the                  current period; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $48                  million in net losses on settlement of other hedge positions that                  offset                  hedged electricity revenues recognized in the current period;                  and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $9                  million in net gains on settlement of trading                  positions. |
|--------|--------|-----------------------------------------------------------------------------------------------|

----

*    Gross        Margin*

|                                                                                                                                                                                                                                                                                                                                                             |   | **Three                      Months Ended September 30,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                             |   | **2007**                                                  |   |   | **%                      of Revenue** |   |   | **2006** |   |   | **%                      of Revenue** |   |
|                                                                                                                                                                                                                                                                                                                                                             |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Operating                    revenues                                                        |   | $                                                         | 3,034  |   |   |   | 100 | % |   | $ | 3,148 |   |   |   | 100 | % |
| Costs                    and expenses:                                                                                                                                                                                                                                                                                                                           |   |                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                    purchased power costs and                    delivery fees                                                                                                                                                                                                                                                                              |   |                                                      | 1,184  |   |   |   | 39 |   |   |   | 1,348 |   |   |   | 43 |   |
| Generation                    plant operating                    costs                                                |   |                                                      | 137    |   |   |   | 4 |   |   |   | 141 |   |   |   | 4 |   |
| Depreciation                    and                    amortization                                                   |   |                                                      | 82     |   |   |   | 3 |   |   |   | 80 |   |   |   | 3 |   |
| Gross                    margin                                                              |   | $                                                         | 1,631  |   |   |   | 54 | % |   | $ | 1,579 |   |   |   | 50 | % |

|   | · | $10                million in increased retail marketing                expenses; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | $4                million in higher salary and benefit costs primarily driven by an                increase                in staffing in retail operations;                and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $3                million in higher professional fees primarily for marketing/strategic                projects and retail billing and customer care systems                enhancements, |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $5                million in lower bad debt expense driven by a decrease in delinquencies                and lower accounts receivable balances;                and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $4                million in lower expenses related to development of new generation                facilities. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

----

----

**Competitive      Electric Segment**

***Nine      Months Ended September 30, 2007 Compared to Nine Months Ended September 30,      2006***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **Nine                  Months Ended September 30,** |   |   |     |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **2007**                                             |   |   | **2006** |   |   | **Increase****(Decrease)** |   |
| Retail                electricity                revenues                                                                       |   | $                                                    | 4,828  |   |     | $      | 5,543 |   |   | $ | (715 | ) |
| Wholesale                electricity                revenues                                                                    |   |                                                 | 1,571  |   |     |   | 1,635 |   |   |   | (64 | ) |
| Wholesale                balancing                activities                                                                    |   |                                                 | (11    | )      |     |   | (6 | ) |   |   | (5 | ) |
| Net                (losses) gains from risk                management and trading activities                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                 | (607   | )      |     |   | 61 |   |   |   | (668 | ) |
| Other                operating                revenues                                                                          |   |                                                 | 236    |   |     |   | 274 |   |   |   | (38 | ) |
| Total                operating                revenues                                                                                         |   | $                                                    | 6,017  |   |     | $      | 7,507 |   |   | $ | (1,490 | ) |

|   | · | Lower                  retail volumes contributed $421 million to the revenue                  decrease.  Residential and small business volumes in the                  historical service territory decreased 14% reflecting the effects                  of a net                  loss of customers due to competitive activity and lower average                  consumption per customer of 7% in the residential market and 6%                  in the                  small business market due in part to cooler, below normal summer                  weather.  Large business market volumes increased 2% reflecting                  a change in customer mix. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Lower                  average pricing (including customer mix effects) contributed $294                  million                  to the revenue decrease.  Lower average retail pricing was                  driven by residential price discounts including a six percent price                  discount, effective with meter reads on March 27, 2007, and an                  additional                  four percent price discount, effective with meter reads on June                  8, 2007,                  to those residential customers in the historical service territory                  with                  month-to-month service plans and a rate equivalent to the former                  price-to-beat rate.  Such customers received an additional five                  percent price discount upon closing of the Merger (effective with                  October                  24, 2007 meter reads).  Lower average pricing also reflected new                  competitive product offerings in residential and small business                  markets                  and a change in customer mix in the large business                  market. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Total                  retail electricity customer counts at September 30, 2007 declined                  3% from                  September 30, 2006.  Total residential and small business                  customer counts in the historical service territory declined 7%                  and in all                  combined territories declined 3%. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Nine        Months Ended September 30, 2007**

|   | · | $687                  million in net losses on positions in the long-term hedging program,                  which                  includes: |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $578                  million in net losses on unsettled positions and $13 million in                  net gains                  that represent reversals of previously recorded net losses on positions                  settled in the current period; |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $114                  million in cash flow hedge ineffectiveness net gains on unsettled                  positions and $18 million in net losses that represent reversals                  of                  previously recorded ineffectiveness net gains on positions settled                  in the                  current period; and |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | $218                  million in "day one" losses on large positions entered into at                  below-market prices; |
|--------|---|----------------------------------------------------------------------------------------------------------------------------|

|   | · | $50                  million in net losses on commodity trading positions, which includes                  $15                  million in net losses on unsettled positions and $35 million in                  net losses                  that represent reversals of previously recorded net gains on positions                  settled in the current period; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $30                  million in a "day one" gain on a power purchase                  agreement. |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | $126                  million in net gains on settlement of positions in the long-term                  hedging                  program, which offset hedged electricity revenues recognized in                  the                  current period; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $56                  million in losses on settlement of other economic hedges, which                  offset                  hedged revenues and cost of energy sold recognized in the current                  period;                  and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $26                  million in net gains on settlement of trading                  positions. |
|--------|--------|------------------------------------------------------------------------------------------------|

**Nine        Months Ended September 30, 2006**

|   | · | $302                  million in net gains on positions in the long-term hedging program,                  which                  includes $273 million in cash flow hedge ineffectiveness net gains                  and $29                  million in net gains on unsettled positions;                  and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $109                  million in "day one" losses on commodity price hedges entered into                  at                  below-market prices. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $101                  million in net losses on settlement of economic hedge positions                  that                  offset hedged electricity revenues recognized in the current period;                  and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $51                  million in net losses on settlement of trading                  positions. |
|--------|--------|-------------------------------------------------------------------------------------------------|

----

*Gross        Margin*

|                                                                                                                                                                                                                                                                                                                                                             |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                             |   | **Nine                      Months Ended September 30,** |   |
|                                                                                                                                                                                                                                                                                                                                                             |   | **2007** |   |   | **%                      of Revenue** |   |   | **2006** |   |   | **%                      of Revenue** |   |
|                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                    revenues                                                        |   | $ | 6,017 |   |   |   | 100 | % |   | $ | 7,507 |   |   |   | 100 | % |
| Costs                    and expenses:                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel,                    purchased power costs and                    delivery fees                                                                                                                                                                                                                                                                              |   |   | 3,086 |   |   |   | 51 |   |   |   | 3,081 |   |   |   | 41 |   |
| Generation                    plant operating                    costs                                                |   |   | 452 |   |   |   | 8 |   |   |   | 442 |   |   |   | 6 |   |
| Depreciation                    and                    amortization                                                   |   |   | 240 |   |   |   | 4 |   |   |   | 247 |   |   |   | 3 |   |
| Gross                    margin                                                              |   | $ | 2,239 |   |   |   | 37 | % |   | $ | 3,737 |   |   |   | 50 | % |

|   | · | the                      effect of results from risk management and trading activities,                      including                      net unrealized mark-to-market losses on positions in the long-term                      hedging                      program (six percentage point margin                      decrease); |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                      effect of lower average retail electricity pricing (three percentage                      point                      margin decrease); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                      effect of a decrease in residential and small business retail                      sales                      volumes and an increase in wholesale sales volumes (two percentage                      point                      margin decrease); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                      effect of lower nuclear generation volumes and higher purchased                      power                      volumes (one percentage point margin decrease);                      and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                      effect of higher lignite mining costs (one percentage point                      margin                      decrease). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | $27                      million in increased retail marketing                      expenses; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | $16                      million in costs associated with the new generation facilities                      development                      program, principally salaries and consulting                      expenses; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $14                      million in higher professional fees primarily for retail billing                      and                      customer care systems enhancements and marketing/strategic                      projects; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $12                      million in higher salary and benefit costs primarily driven                      by an increase                      in staffing in retail operations;                      and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $10                      million in higher costs primarily due to reallocation of Capgemini                      outsourcing fees, |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | net                      charges of $812 million in connection with the canceled development                      of                      eight coal-fueled generation units (see Note 2 to Financial                      Statements); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $10                      million in charges related to the termination of a railcar                      operating                      lease; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a                      $48 million credit for reducing a liability previously recorded                      for leases                      related to gas-fueled combustion turbines that EFH Corp. has                      ceased                      operating for its own benefit (see Note 6 to Financial                      Statements). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a                      $198 million charge related to the write-down of the natural                      gas-fueled                      generation plants to fair value;                      and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $8                      million in equity losses (representing amortization expense)                      related to                      the ownership interest in the EFH Corp. subsidiary holding                      the capitalized                      software licensed to Capgemini; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

