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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006

 OR 



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



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Commission File Number 1-12833

TXU Corp.

(Exact
Name of Registrant as Specified in its Charter)



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|                                                    |  |                                     
|--------------------------------------------------- |  | ------------------------------------
|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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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act. (Check one):



|                           |  |                    |  |                       
|-------------------------- |  | ------------------ |  | ----------------------
|Large accelerated filer  x |  | Accelerated filer ̈ |  | Non-Accelerated filer ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes ̈No  x

Common Stock outstanding at May 2, 2006: 456,735,660 shares, without par value.



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##### Table of Contents

TABLE OF CONTENTS



|          |  |                                                                                                        |  |     
|--------- |  | ------------------------------------------------------------------------------------------------------ |  | ----
|          |  |                                                                                                        |  | PAGE
|GLOSSARY  |  | ii                                                                                                    
|          |  |                                                                                                       
|PART I.   |  | FINANCIAL INFORMATION                                                                                  |  |     
|          |  |                                                                                                       
|Item 1.   |  | Financial Statements                                                                                   |  |     
|          |  |                                                                                                       
|          |  | Condensed Statements of Consolidated Income  Three Months Ended March 31, 2006 and 2005               |  | 1   
|          |  |                                                                                                       
|          |  | Condensed Statements of Consolidated Comprehensive Income  Three Months Ended March 31, 2006 and 2005 |  | 2   
|          |  |                                                                                                       
|          |  | Condensed Statements of Consolidated Cash Flows  Three Months Ended March 31, 2006 and 2005           |  | 3   
|          |  |                                                                                                       
|          |  | Condensed Consolidated Balance Sheets  March 31, 2006 and December 31, 2005                           |  | 4   
|          |  |                                                                                                       
|          |  | Notes to Condensed Consolidated Financial Statements                                                   |  | 5   
|          |  |                                                                                                       
|          |  | Report of Independent Registered Public Accounting Firm                                                |  | 29  
|          |  |                                                                                                       
|Item 2.   |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                  |  | 30  
|          |  |                                                                                                       
|Item 3.   |  | Quantitative and Qualitative Disclosures About Market Risk                                             |  | 54  
|          |  |                                                                                                       
|Item 4.   |  | Controls and Procedures                                                                                |  | 59  
|          |  |                                                                                                       
|PART II.  |  | OTHER INFORMATION                                                                                      |  |     
|          |  |                                                                                                       
|Item 1.   |  | Legal Proceedings                                                                                      |  | 60  
|          |  |                                                                                                       
|Item 1A.  |  | Risk Factors                                                                                           |  | 60  
|          |  |                                                                                                       
|Item 2.   |  | Unregistered Sales of Equity Securities and Use of Proceeds                                            |  | 63  
|          |  |                                                                                                       
|Item 6.   |  | Exhibits                                                                                               |  | 64  
|          | 
|SIGNATURE |  | 66                                                                                                    

TXU Corp. files periodic reports on Form 10-K and Form 10-Q and current reports on Form 8-K which are generally
made available to the public, free of charge, on the TXU Corp. website at http://www.txucorp.com, shortly after they have been filed with the Securities and Exchange Commission. To the extent any of those reports are not posted on the TXU Corp.
website, TXU Corp. will provide copies of such reports upon request. The information on TXU Corp.s website shall not be deemed a part of, or incorporated by reference into, this report on Form 10-Q.



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##### Table of Contents

GLOSSARY

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated
below.



|                               |  |                                                                                                                                                                                                                                                                                                                      
|------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1999 Restructuring Legislation |  | legislation that restructured the electric utility industry in Texas to provide for retail competition                                                                                                                                                                                                               
|                               | 
|2005 Form 10-K                 |  | TXU Corp.s Annual Report on Form 10-K for the year ended December 31, 2005                                                                                                                                                                                                                                          
|                               | 
|Capgemini                      |  | Capgemini Energy LP, a subsidiary of Cap Gemini North America Inc. that provides business support services to TXU Corp.                                                                                                                                                                                              
|                               | 
|Commission                     |  | Public Utility Commission of Texas                                                                                                                                                                                                                                                                                   
|                               | 
|EPA                            |  | Environmental Protection Agency                                                                                                                                                                                                                                                                                      
|                               | 
|ERCOT                          |  | Electric Reliability Council of Texas, the Independent System Operator and the regional reliability coordinator of the various electricity systems within Texas                                                                                                                                                      
|                               | 
|ERISA                          |  | Employee Retirement Income Security Act                                                                                                                                                                                                                                                                              
|                               | 
|FASB                           |  | Financial Accounting Standards Board, the designated organization in the private sector for establishing standards for financial accounting and reporting                                                                                                                                                            
|                               | 
|FERC                           |  | Federal Energy Regulatory Commission                                                                                                                                                                                                                                                                                 
|                               | 
|FIN                            |  | Financial Accounting Standards Board Interpretation                                                                                                                                                                                                                                                                  
|                               | 
|FIN 46R                        |  | FIN No. 46R (Revised 2003), Consolidation of Variable Interest Entities                                                                                                                                                                                                                                            
|                               | 
|FIN 47                         |  | FIN No. 47, Accounting for Conditional Asset Retirement Obligations  An Interpretation of FASB Statement No. 143                                                                                                                                                                                                  
|                               | 
|Fitch                          |  | Fitch Ratings, Ltd. (a credit rating agency)                                                                                                                                                                                                                                                                         
|                               | 
|GW                             |  | gigawatts                                                                                                                                                                                                                                                                                                            
|                               | 
|GWh                            |  | gigawatt-hours                                                                                                                                                                                                                                                                                                       
|                               | 
|historical service territory   |  | the territory, largely in north Texas, being served by TXU Corp.s regulated electric utility subsidiary at the time of entering retail competition on January 1, 2002                                                                                                                                               
|                               | 
|IRS                            |  | Internal Revenue Service                                                                                                                                                                                                                                                                                             
|                               | 
|kWh                            |  | kilowatt-hours                                                                                                                                                                                                                                                                                                       
|                               | 
|market heat rate               |  | Heat rate is a measure of the efficiency of converting a fuel source to electricity. The market heat rate is based on the price offer of the marginal supplier (generally gas plants) in
generating electricity and is calculated by dividing the wholesale market price of power by the market price of natural gas.
|                               | 
|MMBtu                          |  | million British thermal units                                                                                                                                                                                                                                                                                        
|                               | 
|Moodys                        |  | Moodys Investors Services, Inc. (a credit rating agency)                                                                                                                                                                                                                                                            
|                               | 
|MW                             |  | megawatts                                                                                                                                                                                                                                                                                                            
|                               | 
|MWh                            |  | megawatt-hours                                                                                                                                                                                                                                                                                                       
|                               | 
|NRC                            |  | United States Nuclear Regulatory Commission                                                                                                                                                                                                                                                                          



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|                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|price-to-beat rate       |  | residential and small business customer electricity rates established by the Commission that (i) were required to be charged in a REPs historical service territories until the earlier
of January 1, 2005 or the date when 40% of the electricity consumed by such customer classes is supplied by competing REPs, adjusted periodically for changes in fuel costs, and (ii) are required to be made available to those customers until
January 1, 2007
|                         | 
|PURA                     |  | Texas Public Utility Regulatory Act                                                                                                                                                                                                                                                                                                                                                                                                                      
|                         | 
|REP                      |  | retail electric provider                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                         | 
|S&P                      |  | Standard & Poors Ratings Services, a division of the McGraw Hill Inc. Companies (a credit rating agency)                                                                                                                                                                                                                                                                                                                                                
|                         | 
|SEC                      |  | United States Securities and Exchange Commission                                                                                                                                                                                                                                                                                                                                                                                                         
|                         | 
|SFAS                     |  | Statement of Financial Accounting Standards issued by the FASB                                                                                                                                                                                                                                                                                                                                                                                           
|                         | 
|SFAS 133                 |  | SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities                                                                                                                                                                                                                                                                                                                                                                             
|                         | 
|SFAS 140                 |  | SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of FASB Statement 125                                                                                                                                                                                                                                                                                                       
|                         | 
|SFAS 143                 |  | SFAS No. 143, Accounting for Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                              
|                         | 
|SG&A                     |  | selling, general and administrative                                                                                                                                                                                                                                                                                                                                                                                                                      
|                         | 
|Short-cut method         |  | refers to the short-cut method under SFAS 133 that allows entities to assume no hedge ineffectiveness in a hedging relationship of interest rate risk if certain conditions are
met                                                                                                                                                                                                                                                                      
|                         | 
|TCEQ                     |  | Texas Commission on Environmental Quality                                                                                                                                                                                                                                                                                                                                                                                                                
|                         | 
|TXU Australia            |  | refers to TXU Australia Group Pty Ltd, a former subsidiary of TXU Corp., and/or its consolidated subsidiaries, depending on context                                                                                                                                                                                                                                                                                                                      
|                         | 
|TXU Corp.                |  | refers to TXU Corp., a holding company, and/or its consolidated subsidiaries, depending on context                                                                                                                                                                                                                                                                                                                                                       
|                         | 
|TXU Electric Delivery    |  | refers to TXU Electric Delivery Company, a subsidiary of TXU Corp., and/or its consolidated bankruptcy remote financing subsidiary, TXU Electric Delivery Transition Bond Company LLC,
depending on context                                                                                                                                                                                                                                              
|                         | 
|TXU Energy Holdings      |  | refers to TXU Energy Company LLC, a subsidiary of TXU Corp., and/or its consolidated subsidiaries, depending on context                                                                                                                                                                                                                                                                                                                                  
|                         | 
|TXU Europe               |  | TXU Europe Limited, a former subsidiary of TXU Corp.                                                                                                                                                                                                                                                                                                                                                                                                     
|                         | 
|TXU Fuel                 |  | TXU Fuel Company, a former subsidiary of TXU Energy Holdings                                                                                                                                                                                                                                                                                                                                                                                             
|                         | 
|TXU Gas                  |  | TXU Gas Company, a former subsidiary of TXU Corp.                                                                                                                                                                                                                                                                                                                                                                                                        
|                         | 
|TXU Portfolio Management |  | TXU Portfolio Management Company LP, a subsidiary of TXU Energy Holdings                                                                                                                                                                                                                                                                                                                                                                                 
|                         | 
|US                       |  | United States of America                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                         | 
|US GAAP                  |  | accounting principles generally accepted in the US                                                                                                                                                                                                                                                                                                                                                                                                       
|                         | 
|US Holdings              |  | TXU US Holdings Company, a subsidiary of TXU Corp.                                                                                                                                                                                                                                                                                                                                                                                                       



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PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

TXU CORP. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

(Unaudited)



|                                                                        |  |                                                |       |   |      |   |       |  
|----------------------------------------------------------------------- |  | ---------------------------------------------- | ----- | - | ---- | - | ----- | -
|                                                                        |  | Three Months EndedMarch 31,                    |      
|                                                                        |  | 2006                                           |       |   | 2005 |  
|                                                                        |  | (millions of dollars,except per share amounts) |      
|Operating revenues                                                      |  | $                                              | 2,304 |   |      | $ | 2,058 |  
|                                                                        |  |                                               
|Costs and expenses:                                                     |  |                                                |       |   |      |   |       |  
|Fuel, purchased power costs and delivery fees                           |  |                                                | 521   |   |      |   | 761   |  
|Operating costs                                                         |  |                                                | 344   |   |      |   | 334   |  
|Depreciation and amortization                                           |  |                                                | 205   |   |      |   | 187   |  
|Selling, general and administrative expenses                            |  |                                                | 192   |   |      |   | 181   |  
|Franchise and revenue-based taxes                                       |  |                                                | 86    |   |      |   | 85    |  
|Other income (Note 10)                                                  |  |                                                | (14   | ) |      |   | (51   | )
|Other deductions (Note 10)                                              |  |                                                | (1    | ) |      |   | 5     |  
|Interest income                                                         |  |                                                | (9    | ) |      |   | (19   | )
|Interest expense and related charges (Note 11)                          |  |                                                | 213   |   |      |   | 195   |  
|                                                                        |  |                                                |       |   |      |   |       |  
|Total costs and expenses                                                |  |                                                | 1,537 |   |      |   | 1,678 |  
|                                                                        |  |                                                |       |   |      |   |       |  
|Income from continuing operations before income taxes                   |  |                                                | 767   |   |      |   | 380   |  
|                                                                        |  |                                               
|Income tax expense (benefit)                                            |  |                                                | 251   |   |      |   | (26   | )
|                                                                        |  |                                                |       |   |      |   |       |  
|Income from continuing operations                                       |  |                                                | 516   |   |      |   | 406   |  
|                                                                        |  |                                               
|Income from discontinued operations, net of tax effect (Note 2)         |  |                                                | 60    |   |      |   | 15    |  
|                                                                        |  |                                                |       |   |      |   |       |  
|Net income                                                              |  | $                                              | 576   |   |      | $ | 421   |  
|                                                                        |  |                                               
|Preference stock dividends                                              |  |                                                |      |   |      |   | 5     |  
|                                                                        |  |                                                |       |   |      |   |       |  
|Net income available to common shareholders                             |  | $                                              | 576   |   |      | $ | 416   |  
|                                                                        |  |                                                |       |   |      |   |       |  
|Average shares of common stock outstanding (millions):                  |  |                                                |       |   |      |   |       |  
|Basic                                                                   |  |                                                | 464   |   |      |   | 476   |  
|Diluted                                                                 |  |                                                | 474   |   |      |   | 476   |  
|                                                                        |  |                                               
|Per share of common stock - Basic:                                      |  |                                                |       |   |      |   |       |  
|Income from continuing operations                                       |  | $                                              | 1.11  |   |      | $ | 0.86  |  
|Preference stock dividends                                              |  |                                                |      |   |      |   | (0.01 | )
|                                                                        |  |                                                |       |   |      |   |       |  
|Net income from continuing operations available for common stock        |  |                                                | 1.11  |   |      |   | 0.85  |  
|Income from discontinued operations, net of tax effect                  |  |                                                | 0.13  |   |      |   | 0.03  |  
|                                                                        |  |                                                |       |   |      |   |       |  
|Net income available for common stock                                   |  | $                                              | 1.24  |   |      | $ | 0.88  |  
|                                                                        |  |                                                |       |   |      |   |       |  
|Per share of common stock  Diluted:                                    |  |                                                |       |   |      |   |       |  
|Income (loss) from continuing operations                                |  | $                                              | 1.09  |   |      | $ | (0.12 | )
|Preference stock dividends                                              |  |                                                |      |   |      |   | (0.01 | )
|                                                                        |  |                                                |       |   |      |   |       |  
|Net income (loss) from continuing operations available for common stock |  |                                                | 1.09  |   |      |   | (0.13 | )
|Income from discontinued operations, net of tax effect                  |  |                                                | 0.13  |   |      |   | 0.03  |  
|                                                                        |  |                                                |       |   |      |   |       |  
|Net income (loss) available for common stock                            |  | $                                              | 1.22  |   |      | $ | (0.10 | )
|                                                                        |  |                                                |       |   |      |   |       |  
|Dividends declared                                                      |  | $                                              | 0.41  |   |      | $ | 0.28  |  

See Notes to Financial Statements.



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TXU CORP. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

(Unaudited)



|                                                                                                                                                                      |  |                             |     |   |      |   |     |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | --- | - | ---- | - | --- | -
|                                                                                                                                                                      |  | Three Months EndedMarch 31, |    
|                                                                                                                                                                      |  | 2006                        |     |   | 2005 |  
|                                                                                                                                                                      |  | (millions of dollars)       |    
|Components related to continuing operations:                                                                                                                          |  |                             |     |   |      |   |     |  
|                                                                                                                                                                      |  |                            
|Income from continuing operations                                                                                                                                     |  | $                           | 516 |   |      | $ | 406 |  
|                                                                                                                                                                      |  |                            
|Other comprehensive income (loss):                                                                                                                                    |  |                             |     |   |      |   |     |  
|                                                                                                                                                                      |  |                            
|Minimum pension liability adjustments (net of tax benefit of $- and $9)                                                                                               |  |                             |    |   |      |   | (16 | )
|                                                                                                                                                                      |  |                            
|Cash flow hedges:                                                                                                                                                     |  |                             |     |   |      |   |     |  
|Net increase in fair value of derivatives held at end of period (net of tax expense of $60 and $8)                                                                    |  |                             | 113 |   |      |   | 15  |  
|Derivative value net (gains)/losses related to hedged transactions settled during the period and reported in net income (net of tax expense of
$- and benefit of $11) |  |                             | (1  | ) |      |   | 20  |  
|                                                                                                                                                                      |  |                             |     |   |      |   |     |  
|Total effect of cash flow hedges                                                                                                                                      |  |                             | 112 |   |      |   | 35  |  
|                                                                                                                                                                      |  |                             |     |   |      |   |     |  
|Comprehensive income from continuing operations                                                                                                                       |  |                             | 628 |   |      |   | 425 |  
|                                                                                                                                                                      |  |                            
|Comprehensive income from discontinued operations                                                                                                                     |  |                             | 60  |   |      |   | 15  |  
|                                                                                                                                                                      |  |                             |     |   |      |   |     |  
|Comprehensive income                                                                                                                                                  |  | $                           | 688 |   |      | $ | 440 |  
|                                                                                                                                                                      |  |                             |     |   |      |   |     |  

See Notes to Financial Statements.