**Regulated            Delivery Segment**

***Financial            Results***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **Three                        Months Ended****September                        30,** |    |   | **Nine                        Months Ended****September                        30,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|---------|--------|--------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **2007**                                                                              |    |   | **2006**                                                                             |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |
| Operating                      revenues                                                                                            |   | $                                                                                     | 712     |   |                                                                                 | $      | 708 |   |   | $ | 1,919 |   |   | $ | 1,874 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Costs                      and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Operating                      costs                                                                                                                             |   |                                                                                  | 214     |   |                                                                                 |   | 194 |   |   |   | 616 |   |   |   | 579 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                      and                      amortization                                                                                          |   |                                                                                  | 119     |   |                                                                                 |   | 128 |   |   |   | 353 |   |   |   | 359 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Selling,                      general and                      administrative expenses                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                                  | 44      |   |                                                                                 |   | 44 |   |   |   | 136 |   |   |   | 138 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Franchise                      and revenue-based                      taxes                                                                                      |   |                                                                                  | 69      |   |                                                                                 |   | 71 |   |   |   | 190 |   |   |   | 189 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Other                      income                                                                                                                                |   |                                                                                  | ― |   |                                                                                 |   | (2 | ) |   |   | (3 | ) |   |   | (2 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Other                      deductions                                                                                                                            |   |                                                                                  | 7       |   |                                                                                 |   | 11 |   |   |   | 26 |   |   |   | 13 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Interest                      income                                                                                                                             |   |                                                                                  | (14     | )      |                                                                                 |   | (14 | ) |   |   | (42 | ) |   |   | (43 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Interest                      expense and related                      charges                                                                                   |   |                                                                                  | 79      |   |                                                                                 |   | 74 |   |   |   | 233 |   |   |   | 213 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Total                      costs and                      expenses                                                                                                                        |   |                                                                                  | 518     |   |                                                                                 |   | 506 |   |   |   | 1,509 |   |   |   | 1,446 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Income                      before income                      taxes                                                               |   |                                                                                  | 194     |   |                                                                                 |   | 202 |   |   |   | 410 |   |   |   | 428 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Income                      tax                      expense                                                                       |   |                                                                                  | 70      |   |                                                                                 |   | 71 |   |   |   | 146 |   |   |   | 146 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net                      income                                                                                                    |   | $                                                                                     | 124     |   |                                                                                 | $      | 131 |   |   | $ | 264 |   |   | $ | 282 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                  |    |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |

----

**Regulated              Delivery Segment**

***Operating              Data***

|                                                                                                              |   | **Three                        Months Ended****September                        30,** |   |   | **Nine                        Months Ended****September                        30,** |   |
|-------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------|--------|
|                                                                                                              |   | **2007**                                                                              |   |   | **2006**                                                                             |   |   | **Change****%** |   |   | **2007** |   |   | **2006** |   |   | **Change****%** |   |
| **Operating                      statistics – volumes:**                                                    |   |                                                                                  |   |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Electric                      energy delivered (GWh)                                                              |   |                                                                                  | 31,558 |   |                                                                                 |   | 33,105 |   |   |   | (4.7 | ) |   |   | 81,523 |   |   |   | 83,480 |   |   |   | (2.3 | ) |
|                                                                                                              |   |                                                                                  |   |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Reliability                      statistics (a):**                                                              |   |                                                                                  |   |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| System                      Average Interruption Duration Index (SAIDI) (nonstorm)                                |   |                                                                                  |   | 79.22  |                                                                                 |   |   | 78.29 |   |   |   | 1.2 |   |
| System                      Average Interruption Frequency Index (SAIFI) (nonstorm)                               |   |                                                                                  |   | 1.14   |                                                                                 |   |   | 1.16 |   |   |   | (1.7 | ) |
| Customer                      Average Interruption Duration Index (CAIDI) (nonstorm)                              |   |                                                                                  |   | 69.51  |                                                                                 |   |   | 67.31 |   |   |   | 3.3 |   |
|                                                                                                              |   |                                                                                  |   |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Electricity                      points of delivery (end of period and in                      thousands):**    |   |                                                                                  |   |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Electricity                      distribution points of delivery (based on number of                      meters) |   |                                                                                  |   | 3,087  |                                                                                 |   |   | 3,051 |   |   |   | 1.2 |   |
|                                                                                                              |   |                                                                                  |   |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                      revenues:**                                                                      |   |                                                                                  |   |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Electricity                      distribution revenues (b):                                                       |   |                                                                                  |   |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Affiliated                      (TCEH)                                                                            |   | $                                                                                     | 300    |   |                                                                                 | $      | 344 |   |   |   | (12.8 | ) |   | $ | 794 |   |   | $ | 894 |   |   |   | (11.2 | ) |
| Nonaffiliated                                                                                                     |   |                                                                                  | 331    |   |                                                                                 |   | 296 |   |   |   | 11.8 |   |   |   | 889 |   |   |   | 782 |   |   |   | 13.7 |   |
| Total                      distribution                      revenues                                             |   |                                                                                  | 631    |   |                                                                                 |   | 640 |   |   |   | (1.4 | ) |   |   | 1,683 |   |   |   | 1,676 |   |   |   | 0.4 |   |
| Third-party                      transmission revenues                                                            |   |                                                                                  | 66     |   |                                                                                 |   | 60 |   |   |   | 10.0 |   |   |   | 192 |   |   |   | 176 |   |   |   | 9.1 |   |
| Other                      miscellaneous revenues                                                                 |   |                                                                                  | 15     |   |                                                                                 |   | 8 |   |   |   | 87.5 |   |   |   | 44 |   |   |   | 22 |   |   |   | 100.0 |   |
| Total                      operating revenues                                                                     |   | $                                                                                     | 712    |   |                                                                                 | $      | 708 |   |   |   | 0.6 |   |   | $ | 1,919 |   |   | $ | 1,874 |   |   |   | 2.4 |   |

**__________________________**

|   | (a) | SAIDI                      is the average number of electric service interruption minutes                      per                      consumer in a year.  SAIFI is the average number of electric                      service interruptions per consumer in a year.  CAIDI is the                      average duration in minutes per electric service interruption                      in a                      year.  The statistics presented are based on the preceding                      twelve months’ data.                                                      |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) | Includes                      transition charge revenue associated with the issuance of securitization                      bonds totaling $42 million and $44 million for the three months                      ended                      September 30, 2007 and 2006, respectively, and $112 million                      and $117                      million for the nine months ended September 30, 2007 and 2006,                      respectively.  Also includes disconnect/reconnect fees and other                      discretionary revenues for services requested by                      REPs. |

----

**Regulated              Delivery Segment**

***Three              Months Ended September 30, 2007 Compared to Three Months Ended September              30,              2006***

|   | · | $8                        million from increased distribution tariffs to recover higher                        transmission                        costs; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $7                        million in higher transmission revenues primarily due to                        rate increases                        approved in 2006 and 2007 to recover ongoing investment in                        the                        transmission system; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $7                        million for installation services related to equipment to                        support the                        broadband-over-powerlines                        initiative, |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a                        4.7% decline in delivered volumes, with an estimated $25                        million effect of                        lower average consumption due in part to cooler, below normal                        weather,                        partially offset by an estimated $9 million impact of increased                        points of                        delivery; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $2                        million in lower charges to REPs related to securitization                        bonds (offset                        by lower amortization of the related regulatory                        asset). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Gross              Margin*

|                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **Three                          Months Ended****September                          30,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **2007**                                                                                  |   |   | **%                          of****Revenue** |   |   | **2006** |   |   | **%                          of****Revenue** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                      |   |   |   |   |   |   |   |   |   |   |
| Operating                        revenues                                                                        |   | $                                                                                         | 712    |   |   |   | 100 | % |   | $ | 708 |   |   |   | 100 | % |
| Costs                        and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                        costs                                                                                                    |   |                                                                                      | 214    |   |   |   | 30 |   |   |   | 194 |   |   |   | 27 |   |
| Depreciation                        and                        amortization                                                               |   |                                                                                      | 119    |   |   |   | 17 |   |   |   | 128 |   |   |   | 18 |   |
| Gross                        margin                                                                              |   | $                                                                                         | 379    |   |   |   | 53 | % |   | $ | 386 |   |   |   | 55 | % |

----

----

**Regulated      Delivery Segment**

***Nine      Months Ended September 30, 2007 Compared to Nine Months Ended September 30,      2006***

|   | · | $19                million for installation services related to equipment to support                the                broadband-over-powerlines                initiative; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $18                million from increased distribution tariffs to recover higher transmission                costs; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | $16                million in higher transmission revenues primarily due to rate increases                approved in 2006 and 2007 to recover ongoing investment in the                transmission system, |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a                2.3% decline in delivered volumes, with an estimated $32 million                effect of                lower average consumption due in part to cooler, below normal weather,                partially offset by an estimated $23 million impact of growth in                points of                delivery; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $5                million in lower charges to REPs related to securitization bonds                (offset                by lower amortization of the related regulatory                asset). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Gross      Margin*

|                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **Nine                    Months Ended****September                    30,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **2007**                                                                     |   |   | **%                    of****Revenue** |   |   | **2006** |   |   | **%                    of****Revenue** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                         |   |   |   |   |   |   |   |   |   |   |
| Operating                  revenues                                                                    |   | $                                                                            | 1,919  |   |   |   | 100 | % |   | $ | 1,874 |   |   |   | 100 | % |
| Costs                  and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  costs                                                                                                |   |                                                                         | 616    |   |   |   | 32 |   |   |   | 579 |   |   |   | 31 |   |
| Depreciation                  and                  amortization                                                                 |   |                                                                         | 352    |   |   |   | 18 |   |   |   | 358 |   |   |   | 19 |   |
| Gross                  margin                                                                          |   | $                                                                            | 951    |   |   |   | 50 | % |   | $ | 937 |   |   |   | 50 | % |

----

|   | · | $19                    million in costs as a result of the 2006 cities rate                    settlement; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | $3                    million in costs related to the InfrastruX Energy Services joint                    venture,                    which was not consummated in connection with the Merger;                    and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $2                    million in equity losses (representing amortization expense)                    related to                    the ownership interest in the EFH Corp. subsidiary holding the                    capitalized                    software licensed to Capgemini. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $6                    million in costs under the cities rate                    settlement; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | $3                    million in costs related to the InfrastruX Energy Services joint                    venture;                    and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $3                    million in equity losses (representing amortization expense)                    related to                    the ownership interest in the EFH Corp. subsidiary holding the                    capitalized                    software licensed to Capgemini. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**COMPREHENSIVE          INCOME – Continuing Operations**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **Three                        Months Ended****September                        30,** |   |   | **Nine                        Months Ended****September                        30,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **2007**                                                                              |   |   | **2006**                                                                             |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                  |   |   |                                                                                 |   |   |   |   |   |   |   |
| Net                      increase (decrease) in fair value of cash flow hedges (all                      commodity-related) held at end of period                                                                                                                                                                                                                                                                                                                                                                              |   | $                                                                                     | 9      |   |                                                                                 | $      | 401 |   |   | $ | (272 | ) |   | $ | 431 |   |
| Derivative                      value net losses (gains) reported in net income that relate                      to hedged                      transactions recognized in the period:                                                                                                                                                                                                                                                                                                                                         |   |                                                                                  |   |   |                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Commodities                                                                                                                                                                |   |                                                                                  | (13    | )      |                                                                                 |   | 9 |   |   |   | (108 | ) |   |   | 16 |   |
| Financing–interest                      rate                      swaps                      (a)                                                                     |   |                                                                                  | 1      |   |                                                                                 |   | 2 |   |   |   | 5 |   |   |   | 6 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                  | (12    | )      |                                                                                 |   | 11 |   |   |   | (103 | ) |   |   | 22 |   |
| Total                      income (loss) effect of cash flow hedges reported in other                      comprehensive                      income from continuing operations                                                                                                                                                                                                                                                                                                                                                |   | $                                                                                     | (3     | )      |                                                                                 | $      | 412 |   |   | $ | (375 | ) |   | $ | 453 |   |

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

----

**FINANCIAL              CONDITION**

***LIQUIDITY              AND CAPITAL RESOURCES – HISTORICAL/PRE-MERGER***

***Cash              Flows —***

|   | · | lower                        operating earnings after taking into account noncash items                        such as                        deferred federal income taxes, unrealized mark-to-market                        valuations and                        charges related to canceled development of generation                        facilities; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an                        unfavorable change of $1.3 billion in net margin deposits                        due to the                        effect of higher forward natural gas prices on hedge                        positions; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an                        unfavorable change in working capital (accounts receivable,                        accounts                        payable and inventories) balances of $111 million primarily                        due to the                        effects of lower natural gas prices, as cash flows in 2006                        included the                        collection of higher wholesale natural gas and electricity                        receivables                        that resulted from higher prices in late 2005;                        and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **Nine                            Months Ended****September                            30,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **2007**                                                                                     |   |   | **2006** |   |
| Net                          issuances, repayments and                          repurchases of borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                                                                                            | 2,022  |   |   | $ | (992 | ) |
| Net                          issuances and repurchases                          of common                          stock                                                                        |   |                                                                                         | (12    | ) |   |   | (773 | ) |
| Common                          stock dividends                          paid                                                                                                                   |   |                                                                                         | (594   | ) |   |   | (575 | ) |
| Excess                          tax benefit on                          stock-based incentive compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | ─                                                                                      |   |   |   | 47 |   |
| Settlements                          of minimum                          withholding tax liabilities under stock-based incentive                          compensation                          plans                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                         | (93    | ) |   |   | (59 | ) |
| Total                          provided by (used in)                          financing                          activities                                                                                                        |   | $                                                                                            | 1,323  |   |   | $ | (2,352 | ) |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **Nine                      Months Ended****September                      30,** |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **2007**                                                                         |    |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                             |    |   |   |   |
| Capital                    expenditures,                    including purchases of mining-related assets and                    nuclear                    fuel                                                                     |   | $                                                                                | (2,450  | ) |   | $ | (1,486 | ) |
| Reduction                    of restricted cash related to pollution control revenue                    bonds                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                             | 197     |   |   |   | ― |   |
| Purchase                    of lease                    trust                                                                                                                                                        |   |                                                                             | ― |   |   |   | (69 | ) |
| Proceeds                    from pollution control                    revenue bonds deposited with trustee                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                             | ― |   |   |   | (99 | ) |
| Net                    investments in nuclear                    decommissioning trust fund securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                             | (11     | ) |   |   | (12 | ) |
| Proceeds                    from sale of                    assets                                                                                                                                                   |   |                                                                             | 6       |   |   |   | 15 |   |
| Investment                    in unconsolidated                    affiliate                                                                                                                                         |   |                                                                             | ― |   |   |   | (15 | ) |
| Costs                    to remove retired                    property                                                                                                                                               |   |                                                                             | (24     | ) |   |   | (33 | ) |
| Other                                                                                                                                                                                                                |   |                                                                             | (3      | ) |   |   | (6 | ) |
| Total                    used in investing                    activities                                                                                                                                                                                |   | $                                                                                | (2,285  | ) |   | $ | (1,705 | ) |