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TXU CORP. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(Unaudited)



|                                                                                                     |  |                             |       |   |      |   |      |  
|---------------------------------------------------------------------------------------------------- |  | --------------------------- | ----- | - | ---- | - | ---- | -
|                                                                                                     |  | Three Months EndedMarch 31, |      
|                                                                                                     |  | 2006                        |       |   | 2005 |  
|                                                                                                     |  | (millions of dollars)       |      
|Cash flows  operating activities:                                                                   |  |                             |       |   |      |   |      |  
|Income from continuing operations                                                                    |  | $                           | 516   |   |      | $ | 406  |  
|Adjustments to reconcile income from continuing operations to cash provided by operating activities: |  |                             |       |   |      |   |      |  
|Depreciation and amortization                                                                        |  |                             | 220   |   |      |   | 203  |  
|Deferred income taxes and investment tax credits  net                                               |  |                             | 229   |   |      |   | (49  | )
|Net effect of unrealized mark-to-market valuations of commodity contracts                            |  |                             | (5    | ) |      |   | 24   |  
|Charge (credit) related to impaired leases                                                           |  |                             | 2     |   |      |   | (15  | )
|Net gain from sale of assets                                                                         |  |                             | (12   | ) |      |   | (13  | )
|Change in regulatory-related liabilities                                                             |  |                             |      |   |      |   | (20  | )
|Litigation settlement insurance recovery                                                             |  |                             |      |   |      |   | (35  | )
|Charge (credit) related to coal contract counterparty claim                                          |  |                             | (12   | ) |      |   | 12   |  
|Stock-based compensation expense                                                                     |  |                             | 3     |   |      |   | 10   |  
|Bad debt expense                                                                                     |  |                             | 12    |   |      |   | 11   |  
|Changes in operating assets and liabilities                                                          |  |                             | 93    |   |      |   | (337 | )
|                                                                                                     |  |                             |       |   |      |   |      |  
|Cash provided by operating activities                                                                |  |                             | 1,046 |   |      |   | 197  |  
|                                                                                                     |  |                             |       |   |      |   |      |  
|Cash flows  financing activities:                                                                   |  |                             |       |   |      |   |      |  
|Issuances of securities:                                                                             |  |                             |       |   |      |   |      |  
|Long-term debt                                                                                       |  |                             | 100   |   |      |   | 71   |  
|Common stock                                                                                         |  |                             | 1     |   |      |   | 2    |  
|Retirements/repurchases of securities:                                                               |  |                             |       |   |      |   |      |  
|Equity-linked debt                                                                                   |  |                             |      |   |      |   | (25  | )
|Long-term debt                                                                                       |  |                             | (434  | ) |      |   | (27  | )
|Common stock                                                                                         |  |                             | (507  | ) |      |   |     |  
|Change in notes payable:                                                                             |  |                             |       |   |      |   |      |  
|Commercial paper                                                                                     |  |                             | 878   |   |      |   |     |  
|Banks                                                                                                |  |                             | (395  | ) |      |   | 185  |  
|Cash dividends paid:                                                                                 |  |                             |       |   |      |   |      |  
|Common stock                                                                                         |  |                             | (194  | ) |      |   | (134 | )
|Preference stock                                                                                     |  |                             |      |   |      |   | (5   | )
|Debt premium, discount, financing and reacquisition expenses                                         |  |                             | (10   | ) |      |   | (23  | )
|                                                                                                     |  |                             |       |   |      |   |      |  
|Cash provided by (used in) financing activities                                                      |  |                             | (561  | ) |      |   | 44   |  
|                                                                                                     |  |                             |       |   |      |   |      |  
|Cash flows  investing activities:                                                                   |  |                             |       |   |      |   |      |  
|Capital expenditures                                                                                 |  |                             | (309  | ) |      |   | (223 | )
|Nuclear fuel                                                                                         |  |                             | (14   | ) |      |   | (26  | )
|Proceeds from sale of assets                                                                         |  |                             |      |   |      |   | 7    |  
|Purchase of lease trust                                                                              |  |                             | (69   | ) |      |   |     |  
|Proceeds from pollution control revenue bonds deposited with trustee                                 |  |                             | (99   | ) |      |   |     |  
|Proceeds from sales of nuclear decommissioning trust fund securities                                 |  |                             | 44    |   |      |   | 41   |  
|Investments in nuclear decommissioning trust fund securities                                         |  |                             | (48   | ) |      |   | (45  | )
|Other                                                                                                |  |                             | (9    | ) |      |   | (2   | )
|                                                                                                     |  |                             |       |   |      |   |      |  
|Cash used in investing activities                                                                    |  |                             | (504  | ) |      |   | (248 | )
|                                                                                                     |  |                             |       |   |      |   |      |  
|Discontinued operations:                                                                             |  |                             |       |   |      |   |      |  
|Cash used in operating activities                                                                    |  |                             | (1    | ) |      |   | (9   | )
|Cash used in financing activities                                                                    |  |                             |      |   |      |   |     |  
|Cash used in investing activities                                                                    |  |                             |      |   |      |   |     |  
|                                                                                                     |  |                             |       |   |      |   |      |  
|Cash used in discontinued operations                                                                 |  |                             | (1    | ) |      |   | (9   | )
|                                                                                                     |  |                             |       |   |      |   |      |  
|Net change in cash and cash equivalents                                                              |  |                             | (20   | ) |      |   | (16  | )
|Cash and cash equivalents  beginning balance                                                        |  |                             | 37    |   |      |   | 106  |  
|                                                                                                     |  |                             |       |   |      |   |      |  
|Cash and cash equivalents  ending balance                                                           |  | $                           | 17    |   |      | $ | 90   |  
|                                                                                                     |  |                             |       |   |      |   |      |  

See Notes to Financial Statements.



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##### Table of Contents

TXU CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



|                                                                 |  |                       |        |   |                  |   |        |  
|---------------------------------------------------------------- |  | --------------------- | ------ | - | ---------------- | - | ------ | -
|                                                                 |  | March 31,    2006     |        |   | December 31,2005 |  
|                                                                 |  | (millions of dollars) |       
|ASSETS                                                           |  |                       |        |   |                  |   |        |  
|Current assets:                                                  |  |                       |        |   |                  |   |        |  
|Cash and cash equivalents                                        |  | $                     | 17     |   |                  | $ | 37     |  
|Restricted cash                                                  |  |                       | 99     |   |                  |   | 54     |  
|Accounts receivable  trade                                      |  |                       | 817    |   |                  |   | 1,328  |  
|Income taxes receivable                                          |  |                       |       |   |                  |   | 14     |  
|Inventories                                                      |  |                       | 369    |   |                  |   | 364    |  
|Commodity contract assets                                        |  |                       | 848    |   |                  |   | 1,603  |  
|Cash flow hedge and other derivative assets                      |  |                       | 47     |   |                  |   | 65     |  
|Accumulated deferred income taxes                                |  |                       | 450    |   |                  |   | 717    |  
|Margin deposits related to commodity positions                   |  |                       | 25     |   |                  |   | 247    |  
|Other current assets                                             |  |                       | 151    |   |                  |   | 129    |  
|                                                                 |  |                       |        |   |                  |   |        |  
|Total current assets                                             |  |                       | 2,823  |   |                  |   | 4,558  |  
|                                                                 |  |                       |        |   |                  |   |        |  
|Restricted cash                                                  |  |                       | 70     |   |                  |   | 16     |  
|Investments                                                      |  |                       | 659    |   |                  |   | 643    |  
|Property, plant and equipment  net                              |  |                       | 17,328 |   |                  |   | 17,192 |  
|Goodwill                                                         |  |                       | 542    |   |                  |   | 542    |  
|Regulatory assets  net                                          |  |                       | 1,805  |   |                  |   | 1,826  |  
|Commodity contract assets                                        |  |                       | 242    |   |                  |   | 338    |  
|Cash flow hedge and other derivative assets                      |  |                       | 57     |   |                  |   | 75     |  
|Other noncurrent assets                                          |  |                       | 357    |   |                  |   | 349    |  
|                                                                 |  |                       |        |   |                  |   |        |  
|Total assets                                                     |  | $                     | 23,883 |   |                  | $ | 25,539 |  
|                                                                 |  |                       |        |   |                  |   |        |  
|LIABILITIES AND SHAREHOLDERS EQUITY                             |  |                       |        |   |                  |   |        |  
|Current liabilities:                                             |  |                       |        |   |                  |   |        |  
|Notes payable:                                                   |  |                       |        |   |                  |   |        |  
|Commercial paper                                                 |  | $                     | 1,236  |   |                  | $ | 358    |  
|Banks                                                            |  |                       | 45     |   |                  |   | 440    |  
|Long-term debt due currently                                     |  |                       | 850    |   |                  |   | 1,250  |  
|Accounts payable  trade                                         |  |                       | 762    |   |                  |   | 1,026  |  
|Commodity contract liabilities                                   |  |                       | 803    |   |                  |   | 1,481  |  
|Cash flow hedge and other derivative liabilities                 |  |                       | 70     |   |                  |   | 275    |  
|Margin deposits related to commodity positions                   |  |                       | 104    |   |                  |   | 357    |  
|Other current liabilities                                        |  |                       | 939    |   |                  |   | 1,163  |  
|                                                                 |  |                       |        |   |                  |   |        |  
|Total current liabilities                                        |  |                       | 4,809  |   |                  |   | 6,350  |  
|                                                                 |  |                       |        |   |                  |   |        |  
|Accumulated deferred income taxes                                |  |                       | 3,726  |   |                  |   | 3,697  |  
|Investment tax credits                                           |  |                       | 379    |   |                  |   | 384    |  
|Commodity contract liabilities                                   |  |                       | 339    |   |                  |   | 516    |  
|Cash flow hedge and other derivative liabilities                 |  |                       | 166    |   |                  |   | 91     |  
|All other long-term debt, less amounts due currently             |  |                       | 11,327 |   |                  |   | 11,332 |  
|Other noncurrent liabilities and deferred credits                |  |                       | 2,656  |   |                  |   | 2,694  |  
|                                                                 |  |                       |        |   |                  |   |        |  
|Total liabilities                                                |  |                       | 23,402 |   |                  |   | 25,064 |  
|                                                                 |  |                       |        |   |                  |   |        |  
|Contingencies (Note 6)                                           |  |                       |        |   |                  |   |        |  
|                                                                 |  |                      
|Shareholders equity (Note 5):                                   |  |                       |        |   |                  |   |        |  
|Common stock without par value: Authorized shares: 1,000,000,000 |  |                       |        |   |                  |   |        |  
|Outstanding shares: 460,752,849 and 470,845,978                  |  |                       | 5      |   |                  |   | 5      |  
|Additional paid-in capital                                       |  |                       | 1,347  |   |                  |   | 1,840  |  
|Retained deficit                                                 |  |                       | (781   | ) |                  |   | (1,168 | )
|Accumulated other comprehensive loss                             |  |                       | (90    | ) |                  |   | (202   | )
|                                                                 |  |                       |        |   |                  |   |        |  
|Total shareholders equity                                       |  |                       | 481    |   |                  |   | 475    |  
|                                                                 |  |                       |        |   |                  |   |        |  
|Total liabilities and shareholders equity                       |  | $                     | 23,883 |   |                  | $ | 25,539 |  
|                                                                 |  |                       |        |   |                  |   |        |  

See Notes to Financial Statements.



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##### Table of Contents

TXU CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES

Description of Business TXU Corp. is a holding company conducting its operations principally through its TXU
Energy Holdings and TXU Electric Delivery subsidiaries. TXU Energy Holdings is engaged in electricity generation, residential and business retail electricity sales as well as wholesale energy markets activities, largely in Texas. TXU Electric
Delivery is engaged in regulated electricity transmission and distribution operations in Texas.

TXU Corp. has two reportable segments: TXU
Energy Holdings and TXU Electric Delivery. (See Note 9 for further information concerning reportable business segments.)

Basis of
Presentation  The condensed, consolidated financial statements of TXU Corp. have been prepared in accordance with accounting principles generally accepted in the US and on the same basis as the audited financial statements included in
its 2005 Form 10-K. All adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results of operations and financial position have been included therein. Certain reclassifications have been made to conform prior
period data to current period presentation. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in
accordance with US GAAP have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and footnotes required by US GAAP, they
should be read in conjunction with the audited financial statements and related notes included in the 2005 Form 10-K. The results of operations for an interim period may not give a true indication of results for a full year. All dollar amounts in
the financial statements and tables in the notes are stated in millions of US dollars unless otherwise indicated.

Effective
January 1, 2006, TXU Corp. completed a realignment of its wholesale energy operations. Under the realignment, management of wholesale purchases and sales of power for purposes of balancing power supply and demand has been segregated from the
buying and selling of power for trading purposes. Previously, all wholesale power purchases and sales were managed in aggregate under a portfolio management structure, as the primary activity was energy balancing and all wholesale
activity utilized (and continues to utilize) contracts for physical delivery. Financial derivative instruments, as are common in natural gas markets, are not as readily available in the Texas power market. The realignment reflects an expectation of
a growing market for power trading in Texas. Under the previous structure, all purchases and sales scheduled with ERCOT for delivery were reported gross in the income statement, and booked-out sales and purchases (agreement with the
counterparty to net settle before scheduling for delivery) were reported net. Under the new structure, those contracts that are now separately managed as a trading book and are scheduled for physical delivery are now reported net upon settlement in
accordance with existing accounting rules (EITF 02-03). All transactions reported net, including booked-out contracts, are reported as a component of revenues. Gross revenues from power trading activities totaled approximately $350 million for the
first quarter of 2006.



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##### Table of Contents

Also, TXU Corp. has reviewed its reporting of ERCOT power balancing transactions. These transactions
represent wholesale purchases and sales of power for real-time balancing purposes as measured in 15-minute intervals. As is industry practice, these purchases and sales with ERCOT, as the balancing energy clearinghouse agent, are reported net. TXU
Corp. has historically reported the net amount as a component of purchased power cost, as its retail load had exceeded baseload generation. The amount had consistently represented a net purchase of power prior to 2005. With changing market
conditions and TXU Corp.s declining retail sales load, the net balancing activity has more recently resulted in net sales of power. TXU Corp. believes that presentation of this activity as a component of revenues more appropriately reflects
TXU Corp.s market position. Accordingly, TXU Corp. has implemented a change effective with reporting for the first quarter of 2006 to report the net balancing transactions in revenues and has reclassified the prior years amount. The
amount reported in revenues in 2006 is $58 million and the amount reclassified for 2005 is $17 million, both representing net sales in the quarters.

Stock Split  All share and per share amounts reflect a two-for-one stock split completed in December 2005.

Discontinued Businesses  Note 2 presents detailed information regarding the effects of discontinued businesses, the
results of which have been classified as discontinued operations.

Use of Estimates  Preparation of TXU
Corp.s financial statements requires management to make estimates and assumptions about future events that affect the reporting of assets and liabilities at the balance sheet dates and the reported amounts of revenue and expense, including
mark-to-market valuation adjustments. In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information. No material adjustments, other than those
disclosed elsewhere herein, were made to previous estimates or assumptions during the current period.

Purchase of Lease Trust
Interest As previously disclosed, in December 2005 TXU Corp. entered into an agreement to purchase, for $69 million in cash, the owner participant interest in a trust established to lease combustion turbines to TXU Corp. The trust is
a variable interest entity, and in accordance with FIN 46R, the trust was consolidated at December 31, 2005, with the trusts combustion turbine assets and related debt recorded at estimated fair market values of $35 million and $96
million, respectively. The transaction was closed on March 31, 2006. In the fourth quarter of 2005, TXU Corp. recorded an extraordinary loss of $50 million (net of a $28 million tax benefit) for the excess of the purchase price over the fair
value of the trusts net assets, net of the reversal of a previously established liability of $59 million related to the combustion turbine lease.

Earnings Per Share Basic earnings per share available to common shareholders are based on the weighted average number of common shares outstanding during the quarter. Diluted earnings per share
include the effect of all potential issuances of common shares under certain securities and employee incentive arrangements.

The 2005
diluted per share results reflect a $0.97 per share negative impact associated with the November 2004 accelerated share repurchase program. In November 2004, TXU Corp. entered into an agreement with a broker-dealer counterparty under which TXU Corp.
repurchased and retired 105 million shares of its outstanding common stock for an initial price totaling $3.4 billion. Under the agreement, the counterparty immediately borrowed shares that were sold to and canceled by TXU Corp. and in turn
purchased shares in the open market over a subsequent time period. The agreement was therefore subject to a contingent purchase price adjustment based on the actual price of the shares purchased by the counterparty. Because TXU Corp. intended to
settle in cash the difference between the initial price of the shares and the actual costs of the shares purchased by the counterparty under the program (the true-up), accounting rules required that earnings used in the diluted earnings per share
calculation be reduced by the change in the fair value of the true-up liability in the quarter, which had been estimated to be $462 million (without tax benefit) at March 31, 2005. In May 2005, TXU Corp. paid $523 million (including related
fees and expenses) in cash to the counterparty in full settlement of the transaction. The counterparty had repurchased the shares at an average price per share of $36.91.



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Diluted earnings per share for the three months ended March 31, 2005 would have reflected
approximately 9.8 million shares of common stock issuable in connection with stock-based compensation plans and equity-linked debt securities. However, because of antidilution arising from the effect of the accelerated share repurchase program
on earnings per share, these dilutive shares had no effect on the calculation of diluted earnings per share for the three months ended March 31, 2005.

Changes in Accounting Standards  There are no recently issued accounting standards effective after March 31, 2006 that are expected to materially impact TXU Corp.

2. DISCONTINUED OPERATIONS

A net $60 million credit
in the first quarter of 2006 related to discontinued operations consists almost entirely of a reversal of a TXU Gas income tax reserve due to a favorable resolution of an IRS audit matter, which related to a business sold in 2000. The TXU Gas
business was disposed of in October 2004. (Also see discussion in Note 6 under Income Tax Contingencies.)

A $15 million credit
in the first quarter of 2005 related to discontinued operations consists primarily of a $17 million credit associated with the expected favorable resolution of a previously proposed working capital adjustment to the TXU Gas sales price. Discontinued
operations in 2005 also included the results of the Pedricktown, New Jersey power production business sold in July 2005 as follows:



|                                    |  |                                   |    |  
|----------------------------------- |  | --------------------------------- | -- | -
|                                    |  | Three Months Ended March 31, 2005 |   
|Operating revenues                  |  | $                                 | 5  |  
|Operating costs and expenses        |  |                                   | 7  |  
|                                    |  |                                   |    |  
|Operating loss before income taxes  |  |                                   | (2 | )
|Income tax benefit                  |  |                                   | (1 | )
|Charges related to exit (after-tax) |  |                                   | (2 | )
|                                    |  |                                   |    |  
|Loss from discontinued operations   |  | $                                 | (3 | )
|                                    |  |                                   |    |  



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##### Table of Contents

3. FINANCING ARRANGEMENTS

Short-term Borrowings At March 31, 2006, TXU Corp. had outstanding short-term borrowings consisting of commercial paper of $1.2 billion and bank borrowings under the credit facilities of $45
million at a total weighted average interest rate of 4.94%.At December 31, 2005, TXU Corp. had outstanding short-term borrowings consisting of bank borrowings under the credit facilities of $440 million and commercial paper of
$358 million at a total weighted average interest rate of 4.69%.

Under the commercial paper programs, TXU Energy Holdings and TXU Electric
Delivery may issue up to $2.4 billion and $1.0 billion, respectively, of these securities. These programs are supported by existing credit facilities.

Credit Facilities  At March 31, 2006, TXU Corp. had access to credit facilities (all of which provide for long-term borrowings) as follows:



|                                     |  |               |  |                                            |  |                   |       |                  |   |                |  |              |    |  |   |      
|------------------------------------ |  | ------------- |  | ------------------------------------------ |  | ----------------- | ----- | ---------------- | - | -------------- |  | ------------ | -- |  | - | -----
|                                     |  |               |  |                                            |  | At March 31, 2006
|Facility                             |  | Maturity Date |  | Authorized Borrowers                       |  | FacilityLimit     |       | Letters ofCredit |   | CashBorrowings |  | Availability
|Three-Year Revolving Credit Facility |  | June 2008     |  | TXU Energy Holdings, TXU Electric Delivery |  | $                 | 1,400 |                  | $ | 487            |  | $            |   |  | $ | 913  
|Three-Year Revolving Credit Facility |  | August 2008   |  | TXU Energy Holdings, TXU Electric Delivery |  |                   | 1,000 |                  |   |               |  |              |   |  |   | 1,000
|Five-Year Revolving Credit Facility  |  | March 2010    |  | TXU Energy Holdings, TXU Electric Delivery |  |                   | 1,600 |                  |   |               |  |              |   |  |   | 1,600
|Five-Year Revolving Credit Facility  |  | June 2010     |  | TXU Energy Holdings, TXU Electric Delivery |  |                   | 500   |                  |   |               |  |              |   |  |   | 500  
|Five-Year Revolving Credit Facility  |  | December 2009 |  | TXU Energy Holdings                        |  |                   | 500   |                  |   | 455            |  |              | 45 |  |   |     
|                                     |  |               |  |                                            |  |                   |       |                  |   |                |  |              |    |  |   |      
|Total                                |  |               |  |                                            |  | $                 | 5,000 |                  | $ | 942            |  | $            | 45 |  | $ | 4,013
|                                     |  |               |  |                                            |  |                   |       |                  |   |                |  |              |    |  |   |      

The maximum amount TXU Energy Holdings and TXU Electric Delivery can directly access under the
facilities is $5.0 billion and $3.6 billion, respectively. These facilities may be used for working capital and general corporate purposes, including providing support for issuances of commercial paper and letters of credit by TXU Energy Holdings
and TXU Electric Delivery.