----

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | **Issuances                    (a)** |    |   | **Repayments****and****Repurchases** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|---------|--------|--------------------------------------|--------|
| TCEH:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                 |    |   |                                 |   |
| Floating                  rate senior notes                  (b)                                                                                         |   | $                                    | 1,000   |   |                                 | $      | ― |   |
| Secured                  promissory                  note                                                                                                |   |                                 | 65      |   |                                 |   | ― |   |
| Pollution                  control revenue                  bonds                                                                                        |   |                                 | ― |   |                                 |   | (143 | ) |
| Other                  long-term                  debt                                                                                                   |   |                                 | ― |   |                                 |   | (8 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |   |   |
| EFC                  Holdings:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                 |    |   |                                 |   |   |   |
| Fixed                  senior                  debentures                                                                                                |   |                                 | ― |   |                                 |   | (10 | ) |
| Other                  long-term                  debt                                                                                                   |   |                                 | ― |   |                                 |   | (9 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |   |   |
| EFH                  Corp.:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                 |    |   |                                 |   |   |   |
| Other                  long-term                  debt                                                                                                   |   |                                 | ― |   |                                 |   | (11 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |   |   |
| Oncor:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                 |    |   |                                 |   |   |   |
| Floating                  rate senior notes                  (b)                                                                                         |   |                                 | 800     |   |                                 |   | ― |   |
| Fixed                  debentures                                                                                                                        |   |                                 | ― |   |                                 |   | (200 | ) |
| Transition                  bonds                                                                                                                        |   |                                 | ― |   |                                 |   | (64 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |   |   |
| Total                                                                                                                                                    |   | $                                    | 1,865   |   |                                 | $      | (445 | ) |
| ________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                 |    |   |                                 |   |   |   |

| (a) | Excludes                  $52 million capital lease liability related to a rail car lease                  and $7                  million capital lease liability related to a mining equipment                  lease.  Both leases were entered into in September                  2007. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Notes                  were subject to mandatory redemption upon closing of the                  Merger.                                                                                                                                                                                              |

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

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

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

----

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

***Sales        of Accounts Receivable***

***New        Lease***
** **

----

***LIQUIDITY        AND CAPITAL RESOURCES – POST-MERGER***

***New        Debt, Covenants and Restrictions***

*TCEH        Senior Secured Facilities*
** **
***—***

*Senior        Unsecured Interim Facilities/Senior        Notes*
** **
***—***

*Oncor        Revolving Credit Facility*
***—***
** **

*TXU          Receivables Program *
***—***

----

|                                                                                            |   | **Outstanding                      at October 31, 2007** |    |
|-------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|---------|
| TCEH                    Senior Secured Facilities:                                              |   |                                                     |    |
| TCEH                    Initial Term Loan Facility                    (a)                       |   | $                                                        | 16,450  |   |
| TCEH                    Delayed Draw Term Loan                    Facility (b)                  |   |                                                     | 2,150   |   |
| TCEH                    Letter of Credit Facility                    (c)                        |   |                                                     | 1,250   |   |
| TCEH                    Commodity Collateral                    Posting Facility (d)            |   |                                                     | 741     |   |
| TCEH                    Revolving Credit Facility                    (e)                        |   |                                                     | ― |   |
| TCEH                    Senior Unsecured Interim Facility (f)                                   |   |                                                     | 3,750   |   |
| TCEH                    Notes (f)                                                               |   |                                                     | 3,000   |   |
| Total                    debt financing issued by                    TCEH                       |   |                                                     | 27,341  |   |
| EFH                    Corp. Notes (g)                                                          |   |                                                     | 4,500   |   |
| Oncor                    Revolving Credit Facility (h)                                          |   |                                                     | 1,316   |   |
| Total                    debt financing issued by                    EFH Corp. and subsidiaries |   | $                                                        | 33,157  |   |
| ________________                                                                                |   |                                                     |    |   |

|   |
|--------|
| (a)    | Initial                    term loan facility used to fund the Merger. |
| (b)    | A                    $4.1 billion credit facility to be used during the two-year period                    commencing on the consummation of the Merger to fund expenditures                    for                    constructing new generation facilities and environmental upgrades                    of                    existing generation plants. |
| (c)    | A                    $1.25 billion letter of credit facility to be used for general                    corporate                    purposes, including, but not limited to, providing collateral                    support                    under commodity hedging arrangements and other commodity transactions                    that                    are not eligible for funding under the TCEH Commodity Collateral                    Posting                    Facility.  The borrowings have been retained as restricted                    cash.  Letters of credit totaling $1.24 billion issued against                    this facility as of October 31, 2007 are supported by the restricted                    cash. |
| (d)    | Revolving                    credit facility to be used to fund cash collateral posting requirements                    under certain specified natural gas hedging transactions.  See                    discussion below under “Liquidity Effects of Risk Management and Trading                    Activities”. |
| (e)    | A                    $2.7 billion credit facility to be used for letters of credit                    and for                    borrowings for general corporate purposes.  Letters of                    credit totaling $279 million have been issued against this facility                    as of                    October 31, 2007. |
| (f)    | A                    $6.75 billion senior unsecured interim loan facility used to                    fund the                    Merger, net of $3.0 billion that was repaid with the proceeds                    from the                    sale of the TCEH Notes offering completed on October 31,                    2007. |
| (g)    | Represents                    $2.0 billion EFH Corp. Cash Pay Notes and $2.5 billion EFH Corp.                    Toggle                    Notes issued under an offering completed on October 31, 2007,                    which repaid                    in full a Senior Unsecured Interim Facility entered into in connection                    with the Merger. |
| (h)    | None                    of the borrowings under this facility were used to fund the                    Merger.  This facility is expected to be secured by a first                    priority lien on certain of Oncor's transmission and distribution                    assets. |

***      Description      of Certain      Covenants***
*– *

*** ***

----

*Maintenance        Covenant*
*– *

*Debt        Incurrence Covenant – *

*Restricted        Payments/Limitation on Investments – *

----

***Debt        Repayment —***

***Interest        Rate Swaps —***

***Long-term***
** **
***Contractual        Obligations and Commitments***

|                                                |   | **Less****Than****One                    Year** |   |   | **One                    to****Three****Years** |   |   | **Three                    to****Five****Years** |   |   | **More****Than****Five****Years** |   |   | **Total** |   |
|-----------------------------------------------------|--------|-------------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|--------------------------------------------------|--------|--------|-----------------------------------|--------|--------|-----------|--------|
|                                                |   |                                            |   |   |                                            |   |   |                                             |   |   |                              |   |   |      |   |
| Long-term                    debt – principal |   | $                                               | 165    |   |                                            | $      | (899   | )                                                |   | $      | 372                               |   |   | $         | 29,569 |   |   | $ | 29,207 |   |
| Long-term                    debt – interest  |   | $                                               | 589    |   |                                            | $      | 4,542  |                                             |   | $      | 4,421                             |   |   | $         | 6,613  |   |   | $ | 16,165 |   |

----

***Liquidity            Needs, Including Capital Expenditures —***

|   | · | $750                      million for increased investment in Oncor’s transmission and distribution                      infrastructure; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $2.3                      billion for investments in generation facilities, including                      approximately                      $1.5 billion for construction of one generation unit at Sandow                      and two                      generation units at Oak Grove; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $350                      million related to the canceled development of eight coal-fueled                      generation units. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | $11                      million in cash has been received with counterparties for exchange                      cleared transactions (including initial margin), as compared                      to $672                      million received as of December 31,                      2006; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $459                      million in cash has been posted with counterparties for over-the-counter                      and other non-exchanged cleared transactions, as compared to                      $2 million                      received as of December 31, 2006;                      and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $667                      million in letters of credit have been posted with counterparties,                      as                      compared to $455 million posted as of December 31,                      2006. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

*Credit            Ratings*

|                                                                                                                                        | EFH                          Corp.        | EFC                          Holdings     | TCEH                                    | TCEH                                      | Oncor                                   | Oncor                                     |
|---------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|-------------------------------------------|-----------------------------------------|-------------------------------------------|-----------------------------------------|-------------------------------------------|
|                                                                                                                                        | (Senior                        Unsecured) | (Senior                        Unsecured) | (Senior                        Secured) | (Senior                        Unsecured) | (Senior                        Secured) | (Senior                        Unsecured) |
| S&P                            | CCC+                                      | CCC                                       | B+                                      | CCC                                       | BBB-                                    | BBB-                                      |
| Moody’s                      | B3                                        | Caa1                                      | Ba3                                     | B3                                        | Ba1                                     | Ba1                                       |
| Fitch                              | B+                                        | CCC+                                      | BB                                      | B+                                        | BBB                                     | BBB-                                      |

----

*Material                Credit Rating Covenants*

----

*Material                Cross Default Provisions*

** **

----

**OFF                BALANCE SHEET ARRANGEMENTS**

*.*

**COMMITMENTS                AND CONTINGENCIES**

**CHANGES                IN ACCOUNTING STANDARDS**

----

**REGULATION                AND RATES**

***Regulatory                Investigations***

***2007                Texas Legislative Session***

***REP                Certification Rulemaking***

----

***Oncor                Matters Pending with the PUCT***

|   | · | Oncor                          will agree to a one-time $72 million credit, which is intended                          for all                          retail customers in its service territory.  While the credit                          will be given to REPs, the intent of the parties to the                          agreement is that                          the credit will be passed through to end-use consumers,                          and only those                          REPs that agree to do so will receive their portion of                          the                          credit. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                          PUCT will dismiss Oncor’s pending rate case discussed immediately                          above.  Consistent with the 2006 cities rate settlement, Oncor                          will file a system-wide rate case no later than July 1,                          2008 based on a                          test-year ended December 31, 2007. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Oncor                          will write-off regulatory assets of approximately $56 million                          related to                          self-insurance reserve costs and 2002 restructuring                          expenses. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Dividends                          paid by Oncor will be limited through December 31, 2012,                          to an amount not                          to exceed Oncor’s net income (determined in accordance with GAAP), subject                          to certain defined adjustments. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Oncor                          will commit to minimum capital spending of $3.6 billion                          over the five-year                          period ending December 31, 2012, subject to certain defined                          conditions. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Oncor                          will commit to $100 million in spending over the five-year                          period ending                          December 31, 2012 on demand side management or other energy                          efficiency                          initiatives.  This spending will not be recoverable in                          rates. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Transmission                Rates***

*** ***

***Competitive                Renewable Energy Zones***

***Summary***

----

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

***RISK                OVERSIGHT***

***COMMODITY                PRICE RISK***

----

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

***VaR                Methodology***

***Trading                VaR***

|                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **Nine                              Months Ended****September                              30, 2007** |   |   | **Year                              Ended****December                              31, 2006** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------|--------|
| Month-end                            average Trading                            VaR:                                                        |   | $                                                                                                     | 8      |   |                                                                                          | $      | 12 |   |
| Month-end                            high Trading                            VaR:                                                           |   | $                                                                                                     | 11     |   |                                                                                          | $      | 30 |   |
| Month-end                            low Trading                            VaR:                                                            |   | $                                                                                                     | 6      |   |                                                                                          | $      | 5 |   |

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

|                                                                                                                                                                                                                                                                                                                                                                                                   |   | **Nine                    Months Ended****September                    30, 2007** |   |   | **Year                    Ended****December                    31, 2006** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------|--------|
| Month-end                  average MtM                  VaR:                                                        |   | $                                                                                 | 946    |   |                                                                      | $      | 149 |   |
| Month-end                  high MtM                  VaR:                                                           |   | $                                                                                 | 1,576  |   |                                                                      | $      | 391 |   |
| Month-end                  low MtM                  VaR:                                                            |   | $                                                                                 | 322    |   |                                                                      | $      | 5 |   |

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

|                                                                                                                                                                                                                                                                                                                                                                                               |   | **Nine                    Months Ended****September                    30, 2007** |   |   | **Year                    Ended****December                    31, 2006** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------|--------|
| Month-end                  average                  EaR:                                                        |   | $                                                                                 | 938    |   |                                                                      | $      | 156 |   |
| Month-end                  high                  EaR:                                                           |   | $                                                                                 | 1,559  |   |                                                                      | $      | 387 |   |
| Month-end                  low                  EaR:                                                            |   | $                                                                                 | 318    |   |                                                                      | $      | 21 |   |

----

***INTEREST        RATE RISK***

|                                                                                                                                                                                                                                                                               |   | **Expected                      Maturity Date**                    |    |   |     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|---------|--------|----------|--------|
|                                                                                                                                                                                                                                                                               |   | **(millions                      of dollars, except percentages)** |    |   |     |   |
|                                                                                                                                                                                                                                                                               |   | **2007**                                                           |    |   | **2008** |   |   | **2009** |   |   | **2010** |   |   | **2011** |   |   | **There-****After** |   |   | **Total****Carrying****Amount** |   |
|                                                                                                                                                                                                                                                                               |   |                                                               |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                      debt issued in connection with the Merger (including current                      maturities)                                                                                                                                                       |   |                                                               |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed                      rate debt                      amount                                    |   | $                                                                  | — |   |     | $      | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | 12,500 |   |   | $ | 12,500 |   |
| Average                      interest                      rate                                                                   |   |                                                               | — |   |     |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 9.92 | % |   |   | 9.92 | % |
| Variable                      rate debt                      amount                                                                                                                                                                                                                |   | $                                                                  | 165     |   |     | $      | 165 |   |   | $ | 186 |   |   | $ | 186 |   |   | $ | 186 |   |   | $ | 17,712 |   |   | $ | 18,600 |   |
| Average                      interest                      rate                                                                   |   |                                                               | 8.46    | %      |     |   | 8.25 | % |   |   | 8.54 | % |   |   | 8.66 | % |   |   | 8.80 | % |   |   | 8.93 | % |   |   | 8.91 | % |
| Total                      debt issued in connection                      with the Merger                                                                                                                                                                                          |   | $                                                                  | 165     |   |     | $      | 165 |   |   | $ | 186 |   |   | $ | 186 |   |   | $ | 186 |   |   | $ | 30,212 |   |   | $ | 31,100 |   |
| Debt                      swapped to                      fixed:                                                                                                                                                                                                                   |   |                                                               |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amount                                                                                                             |   | $                                                                  | — |   |     | $      | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | 9,000 |   |   | $ | 9,000 |   |
| Average                      pay                      rate                                                                        |   |                                                               | — |   |     |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 8.29 | % |   |   | 8.29 | % |
| Average                      receive                      rate                                                                    |   |                                                               | — |   |     |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 8.39 | % |   |   | 8.39 | % |

----

***CREDIT          RISK***

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

***Credit          Exposure***

----

|                                                                                                                                                                                                    |   |                                           |   |   |                     |   |   |                |   |   | **Net                        Exposure byMaturity** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|--------|--------------------------|--------|--------|---------------------|--------|--------|----------------------------------------------------|--------|
|                                                                                                                                                                                                    |   | **Exposure****before****Credit****Collateral** |   |   | **Credit****Collateral** |   |   | **Net****Exposure** |   |   | **2                        years or****less**      |   |   | **Between****2-5                        years** |   |   | **Greater****than                        5****years** |   |   | **Total** |   |
|                                                                                                                                                                                                    |   |                                           |   |   |                     |   |   |                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                    |   |                                           |   |   |                     |   |   |                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |
| Investment                      grade                            |   | $                                              | 1,023  |   |                     | $      | 3      |                |   | $      | 1,020                                              |   |   | $ | 735 |   |   | $ | 61 |   |   | $ | 224 |   |   | $ | 1,020 |   |
| Noninvestment                      grade                                                                                                                                                                |   |                                           | 332    |   |                     |   | 27     |                |   |   | 305                                                |   |   |   | 222 |   |   |   | 35 |   |   |   | 48 |   |   |   | 305 |   |
| Totals                                                                                    |   | $                                              | 1,355  |   |                     | $      | 30     |                |   | $      | 1,325                                              |   |   | $ | 957 |   |   | $ | 96 |   |   | $ | 272 |   |   | $ | 1,325 |   |
|                                                                                                                                                                                                    |   |                                           |   |   |                     |   |   |                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                      grade                            |   |                                           | 75     | %      |                     |   | 10     | %                   |   |   | 77                                                 | %      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninvestment                      grade                                                                                                                                                                |   |                                           | 25     | %      |                     |   | 90     | %                   |   |   | 23                                                 | %      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**FORWARD-LOOKING            STATEMENTS**

|   | · | prevailing                      governmental policies and regulatory actions, including those                      of the Texas                      Legislature, the Governor of Texas, the US Congress, FERC,                      the PUCT, 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; |
|--------------------|-------------------------------------------------|