In addition, TXU Energy Holdings and TXU Electric Delivery have access to $25 million under a joint uncommitted
line of credit facility expiring December 31, 2006. In April 2006, TXU Energy Holdings borrowed the full amount under the facility. Under uncommitted facilities, lenders provide credit on a best efforts basis. Terms are generally consistent
with existing credit facilities.



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Sale of Receivables  TXU Corp. has had an accounts receivable securitization program
in place for a number of years. The activity under this program is accounted for as a sale of accounts receivable in accordance with SFAS 140. Under the program, subsidiaries of TXU Corp. (originators) sell trade accounts receivable to TXU
Receivables Company, a consolidated wholly-owned bankruptcy remote direct subsidiary of TXU Corp., which sells undivided interests in the purchased accounts receivable for cash to special purpose entities established by financial institutions (the
funding entities). In June 2005, the program was renewed until June 2008.

The maximum amount of funding currently available under the
program is $700 million, and as of March 31, 2006 the program funding was $680 million. Under certain circumstances, the amount of customer deposits held by the originators can reduce the amount of undivided interests that can be sold, thus
reducing funding available under the program. Funding availability for all originators is reduced by 100% of the customer deposits if TXU Energy Holdings coverage ratio is less than 2.5 times; 50% if TXU Energy Holdings coverage ratio is
less than 3.25 times, but at least 2.5 times; and zero % if TXU Energy Holdings coverage ratio is 3.25 times or more. The originators customer deposits, which totaled $114 million at March 31, 2006, did not affect funding
availability at that date as TXU Energy Holdings coverage ratio was in excess of 3.25 times.

All new trade receivables under the
program generated by the originators are continuously purchased by TXU Receivables Company with the proceeds from collections of receivables previously purchased. Changes in the amount of funding under the program, through changes in the amount of
undivided interests sold by TXU Receivables Company, reflect seasonal variations in the level of accounts receivable, changes in collection trends as well as other factors such as changes in sales prices and volumes. TXU Receivables Company has
issued subordinated notes payable to the originators for the difference between the face amount of the uncollected accounts receivable purchased, less a discount, and cash paid to the originators that was funded by the sale of the undivided
interests. The balance of the subordinated notes payable was $202 million and $201 million at March 31, 2006 and December 31, 2005, respectively.

The discount from face amount on the purchase of receivables principally funds program fees paid by TXU Receivables Company to the funding entities, as well as a servicing fee paid by TXU Receivables Company to TXU
Business Services, a direct subsidiary of TXU Corp. The program fees (losses on sale), which consist primarily of interest costs on the underlying financing, were $9 million and $4 million for the three-month periods ending March 31, 2006 and
2005, respectively, and approximated 5.2% and 3.5% for the first three months of 2006 and 2005, respectively, of the average funding under the program on an annualized basis; these fees represent the net incremental costs of the program to the
originators and are reported in SG&A expenses. The servicing fees, which totaled approximately $1 million in the first three months of both 2006 and 2005, compensate TXU Business Services for its services as collection agent, including
maintaining the detailed accounts receivable collection records.

The March 31, 2006 consolidated balance sheet reflects $882 million
face amount of trade accounts receivable of TXU Energy Holdings and TXU Electric Delivery sold to TXU Receivables Company, such amount having been reduced by $680 million of undivided interests sold by TXU Receivables Company. Funding under the
program increased $9 million and $31 million for the three months ended March 31, 2006 and 2005, respectively. Funding increases or decreases under the program are reflected as operating cash flow activity in the statement of cash flows. The
carrying amount of the retained interests in the accounts receivable approximated fair value due to the short-term nature of the collection period.



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Activities of TXU Receivables Company for the three months ended March 31, 2006 and 2005 were as
follows:



|                                                             |  |                              |        |   |      |   |        |  
|------------------------------------------------------------ |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                             |  | Three Months Ended March 31, |       
|                                                             |  | 2006                         |        |   | 2005 |  
|Cash collections on accounts receivable                      |  | $                            | 1,835  |   |      | $ | 1,640  |  
|Face amount of new receivables purchased                     |  |                              | (1,845 | ) |      |   | (1,611 | )
|Discount from face amount of purchased receivables           |  |                              | 10     |   |      |   | 5      |  
|Program fees paid                                            |  |                              | (9     | ) |      |   | (4     | )
|Servicing fees paid                                          |  |                              | (1     | ) |      |   | (1     | )
|Increase (decrease) in subordinated notes payable            |  |                              | 1      |   |      |   | (60    | )
|                                                             |  |                              |        |   |      |   |        |  
|Operating cash flows provided to TXU Corp. under the program |  | $                            | (9     | ) |      | $ | (31    | )
|                                                             |  |                              |        |   |      |   |        |  

Upon termination of the program, cash flows to TXU Corp. would be delayed as collections of sold
receivables would be used by TXU Receivables Company to repurchase the undivided interests sold instead of purchasing new receivables. The level of cash flows would normalize in approximately 16 to 30 days.

Contingencies Related to Sale of Receivables Program Although TXU Receivables Company expects to be able to pay its subordinated
notes from the collections of purchased receivables, these notes are subordinated to the undivided interests of the financial institutions in those receivables, and collections might not be sufficient to pay the subordinated notes. The program may
be terminated if either of the following events occurs:



| | 1) | all of the originators cease to maintain their required fixed charge coverage ratio and debt to capital (leverage) ratio;
| | -- | -------------------------------------------------------------------------------------------------------------------------



| | 2) | the delinquency ratio (delinquent for 31 days) for the sold receivables, the default ratio (delinquent for 91 days or deemed uncollectible), the dilution ratio (reductions for
discounts, disputes and other allowances) or the days collection outstanding ratio exceed stated thresholds and the financial institutions do not waive such event of termination. The thresholds apply to the entire portfolio of sold receivables, not
separately to the receivables of each originator.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Long-term debt At March 31, 2006 and December 31, 2005, the long-term debt
of TXU Corp. consisted of the following:



|                                                                                   |  |                |       |                   |   |      
|---------------------------------------------------------------------------------- |  | -------------- | ----- | ----------------- | - | -----
|                                                                                   |  | March 31, 2006 |       | December 31, 2005
|TXU Energy Holdings                                                                |  |                |       |                   |   |      
|Pollution Control Revenue Bonds:                                                   |  |                |       |                   |   |      
|Brazos River Authority:                                                            |  |                |       |                   |   |      
|5.400% Fixed Series 1994A due May 1, 2029                                          |  | $              | 39    |                   | $ | 39   
|5.400% Fixed Series 1994B due May 1, 2029, remarketing date May 1, 2006(a) (h)     |  |                | 39    |                   |   | 39   
|5.400% Fixed Series 1995A due April 1, 2030, remarketing date May 1, 2006(a) (h)   |  |                | 50    |                   |   | 50   
|5.050% Fixed Series 1995B due June 1, 2030, remarketing date June 19, 2006(a)      |  |                | 114   |                   |   | 114  
|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   
|3.220% Floating Series 2001A due October 1, 2030 (b)                               |  |                | 71    |                   |   | 71   
|4.750% Fixed Series 2001B due May 1, 2029, remarketing date November 1, 2006(a)    |  |                | 19    |                   |   | 19   
|5.750% Fixed Series 2001C due May 1, 2036, remarketing date November 1, 2011(a)    |  |                | 217   |                   |   | 217  
|3.220% Floating Series 2001D due May 1, 2033 (b)                                   |  |                | 268   |                   |   | 268  
|4.850% Floating Taxable Series 2001I due December 1, 2036(b)                       |  |                | 62    |                   |   | 62   
|3.220% 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   |                   |   |     
|                                                                                   |  |               
|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   
|                                                                                   |  |               
|Trinity River Authority of Texas:                                                  |  |                |       |                   |   |      
|6.250% Fixed Series 2000A due May 1, 2028                                          |  |                | 14    |                   |   | 14   
|5.000% Fixed Series 2001A due May 1, 2027, remarketing date November 1, 2006(a)    |  |                | 37    |                   |   | 37   
|                                                                                   |  |               
|Other:                                                                             |  |                |       |                   |   |      
|6.125% Fixed Senior Notes due March 15, 2008(c)                                    |  |                | 250   |                   |   | 250  
|7.000% Fixed Senior Notes due March 15, 2013                                       |  |                | 1,000 |                   |   | 1,000
|4.920% Floating Rate Senior Notes due January 17, 2006                             |  |                |      |                   |   | 400  
|Capital lease obligations                                                          |  |                | 102   |                   |   | 103  
|Fair value adjustments related to interest rate swaps                              |  |                | 8     |                   |   | 9    
|                                                                                   |  |                |       |                   |   |      
|Total TXU Energy Holdings                                                          |  | $              | 3,154 |                   | $ | 3,456
|                                                                                   |  |                |       |                   |   |      



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|                                                                                        |  |               |        |   |                  |   |        |  
|--------------------------------------------------------------------------------------- |  | ------------- | ------ | - | ---------------- | - | ------ | -
|                                                                                        |  | March 31,2006 |        |   | December 31,2005 |  
|TXU Electric Delivery                                                                   |  |               |        |   |                  |   |        |  
|6.375% Fixed Senior Notes due May 1, 2012                                               |  |               | 700    |   |                  |   | 700    |  
|7.000% Fixed Senior Notes due May 1, 2032                                               |  |               | 500    |   |                  |   | 500    |  
|6.375% Fixed Senior Notes due January 15, 2015(c)                                       |  |               | 500    |   |                  |   | 500    |  
|7.250% Fixed Senior Notes due January 15, 2033                                          |  |               | 350    |   |                  |   | 350    |  
|5.000% Fixed Debentures due September 1, 2007(c)                                        |  |               | 200    |   |                  |   | 200    |  
|7.000% Fixed Debentures due September 1, 2022                                           |  |               | 800    |   |                  |   | 800    |  
|Unamortized discount                                                                    |  |               | (17    | ) |                  |   | (17    | )
|                                                                                        |  |               |        |   |                  |   |        |  
|Sub-total                                                                               |  |               | 3,033  |   |                  |   | 3,033  |  
|                                                                                        |  |              
|TXU Electric Delivery Transition Bond Company LLC:(e)                                   |  |               |        |   |                  |   |        |  
|2.260% Fixed Series 2003 Bonds due in semiannual installments through February 15, 2007 |  |               | 23     |   |                  |   | 44     |  
|4.030% Fixed Series 2003 Bonds due in semiannual installments through February 15, 2010 |  |               | 122    |   |                  |   | 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 |  |               | 215    |   |                  |   | 215    |  
|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 TXU Electric Delivery Transition Bond Company LLC                                 |  |               | 1,146  |   |                  |   | 1,167  |  
|                                                                                        |  |               |        |   |                  |   |        |  
|Total TXU Electric Delivery                                                             |  |               | 4,179  |   |                  |   | 4,200  |  
|                                                                                        |  |               |        |   |                  |   |        |  
|US Holdings                                                                             |  |               |        |   |                  |   |        |  
|7.170% Fixed Senior Debentures due August 1, 2007                                       |  |               | 10     |   |                  |   | 10     |  
|7.460% Fixed Secured Facility Bonds with amortizing payments through January 2015       |  |               | 85     |   |                  |   | 91     |  
|9.580% Fixed Notes due in semiannual installments through December 4, 2019              |  |               | 65     |   |                  |   | 65     |  
|8.254% Fixed Notes due in quarterly installments through December 31, 2021              |  |               | 61     |   |                  |   | 62     |  
|5.480% Floating Rate Junior Subordinated Debentures, Series D due January 30, 2037(d)   |  |               | 1      |   |                  |   | 1      |  
|8.175% Fixed Junior Subordinated Debentures, Series E due January 30, 2037              |  |               | 8      |   |                  |   | 8      |  
|Unamortized premium                                                                     |  |               | 5      |   |                  |   | 5      |  
|                                                                                        |  |               |        |   |                  |   |        |  
|Total US Holdings                                                                       |  |               | 235    |   |                  |   | 242    |  
|                                                                                        |  |               |        |   |                  |   |        |  
|TXU Corp.                                                                               |  |               |        |   |                  |   |        |  
|6.375% Fixed Senior Notes Series C due January 1, 2008(c)                               |  |               | 200    |   |                  |   | 200    |  
|6.375% Fixed Senior Notes Series J due June 15, 2006(c)                                 |  |               | 683    |   |                  |   | 683    |  
|4.446% Fixed Senior Notes Series K due November 16, 2006                                |  |               | 50     |   |                  |   | 50     |  
|5.800% Fixed Senior Notes Series M due May 16, 2008 (f)(g)                              |  |               | 179    |   |                  |   | 179    |  
|4.800% Fixed Senior Notes Series O due November 15, 2009(c)                             |  |               | 1,000  |   |                  |   | 1,000  |  
|5.550% Fixed Senior Notes Series P due November 15, 2014(c)                             |  |               | 1,000  |   |                  |   | 1,000  |  
|6.500% Fixed Senior Notes Series Q due November 15, 2024(c)                             |  |               | 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                    |  |               | 104    |   |                  |   | 109    |  
|6.100% Floating Convertible Senior Notes due July 15, 2033(d)                           |  |               | 25     |   |                  |   | 25     |  
|Fair value adjustments related to interest rate swaps                                   |  |               | (123   | ) |                  |   | (53    | )
|Unamortized discount                                                                    |  |               | (9     | ) |                  |   | (9     | )
|                                                                                        |  |               |        |   |                  |   |        |  
|Total TXU Corp.                                                                         |  |               | 4,609  |   |                  |   | 4,684  |  
|                                                                                        |  |               |        |   |                  |   |        |  
|Total TXU Corp. consolidated                                                            |  |               | 12,177 |   |                  |   | 12,582 |  
|Less amount due currently                                                               |  |               | (850   | ) |                  |   | (1,250 | )
|                                                                                        |  |               |        |   |                  |   |        |  
|Total long-term debt                                                                    |  | $             | 11,327 |   |                  | $ | 11,332 |  
|                                                                                        |  |               |        |   |                  |   |        |  

---

|(a) | These series are in the multiannual mode and are subject to mandatory tender prior to maturity on the mandatory remarketing date. On such date, the interest rate and interest rate
period will be reset for the bonds.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Interest rates in effect at March 31, 2006. These series are in a weekly rate mode and are classified as long-term as they are supported by long-term irrevocable letters of
credit.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Interest rates swapped to floating on an aggregate $3.4 billion principal amount.
|--- | ---------------------------------------------------------------------------------

|(d) | Interest rates in effect at March 31, 2006.
|--- | -------------------------------------------

|(e) | These bonds are nonrecourse to TXU Electric Delivery.
|--- | -----------------------------------------------------

|(f) | Equity-linked.
|--- | --------------

|(g) | Expected to be remarketed on May 11, 2006, at which time the rate may change.
|--- | -----------------------------------------------------------------------------

|(h) | Repurchased on May 1, 2006 for remarketing at a later date.
|--- | -----------------------------------------------------------



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Debt Issuances and Retirements in 2006  In March 2006, TXU Energy Holdings issued the
Brazos River Authority Series 2006 pollution control revenue bonds with an aggregate principal amount of $100 million. The bonds have a fixed interest rate of 5.0% and mature in March 2041. Net proceeds of $99 million (face amount less issuance
expenses) from the issuance are held in a trust and are classified as restricted cash. Such proceeds will be released to TXU Energy Holdings by the trust at such time documentation of qualified expenditures are presented and approved by the trustee.

Retirements of long-term debt in 2006 totaling $434 million represent payments at scheduled maturity dates.

Fair Value Hedges TXU Corp. uses fair value hedging strategies to manage its exposure to fixed interest rates on long-term debt. At
March 31, 2006, $3.4 billion of fixed rate debt had been effectively converted to variable rates through interest rate swap transactions, expiring through 2024. These swaps qualified for and have been designated as fair value hedges in
accordance with SFAS 133 (under the short-cut method as the hedges are 100% effective).

Long-term debt fair value adjustments



|                                                                                                                                |  |                |      |  
|------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---- | -
|                                                                                                                                |  | March 31, 2006 |     
|Long-term debt fair value adjustments related to interest rate swaps at beginning of period  reduction in debt carrying
value  |  | $              | (44  | )
|Fair value adjustments during the period                                                                                        |  |                | (68  | )
|Amortization of net gains on settled fair value hedges (a) (b)                                                                  |  |                | (3   | )
|                                                                                                                                |  |                |      |  
|Long-term debt fair value adjustments at end of period  reduction in debt carrying value (net out-of-the-money value of
swaps) |  | $              | (115 | )
|                                                                                                                                |  |                |      |  

| | 
| | 

| | (a) | Amount is pretax.
| | --- | -----------------

| | (b) | Net value of settled in-the-money fixed-to-variable swaps that is being amortized as a reduction to interest expense over the remaining life of the associated debt.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

Any changes in open swap fair values reported as fair value adjustments to debt amounts are offset by changes in derivative
assets and liabilities.

4. TAX BENEFIT RELATED TO TXU EUROPE

A net income tax benefit of $26 million in the first quarter of 2005 includes $138 million in additional tax benefit related to the 2002 TXU Europe worthlessness deduction. The tax benefit reflects identification of
tax planning strategies TXU Corp. would implement to ensure utilization of capital losses associated with the write-off of the investment in TXU Europe. Also see Note 6 regarding income tax contingencies.



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##### Table of Contents

5. SHAREHOLDERS EQUITY

Declaration of dividend  At its February 2006 meeting, the board of directors of TXU Corp. declared a quarterly dividend of $0.4125 a share, which was paid on April 3, 2006 to
shareholders of record at March 3, 2006.

Dividend Restrictions At March 31, 2006, there were
no material restrictions on TXU Corp.s ability to pay regular quarterly dividends. To pay these dividends, TXU Corp. depends, in part, on the dividends it receives from its subsidiaries.

Common Stock RepurchaseIn November 2005, the TXU Corp. board of directors authorized the repurchase of
up to 34 million shares of common stock through the end of 2006. Under this authority, TXU Corp. repurchased and retired 12 million shares in November 2005 and 10 million shares during the three months ended March 31, 2006 at an
average price of $49.51 and $50.20 per share, respectively, (including related fees and expenses). Between March 31, 2006 and May 3, 2006, TXU Corp. repurchased an additional 4 million shares at an average price of $47.25 per share
(including related fees and expenses). As of May 3, 2006, 26 million of the 34 million shares authorized have been repurchased.