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

| ·   | EFH                        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; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| ·   | EFH                        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 EFH                        Corp.’s financial instruments; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | significant                        changes in EFH 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 EFH                        Corp.; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

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

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

|   | · | with                        respect to EFH Corp.’s lignite coal-fueled generation construction and                        development program, more specifically, EFH Corp.’s ability to fund such                        investments, 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                        EFH 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 EFH Corp. to manage the significant construction                        program to                        a timely conclusion with limited cost overruns;                        and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | with                        respect to the Merger: the outcome of any legal proceedings                        that have been                        or may be instituted against EFH Corp. and others related                        to the Merger                        Agreement; risks that the Merger and related transactions                        disrupt current                        plans and operations and the potential difficulties in management                        and                        employee retention as a result of the Merger; the amount                        of the costs,                        fees, expenses and charges related to the Merger; and the                        impact of the                        substantial indebtedness incurred to finance the consummation                        of the                        Merger. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item            4.  CONTROLS AND PROCEDURES.**

----

**PART            II.  OTHER INFORMATION**

**Item            1.  LEGAL PROCEEDINGS.**

**Item            1A.  RISK FACTORS.**

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

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

----

|   | • | required                      EFH Corp. to separate its                      subsidiaries into two or three stand-alone companies, which                      could have                      resulted in a significant tax cost to EFH Corp. or the sale                      by EFH Corp.                      of assets for an amount it would not have considered to be                      full                      value; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | required                      divestiture of                      significant wholesale power generation assets, which also could                      have                      resulted in a significant tax cost to EFH Corp. or the sale                      by EFH Corp.                      of assets for an amount it would not have considered to be                      full value;                      and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | given                      new authority to the PUCT to                      cap retail electric prices. |
|--------|---------|----------------------------------------------------------------------------------------------------------|

|   | • | spend                      more than $30 million per                      year over five years to provide relief for low-income residents                      and to                      pursue new demand side management initiatives in conservation,                      energy                      efficiency and                      weatherization; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | in                      the current regulatory system,                      hold a majority of their ownership in EFH Corp. for more than                      five years                      after closing of the Merger;                      and |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | invest                      significant resources in                      emerging energy technologies, such as integrated gasification                      combined                      cycle coal plants, including an increased commitment to renewable                      energy. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Litigation            or legal proceedings could expose EFH Corp. to significant liabilities,            damage            EFH Corp.’s reputation and have a material adverse effect on EFH Corp.’s results            of operations, and the litigation environment in which EFH Corp. operate            poses a            significant risk to its businesses.***

----

***TXU            Energy may lose a significant number of retail customers in its historical            service territory due to competitive marketing activity by retail electric            providers and face competition from incumbent providers outside its historical            service territory.***

----

***EFH            Corp.’s revenues and results of operations may be negatively impacted by            decreases in market prices for power, decreases in natural gas prices,            and/or            decreases in market heat rates.***

|   | • | severe                      or unexpected weather                      conditions; |
|--------|---------|------------------------------------------------------------------------------------|

|   | • | seasonality; |
|--------|---------|--------------|

|   | • | changes                      in electricity and fuel                      usage; |
|--------|---------|----------------------------------------------------------------------------------|

|   | • | illiquidity                      in the wholesale power                      or other markets; |
|--------|---------|------------------------------------------------------------------------------------------------|

|   | • | transmission                      or transportation                      constraints, inoperability or                      inefficiencies; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | availability                      of                      competitively-priced alternative energy                      sources; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------|

|   | • | changes                      in** **supply                      and demand for energy                      commodities, including nuclear fuel and related enrichment                      and conversion                      services; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | changes                      in generation efficiency                      and market heat rates; |
|--------|---------|---------------------------------------------------------------------------------------------------|

|   | • | outages                      at EFH Corp.’s generation                      facilities or those of EFH Corp.’s                      competitors; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | changes                      in production and storage                      levels of natural gas, lignite, coal, crude oil and refined                      products; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | natural                      disasters, wars, sabotage,                      terrorist acts, embargoes and other catastrophic events;                      and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | federal,                      state and local energy,                      environmental and other regulation and                      legislation. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

***EFH            Corp.’s assets or positions cannot be fully hedged against changes in commodity            prices and market heat rates, and EFH Corp.’s hedging transactions may not work            as planned or hedge counterparties may default on their obligations to            EFH            Corp.***

----

***EFH            Corp. may suffer material losses, costs and liabilities due to its ownership            and            operation of the Comanche Peak nuclear generation            plant.***

|   | • | unscheduled                      outages or unexpected                      costs due to equipment, mechanical, structural or other                      problems; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | inadequacy                      or lapses in                      maintenance protocols; |
|--------|---------|------------------------------------------------------------------------------------------|

|   | • | the                      impairment of reactor                      operation and safety systems due to human                      error; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | the                      costs of storage, handling and                      disposal of nuclear                      materials; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------|

|   | • | the                      costs of procuring nuclear                      fuel; |
|--------|---------|--------------------------------------------------------------------------------|

|   | • | the                      costs of securing the plant                      against possible terrorist                      attacks; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------|

|   | • | limitations                      on the amounts and                      types of insurance coverage commercially available;                      and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | uncertainties                      with respect to the                      technological and financial aspects of decommissioning nuclear                      facilities                      at the end of their useful                      lives. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | *Operational                      Risk*—Operations                      at                      any nuclear generation plant could degrade to the point where                      the plant                      would have to be shut down.  If such degradations were to occur,                      the process of identifying and correcting the causes of the                      operational                      downgrade to return the plant to operation could require significant                      time                      and expense, resulting in both lost revenue and increased fuel                      and                      purchased power expense to meet supply                      commitments.  Furthermore, a shut-down or failure at any other                      nuclear generation plant could cause regulators to require                      a shut-down or                      reduced availability at Comanche Peak. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | *Regulatory                      Risk*—The                      NRC may                      modify, suspend or revoke licenses and impose civil penalties                      for failure                      to comply with the Atomic Energy Act, the regulations under                      it or the                      terms of the licenses of nuclear generation facilities.  Unless                      extended, the NRC operating licenses for Comanche Peak Unit                      1 and Unit 2                      will expire in 2030 and 2033, respectively.  Changes in                      regulations by the NRC could require a substantial increase                      in capital                      expenditures or result in increased operating or decommissioning                      costs. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | *Nuclear                      Accident Risk*—Although                      the                      safety record of Comanche Peak and other nuclear generation                      plants                      generally has been very good, accidents and other unforeseen                      problems have                      occurred both in the United States and elsewhere.  The                      consequences of an accident can be severe and include loss                      of life,                      injury, lasting negative health impact and property damage.                      Any accident,                      or perceived accident, could subject EFH Corp. to significant                      liabilities                      and damage  EFH Corp.’s reputation. Any such resulting liability                      from a nuclear accident could exceed EFH Corp.’s resources, including                      insurance coverage. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***The            operation and maintenance of electricity generation and delivery facilities            involves significant risks that could adversely affect EFH Corp.’s results of            operations and financial condition.***

***EFH            Corp.’s cost of compliance with environmental laws and regulations and its            commitments, and the cost of compliance with new environmental laws,            regulations            or commitments could materially adversely affect EFH Corp.’s results of            operations and financial condition.***

----

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

----

***EFH            Corp.’s growth strategy, including its investment in three new lignite            coal-fueled generation facilities, may not be executed as planned which            could            adversely impact its financial condition and results of            operations.***

----

***TXU            Energy’s retail business is subject to the risk that sensitive customer data            may            be compromised, which could result in an adverse impact to its reputation            and/or            the results of operations of the retail business.***

----

***Ongoing            performance improvement initiatives may not achieve desired cost reductions            and            may instead result in significant additional costs if            unsuccessful.***

***TXU            Energy relies on the infrastructure of local utilities or independent            transmission system operators to provide electricity to, and to obtain            information about, its customers. Any infrastructure failure could negatively            impact customer satisfaction and could have a material negative impact            on its            business and results of operations.***

***TXU            Energy offers bundled services to its retail customers, with some bundled            services offered at fixed prices and for fixed terms. If TXU Energy’s costs for            these bundled services exceed the prices paid by its customers, TXU Energy’s            results of operations could be materially adversely            affected.***

----

***TXU            Energy’s retail business is subject to the risk that it will not be able to            profitably serve its customers given the announced price protection and            price            cuts, which could result in an adverse impact to its reputation and/or            results            of operations of TXU Energy’s retail business.***

***Changes            in technology may reduce the value of EFH Corp.’s generation plants and/or            Oncor’s electric delivery facilities and may significantly impact EFH Corp.’s            businesses in other ways as well.***

***EFH            Corp.’s future results of operations may be negatively impacted by settlement            adjustments determined by ERCOT related to prior            periods.***

----

***EFH            Corp.’s results of operations and            financial condition could be negatively impacted by any development            or event beyond EFH            Corp.’s control that causes economic weakness in the ERCOT            market.***

***EFH            Corp.’s (or an applicable subsidiary’s) credit ratings could negatively affect            EFH Corp.’s (or the pertinent subsidiary’s) ability to access capital and could            require EFH Corp. or its subsidiaries to post collateral or repay certain            indebtedness.***

***EFH            Corp.’s liquidity needs could be difficult to satisfy under some circumstances,            particularly during times of uncertainty in the financial markets and/or            during            times when there are significant increases in natural gas prices.  The            inability to access liquidity, particularly on favorable terms, could            materially            adversely affect EFH Corp.’s results of operations and/or financial            condition.***

|   | • | changes                      in financial markets that                      reduce available credit or the ability to obtain or renew liquidity                      facilities on acceptable                      terms; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | economic                      weakness in the ERCOT                      market; |
|--------|---------|----------------------------------------------------------------------------------|

|   | • | changes                      in interest                      rates; |
|--------|---------|----------------------------------------------------------------------|

|   | • | a                      deterioration of EFH Corp.’s                      credit or the credit of its subsidiaries or a reduction in                      EFH Corp.’s                      credit ratings or the credit ratings of its                      subsidiaries; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | volatility                      in commodity prices                      that increases margin or credit                      requirements; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | a                      material breakdown in EFH                      Corp.’s risk management procedures;                      and |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | the                      occurrence of material adverse                      changes in EFH Corp.’s businesses that restrict its ability to access its                      liquidity facilities. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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***The            loss of the services of EFH Corp.’s key management and personnel could adversely            affect EFH Corp.’s ability to operate its businesses.***

----

***The            Sponsor Group controls EFH Corp. and may have conflicts of interest with            EFH            Corp. in the future.***

----

***Risks            Relating to EFH Corp.’s Indebtedness***

***EFH            Corp. and its subsidiaries’ substantial leverage could adversely affect EFH            Corp.’s ability to raise additional capital to fund its operations, limit EFH            Corp.’s ability to react to changes in the economy or its industry, expose            EFH            Corp. to interest rate risk to the extent of its variable rate debt and            prevent            EFH Corp. from meeting its obligations under its            indebtedness.***

|   | · | making                      it more difficult for EFH                      Corp. to make payments on its                      indebtedness; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | requiring                      a substantial portion of                      cash flow from operations to be dedicated to the payment of                      principal and                      interest on EFH Corp.’s indebtedness, therefore reducing EFH Corp.’s                      ability to use its cash flow to fund its operations, capital                      expenditures                      and future business                      opportunities; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increasing                      EFH Corp.’s                      vulnerability to general economic and industry                      conditions; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | exposing                      EFH Corp. to the risk of                      increased interest rates because certain of EFH Corp.’s borrowings will be                      at variable rates of                      interest; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | limiting                      EFH Corp.’s ability to                      make strategic acquisitions or causing it to make non-strategic                      divestitures; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | limiting                      EFH Corp.’s ability to                      obtain additional financing for working capital, capital expenditures,                      product development, debt service requirements, acquisitions                      and general                      corporate or other purposes;                      and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | limiting                      EFH Corp.’s ability to                      adjust to changing market conditions and placing it at a competitive                      disadvantage compared to its competitors who are less highly                      leveraged. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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***EFH            Corp.’s debt agreements and those of EFH Corp.’s subsidiaries contain            restrictions that limit EFH Corp.’s flexibility in operating its            businesses.***

|   | · | incur                      additional indebtedness or                      issue preferred shares; |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | pay                      dividends on, repurchase or                      make distributions in respect of capital stock or make other                      restricted                      payments; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | make                      investments; |
|--------|--------|----------------------------------------|

|   | · | sell                      or transfer                      assets; |
|--------|--------|--------------------------------------------------------------------|

|   | · | create                      liens; |
|--------|--------|------------------------------------|

|   | · | consolidate,                      merge, sell or                      otherwise dispose of all or substantially all of EFH Corp.’s assets;                      and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | enter                      into transactions with EFH                      Corp.’s affiliates. |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | Oncor                      not being restricted from                      incurring its own indebtedness;                      and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Oncor                      not guaranteeing or pledging                      any of its assets to secure the indebtedness of Texas Holdings                      and its                      other subsidiaries. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***EFH            Corp.’s subsidiaries may not be able to generate sufficient cash to service            all            of EFH Corp.’s and its subsidiaries’ indebtedness and may be forced to take            other actions to satisfy EFH Corp.’s and its subsidiaries’ obligations under EFH            Corp.’s indebtedness, which may not be successful.***

----

***Under            the terms of TCEH’s debt agreements, TCEH will be restricted from making certain            payments to EFH Corp.***

***EFH            Corp. is a holding company, and its obligations are structurally subordinated            to            existing and future liabilities and preferred stock of its            subsidiaries.***

----

***Despite            current indebtedness levels, EFH Corp. and its subsidiaries may still            be able to            incur substantially more indebtedness.  This could further exacerbate            the risks associated with EFH Corp.’s substantial financial            leverage.***

----

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

**Issuer            Purchases of Equity Securities**

| **Period**                                                                                                                                                                                                                                                                                                                                   |   | **Total                        Number of****Shares                        Purchased** |   |   | **Average                          Price****Paid                          per****Share** |   |   | **Total                          Number of****Shares****Purchased                          as****Part                          of Publicly****Announced****Plans                          or****Programs** |   |    |   |   |   | **Maximum****Number                        of****Shares                        That May****Yet                        be Purchased****Under                        the****Plans                          or****Programs                          (a)** |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                         |   |                                                                                  |   |   |                                                                                     |   |   |                                                                                                                                                                                                       |   |    |   |   |   |                                                                                                                                                                                                                                                   |    |   |   |   |
| July                        1, 2007 – July 31,                        2007                                           |   |                                                                                  | 44,621 |   |                                                                                     | $      | 67.70  |                                                                                                                                                                                                       |   | ─ |   |   |   |                                                                                                                                                                                                                                                   |    |   | ─ |   |
| August                        1, 2007 – August 31, 2007                                                                                                                                                                                                                                                                                |   | ─                                                                               |   |   | ─                                                                                  |   |   | ─                                                                                                                                                                                                    |   |    |   |   |   |                                                                                                                                                                                                                                                   | ─ |   |
| September                        1, 2007 – September 30, 2007                                                                                                                                                                                                                                                                          |   | ─                                                                               |   |   | ─                                                                                  |   |   | ─                                                                                                                                                                                                    |   |    |   |   |   |                                                                                                                                                                                                                                                   | ─ |   |
| Total                        as of September 30,                        2007                                               |   |                                                                                  | 44,621 |   |                                                                                     | $      | 67.70  |                                                                                                                                                                                                       |   | ─ |   |   |   |                                                                                                                                                                                                                                                   |    |   |   | 23,251,532 |   |