The following table presents the changes to common stock equity during the three months ended March 31, 2006:



|                                                   |  |              |   |                            |        |   |                  |   |        |                                             |  |   |                           |   |  |   |      |  
|-------------------------------------------------- |  | ------------ | - | -------------------------- | ------ | - | ---------------- | - | ------ | ------------------------------------------- |  | - | ------------------------- | - |  | - | ---- | -
|                                                   |  | Common Stock |   | Additional Paid-in Capital |        |   | Retained Deficit |   |        | Accumulated Other Comprehensive Gain (Loss) |  |   | Total Common Stock Equity |  
|Balance at December 31, 2005                       |  | $            | 5 |                            | $1,840 |   |                  | $ | (1,168 | )                                           |  | $ | (202                      | ) |  | $ | 475  |  
|Common stock issuances                             |  |              |  |                            | 1      |   |                  |   |       |                                             |  |   |                          |   |  |   | 1    |  
|Common stock repurchases                           |  |              |  |                            | (507   | ) |                  |   |       |                                             |  |   |                          |   |  |   | (507 | )
|Net effects of cash flow hedges                    |  |              |  |                            |       |   |                  |   |       |                                             |  |   | 112                       |   |  |   | 112  |  
|Dividends                                          |  |              |  |                            |       |   |                  |   | (190   | )                                           |  |   |                          |   |  |   | (190 | )
|Net income                                         |  |              |  |                            |       |   |                  |   | 576    |                                             |  |   |                          |   |  |   | 576  |  
|Effects of incentive compensation plans            |  |              |  |                            | 4      |   |                  |   |       |                                             |  |   |                          |   |  |   | 4    |  
|Special allocation to Thrift Plan by LESOP trustee |  |              |  |                            | 2      |   |                  |   |       |                                             |  |   |                          |   |  |   | 2    |  
|Other                                              |  |              |  |                            | 7      |   |                  |   | 1      |                                             |  |   |                          |   |  |   | 8    |  
|                                                   |  |              |   |                            |        |   |                  |   |        |                                             |  |   |                           |   |  |   |      |  
|Balance at March 31, 2006                          |  | $            | 5 |                            | $1,347 |   |                  | $ | (781   | )                                           |  | $ | (90                       | ) |  | $ | 481  |  
|                                                   |  |              |   |                            |        |   |                  |   |        |                                             |  |   |                           |   |  |   |      |  



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6. COMMITMENTS AND CONTINGENCIES

Guarantees  As discussed below, TXU Corp. has entered into contracts that contain guarantees to outside parties that could require performance or payment under certain conditions.
Accounting rules require the recording of a liability for the fair value of all guarantees entered into or modified subsequent to December 31, 2002.

Disposed TXU Gas operations  In connection with the TXU Gas transaction in October 2004, TXU Corp. agreed, for a period of three years from the disposition date, to indemnify Atmos Energy Corporation for
certain qualified environmental claims that may arise in relation to the assets acquired by Atmos Energy Corporation. TXU Corp. is not required to indemnify Atmos Energy Corporation until the aggregate of all such qualified claims exceeds $10
million, and TXU Corp. is only required to indemnify Atmos Energy Corporation for 50% of qualified claims between $10 million and $20 million. The maximum amount that TXU Corp. would be required to pay Atmos Energy Corporation pursuant to this
environmental indemnity is $192.5 million. In addition, TXU Corp. agreed to indemnify Atmos Energy Corporation for up to $500 million for any liability related to assets retained by TXU Gas, including certain inactive gas plant sites not acquired by
Atmos Energy Corporation, and up to $1.4 billion for contingent liabilities associated with preclosing tax and employee related matters. In each case, TXU Corp.s indemnification is limited to 10 years from the disposition date. The maximum
aggregate amount that TXU Corp. may be required to pay is $1.925 billion. The estimated fair value of the indemnification recorded upon completion of the TXU Gas transaction was $2.5 million. To date, TXU Corp. has not been required to make any
payments to Atmos Energy Corporation under this indemnity obligation.

In 1992, a discontinued engineering and construction business of TXU
Gas completed construction of a plant, the performance of which is guaranteed by TXU Gas through 2008. The maximum contingent liability under the guarantee is approximately $101 million. No claims have been asserted under the guarantee and none are
anticipated. TXU Corp. retains this contingent liability under the terms of the TXU Gas transaction agreement.

Letters of credit
 At March 31, 2006, TXU Energy Holdings had outstanding letters of credit under its revolving credit facilities in the amount of $452 million to support risk management and trading margin requirements in the normal course of business and
for miscellaneous credit support requirements. As of March 31, 2006, approximately 71% of the obligations supported by these letters of credit mature within one year, and substantially all of the remainder mature in the next two years.

TXU Energy Holdings has entered into various agreements that require letters of credit for financial assurance purposes. Under its
five-year revolving credit facility maturing in December 2009, letters of credit totaling $455 million were outstanding at March 31, 2006 to support existing floating rate pollution control revenue bond debt of approximately $445 million. The
letters of credit are available to fund the payment of such debt obligations. These letters of credit expire in 2009.

Residual value
guarantees in operating leases  TXU Corp. is the lessee under various operating leases that obligate it to guarantee the residual values of the leased facilities. At March 31, 2006, the aggregate maximum amount of residual values
guaranteed was approximately $128 million with an estimated residual recovery of approximately $125 million. These leased assets consist primarily of mining equipment, rail cars and vehicles. A significant portion of the maximum guarantee amount
relates to leases entered into prior to December 31, 2002. The average life of the lease portfolio is approximately seven years.



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##### Table of Contents

Indebtedness guarantee  In 1990, US Holdings repurchased an electric co-ops minority
ownership interest in the Comanche Peak nuclear generation plant and assumed the co-ops indebtedness to the US government for the facilities. The indebtedness is included in long-term debt reported in the consolidated balance sheet. US
Holdings is making principal and interest payments to the co-op in an amount sufficient for the co-op to make payments on its indebtedness. US Holdings guaranteed the co-ops payments, and in the event that the co-op fails to make its payments
on the indebtedness, the US government would assume the co-ops rights under the agreement, and such payments would then be owed directly by US Holdings. At March 31, 2006, the balance of the indebtedness was $126 million with maturities
of principal and interest extending to December 2021. The indebtedness is secured by a lien on the purchased facilities.

Income Tax
Contingencies  TXU Corp. and certain of its subsidiaries are currently under audit by the IRS with respect to tax returns for various tax periods as discussed below, and are subject to audit by other taxing authorities
and by the IRS for subsequent tax periods. The amount and timing of any tax assessments resulting from these audits are uncertain, and could have a material effect on TXU Corp.s liquidity and results of operations. Certain audit matters as to
which management believes there is a reasonable possibility of a material future tax assessment are discussed below.

TXU Corp.
1997-2002 Audit  The IRS is currently examining TXU Corp.s federal income tax returns for 1997-2002. A tax basis step-up of a business that occurred at ENSERCH Corporation prior to its acquisition by TXU Corp. in 1997 resulted in a
TXU Corp. audit issue as a result of the 2000 sale of the business. The issue was resolved in the first quarter of 2006, and a reserve of $62 million was released. (See Note 2.) In addition to proposed adjustments with respect to the worthlessness
of TXU Corp.s investment in TXU Europe (discussed separately below), the IRS has issued notices of proposed adjustment with respect to several other items. The IRS is expected to complete its examination before the fourth quarter of 2006. TXU
Corp. expects to protest a number of adjustments, and expects that the protested issues will not be resolved until after 2006. Management believes that tax reserves recorded for potential adjustments to TXU Corp.s 1997-2002 tax returns are
adequate to provide for the expected outcome of the IRSs proposed adjustments.

TXU Corp. 2003-2005 Audit  TXU Corp.
expects that the IRS will commence an examination of its 2003 through 2005 tax returns during 2006. Consistent with its experience in prior audits, TXU Corp. expects that the IRS will propose adjustments to the tax returns and that TXU Corp. will
incur some liability to resolve those proposed adjustments with the IRS. The precise nature and amount of any such proposed adjustments is uncertain but the likelihood of occurrence is probable. TXU Corp. has recorded reserves related to potential
audit adjustments, representing the estimated tax expense to be incurred as a result of such audit adjustments.

TXU Gas (formerly
ENSERCH Corporation) Audits  The IRS audits of the 1993 and 1994-1997 ENSERCH tax returns have been closed. See discussion above concerning the TXU Corp. 1997-2002 audit.

TXU Europe  On its US federal income tax return for calendar year 2002, TXU Corp. claimed an ordinary loss deduction related to the
worthlessness of TXU Corp.s investment in TXU Europe, the tax benefit of which is estimated to be $983 million (assuming the deduction is sustained on audit). Due to a number of uncertainties regarding the proper tax treatment of the
worthlessness loss, no portion of the tax benefit related to TXU Corp.s 2002 write-off of its investment in TXU Europe was recognized in income prior to the second quarter of 2004.



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In June 2004, the IRS issued a preliminary notice of proposed adjustment (subsequently amended in
September 2004) proposing to disallow the 2002 worthlessness deduction and treat the worthlessness as a capital loss (deductible only against capital gains). In addition, in 2004 TXU Corp. revised the estimates of capital losses and ordinary
deductions expected from the worthlessness deduction utilization. Accordingly, in 2004 TXU Corp. recorded a tax benefit of $755 million ($680 million classified as discontinued operations) related to the TXU Europe worthlessness deduction, which
reflects expected utilization of the capital loss deduction against capital gains realized in 2004 and prior periods. The benefit recognized also included $220 million for deductions related to the write-off of the investment in TXU Europe expected
to be sustained as ordinary as a result of the preliminary notice.

The tax benefits recognized are based on the notice of proposed
adjustment, adjusted to exclude the effects of elements of the IRS notice that TXU Corp. believes are without merit and unlikely to be sustained. While the notice of proposed adjustment is not binding on the IRS and therefore it is uncertain what
positions the IRS might ultimately assert or what, if any, tax liability might result, TXU Corp. believes that the possibility of the IRS adopting a more adverse position is remote.

If TXU Corp.s ordinary loss deduction claimed on the 2002 tax return is not sustained, TXU Corp. would be required to repay approximately $480
million in tax refunds previously received (including interest) based on the assumptions used to determine the tax benefits recognized after receipt of the notice of proposed adjustments, and before taking into account other potential IRS
adjustments to TXU Corp.s 1997-2002 tax returns. In addition, TXU Corp. would owe additional tax of $118 million related to 2004. These amounts are reported as other noncurrent liabilities on the March 31, 2006 balance sheet. No material
earnings charge is expected with respect to any such repayment. TXU Corp. is unable to predict the timing of any such repayment, but currently expects that it would not be made prior to 2007.

TXU Corp. believes that its original tax reporting of the worthlessness of its investment in TXU Europe as an ordinary deduction was proper and intends
to protest the IRSs proposed adjustments. If TXU Corp.s position is sustained, approximately $79 million would be recognized in earnings.

Legal Proceedings  On September 6, 2005 a lawsuit was filed in the United States District Court for the Northern District of Texas, Dallas Division against TXU Corp. and C. John Wilder. The
complaint asserts claims on behalf of the plaintiffs and a putative class of owners of certain TXU Corp. securities who tendered such securities in connection with a tender offer conducted by TXU Corp. in 2004. The complaint alleged violations of
the provisions of Sections 14(e), 10(b) and 20(a) of the Securities and Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, and purported to assert a claim for alleged breach of fiduciary duty. An amended complaint dropped the
claim for breach of fiduciary duty. The allegations relate to a tender offer conducted in September and October 2004 for certain equity-linked securities in which it was expressly disclosed that TXU Corp. management was evaluating whether it should
recommend to the TXU Corp. board of directors that the board reevaluate TXU Corp.s dividend policy. After the tender offer was closed, and consistent with the disclosure, TXU Corp. management did make a recommendation to the board to
reevaluate TXU Corp.s dividend policy and the board elected to increase the quarterly dividend. The plaintiffs in the litigation contend that such disclosure in connection with the tender offer was inadequate. While TXU Corp. is unable to
estimate any possible loss or predict the outcome of this litigation, TXU Corp. believes the allegations are without merit and that the disclosure provided in connection with the tender offer regarding the evaluation of the dividend policy was
complete and accurate at the time the tender offer was initiated as well as when it was closed. Accordingly, TXU Corp. intends to vigorously defend this litigation. A Motion to Dismiss filed by the defendants is pending before the Court.



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On March 18, 2005, TXU Corp. received a subpoena from the SEC. The subpoena requires TXU Corp. to
produce documents and other information for the period from January 1, 2001 to March 31, 2003 relating to, among other things, the financial distress at TXU Europe during 2002 and the resulting financial condition of TXU Corp., TXU
Corp.s reduction of its quarterly dividend in October 2002, and the following two previously disclosed claims against TXU Corp. and certain other persons named in such claims: (i) a lawsuit brought in April 2003 by a former employee of
TXU Portfolio Management, William J. Murray (Murray Litigation) and (ii) various consolidated lawsuits brought by various shareholders of TXU Corp. during late 2002 and January 2003 (Shareholders Litigation). The documents accompanying
the subpoena state that (i) the SEC is conducting a fact-finding inquiry for purposes of allowing it to determine whether there have been any violations of the federal securities laws and (ii) the request does not mean the SEC has
concluded that TXU Corp. or any other person has violated the law. Although TXU Corp. cannot predict the outcome of the SEC inquiry, TXU Corp. does not believe there was any basis for the claims made in the Murray Litigation, which has now been
settled. A final settlement stipulation was signed and filed with the Court in the Shareholders Litigation and the Court has approved the settlement, although certain members of the settlement class who object to the approval of the settlement
have appealed the Courts order approving the settlement. TXU Corp. has cooperated with the SEC and completed the production of the documents requested by the subpoena and has responded to the SECs requests for information. In addition,
on July 12, 2005, Mr. Erle Nye, formerly a director of TXU Corp. and formerly the CEO and Chairman of the Board of TXU Corp., received a similar fact-finding subpoena from the SEC. Mr. Nye has informed TXU Corp. that he
has completed his response to the SEC.

Between October 19, 2004 and October 31, 2005, twelve lawsuits were filed in various
California superior courts by purported customers against TXU Corp., TXU Energy Trading Company and TXU Energy Services and other marketers, traders, transporters and sellers of natural gas in California. Plaintiffs allege that beginning at least by
the summer of 2000, defendants manipulated and fixed at artificially high levels natural gas prices in California in violation of the Cartwright Act and other California state laws. These lawsuits have been coordinated in the San Diego Superior
Court with numerous other natural gas actions as In re Natural Gas Anti-Trust Cases I, II, III, IV and V. TXU Corp. has filed a Motion to Quash Service for lack of personal jurisdiction. Discovery has commenced in this litigation. TXU
Corp. believes the claims against TXU Corp. and its subsidiaries are without merit and TXU Corp. intends to vigorously defend the lawsuits. TXU Corp. is, however, unable to estimate any possible loss or predict the outcome of these actions.

On July 7, 2003, a lawsuit was filed by Texas Commercial Energy (TCE) in the United States District Court for the Southern District
of Texas, Corpus Christi Division, against TXU Energy Holdings and certain of its subsidiaries, as well as various other wholesale market participants doing business in ERCOT, claiming generally that defendants engaged in market manipulation, in
violation of antitrust and other laws, primarily during the period of extreme weather conditions in late February 2003. An order granting TXU Energy Holdings Motion to Dismiss based on the filed rate doctrine was entered on June 24, 2004.
TCE appealed and the Fifth Circuit Court of Appeals affirmed the dismissal. TCE subsequently filed pleadings seeking further appellate review of this decision by the United States Supreme Court, however, the Supreme Court denied the appeal on
January 9, 2006.



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##### Table of Contents

In November 2002 and February and March 2003, three lawsuits were filed in the United States District
Court for the Northern District of Texas asserting claims under ERISA on behalf of a putative class of participants in and beneficiaries of various employee benefit plans of TXU Corp. These ERISA lawsuits have been consolidated, and a consolidated
complaint was filed in February 2004 against TXU Corp., the directors of TXU Corp. serving during the putative class period as well as members of the TXU Thrift Plan Committee comprised of Peter B. Tinkham, Kirk R. Oliver, Biggs C. Porter, Diane J.
Kubin, Barbara B. Curry and Richard Wistrand. The plaintiffs seek to represent a class of participants in such employee benefit plans during the period between April 26, 2001 and October 11, 2002. The plaintiffs filed an initial motion for
class certification and, after class certification discovery was completed, the Court denied plaintiffs initial class certification motion without prejudice and granted plaintiffs leave to amend their complaint. Plaintiffs second
class certification motion was filed on the basis of their amended complaint and was also denied and the case was ordered dismissed without prejudice on September 29, 2005. The plaintiffs have filed an appeal of the dismissal to the Fifth
Circuit Court of Appeals. TXU Corp. believes the claims are without merit and intends to vigorously defend the lawsuit. TXU Corp. is, however, unable to estimate any possible loss or predict the outcome of this action in the event the Fifth Circuit
reverses the dismissal or the suit is refiled by the plaintiffs or others seeking to assert similar claims.

On October 23, 2002, a
derivative lawsuit was filed by a purported shareholder on behalf of TXU Corp. in the 116th Judicial District Court of Dallas County, Texas, against TXU Corp., Erle Nye, Michael J. McNally, David W. Biegler, J.S. Farrington, William M. Griffin,
Kerney Laday, Jack E. Little, Margaret M. Maxey, J.E. Oesterreicher, Charles R. Perry and Herbert H. Richardson. The plaintiff alleged breach of fiduciary duty, abuse of control, mismanagement, waste of corporate assets, and breach of duties of
loyalty and good faith. The named individual defendants are current or former officers and/or directors of TXU Corp. The plaintiffs in such suit failed to make a demand upon the directors as is required by law and TXU Corp. never agreed to waive the
requirements for such a demand nor took any action inconsistent with insistence upon a demand. The defendants filed pleadings seeking to have the case dismissed due to plaintiffs failure to make the statutorily required presuit demand, however
the Court had not ruled on the requested dismissal when the parties reached an agreement in principle to settle this litigation. A Memorandum of Understanding regarding the proposed settlement was signed by the parties on March 9, 2006. The
settlement is subject to the execution of mutually agreed settlement documents and submission of the proposed settlement to the Court for approval.

In October, November and December 2002 and January 2003, a number of lawsuits were filed in, removed to or transferred to the United States District Court for the Northern District of Texas against TXU Corp. and certain of its officers.
These lawsuits, referred to above as the Shareholders Litigation, were consolidated and lead plaintiffs were appointed by the Court. The complaint alleged violations of the provisions of Sections 10(b) and 20(a) of the Securities and Exchange
Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, and Section 11 and 12 of the Securities Act of 1933, as amended, relating to alleged materially false and misleading statements, including statements in prospectuses related to the
offering by TXU Corp. of its equity-linked debt securities and common stock in May and June 2002. In addition to TXU Corp., Erle Nye, Michael J. McNally, V.J. Horgan, and Brian N. Dickie and directors Derek C. Bonham, J.S. Farrington, William M.
Griffin, Kerney Laday, Jack E. Little, Margaret M. Maxey, J.E. Oesterreicher, Herbert H. Richardson and Charles R. Perry were named as defendants in the litigation. On January 20, 2005, TXU Corp. executed a memorandum of understanding pursuant
to which (i) TXU Corp. made a one-time payment of $150 million, of which $101 million has now been reimbursed by insurance carriers, (ii) TXU Corp. agreed to make certain corporate governance changes, including heightened independence
standards for directors, (iii) TXU Corp. denied any liability in connection with the lawsuits and (iv) the defendants are to be released from any claims or liabilities asserted in the litigation. TXU Corp. may receive some additional
amounts from insurance carriers, which would further reduce the financial impact of the settlement to TXU Corp. A final settlement stipulation was filed with the Court and the Court entered an order April 11, 2005 granting preliminary approval
of the settlement, conditionally certifying a class for purposes of the settlement and providing for notice to the class members. After such notice, the Court conducted a hearing on June 23, 2005 to consider final approval of the settlement and
the Court granted the final approval on November 8, 2005. Certain members of the settlement class who objected to the plan of allocation, the plaintiffs attorneys fees and other matters related to the approval of the settlement have
appealed the orders approving the settlement to the Fifth Circuit Court of Appeals.