| (a) | On                        October 10, 2007, Merger Sub, Texas Holdings’ wholly-owned subsidiary,                        acquired EFH Corp. through a merger of Merger Sub with and                        into EFH Corp.                        under the terms and conditions of the Merger Agreement.  Upon                        the effective date of the Merger, each share of EFH Corp.’s common stock                        outstanding immediately prior to the Merger (other than shares                        held by EFH                        Corp. or any of its subsidiaries or Texas Holdings or any                        of its                        subsidiaries, including Merger Sub, in each case not held                        on behalf of                        third parties, or shares held by holders who properly exercised                        their                        rights of dissent and appraisal under Texas law) was canceled                        and                        converted into the right to receive $69.25 in cash, without                        interest and                        less any applicable withholding                        taxes. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                              |  VotesFor                                                                                            | VotesWithheld                          orAgainst                                                 |   Abstentions                    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|--------------------------------------------|
|  A                          proposal to approve the Agreement and Plan of Merger, dated                          as of February                          25, 2007 (as amended from time to time, the "Merger Agreement")                          among EFH                          Corp., Texas Holdings and Merger Sub, including the plan                          of merger                          contained in the Merger Agreement. |      349,618,766                                                                 |      9,697,199                                                          |      3,669,661    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                      |                                                                                             |                                       |
| A                          proposal to approve any proposal by EFH Corp. to adjourn                          or postpone the                          annual meeting, if determined to be necessary.                                                                                                                                                                                                                                              |  358,519,923                                                                                         |  40,262,968                                                                                 |  8,803,927                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                      |                                                                                             |                                       |
| Election                          of DirectorsLeldon                          E. EcholsKerney                          LadayJack                          E. LittleGerardo                          I. LopezJ.                          E. OesterreicherMichael                          W. RangerLeonard                          H. RobertsGlenn                          F. TiltonC.                          John Wilder                      |  396,248,833394,384,171396,214,585396,044,169394,381,027396,338,962396,198,139395,207,838393,671,764 |  11,338,24313,202,90511,372,49111,542,90713,206,04911,248,11411,388,93712,379,23813,915,312 |  NoneNoneNoneNoneNoneNoneNoneNoneNone |
|                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                      |                                                                                             |                                       |
| Selection                          of Deloitte & Touche LLP as Independent Auditor                                                                                                                                                                                                                                                                                                                                                            | 394,750,810                                                                                               | 3,736,277                                                                                        | 9,100,147                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                      |                                                                                             |                                       |
| Shareholder                          proposal related to EFH Corp.'s adoption of quantitative                          goals for                          emissions at its existing and proposed plants.                                                                                                                                                                                                                                          |   33,086,172                                                                                    |   275,449,705                                                                          |   54,449,331                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                      |                                                                                             |                                       |
| Shareholder                          proposal requesting a report on EFH Corp.'s political contributions                          and                          expenditures.                                                                                                                                                                                                                                                                      |  78,363,080                                                                                          |  231,584,328                                                                                |  53,038,189                           |

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**Item        5.  Other Disclosure**

----

**Item      6.             Exhibits**

|  **Exhibits** | **Previously                  Filed With File****Number***                                                      | **As****Exhibit** |    |                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------|-----------------------------------------------------------------------------------------------------------------|-------------------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **(3(i))**         | **Articles                  of Incorporation**                                                                  |
| 3(a)               | 1-12833Form                  8-K (filed October 11, 2007)                                                       | 3.1               | ─ | Restated                  Certificate of Formation of Energy Future Holdings Corp., dated                  October                  10, 2007                                                                                                                                                                                                                                                            |
| **(3(ii))**        | **By-laws**                                                                                                     |
| 3(b)               | 1-12833Form                  8-K (filed October 11, 2007)                                                       | 3.2               | ─ | Amended                  and Restated Bylaws of Energy Future Holdings Corp., dated October                  10,                  2007                                                                                                                                                                                                                                                                  |
| **(4)**            | **Instruments                  Defining the Rights of Security Holders, Including                  Indentures** |
|               | **Energy                  Future Holdings Corp.**                                                               |
| 4(a)               |                                                                                                            |              | ─ | First                  Supplemental Indenture, dated as of October 5, 2007, to the Indenture                  (For                  Unsecured Debt Securities Series O), dated as of November 1, 2004,                  between                  Energy Future Holdings Corp. (formerly known as TXU Corp.) and                  The Bank of                  New York, as trustee.                     |
| 4(b)               |                                                                                                            |              | ─ | First                  Supplemental Indenture, dated as of October 10, 2007, to the Indenture                  (For Unsecured Debt Securities Series N), dated as of July 1, 2003,                  between Energy Future Holdings Corp. (formerly known as TXU Corp.)                  and The                  Bank of New York, as trustee.                                                          |
| 4(c)               | 1-12833Form                  8-K (filed October 31, 2007)                                                       | ____              | ─ | Indenture,                  dated as of October 31, 2007, relating to Energy Future Holdings                  Corp.’s                  10.875% Senior Notes due 2017 and 11.250%/12.000% Senior Toggle                  Notes due                  2017                                                                                                                                           |
|               | **Texas                  Competitive Electric Holdings Company LLC / TCEH Finance,                  Inc.**      |
| 4(d)               |                                                                                                            |              | ─ | First                  Supplemental Indenture, dated as of October 5, 2007, to the Indenture                  (For                  Unsecured Debt Securities), dated as of March 1, 2003, between                  Texas                  Competitive Electric Holdings Company LLC (formerly known as TXU                  Energy                  Company LLC) and The Bank of New York, as trustee. |
|               | 333-108876Form                  8-K (filed October 31, 2007)                                                    | ____              | ─ | Indenture,                  dated as of October 31, 2007, relating to Texas Competitive Electric                  Holdings Company LLC’s and TCEH Finance, Inc.’s 10.25% Senior Notes due                  2015                                                                                                                                                                             |

----

| **(10)** | **Material                    Contracts.**                                       |
|----------|----------------------------------------------------------------------------------|
| 10(a)    |                                                                             |   | ─ | Amendment                    No. 2 to $1,500,000,000 Revolving Credit Agreement, dated as                    of August 24,                    2007, by and among Texas Competitive Electric Holdings Company                    LLC and                    Citibank, N.A., and Credit Suisse, Cayman Islands                    Branch |
| 10(b)    |                                                                             |   | ─ | Engineering,                    Procurement and Construction Agreement, dated as of May 26, 2006,                    between                    Texas Competitive Electric Holdings Company (formerly TXU US                    Holdings                    Company) and Bechtel Power Corporation (confidential treatment                    has been                    requested for portions of this exhibit) |
| 10(c)    |                                                                             |   | ─ | $24,500,000,000                    Credit Agreement dated as of October 10, 2007 among Energy Future                    Competitive Holdings Company, Texas Competitive Electric Holdings                    Company                    LLC, as the Borrower, Citibank, N.A., as Administrative Agent,                    Goldman                    Sachs Credit Partners L.P. as Posting Agent, J. Aron & Company, as                    Posting Calculation Agent and the several lenders thereto from                    time to                    time (i.e.  the TCEH Senior Secured                    Facilities) |
| **(31)** | **Rule                    13a – 14(a)/15d – 14 (a) Certifications.** |
| 31(a)    |                                                                             |   | ─ | Certification                    of David A. Campbell, Interim Co-President and Chief Financial                    Officer of                    Energy Future Holdings 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 M.S. Greene, Interim Co-President of Energy Future Holdings                    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. |
| **(99)** | **Additional                    Exhibits.**                                      |
| 99(a)    |                                                                             |   | ─ | Condensed                    Statements of Consolidated Income for the twelve month period                    ended                    September 30, 2007. |
| 99(b)    |                                                                             |   | ─ | Adjusted                    EBITDA reconciliation for twelve month period ended September                    30,                    2007 |

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**SIGNATURE**

|   |   | **Energy                  Future Holdings Corp.**     |   |
|--------|--------|---------------------------------------------------------------------------|--------|
|   | By:    | /s/   Stan                  Szlauderbach                   |   |
|   | Name:  | Stan                  Szlauderbach                                        |   |
|   | Title: | Senior                  Vice President and                  Controller    |   |
|   |   |                                                                      |   |

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