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In addition to the above, TXU Corp. is involved in various other legal and administrative proceedings in
the normal course of business the ultimate resolution of which, in the opinion of management, should not have a material effect upon its financial position, results of operations or cash flows.

Environmental Contingencies  The federal Clean Air Act, as amended (Clean Air Act) includes provisions which, among
other things, place limits on sulfur dioxide and nitrogen oxide emissions produced by electricity generation plants. TXU Corp.s capital requirements have not been significantly affected by the requirements of the Clean Air Act. In addition,
all air pollution control provisions of the 1999 Restructuring Legislation have been satisfied.

TXU Corp. must comply with environmental
laws and regulations applicable to the handling and disposal of hazardous waste. TXU Corp. is in compliance with all current laws and regulations; however, the impact, if any, of changes to existing regulations or the implementation of new
regulation is not determinable. The costs to comply with environmental regulations can be significantly affected by the following external events or conditions:

changes to existing state or federal regulation by governmental authorities having jurisdiction over air quality, water quality, control of toxic substances and hazardous and solid wastes, and other environmental
matters;

the identification of sites requiring clean-up or the filing of other complaints in which TXU Corp. may be asserted to be a
potential responsible party.



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7. PENSION AND OTHER POSTRETIREMENT BENEFITS

Net pension and other postretirement benefit costs for the three months ended March 31, 2006 and 2005 are comprised of the following:



|                                                                    |  |                             |     |   |      |   |     |  
|------------------------------------------------------------------- |  | --------------------------- | --- | - | ---- | - | --- | -
|                                                                    |  | Three Months EndedMarch 31, |    
|                                                                    |  | 2006                        |     |   | 2005 |  
|Components of net pension costs:                                    |  |                             |     |   |      |   |     |  
|Service cost                                                        |  | $                           | 10  |   |      | $ | 11  |  
|Interest cost                                                       |  |                             | 34  |   |      |   | 40  |  
|Expected return on assets                                           |  |                             | (37 | ) |      |   | (45 | )
|Amortization of unrecognized prior service cost                     |  |                             | 1   |   |      |   | 1   |  
|Amortization of net loss                                            |  |                             | 8   |   |      |   | 5   |  
|                                                                    |  |                             |     |   |      |   |     |  
|Net pension cost                                                    |  |                             | 16  |   |      |   | 12  |  
|                                                                    |  |                             |     |   |      |   |     |  
|Components of net other postretirement benefit costs:               |  |                             |     |   |      |   |     |  
|Service cost                                                        |  |                             | 3   |   |      |   | 3   |  
|Interest cost                                                       |  |                             | 15  |   |      |   | 14  |  
|Expected return on assets                                           |  |                             | (5  | ) |      |   | (4  | )
|Amortization of unrecognized prior service cost                     |  |                             | (1  | ) |      |   | (1  | )
|Amortization of net loss                                            |  |                             | 8   |   |      |   | 6   |  
|                                                                    |  |                             |     |   |      |   |     |  
|Net other postretirement benefit cost                               |  |                             | 20  |   |      |   | 18  |  
|                                                                    |  |                             |     |   |      |   |     |  
|Net pension and other postretirement benefit costs                  |  |                             | 36  |   |      |   | 30  |  
|Less amounts deferred principally as a regulatory asset or property |  |                             | (20 | ) |      |   | (4  | )
|                                                                    |  |                             |     |   |      |   |     |  
|Net amounts recognized as expense                                   |  | $                           | 16  |   |      | $ | 26  |  
|                                                                    |  |                             |     |   |      |   |     |  

The discount rate reflected in net pension and other postretirement benefit costs in 2006 is
5.75%. The expected rate of return on plan assets reflected in the 2006 cost amounts is 8.75% for the pension plan and 8.67% for other postretirement benefits.

Legislation enacted in the second quarter of 2005 resulted in a reduction of pension and other postretirement benefit costs recognized in earnings, as it provides for regulatory recovery of additional amounts of such
costs. See discussion immediately below.

Regulatory Recovery of Pension and Other Postretirement Benefit Costs  In
June 2005, an amendment to PURA relating to pension and other postretirement benefits was enacted by the Legislature of the State of Texas. This amendment provides for the recovery by TXU Electric Delivery of pension and other postretirement benefit
costs for all applicable former employees of the regulated predecessor integrated electric utility (i.e., certain TXU Energy Holdings active and retired employees) related to employee service prior to the unbundling of TXU Corp.s electric
utility business effective January 1, 2002 resulting from the 1999 Restructuring Legislation. The amendment additionally authorizes TXU Electric Delivery to establish a regulatory asset or liability for the difference between the amounts of
pension and other postretirement benefits approved in current billing rates and the actual amounts that would otherwise have been recorded as charges or credits to earnings. Accordingly, in the second quarter of 2005 TXU Electric Delivery began
deferring (principally as a regulatory asset or property) additional pension and postretirement benefit costs for the effect of the amendment, which was retroactively effective January 1, 2005. Amounts deferred are ultimately subject to
regulatory approval. Amounts recorded as a regulatory asset totaled $8 million for the first three months of 2006.



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8. CASH FLOW HEDGES UNDER SFAS 133

TXU Corp. experienced net cash flow hedge ineffectiveness related to positions held at the end of the period of $5 million in losses for the three months ended March 31, 2006 and $1 million in gains for the three
months ended March 31, 2005. These amounts are pretax and are reported in revenues.

The net effect of recording unrealized
mark-to-market gains and losses arising from hedge ineffectiveness (versus recording gains and losses upon settlement) includes the above amounts as well as the effect of reversing unrealized ineffectiveness gains and losses recorded in previous
periods to offset realized gains and losses in the current period. Such net effect totaled $1 million in net losses for the three months ended March 31, 2006 and $3 million in net gains for the three months ended March 31, 2005.

As of March 31, 2006, TXU Corp. had no hedging positions against exposure to the variability of future cash flows from energy-related
transactions that extend beyond 2010.

Cash flow hedge amounts reported in the statements of consolidated comprehensive income exclude net
losses and gains associated with cash flow hedges entered into and settled within the period. These totaled $4 million in after-tax net gains for the three months ended March 31, 2006 and $180 thousand in after-tax net gains for the three
months ended March 31, 2005.

TXU Corp. expects that $6 million of after-tax net gains accumulated in other comprehensive income will
be reclassified into earnings during the next twelve months. These net gains relate to cash flow hedges and will be reclassified from accumulated other comprehensive income as the related hedged transactions are settled. Of this amount, $14 million
of gains relate to commodity hedges and $8 million of losses relate to financing-related hedges.



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9. SEGMENT INFORMATION

TXU Corp.s operations are aligned into two reportable segments: TXU Energy Holdings and TXU Electric Delivery. The segments are managed separately because they are strategic business units that offer different
products or services and involve different risks.

TXU Energy Holdings  consists of electricity generation, residential and
business retail electricity sales as well as wholesale energy markets activities, largely in Texas.

TXU Electric Delivery 
consists of regulated operations involving the transmission and distribution of electricity in Texas.

Corporate and Other 
remaining nonsegment operations consisting primarily of discontinued operations, general corporate expenses and interest on debt at the TXU Corp. level.

TXU Corp. evaluates performance based on income from continuing operations. TXU Corp. accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market
prices.



|                                                    |  |                             |       |   |      |   |       |  
|--------------------------------------------------- |  | --------------------------- | ----- | - | ---- | - | ----- | -
|                                                    |  | Three Months EndedMarch 31, |      
|                                                    |  | 2006                        |       |   | 2005 |  
|Operating revenues:                                 |  |                             |       |   |      |   |       |  
|TXU Energy Holdings                                 |  | $                           | 2,010 |   |      | $ | 1,821 |  
|TXU Electric Delivery                               |  |                             | 562   |   |      |   | 550   |  
|Corporate and other                                 |  |                             | 13    |   |      |   | 6     |  
|Eliminations                                        |  |                             | (281  | ) |      |   | (319  | )
|                                                    |  |                             |       |   |      |   |       |  
|Consolidated                                        |  | $                           | 2,304 |   |      | $ | 2,058 |  
|                                                    |  |                             |       |   |      |   |       |  
|Regulated revenues included in operating revenues:  |  |                             |       |   |      |   |       |  
|TXU Energy Holdings                                 |  | $                           |      |   |      | $ |      |  
|TXU Electric Delivery                               |  |                             | 562   |   |      |   | 550   |  
|Corporate and other                                 |  |                             |      |   |      |   |      |  
|Eliminations                                        |  |                             | (267  | ) |      |   | (311  | )
|                                                    |  |                             |       |   |      |   |       |  
|Consolidated                                        |  | $                           | 295   |   |      | $ | 239   |  
|                                                    |  |                             |       |   |      |   |       |  
|Affiliated revenues included in operating revenues: |  |                             |       |   |      |   |       |  
|TXU Energy Holdings                                 |  | $                           | 1     |   |      | $ | 2     |  
|TXU Electric Delivery                               |  |                             | 267   |   |      |   | 311   |  
|Corporate and other                                 |  |                             | 13    |   |      |   | 6     |  
|Eliminations                                        |  |                             | (281  | ) |      |   | (319  | )
|                                                    |  |                             |       |   |      |   |       |  
|Consolidated                                        |  | $                           |      |   |      | $ |      |  
|                                                    |  |                             |       |   |      |   |       |  
|Income (loss) from continuing operations:           |  |                             |       |   |      |   |       |  
|TXU Energy Holdings                                 |  | $                           | 520   |   |      | $ | 203   |  
|TXU Electric Delivery                               |  |                             | 65    |   |      |   | 71    |  
|Corporate and other                                 |  |                             | (69   | ) |      |   | 132   |  
|                                                    |  |                             |       |   |      |   |       |  
|Consolidated                                        |  | $                           | 516   |   |      | $ | 406   |  
|                                                    |  |                             |       |   |      |   |       |  

No customer provided more than 10% of consolidated revenues.



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10. OTHER INCOME AND DEDUCTIONS



|                                                                                  |  |                             |     |   |      |   |     |  
|--------------------------------------------------------------------------------- |  | --------------------------- | --- | - | ---- | - | --- | -
|                                                                                  |  | Three Months EndedMarch 31, |    
|                                                                                  |  | 2006                        |     |   | 2005 |  
|Other income:                                                                     |  |                             |     |   |      |   |     |  
|Net gain on sale of properties and businesses                                     |  | $                           | 12  |   |      | $ | 13  |  
|Insurance recovery of litigation settlement                                       |  |                             |    |   |      |   | 35  |  
|Other                                                                             |  |                             | 2   |   |      |   | 3   |  
|                                                                                  |  |                             |     |   |      |   |     |  
|Total other income                                                                |  | $                           | 14  |   |      | $ | 51  |  
|                                                                                  |  |                             |     |   |      |   |     |  
|Other deductions:                                                                 |  |                             |     |   |      |   |     |  
|Charge (credit) related to coal contract counterparty claim (a)                   |  | $                           | (12 | ) |      | $ | 12  |  
|Pension and other postretirement benefit costs related to discontinued businesses |  |                             | 5   |   |      |   | 2   |  
|Capgemini outsourcing transition costs                                            |  |                             |    |   |      |   | 5   |  
|Charge (credit) related to impaired leases (b)                                    |  |                             | 2   |   |      |   | (15 | )
|Other                                                                             |  |                             | 4   |   |      |   | 1   |  
|                                                                                  |  |                             |     |   |      |   |     |  
|Total other deductions                                                            |  | $                           | (1  | ) |      | $ | 5   |  
|                                                                                  |  |                             |     |   |      |   |     |  

---

|(a) | In the first quarter of 2005, a pretax charge of $12 million was recorded reflecting the nonperformance of a counterparty under a coal agreement. In the first quarter of 2006, this
matter was settled with the counterparty in the amount of $12 million.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | In December 2004, TXU Corp. committed to immediately cease operating for its own benefit nine leased gas-fired combustion turbines, and recorded a charge of $157 million reported in
other deductions. The charge represented the present value of the future lease payments related to the turbines, net of estimated sublease proceeds. An adjustment of $15 million was recorded in the first quarter of 2005 to reflect indicative bids
received that exceeded the originally estimated sublease proceeds.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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11. SUPPLEMENTARY FINANCIAL INFORMATION

Regulated Versus Unregulated Operations 



|                                                                |  |                             |       |   |      |   |       |  
|--------------------------------------------------------------- |  | --------------------------- | ----- | - | ---- | - | ----- | -
|                                                                |  | Three Months EndedMarch 31, |      
|                                                                |  | 2006                        |       |   | 2005 |  
|Operating revenues:                                             |  |                             |       |   |      |   |       |  
|Regulated                                                       |  | $                           | 562   |   |      | $ | 550   |  
|Unregulated                                                     |  |                             | 2,023 |   |      |   | 1,827 |  
|Intercompany sales eliminations  regulated                     |  |                             | (267  | ) |      |   | (311  | )
|Intercompany sales eliminations  unregulated                   |  |                             | (14   | ) |      |   | (8    | )
|                                                                |  |                             |       |   |      |   |       |  
|Total operating revenues                                        |  |                             | 2,304 |   |      |   | 2,058 |  
|Costs and operating expenses:                                   |  |                             |       |   |      |   |       |  
|Fuel, purchased power costs and delivery fees  unregulated (a) |  |                             | 521   |   |      |   | 761   |  
|Operating costs  regulated                                     |  |                             | 192   |   |      |   | 181   |  
|Operating costs  unregulated                                   |  |                             | 152   |   |      |   | 153   |  
|Depreciation and amortization  regulated                       |  |                             | 113   |   |      |   | 105   |  
|Depreciation and amortization  unregulated                     |  |                             | 92    |   |      |   | 82    |  
|Selling, general and administrative expenses  regulated        |  |                             | 47    |   |      |   | 48    |  
|Selling, general and administrative expenses  unregulated      |  |                             | 145   |   |      |   | 133   |  
|Franchise and revenue-based taxes  regulated                   |  |                             | 59    |   |      |   | 57    |  
|Franchise and revenue-based taxes  unregulated                 |  |                             | 27    |   |      |   | 28    |  
|Other income                                                    |  |                             | (14   | ) |      |   | (51   | )
|Other deductions                                                |  |                             | (1    | ) |      |   | 5     |  
|Interest income                                                 |  |                             | (9    | ) |      |   | (19   | )
|Interest expense and related charges                            |  |                             | 213   |   |      |   | 195   |  
|                                                                |  |                             |       |   |      |   |       |  
|Total costs and operating expenses                              |  |                             | 1,537 |   |      |   | 1,678 |  
|                                                                |  |                             |       |   |      |   |       |  
|Income from continuing operations before income taxes           |  | $                           | 767   |   |      | $ | 380   |  
|                                                                |  |                             |       |   |      |   |       |  

---

|(a) | Includes cost of fuel consumed of $166 million and $159 million for the three months ended March 31, 2006 and 2005, respectively. The balance in each period represents energy
purchased for resale and delivery fees.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The operations of the TXU Energy Holdings segment are included above as unregulated
as the Texas market is open to competition. However, retail pricing to residential customers in the historical service territory continues to be subject to certain price controls (price-to-beat).

Interest Expense and Related Charges



|                                                                                                      |  |                             |     |   |      |   |     |  
|----------------------------------------------------------------------------------------------------- |  | --------------------------- | --- | - | ---- | - | --- | -
|                                                                                                      |  | Three Months EndedMarch 31, |    
|                                                                                                      |  | 2006                        |     |   | 2005 |  
|Interest                                                                                              |  | $                           | 214 |   |      | $ | 192 |  
|Amortization of debt discounts, premiums and issuance costs                                           |  |                             | 4   |   |      |   | 7   |  
|Capitalized interest, including debt portion of allowance for borrowed funds used during construction |  |                             | (5  | ) |      |   | (4  | )
|                                                                                                      |  |                             |     |   |      |   |     |  
|Total interest expense and related charges                                                            |  | $                           | 213 |   |      | $ | 195 |  
|                                                                                                      |  |                             |     |   |      |   |     |  

Restricted Cash



|                                                                  |  |                              |    |                      |   |               |  |                  |    |  |   |   
|----------------------------------------------------------------- |  | ---------------------------- | -- | -------------------- | - | ------------- |  | ---------------- | -- |  | - | --
|                                                                  |  | Balance Sheet Classification
|                                                                  |  | At March 31, 2006            |    | At December 31, 2005
|                                                                  |  | Current Assets               |    | NoncurrentAssets     |   | CurrentAssets |  | NoncurrentAssets
|Pollution control revenue bond funds held by trustee (See Note 3) |  | $                            | 45 |                      | $ | 54            |  | $                |   |  | $ |  
|Amounts related to securitization (transition) bonds              |  |                              | 51 |                      |   | 13            |  |                  | 46 |  |   | 13
|All other                                                         |  |                              | 3  |                      |   | 3             |  |                  | 8  |  |   | 3 
|                                                                  |  |                              |    |                      |   |               |  |                  |    |  |   |   
|Total restricted cash                                             |  | $                            | 99 |                      | $ | 70            |  | $                | 54 |  | $ | 16
|                                                                  |  |                              |    |                      |   |               |  |                  |    |  |   |   



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##### Table of Contents

Accounts Receivable  At March 31, 2006 and December 31, 2005 accounts
receivable of $817 million and $1.3 billion included $422 million and $494 million of unbilled revenues, respectively.

Allowance for
Uncollectible Accounts 



|                                                            |  |      |     |   |      |   |     |  
|----------------------------------------------------------- |  | ---- | --- | - | ---- | - | --- | -
|                                                            |  | 2006 |     |   | 2005 |  
|Allowance for uncollectible accounts as of January 1        |  | $    | 36  |   |      | $ | 16  |  
|Increase for bad debt expense                               |  |      | 12  |   |      |   | 11  |  
|Decrease for account write-offs                             |  |      | (28 | ) |      |   | (22 | )
|Charge (credit) related to coal contract counterparty claim |  |      | (12 | ) |      |   | 12  |  
|Changes related to receivables sold                         |  |      | 7   |   |      |   | 14  |  
|Other                                                       |  |      | (3  | ) |      |   | 3   |  
|                                                            |  |      |     |   |      |   |     |  
|Allowance for uncollectible accounts as of March 31         |  | $    | 12  |   |      | $ | 34  |  
|                                                            |  |      |     |   |      |   |     |  

Allowances related to receivables sold are reported in current liabilities and totaled $23 million
and $30 million at March 31, 2006 and December 31, 2005, respectively.

Inventories by Major Category 



|                                                     |  |               |     |                  |   |    
|---------------------------------------------------- |  | ------------- | --- | ---------------- | - | ---
|                                                     |  | March 31,2006 |     | December 31,2005
|Materials and supplies                               |  | $             | 171 |                  | $ | 163
|Environmental energy credits and emission allowances |  |               | 12  |                  |   | 21 
|Fuel stock                                           |  |               | 86  |                  |   | 81 
|Gas stored underground                               |  |               | 100 |                  |   | 99 
|                                                     |  |               |     |                  |   |    
|Total inventories                                    |  | $             | 369 |                  | $ | 364
|                                                     |  |               |     |                  |   |    

Commodity Contracts  Current and noncurrent commodity contract assets totaling
$1.1 billion at March 31, 2006 and $1.9 billion at December 31, 2005 are stated net of applicable credit (collection) and performance reserves totaling $10 million and $12 million, respectively. Performance reserves are provided for
direct, incremental costs to settle the contracts.

Investments



|                                         |  |               |     |                  |   |    
|---------------------------------------- |  | ------------- | --- | ---------------- | - | ---
|                                         |  | March 31,2006 |     | December 31,2005
|Nuclear decommissioning trust            |  | $             | 402 |                  | $ | 389
|Assets related to employee benefit plans |  |               | 181 |                  |   | 178
|Land                                     |  |               | 35  |                  |   | 35 
|Note receivable from Capgemini           |  |               | 25  |                  |   | 25 
|Investment in Capgemini                  |  |               | 3   |                  |   | 3  
|Miscellaneous other                      |  |               | 13  |                  |   | 13 
|                                         |  |               |     |                  |   |    
|Total investments                        |  | $             | 659 |                  | $ | 643
|                                         |  |               |     |                  |   |    

Property, Plant and Equipment As of March 31, 2006 and December 31,
2005, property, plant and equipment of $17.3 billion and $17.2 billion, respectively, is stated net of accumulated depreciation and amortization of $12.0 billion and $11.9 billion, respectively.



26



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##### Table of Contents

Asset Retirement Obligations For TXU Corp., such liabilities primarily relate to
nuclear generation plant decommissioning, land reclamation related to lignite mining, removal of lignite/coal-fired plant ash treatment facilities and asbestos removal and disposal costs. There is no earnings impact with respect to the recognition
of the asset retirement costs for nuclear decommissioning, as all costs are recoverable through the regulatory process as part of TXU Electric Deliverys rate setting.

The following table summarizes the changes to the asset retirement liability during the three months ended March 31, 2006:



|                                                          |  |   |     |  
|--------------------------------------------------------- |  | - | --- | -
|Asset retirement liability at December 31, 2005           |  | $ | 558 |  
|Additions:                                                |  |   |     |  
|Accretion                                                 |  |   | 8   |  
|Reductions:                                               |  |   |     |  
|Net change in mining land reclamation estimated liability |  |   | (4  | )
|Reclamation payments                                      |  |   | (5  | )
|                                                          |  |   |     |  
|Asset retirement liability at March 31, 2006              |  | $ | 557 |  
|                                                          |  |   |     |  

Intangible Assets Intangible assets other than goodwill are comprised of the
following:



|                                                                                     |  |                      |     |                         |   |     |  |                     |     |                         |   |     |  |   |     |  |   |    
|------------------------------------------------------------------------------------ |  | -------------------- | --- | ----------------------- | - | --- |  | ------------------- | --- | ----------------------- | - | --- |  | - | --- |  | - | ---
|                                                                                     |  | As of March 31, 2006 |     | As of December 31, 2005
|                                                                                     |  | GrossCarryingAmount  |     | AccumulatedAmortization |   | Net |  | GrossCarryingAmount |     | AccumulatedAmortization |   | Net
|Intangible assets subject to amortization included in property, plant and equipment: |  |                      |     |                         |   |     |  |                     |     |                         |   |     |  |   |     |  |   |    
|Capitalized software placed in service                                               |  | $                    | 403 |                         | $ | 321 |  | $                   | 82  |                         | $ | 386 |  | $ | 314 |  | $ | 72 
|Land easements                                                                       |  |                      | 178 |                         |   | 64  |  |                     | 114 |                         |   | 178 |  |   | 63  |  |   | 115
|Mineral rights and other                                                             |  |                      | 31  |                         |   | 24  |  |                     | 7   |                         |   | 31  |  |   | 24  |  |   | 7  
|                                                                                     |  |                      |     |                         |   |     |  |                     |     |                         |   |     |  |   |     |  |   |    
|Total                                                                                |  | $                    | 612 |                         | $ | 409 |  | $                   | 203 |                         | $ | 595 |  | $ | 401 |  | $ | 194
|                                                                                     |  |                      |     |                         |   |     |  |                     |     |                         |   |     |  |   |     |  |   |    

Aggregate TXU Corp. amortization expense for intangible assets for the three months ended
March 31, 2006 and 2005 was $8 million and $6 million, respectively. At March 31, 2006, the weighted average useful lives of capitalized software, land easements, and mineral rights and other assets were 5 years, 69 years and 40 years,
respectively. The estimated aggregate amortization expense for each of the five succeeding fiscal years from December 31, 2005 is as follows:



|     |  |                     |   
|---- |  | ------------------- | --
|Year |  | AmortizationExpense
|2006 |  | $                   | 24
|2007 |  |                     | 21
|2008 |  |                     | 18
|2009 |  |                     | 10
|2010 |  |                     | 2 

Goodwill of $542 million reported in the consolidated balance sheet as of March 31, 2006 and
December 31, 2005 includes $517 million related to TXU Energy Holdings and $25 million related to TXU Electric Delivery.



27



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##### Table of Contents

Regulatory Assets and Liabilities 



|                                                                     |  |               |       |                  |   |      
|-------------------------------------------------------------------- |  | ------------- | ----- | ---------------- | - | -----
|                                                                     |  | March 31,2006 |       | December 31,2005
|Regulatory assets:                                                   |  |               |       |                  |   |      
|Generation-related regulatory assets securitized by transition bonds |  | $             | 1,426 |                  | $ | 1,461
|Securities reacquisition costs                                       |  |               | 117   |                  |   | 119  
|Recoverable deferred income taxes  net                              |  |               | 111   |                  |   | 107  
|Storm-related costs                                                  |  |               | 115   |                  |   | 110  
|Employee retirement costs                                            |  |               | 97    |                  |   | 89   
|Nuclear decommissioning cost under-recovery                          |  |               | 3     |                  |   | 8    
|Other regulatory assets                                              |  |               | 34    |                  |   | 33   
|                                                                     |  |               |       |                  |   |      
|Total regulatory assets                                              |  |               | 1,903 |                  |   | 1,927
|                                                                     |  |              
|Regulatory liabilities:                                              |  |               |       |                  |   |      
|Investment tax credit and protected excess deferred taxes            |  |               | 69    |                  |   | 71   
|Over-collection of securitization (transition) bond revenues         |  |               | 28    |                  |   | 28   
|Other regulatory liabilities                                         |  |               | 1     |                  |   | 2    
|                                                                     |  |               |       |                  |   |      
|Total regulatory liabilities                                         |  |               | 98    |                  |   | 101  
|                                                                     |  |               |       |                  |   |      
|Net regulatory assets                                                |  | $             | 1,805 |                  | $ | 1,826
|                                                                     |  |               |       |                  |   |      

Included in net regulatory assets are assets of $121 million at both March 31, 2006 and
December 31, 2005 that have been reviewed and approved by the Commission and are earning a return. These assets have a remaining recovery period of 11 to 45 years. The regulatory assets subject to securitization have a remaining recovery period
of 10 years.

Severance Liability Related to Restructuring Activities 



|                                                      |  |                   |     |   |                     |   |    |       |  |   |     |  
|----------------------------------------------------- |  | ----------------- | --- | - | ------------------- | - | -- | ----- |  | - | --- | -
|                                                      |  | TXUEnergyHoldings |     |   | TXUElectricDelivery |   |    | Total | 
|Liability for severance costs as of December 31, 2005 |  | $                 | 18  |   |                     | $ | 4  |       |  | $ | 22  |  
|Payments charged against liability                    |  |                   | (10 | ) |                     |   | (1 | )     |  |   | (11 | )
|                                                      |  |                   |     |   |                     |   |    |       |  |   |     |  
|Liability for severance costs as of March 31, 2006    |  | $                 | 8   |   |                     | $ | 3  |       |  | $ | 11  |  
|                                                      |  |                   |     |   |                     |   |    |       |  |   |     |  

Supplemental Cash Flow Information 



|                                                           |  |                             |     |   |      |   |    
|---------------------------------------------------------- |  | --------------------------- | --- | - | ---- | - | ---
|                                                           |  | Three Months EndedMarch 31,
|                                                           |  | 2006                        |     |   | 2005
|Cash payments (receipts) related to continuing operations: |  |                             |     |   |      |   |    
|Interest (net of amounts capitalized)                      |  | $                           | 175 |   |      | $ | 150
|Income taxes                                               |  | $                           | (9  | ) |      | $ | 41 



28



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##### Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of TXU Corp.:

We have reviewed the accompanying condensed consolidated balance sheet of TXU Corp. and subsidiaries (TXU Corp.) as of March 31, 2006, and the related
condensed statements of consolidated income, comprehensive income and cash flows for the three-month periods ended March 31, 2006 and 2005. These interim financial statements are the responsibility of TXU Corp.s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information
consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial statements for them to be in
conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of
the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of TXU Corp. and subsidiaries as of December 31, 2005, and the related statements of consolidated income, comprehensive income, shareholders
equity, and cash flows for the year then ended (not presented herein); and in our report dated March 1, 2006, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 2005 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Deloitte & Touche LLP

Dallas, Texas

May 3, 2006



29



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##### Table of Contents

Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BUSINESS

TXU Corp. is a holding company conducting its operations principally through its TXU Energy Holdings and TXU Electric Delivery
subsidiaries. TXU Energy Holdings is engaged in electricity generation, residential and business retail electricity sales as well as wholesale energy markets activities, largely in Texas. TXU Electric Delivery is engaged in regulated electricity
transmission and distribution operations in Texas.

TXU Corp. has two reportable segments: TXU Energy Holdings and TXU Electric Delivery.
(See Note 9 to Financial Statements for further information concerning reportable business segments.)

RESULTS OF OPERATIONS

All dollar amounts in Managements Discussion and Analysis of Financial Condition and Results of Operations and the tables therein, except per share
amounts, are stated in millions of US dollars unless otherwise indicated.

The results of operations and the related managements
discussion of those results for all periods presented reflect the discontinuance of certain operations (see Note 2 to Financial Statements regarding discontinued operations).

TXU Corp. Consolidated

Three Months Ended March 31, 2006 Compared to Three Months Ended
March 31, 2005

Reference is made to comparisons of results by business segment following the discussion of consolidated
results. The business segment comparisons provide additional detail and quantification of items affecting financial results.

TXU
Corp.s operating revenues increased $246 million, or 12%, to $2.3 billion in 2006.



| |  |  | Operating revenues in the TXU Energy Holdings segment increased $189 million, or 10%, to $2.0 billion. Of the increase, $163 million represented higher retail electricity revenues,
which reflected higher pricing driven by the effect of higher natural gas prices on wholesale power prices. The increase in retail electricity revenues was partially offset by a 19% decline in retail sales volumes, which reflected a net loss of
customers due to competitive activity and lower average consumption per customer.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Operating revenues in the TXU Electric Delivery segment increased $12 million, or 2%, to $562 million in 2006. The revenue increase reflected higher transmission and distribution
tariffs, driven by TXU Electric Deliverys ongoing transmission investment program, and increased points of delivery.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Consolidated revenue growth reflected a $38 million reduction in the intercompany sales elimination, primarily reflecting lower sales by TXU Electric Delivery to TXU Energy
Holdings, while its sales to nonaffiliated REPs increased.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



30



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##### Table of Contents

Gross Margin



|                                              |  |                              |       |              |     |   |      |   |              |  |     |  
|--------------------------------------------- |  | ---------------------------- | ----- | ------------ | --- | - | ---- | - | ------------ |  | --- | -
|                                              |  | Three Months Ended March 31, |      
|                                              |  | 2006                         |       | % of Revenue |     |   | 2005 |   | % of Revenue | 
|Operating revenues                            |  | $                            | 2,304 |              | 100 | % |      | $ | 2,058        |  | 100 | %
|Costs and expenses:                           |  |                              |       |              |     |   |      |   |              |  |     |  
|Fuel, purchased power costs and delivery fees |  |                              | 521   |              | 22  |   |      |   | 761          |  | 37  |  
|Operating costs                               |  |                              | 344   |              | 15  |   |      |   | 334          |  | 16  |  
|Depreciation and amortization                 |  |                              | 201   |              | 9   |   |      |   | 184          |  | 9   |  
|                                              |  |                              |       |              |     |   |      |   |              |  |     |  
|Gross margin                                  |  | $                            | 1,238 |              | 54  | % |      | $ | 779          |  | 38  | %
|                                              |  |                              |       |              |     |   |      |   |              |  |     |  

Gross margin is considered a key operating metric as it measures the effect of changes in sales
volumes and pricing versus the variable and fixed costs of energy sold, whether generated or purchased, as well as the variable and fixed costs to deliver energy.

Gross margin increased $459 million, or 59%, to $1.2 billion in 2006.



| |  |  | The TXU Energy Holdings segments gross margin increased $465 million, or 90%, to $982 million, driven by higher pricing partially offset by the effect of lower retail sales
volumes.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The TXU Electric Delivery segments gross margin decreased $7 million, or 3%, to $257 million in 2006, driven by increased operating costs.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------

Operating costs increased $10 million, or 3%, to $344 million in 2006.



| |  |  | TXU Energy Holdings operating costs increased $2 million, or 1%, due to various factors. See discussion below in the business segment analysis.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | TXU Electric Deliverys operating costs rose $11 million, or 6%, driven primarily by increased spending for reliability initiatives and increased third-party transmission
costs.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Depreciation and amortization (consisting almost entirely of amounts related to generation plants and the delivery
system shown in the gross margin table above) increased $18 million, or 10%, to $205 million in 2006. The increased expense reflects higher depreciation related to normal additions and replacements of property.

SG&A expenses increased $11 million, or 6%, to $192 million in 2006. The increase reflected:



| |  |  | $12 million in executive severance expenses;
| | - |  | --------------------------------------------



| |  |  | $7 million in outsourcing costs related to divested businesses for which contract adjustments are anticipated; and
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | $4 million in higher fees related to the accounts receivable sales program driven by higher interest rates,
| | - |  | -----------------------------------------------------------------------------------------------------------

partially offset by:



| |  |  | $10 million in lower executive incentive compensation expense due primarily to fewer outstanding share awards and changes in performance of TXU Corp. common stock; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $4 million of consulting expense incurred in 2005 primarily related to development and implementation of the TXU Operating System.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------

Other income totaled $14 million in 2006 and $51 million in 2005. Other deductions were a credit of $1 million in 2006 and totaled $5 million in 2005.
See Note 10 to Financial Statements for detail of other income and deductions.



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##### Table of Contents

Interest income totaled $9 million in 2006 and $19 million in 2005. Both periods included $6 million in
interest income related to the leveraged employee stock ownership plan note receivable.

Interest expense and related charges increased $18
million, or 9%, to $213 million in 2006 reflecting $15 million related to higher average interest rates (including the effect of interest rate swap transactions) and $3 million due to higher average borrowings.

Income tax expense on income from continuing operations totaled $251 million in 2006 compared to a $26 million benefit in 2005. The 2005 amount included
$138 million in additional tax benefit related to the TXU Europe write-off. This benefit reflects identification of tax planning strategies TXU Corp. would implement to ensure utilization of capital losses associated with the write-off of the
investment in TXU Europe. Excluding this tax benefit, the effective income tax rate was 32.7% in 2006 compared to 29.5% in the 2005 quarter. Because the net amounts that reduce income taxes calculated at the statutory tax rate were comparable in the
quarters, the effective tax rate increase was driven by the effect of significantly higher pretax income in 2006. These adjustment amounts consist primarily of expenses recognized for tax purposes but not for book purposes and vice versa, including
items such as lignite depletion, the production deduction provided for under the American Jobs Creation Act of 2004 and amortization of investment tax credits.

Income from continuing operations (an after-tax measure) increased $110 million, or 27%, to $516 million in 2006.



| |  |  | Earnings in the TXU Energy Holdings segment increased $317 million, or 156%, to $520 million driven primarily by improved gross margin.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Earnings in the TXU Electric Delivery segment decreased $6 million, or 8%, to $65 million driven by an increase in operating costs.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | Results from corporate and other activities totaled $69 million in net expense in 2006 and net income of $132 million in 2005. The amounts in 2006 and 2005 consist principally of
recurring interest expense on outstanding debt at the TXU Corp. parent and corporate general and administrative expenses. In addition, the 2005 amount reflects the $138 million tax benefit related to TXU Europe and the $23 million after-tax
additional insurance recovery related to the securities litigation settlement paid in January 2005. After-tax interest expense increased $30 million driven by higher interest on borrowings from affiliates.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net pension and postretirement benefit costs reduced income from continuing operations by $10 million in 2006 and $14 million in 2005.

Income from discontinued operations (an after-tax measure) totaled $60 million in 2006 and $15 million in 2005. See Note 2 to Financial Statements for
details.

Diluted results per share of common stock were net income of $1.22 in 2006 compared to a net loss of $0.10 in 2005.



| |  |  | The 2005 diluted per share results reflect a $0.97 per share unfavorable impact associated with the November 2004 accelerated share repurchase program, which was settled in May 2005
for $523 million in cash. See Note 1 to Financial Statements for further discussion.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Diluted net income per share in 2006 benefited from a $0.04 per share impact due to the repurchase of 22 million shares since March 31, 2005. Basic average common shares
outstanding decreased 3% to 464 million shares reflecting these share repurchases. Diluted average common shares decreased slightly to 474 million shares; in the first quarter of 2005, basic and diluted shares were the same because of
antidilution. (See Note 5 to Financial Statements.)
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

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

The table below summarizes the changes in commodity contract assets and liabilities for the three months ended March 31, 2006. The net changes in
these assets and liabilities, excluding other activity as described below, represent the net effect of mark-to-market accounting for positions in the commodity contract portfolio, which excludes positions that are subject to hedge
accounting. For the three months ended March 31, 2006, this effect totaled $6 million in unrealized net gains ($24 million in reversals of net losses recognized in prior periods less $18 million in net losses on open positions) These positions
represent economic hedging and proprietary trading activities.



|                                                                            |  |                                 |     |  
|--------------------------------------------------------------------------- |  | ------------------------------- | --- | -
|                                                                            |  | Three MonthsEndedMarch 31, 2006 |    
|Net commodity contract liability at beginning of period                     |  | $                               | (56 | )
|Settlements of positions included in the opening balance (1)                |  |                                 | 24  |  
|Unrealized mark-to-market valuations of positions held at end of period (2) |  |                                 | (18 | )
|Other activity (3)                                                          |  |                                 | (2  | )
|                                                                            |  |                                 |     |  
|Net commodity contract liability at end of period                           |  | $                               | (52 | )
|                                                                            |  |                                 |     |  

---

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

|(2) | Includes $3 million in net gains recorded at contract inception dates.
|--- | ----------------------------------------------------------------------

|(3) | These amounts do not arise from mark-to-market valuations. Includes initial values of positions involving the receipt or payment of cash or other consideration such as option
premiums paid and received and related amortization. Activity for the period includes $12 million of natural gas received related to physical swap transactions as well as $10 million of option premium payments.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition to the net effect of recording unrealized mark-to-market gains and losses that are reflected in changes in commodity contract assets and
liabilities, similar effects arise in the recording of unrealized ineffectiveness gains and losses associated with commodity-related cash flow hedges. These effects, which include reversals of previously recorded unrealized ineffectiveness gains and
losses to offset realized gains and losses upon settlement, are reflected in the balance sheet as changes in cash flow hedge and other derivative assets and liabilities. The total net effect of recording unrealized gains and losses under
mark-to-market accounting is summarized as follows:



|                                                                  |  |                             |    |   |      |   |     |  
|----------------------------------------------------------------- |  | --------------------------- | -- | - | ---- | - | --- | -
|                                                                  |  | Three Months EndedMarch 31, |   
|                                                                  |  | 2006                        |    |   | 2005 |  
|Unrealized gains/(losses) related to commodity contract positions |  | $                           | 6  |   |      | $ | (27 | )
|Ineffectiveness gains/(losses) related to cash flow hedges (a)    |  |                             | (1 | ) |      |   | 3   |  
|                                                                  |  |                             |    |   |      |   |     |  
|Total unrealized gains (losses) related to commodity contracts    |  | $                           | 5  |   |      | $ | (24 | )
|                                                                  |  |                             |    |   |      |   |     |  

---

|(a) | See Note 8 to Financial Statements.
|--- | -----------------------------------

These amounts are
included in the risk management and trading activities component of revenues.



33



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##### Table of Contents

Maturity Table  Included in the net commodity contract liability above at
March 31, 2006 is a net asset of $41 million representing cumulative unrealized mark-to-market net gains that have been recognized in current and prior years earnings. More than offsetting this net asset is a net liability of $93 million
included in the March 31, 2006 balance sheet that is comprised principally of amounts representing current and prior years net receipts of cash or other consideration, including amounts related to natural gas physical swap transactions,
as well as option premiums net of amortization. The following table presents the unrealized net commodity contract asset arising from mark-to-market accounting as of March 31, 2006, scheduled by contractual settlement dates of the underlying
positions.



|                                          |  |                                                                              |      |    |           |   |     |           |  |   |                   |    |  |       |    |    |  |   |      |  
|----------------------------------------- |  | ---------------------------------------------------------------------------- | ---- | -- | --------- | - | --- | --------- |  | - | ----------------- | -- |  | ----- | -- | -- |  | - | ---- | -
|                                          |  | Maturity dates of unrealized net commodity contract assets at March 31, 2006 |     
|Source of fair value                      |  | Less than 1 year                                                             |      |    | 1-3 years |   |     | 4-5 years |  |   | Excess of 5 years |    |  | Total |   
|Prices actively quoted                    |  | $                                                                            | 131  |    |           | $ | 61  |           |  | $ | 11                |    |  | $     |   |    |  | $ | 203  |  
|Prices provided by other external sources |  |                                                                              | (161 | )  |           |   | (4  | )         |  |   | (20               | )  |  |       | (1 | )  |  |   | (186 | )
|Prices based on models                    |  |                                                                              | 25   |    |           |   | (1  | )         |  |   |                  |    |  |       |   |    |  |   | 24   |  
|                                          |  |                                                                              |      |    |           |   |     |           |  |   |                   |    |  |       |    |    |  |   |      |  
|Total                                     |  | $                                                                            | (5   | )  |           | $ | 56  |           |  | $ | (9                | )  |  | $     | (1 | )  |  | $ | 41   |  
|                                          |  |                                                                              |      |    |           |   |     |           |  |   |                   |    |  |       |    |    |  |   |      |  
|Percentage of total fair value            |  |                                                                              | (12  | )% |           |   | 136 | %         |  |   | (22               | )% |  |       | (2 | )% |  |   | 100  | %

As the above table indicates, 124% of the net unrealized mark-to-market valuation gains at
March 31, 2006 mature within three years. This is reflective of the terms of the positions and the methodologies employed in valuing positions for periods where there is less market liquidity and visibility. The prices actively
quoted category reflects only exchange traded contracts with active quotes available. The prices provided by other external sources category represents forward commodity positions at locations for which over-the-counter broker
quotes are available. Over-the-counter quotes for power in ERCOT extend through 2010, depending upon delivery point, and for natural gas generally extend through 2010. The prices based on models category contains the value of all
nonexchange traded options, valued using industry accepted option pricing models. In addition, this category contains other contractual arrangements which may have both forward and option components. In many instances, these contracts can be broken
down into their component parts and modeled as simple forwards and options based on prices actively quoted. As the modeled value is ultimately the result of a combination of prices from two or more different instruments, it has been included in this
category.



34



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##### Table of Contents

TXU Energy Holdings

Financial Results



|                                                      |  |                             |       |   |      |   |       |  
|----------------------------------------------------- |  | --------------------------- | ----- | - | ---- | - | ----- | -
|                                                      |  | Three MonthsEnded March 31, |      
|                                                      |  | 2006                        |       |   | 2005 |  
|Operating revenues                                    |  | $                           | 2,010 |   |      | $ | 1,821 |  
|                                                      |  |                             |       |   |      |   |       |  
|Costs and expenses:                                   |  |                             |       |   |      |   |       |  
|Fuel, purchased power costs and delivery fees         |  |                             | 790   |   |      |   | 1,073 |  
|Operating costs                                       |  |                             | 155   |   |      |   | 153   |  
|Depreciation and amortization                         |  |                             | 84    |   |      |   | 79    |  
|Selling, general and administrative expenses          |  |                             | 121   |   |      |   | 113   |  
|Franchise and revenue-based taxes                     |  |                             | 27    |   |      |   | 26    |  
|Other income                                          |  |                             |      |   |      |   | (2    | )
|Other deductions                                      |  |                             | (10   | ) |      |   | 1     |  
|Interest income                                       |  |                             | (31   | ) |      |   | (9    | )
|Interest expense and related charges                  |  |                             | 101   |   |      |   | 91    |  
|                                                      |  |                             |       |   |      |   |       |  
|Total costs and expenses                              |  |                             | 1,237 |   |      |   | 1,525 |  
|                                                      |  |                             |       |   |      |   |       |  
|Income from continuing operations before income taxes |  |                             | 773   |   |      |   | 296   |  
|Income tax expense                                    |  |                             | 253   |   |      |   | 93    |  
|                                                      |  |                             |       |   |      |   |       |  
|Income from continuing operations                     |  | $                           | 520   |   |      | $ | 203   |  
|                                                      |  |                             |       |   |      |   |       |  



35



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##### Table of Contents

TXU Energy Holdings

Sales Volume Data



|                                                             |  |                              |   |  |        |   |  |          |  
|------------------------------------------------------------ |  | ---------------------------- | - |  | ------ | - |  | -------- | -
|                                                             |  | Three Months Ended March 31, |  
|                                                             |  | 2006                         |   |  | 2005   |   |  | Change % |  
|Sales volumes:                                               |  |                              |   |  |        |   |  |          |  
|                                                             |  |                              |  
|Retail electricity sales volumes (GWh):                      |  |                              |   |  |        |   |  |          |  
|Historical service territory:                                |  |                              |   |  |        |   |  |          |  
|Residential                                                  |  | 5,232                        |   |  | 6,317  |   |  | (17.2    | )
|Small business (a)                                           |  | 1,727                        |   |  | 2,034  |   |  | (15.1    | )
|                                                             |  |                              |   |  |        |   |  |          |  
|Total historical service territory                           |  | 6,959                        |   |  | 8,351  |   |  | (16.7    | )
|Other territories:                                           |  |                              |   |  |        |   |  |          |  
|Residential                                                  |  | 611                          |   |  | 628    |   |  | (2.7     | )
|Small business (a)                                           |  | 132                          |   |  | 139    |   |  | (5.0     | )
|                                                             |  |                              |   |  |        |   |  |          |  
|Total other territories                                      |  | 743                          |   |  | 767    |   |  | (3.1     | )
|Large business and other customers                           |  | 3,233                        |   |  | 4,362  |   |  | (25.9    | )
|                                                             |  |                              |   |  |        |   |  |          |  
|Total retail electricity                                     |  | 10,935                       |   |  | 13,480 |   |  | (18.9    | )
|Wholesale electricity sales volumes (b)                      |  | 9,285                        |   |  | 12,239 |   |  | (24.1    | )
|                                                             |  |                              |   |  |        |   |  |          |  
|Total sales volumes                                          |  | 20,220                       |   |  | 25,719 |   |  | (21.4    | )
|                                                             |  |                              |   |  |        |   |  |          |  
|Average volume (kWh) per retail customer (c):                |  |                              |   |  |        |   |  |          |  
|                                                             |  |                              |  
|Residential                                                  |  | 2,959                        |   |  | 3,256  |   |  | (9.1     | )
|Small business                                               |  | 6,528                        |   |  | 7,002  |   |  | (6.8     | )
|Large business and other customers                           |  | 60,718                       |   |  | 63,906 |   |  | (5.0     | )
|                                                             |  |                              |  
|Weather (service territory average)  percent of normal (d): |  |                              |   |  |        |   |  |          |  
|                                                             |  |                              |  
|Percent of normal:                                           |  |                              |   |  |        |   |  |          |  
|Cooling degree days                                          |  |                             | % |  | 76.2   | % |  |          |  
|Heating degree days                                          |  | 75.1                         | % |  | 88.4   | % |  |          |  

---

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

|(b) | See Note 1 to Financial Statements for discussion of reporting of trading and ERCOT balancing activity in 2006. Includes net sales volumes related to ERCOT balancing of 1,432 GWh
and 759 GWh for the three months ended March 31, 2006 and 2005, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|(d) | 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).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



36



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##### Table of Contents

TXU Energy Holdings

Customer Count Data



|                                                                   |  |           |  |       |  |          |  
|------------------------------------------------------------------ |  | --------- |  | ----- |  | -------- | -
|                                                                   |  | March 31, | 
|                                                                   |  | 2006      |  | 2005  |  | Change % |  
|Customer counts:                                                   |  |           |  |       |  |          |  
|                                                                   |  |           | 
|Retail electricity customers (end of period and in thousands) (a): |  |           |  |       |  |          |  
|Historical service territory:                                      |  |           |  |       |  |          |  
|Residential                                                        |  | 1,750     |  | 1,925 |  | (9.1     | )
|Small business (b)                                                 |  | 274       |  | 299   |  | (8.4     | )
|                                                                   |  |           |  |       |  |          |  
|Total historical service territory                                 |  | 2,024     |  | 2,224 |  | (9.0     | )
|                                                                   |  |           | 
|Other territories:                                                 |  |           |  |       |  |          |  
|Residential                                                        |  | 218       |  | 195   |  | 11.8     |  
|Small business (b)                                                 |  | 7         |  | 7     |  |         |  
|                                                                   |  |           |  |       |  |          |  
|Total other territories                                            |  | 225       |  | 202   |  | 11.4     |  
|                                                                   |  |           | 
|Large business and other customers                                 |  | 52        |  | 61    |  | (14.8    | )
|                                                                   |  |           |  |       |  |          |  
|Total retail electricity customers                                 |  | 2,301     |  | 2,487 |  | (7.5     | )
|                                                                   |  |           |  |       |  |          |  

---

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

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



37



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##### Table of Contents

TXU Energy Holdings

Revenue and Market Share Data



|                                                                                              |  |                              |        |   |      |   |        |          |  |       |  
|--------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -------- |  | ----- | -
|                                                                                              |  | Three Months Ended March 31, |       
|                                                                                              |  | 2006                         |        |   | 2005 |   |        | Change % | 
|Operating revenues (millions of dollars):                                                     |  |                              |        |   |      |   |        |          |  |       |  
|                                                                                              |  |                              |       
|Retail electricity revenues:                                                                  |  |                              |        |   |      |   |        |          |  |       |  
|Historical service territory:                                                                 |  |                              |        |   |      |   |        |          |  |       |  
|Residential                                                                                   |  | $                            | 746    |   |      | $ | 636    |          |  | 17.3  |  
|Small business (a)                                                                            |  |                              | 257    |   |      |   | 228    |          |  | 12.7  |  
|                                                                                              |  |                              |        |   |      |   |        |          |  |       |  
|Total historical service territory                                                            |  |                              | 1,003  |   |      |   | 864    |          |  | 16.1  |  
|                                                                                              |  |                              |       
|Other territories:                                                                            |  |                              |        |   |      |   |        |          |  |       |  
|Residential                                                                                   |  |                              | 89     |   |      |   | 57     |          |  | 56.1  |  
|Small business (a)                                                                            |  |                              | 15     |   |      |   | 12     |          |  | 25.0  |  
|                                                                                              |  |                              |        |   |      |   |        |          |  |       |  
|Total other territories                                                                       |  |                              | 104    |   |      |   | 69     |          |  | 50.7  |  
|                                                                                              |  |                              |       
|Large business and other customers                                                            |  |                              | 316    |   |      |   | 327    |          |  | (3.4  | )
|                                                                                              |  |                              |        |   |      |   |        |          |  |       |  
|Total retail electricity revenues                                                             |  |                              | 1,423  |   |      |   | 1,260  |          |  | 12.9  |  
|Wholesale electricity revenues (b)                                                            |  |                              | 534    |   |      |   | 533    |          |  | 0.2   |  
|Net losses from risk management and trading activities                                        |  |                              | (44    | ) |      |   | (53    | )        |  | (17.0 | )
|Other revenues                                                                                |  |                              | 97     |   |      |   | 81     |          |  | 19.8  |  
|                                                                                              |  |                              |        |   |      |   |        |          |  |       |  
|Total operating revenues                                                                      |  | $                            | 2,010  |   |      | $ | 1,821  |          |  | 10.4  |  
|                                                                                              |  |                              |        |   |      |   |        |          |  |       |  
|Risk management and trading activities:                                                       |  |                              |        |   |      |   |        |          |  |       |  
|                                                                                              |  |                              |       
|Net realized losses on settled positions                                                      |  | $                            | (48    | ) |      | $ | (29    | )        |  |       |  
|Reversal of prior years net unrealized (gains)/losses on positions settled in current period |  |                              | 24     |   |      |   | (9     | )        |  |       |  
|Other net unrealized losses, including ineffectiveness                                        |  |                              | (20    | ) |      |   | (15    | )        |  |       |  
|                                                                                              |  |                              |        |   |      |   |        |          |  |       |  
|Total net losses                                                                              |  | $                            | (44    | ) |      | $ | (53    | )        |  |       |  
|                                                                                              |  |                              |        |   |      |   |        |          |  |       |  
|Average revenues per MWh:                                                                     |  |                              |        |   |      |   |        |          |  |       |  
|                                                                                              |  |                              |       
|Residential                                                                                   |  | $                            | 142.71 |   |      | $ | 99.74  |          |  | 43.1  |  
|Small business                                                                                |  | $                            | 146.50 |   |      | $ | 110.44 |          |  | 32.7  |  
|Large business and other customers                                                            |  | $                            | 97.88  |   |      | $ | 75.05  |          |  | 30.4  |  
|                                                                                              |  |                              |       
|Estimated share of ERCOT retail markets (c):                                                  |  |                              |        |   |      |   |        |          |  |       |  
|                                                                                              |  |                              |       
|Historical service territory:                                                                 |  |                              |        |   |      |   |        |          |  |       |  
|Residential (d)                                                                               |  |                              | 71     | % |      |   | 79     | %        |  |       |  
|Small business (d)                                                                            |  |                              | 69     | % |      |   | 76     | %        |  |       |  
|Total ERCOT:                                                                                  |  |                              |        |   |      |   |        |          |  |       |  
|Residential                                                                                   |  |                              | 39     | % |      |   | 43     | %        |  |       |  
|Small business                                                                                |  |                              | 28     | % |      |   | 30     | %        |  |       |  
|Large business and other customers                                                            |  |                              | 18     | % |      |   | 25     | %        |  |       |  

---

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

|(b) | See Note 1 to Financial Statements for discussion of reporting of trading and ERCOT balancing activity in 2006. Includes net revenues related to ERCOT balancing of $58 million and
$17 million for the three months ended March 31, 2006 and 2005, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Based on number of meters, except large business which is based upon annualized consumption.
|--- | --------------------------------------------------------------------------------------------

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



38



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##### Table of Contents

TXU Energy Holdings

Production, Purchased Power and Delivery Cost Data



|                                                                                          |  |                              |        |   |      |   |        |          |  |       |  
|----------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -------- |  | ----- | -
|                                                                                          |  | Three Months Ended March 31, |       
|                                                                                          |  | 2006                         |        |   | 2005 |   |        | Change % | 
|Fuel, purchased power costs and delivery fees ($ millions):                               |  |                              |        |   |      |   |        |          |  |       |  
|                                                                                          |  |                              |       
|Nuclear fuel                                                                              |  | $                            | 21     |   |      | $ | 20     |          |  | 5.0   |  
|Lignite/coal                                                                              |  |                              | 117    |   |      |   | 115    |          |  | 1.7   |  
|                                                                                          |  |                              |        |   |      |   |        |          |  |       |  
|Total baseload fuel                                                                       |  |                              | 138    |   |      |   | 135    |          |  | 2.2   |  
|Gas/oil fuel and purchased power                                                          |  |                              | 268    |   |      |   | 532    |          |  | (49.6 | )
|Other costs                                                                               |  |                              | 71     |   |      |   | 63     |          |  | 12.7  |  
|                                                                                          |  |                              |        |   |      |   |        |          |  |       |  
|Fuel and purchased power costs (a)                                                        |  |                              | 477    |   |      |   | 730    |          |  | (34.7 | )
|Delivery fees (b)                                                                         |  |                              | 313    |   |      |   | 343    |          |  | (8.7  | )
|                                                                                          |  |                              |        |   |      |   |        |          |  |       |  
|Total                                                                                     |  | $                            | 790    |   |      | $ | 1,073  |          |  | (26.4 | )
|                                                                                          |  |                              |        |   |      |   |        |          |  |       |  
|Fuel and purchased power costs (which excludes generation plant operating costs) per MWh: |  |                              |        |   |      |   |        |          |  |       |  
|Nuclear generation                                                                        |  | $                            | 4.22   |   |      | $ | 4.18   |          |  | 1.0   |  
|Lignite/coal generation (c)                                                               |  | $                            | 12.01  |   |      | $ | 11.93  |          |  | 0.7   |  
|Gas/oil generation and purchased power                                                    |  | $                            | 59.35  |   |      | $ | 49.53  |          |  | 19.8  |  
|                                                                                          |  |                              |       
|Delivery fee per MWh                                                                      |  | $                            | 28.26  |   |      | $ | 25.16  |          |  | 12.3  |  
|                                                                                          |  |                              |       
|Production and purchased power volumes (GWh):                                             |  |                              |        |   |      |   |        |          |  |       |  
|                                                                                          |  |                              |       
|Nuclear                                                                                   |  |                              | 5,080  |   |      |   | 4,797  |          |  | 5.9   |  
|Lignite/coal                                                                              |  |                              | 10,874 |   |      |   | 10,520 |          |  | 3.4   |  
|                                                                                          |  |                              |        |   |      |   |        |          |  |       |  
|Total baseload generation                                                                 |  |                              | 15,954 |   |      |   | 15,317 |          |  | 4.2   |  
|Gas/oil generation                                                                        |  |                              | 189    |   |      |   | 260    |          |  | (27.3 | )
|Purchased power (a)                                                                       |  |                              | 4,326  |   |      |   | 10,565 |          |  | (59.1 | )
|                                                                                          |  |                              |        |   |      |   |        |          |  |       |  
|Total energy supply                                                                       |  |                              | 20,469 |   |      |   | 26,142 |          |  | (21.7 | )
|Less line loss and power imbalances                                                       |  |                              | 249    |   |      |   | 423    |          |  | (41.1 | )
|                                                                                          |  |                              |        |   |      |   |        |          |  |       |  
|Net energy supply volumes                                                                 |  |                              | 20,220 |   |      |   | 25,719 |          |  | (21.4 | )
|                                                                                          |  |                              |        |   |      |   |        |          |  |       |  
|Baseload capacity factors (%):                                                            |  |                              |        |   |      |   |        |          |  |       |  
|                                                                                          |  |                              |       
|Nuclear                                                                                   |  |                              | 102.7  | % |      |   | 96.9   | %        |  | 6.0   |  
|Lignite/coal                                                                              |  |                              | 90.4   | % |      |   | 87.8   | %        |  | 3.0   |  
|Total baseload                                                                            |  |                              | 93.9   | % |      |   | 90.4   | %        |  | 3.9   |  

---

|(a) | See Note 1 to Financial Statements for discussion of reporting of trading and ERCOT balancing activity in 2006.
|--- | ---------------------------------------------------------------------------------------------------------------

|(b) | Includes primarily delivery fee charges from TXU Electric Delivery that are eliminated in consolidation ($269 million in 2006 and $312 million in 2005).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | 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.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



39



---

##### Table of Contents

TXU Energy Holdings

Three Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005

Operating revenues increased $189 million, or 10%, to $2.0 billion in 2006. Retail electricity revenues increased $163 million, or 13%, to $1.4 billion.



| |  |  | The retail revenue increase reflected $392 million in higher pricing due to increased price-to-beat rates, reflecting regulatory-approved fuel factor increases in May and October
2005, and higher pricing in the competitive business market, both resulting from the effects of higher natural gas prices.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The effect of higher pricing due to increased price-to-beat rates was partially offset by $238 million in lower retail volumes. Retail sales volumes declined 19% primarily
reflecting a net loss of customers due to competitive activity and lower average consumption per customer due in part to changes in customer mix (to residential from large business) and milder weather. Total residential and small business volumes
fell 16%. A 26% volume decline in the large business market also reflected a continuing strategy to target higher margin customers in that market.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Retail electricity customer counts at March 31, 2006 declined 7% from March 31, 2005. Total residential and small business customer counts in the historical service
territory declined 9% and in all combined territories declined 7%.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Wholesale electricity revenues increased $1 million to
$534 million. The change reflects the reporting of wholesale power trading activity on a net basis as described in Note 1 to Financial Statements, partially offset by the effect of higher wholesale prices. In addition, ERCOT balancing net revenues
included within wholesale electricity revenues increased $41 million to $58 million due to higher volumes and prices.

The increase in
other revenues of $16 million primarily reflects an increase in retail gas revenues driven by higher natural gas prices.

Results from risk
management and trading activities, which are reported in revenues and include both realized and unrealized (mark-to-market) gains and losses, reflected net losses of $44 million in 2006 and $53 million in 2005. Because hedging activities are
intended to mitigate the risk of commodity price movements on revenues and fuel and purchased power costs, the changes in such results should not be viewed in isolation, but rather taken together with the effects of pricing and cost changes on gross
margin. Results in 2006 included:



| |  |  | $14 million in net realized losses associated with hedges entered into in prior years (largely 2003), the offsetting effects of which are reflected in electricity revenues and fuel
and purchased power. This amount includes $8 million in losses related to positions that had been accounted for as cash flow hedges;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $11 million reversal of net unrealized gains previously recognized on power hedging positions settled in the current period, the offsetting effects of which are reflected in
electricity revenues and fuel and purchased power costs;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $13 million in unrealized cash flow hedge ineffectiveness losses on unsettled positions related to the long-term hedging program initiated late in 2005;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $7 million in net realized gains associated with positions in the long-term hedging program accounted for as cash flow hedges, the offsetting effects of which are reflected in
electricity revenues;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $8 million in unrealized cash flow hedge ineffectiveness gains on other unsettled positions; and
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | $17 million in net realized losses on settlement of various commodity trading positions.
| | - |  | ----------------------------------------------------------------------------------------



40



---

##### Table of Contents

Gross Margin



|                                              |  |                              |       |              |     |   |      |   |              |  |     |  
|--------------------------------------------- |  | ---------------------------- | ----- | ------------ | --- | - | ---- | - | ------------ |  | --- | -
|                                              |  | Three Months Ended March 31, |      
|                                              |  | 2006                         |       | % of Revenue |     |   | 2005 |   | % of Revenue | 
|Operating revenues                            |  | $                            | 2,010 |              | 100 | % |      | $ | 1,821        |  | 100 | %
|Costs and expenses:                           |  |                              |       |              |     |   |      |   |              |  |     |  
|Fuel, purchased power costs and delivery fees |  |                              | 790   |              | 39  |   |      |   | 1,073        |  | 59  |  
|Generation plant operating costs              |  |                              | 155   |              | 8   |   |      |   | 153          |  | 9   |  
|Depreciation and amortization                 |  |                              | 83    |              | 4   |   |      |   | 78           |  | 4   |  
|                                              |  |                              |       |              |     |   |      |   |              |  |     |  
|Gross margin                                  |  | $                            | 982   |              | 49  | % |      | $ | 517          |  | 28  | %
|                                              |  |                              |       |              |     |   |      |   |              |  |     |  

Gross margin increased $465 million, or 90%, to $982 million in 2006. This growth primarily
reflected the relatively low fuel costs of TXU Energy Holdings nuclear and lignite/coal-fired baseload plants, as well as higher baseload production, in an environment of higher wholesale power prices. The increased wholesale power prices were
driven by higher natural gas prices. Retail prices, including price-to-beat rates, were increased in response to higher wholesale prices. The gross margin performance was mitigated by the effect of lower retail sales volumes and higher purchased
power prices.

Gross margin as a percent of revenues increased 21 percentage points to 49%. The improvement reflected:



| |  |  | higher pricing, as the average retail sales price per MWh rose 39%, and the average wholesale sales price per MWh rose 32% (18 percentage point margin increase); and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the effect of reporting wholesale power trading activity on a net basis (seven percentage point margin increase),
| | - |  | -----------------------------------------------------------------------------------------------------------------

partially offset by:



| |  |  | a 20% increase in combined per MWh purchased power costs and fuel costs in gas/oil-fired generation, due to rising natural gas prices (two percentage point margin decrease); and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a 12% increase in delivery fees per MWh reflecting a sales mix shift (to residential from large business) and higher delivery rates (two percentage point margin decrease).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Operating costs increased $2 million, or 1%, to $155 million in 2006. The increase reflected:



| |  |  | $5 million in higher property taxes due to increased property valuations;
| | - |  | -------------------------------------------------------------------------



| |  |  | $4 million in fees related to transition costs associated with generation engineering services agreements entered into in 2006; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | $3 million in costs related to higher baseload production,
| | - |  | ----------------------------------------------------------

partially offset by the absence in 2006 of $9 million in maintenance costs incurred for the nuclear refueling outage in 2005.

Depreciation and amortization (consisting almost entirely of amounts related to generation plants shown in the gross margin table above) increased $5 million, or 6%, to $84 million reflecting higher depreciation related to normal property
additions and replacements.



41



---

##### Table of Contents

SG&A expenses increased by $8 million, or 7%, to $121 million in 2006. The increase reflected:



| |  |  | $6 million in executive severance expense (including amounts allocated from parent);
| | - |  | ------------------------------------------------------------------------------------



| |  |  | $4 million in higher sale of receivable program fees driven by higher interest rates; and
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | $3 million in increased benefits expense due to timing,
| | - |  | -------------------------------------------------------

partially offset by:



| |  |  | $4 million of consulting expense incurred in 2005 primarily related to development and implementation of the TXU Operating System; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $2 million in lower executive incentive compensation expense.
| | - |  | -------------------------------------------------------------

Other deductions totaled a net credit of $10 million in 2006 and a $1 million charge in 2005. The 2006 amount includes $12 million related to the favorable settlement of a counterparty default under a coal contract.

The 2005 amount includes:



| |  |  | $12 million charge related to nonperformance of a counterparty in connection with a coal contract;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | $2 million in equity losses (representing amortization expense) in the TXU Corp. entity holding the capitalized software licensed to Capgemini;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $2 million in transition costs associated with the Capgemini outsourcing agreement; and
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | a $15 million credit adjusting the impairment loss on the leased gas-fired combustion turbines to reflect actual sub-lease proceeds under the terms of a third-party contract entered
into in 2005.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Interest income increased by $22 million to $31 million in 2006 reflecting $15 million due to higher average
advances to affiliates and $7 million due to higher average rates.

Interest expense and related charges increased by $10 million, or 11%,
to $101 million in 2006. The increase is primarily driven by interest on commercial paper issuances in 2006.

The effective income tax rate
was 32.7% in 2006 and 31.4% in 2005. The net amounts that reduce income taxes calculated at the statutory tax rate were higher in 2006 due primarily to a higher production deduction benefit provided for under the American Jobs Creation Act of 2004.
However, this benefit was more than offset by the effect of significantly higher pretax income. Other adjustment amounts that reduce reported income tax expense include lignite depletion and amortization of investment tax credits.

Income from continuing operations increased $317 million, or 156%, to $520 million in 2006 driven primarily by improved gross margin.



42



---

##### Table of Contents

TXU Electric Delivery

Financial Results



|                                             |  |                    |     |   |      |   |     |  
|-------------------------------------------- |  | ------------------ | --- | - | ---- | - | --- | -
|                                             |  | Three Months Ended |    
|                                             |  | March 31,          |    
|                                             |  | 2006               |     |   | 2005 |  
|Operating revenues                           |  | $                  | 562 |   |      | $ | 550 |  
|                                             |  |                    |     |   |      |   |     |  
|Costs and expenses:                          |  |                    |     |   |      |   |     |  
|Operating costs                              |  |                    | 192 |   |      |   | 181 |  
|Depreciation and amortization                |  |                    | 113 |   |      |   | 105 |  
|Selling, general and administrative expenses |  |                    | 48  |   |      |   | 49  |  
|Franchise and revenue-based taxes            |  |                    | 59  |   |      |   | 57  |  
|Other income                                 |  |                    |    |   |      |   | (1  | )
|Other deductions                             |  |                    | 2   |   |      |   | 4   |  
|Interest income                              |  |                    | (14 | ) |      |   | (15 | )
|Interest expense and related charges         |  |                    | 68  |   |      |   | 68  |  
|                                             |  |                    |     |   |      |   |     |  
|Total costs and expenses                     |  |                    | 468 |   |      |   | 448 |  
|                                             |  |                    |     |   |      |   |     |  
|Income before income taxes                   |  |                    | 94  |   |      |   | 102 |  
|Income tax expense                           |  |                    | 29  |   |      |   | 31  |  
|                                             |  |                    |     |   |      |   |     |  
|Net Income                                   |  | $                  | 65  |   |      | $ | 71  |  
|                                             |  |                    |     |   |      |   |     |  



43



---

##### Table of Contents

Operating Data



|                                                                           |  |                             |        |          |   |        |  |       |  
|-------------------------------------------------------------------------- |  | --------------------------- | ------ | -------- | - | ------ |  | ----- | -
|                                                                           |  | Three Months EndedMarch 31, |        | % Change |  
|                                                                           |  | 2006                        |        | 2005     |  
|Operating statistics  volumes:                                            |  |                             |        |          |   |        |  |       |  
|Electric energy delivered (GWh)                                            |  |                             | 23,131 |          |   | 23,448 |  | (1.4  | )
|                                                                           |  |                             |       
|Reliability statistics (a):                                                |  |                             |        |          |   |        |  |       |  
|System Average Interruption Duration Index (SAIDI) (nonstorm)              |  |                             | 79.32  |          |   | 71.59  |  | 10.8  |  
|System Average Interruption Frequency Index (SAIFI) (nonstorm)             |  |                             | 1.18   |          |   | 1.10   |  | 7.3   |  
|Customer Average Interruption Duration Index (CAIDI) (nonstorm)            |  |                             | 67.14  |          |   | 65.09  |  | 3.1   |  
|                                                                           |  |                             |       
|Electricity points of delivery (end of period and in thousands):           |  |                             |        |          |   |        |  |       |  
|Electricity distribution points of delivery (based on number of meters)(b) |  |                             | 3,025  |          |   | 2,985  |  | 1.3   |  
|                                                                           |  |                             |       
|Operating revenues (millions of dollars):                                  |  |                             |        |          |   |        |  |       |  
|Electricity distribution revenues (c):                                     |  |                             |        |          |   |        |  |       |  
|Affiliated (TXU Energy Holdings)                                           |  | $                           | 267    |          | $ | 311    |  | (14.1 | )
|Nonaffiliated                                                              |  |                             | 231    |          |   | 182    |  | 26.9  |  
|                                                                           |  |                             |        |          |   |        |  |       |  
|Total distribution revenues                                                |  |                             | 498    |          |   | 493    |  | 1.0   |  
|Third-party transmission revenues                                          |  |                             | 57     |          |   | 51     |  | 11.8  |  
|Other miscellaneous revenues                                               |  |                             | 7      |          |   | 6      |  | 16.7  |  
|                                                                           |  |                             |        |          |   |        |  |       |  
|Total operating revenues                                                   |  | $                           | 562    |          | $ | 550    |  | 2.2   |  
|                                                                           |  |                             |        |          |   |        |  |       |  

---

|(a) | SAIDI is the number of minutes the average customer is out of electric service in a year. SAIFI is the number of times a year that the average customer experiences an interruption
to electric service. CAIDI is the duration in minutes of the average interruption to electric service.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Includes lighting sites, primarily guard lights, for which TXU Energy Holdings is the REP but are not included in TXU Energy Holdings customer count. Such sites totaled 85,477
and 94,187 at March 31, 2006 and 2005, respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Includes $36 million and $33 million for the three months ended March 31, 2006 and 2005, respectively, of transition charges associated with the issuance of securitization
bonds. Also includes disconnect/reconnect fees and other discretionary revenues for services requested by REPs.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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TXU Electric Delivery

TXU Electric Deliverys future results are expected to be impacted by the effects of the cities rate settlement described below under Regulation and Rates. The cities rate settlement is expected to
result in incremental expenses of approximately $70 million, recognized almost entirely over the period from July 2006 through June 2008.

Three
Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005

Operating revenues increased $12 million,
or 2%, to $562 million in 2006. This change reflected:



| |  |  | $6 million in higher transmission revenues primarily due to rate increases approved in 2005;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | $4 million due to an increase in points of delivery; and
| | - |  | --------------------------------------------------------



| |  |  | $3 million in higher transition charges due to interim rate updates (offset in total by higher amortization of the related regulatory asset),
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

partially offset by the effect of a decrease in average consumption per consumer due in part to milder weather.

Gross Margin



|                                                     |  |                              |     |             |     |   |      |   |             |  |     |  
|---------------------------------------------------- |  | ---------------------------- | --- | ----------- | --- | - | ---- | - | ----------- |  | --- | -
|                                                     |  | Three Months Ended March 31, |    
|                                                     |  | 2006                         |     | % ofRevenue |     |   | 2005 |   | % ofRevenue | 
|Operating revenues                                   |  | $                            | 562 |             | 100 | % |      | $ | 550         |  | 100 | %
|Costs and expenses:                                  |  |                              |     |             |     |   |      |   |             |  |     |  
|Transmission and distribution system operating costs |  |                              | 192 |             | 34  |   |      |   | 181         |  | 33  |  
|Depreciation and amortization                        |  |                              | 113 |             | 20  |   |      |   | 105         |  | 19  |  
|                                                     |  |                              |     |             |     |   |      |   |             |  |     |  
|Gross margin                                         |  | $                            | 257 |             | 46  | % |      | $ | 264         |  | 48  | %
|                                                     |  |                              |     |             |     |   |      |   |             |  |     |  

Gross margin decreased $7 million, or 3%, to $257 million in 2006. The decrease was driven by
increased operating costs. Higher amortization of regulatory assets was offset by higher revenues.

Operating costs rose $11 million, or
6%, to $192 million in 2006. The increase reflected $5 million in increased spending for system reliability initiatives, $4 million in increased costs paid to other transmission entities and $2 million in higher property taxes due to increased
investments in property.

Depreciation and amortization increased $8 million, or 8%, to $113 million in 2006. The increase reflected $5
million in higher depreciation due to normal additions and replacements of property, plant, and equipment and $3 million in higher amortization of the regulatory assets associated with the securitization bonds (offsetting the same amount of
revenue).

Other deductions totaled $2 million in 2006 and $4 million in 2005. The 2006 amount included $1 million related to TXU Electric
Deliverys portion of equity losses (representing amortization expense) of the TXU Corp. entity holding the capitalized software licensed to Capgemini.

The 2005 amount included:



| |  |  | $2 million of severance-related charges related to the 2004 restructuring actions;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | $1 million in costs associated with transitioning the outsourced activities to Capgemini; and
| | - |  | ---------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | $1 million related to TXU Electric Deliverys portion of the equity losses (representing amortization expense) of the TXU Corp. entity holding the capitalized software licensed
to Capgemini.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The effective income tax rate increased slightly to 30.9% in 2006 from 30.4% in 2005. There were no
significant items affecting this comparison.

Net income decreased $6 million, or 8%, to $65 million. This decrease was driven by an
increase in operating costs.

COMPREHENSIVE INCOME  Continuing Operations

Cash flow hedge activity reported in other comprehensive income from continuing operations included (all amounts after-tax):



|                                                                                                                         |  |                             |     |   |      |   |   
|------------------------------------------------------------------------------------------------------------------------ |  | --------------------------- | --- | - | ---- | - | --
|                                                                                                                         |  | Three Months EndedMarch 31,
|                                                                                                                         |  | 2006                        |     |   | 2005
|Net increase in fair value of commodity hedges held at end of period                                                     |  | $                           | 113 |   |      | $ | 15
|Derivative value net (gains)/losses related to hedged transactions settled during the period and reported in net income: |  |                             |     |   |      |   |   
|Commodities                                                                                                              |  |                             | (3  | ) |      |   | 16
|Financing  interest rate swaps                                                                                          |  |                             | 2   |   |      |   | 4 
|                                                                                                                         |  |                             |     |   |      |   |   
|                                                                                                                         |  |                             | (1  | ) |      |   | 20
|                                                                                                                         |  |                            
|Total effect of cash flow hedges reported in other comprehensive income from continuing operations                       |  | $                           | 112 |   |      | $ | 35
|                                                                                                                         |  |                             |     |   |      |   |   

TXU Corp. has historically used, and expects to continue to use, derivative instruments that are
effective in offsetting future cash flow variability in interest rates and energy commodity prices. The amounts included in accumulated other comprehensive income are expected to offset the impact of rate or price changes on forecasted transactions.
Amounts in accumulated other comprehensive income include (i) the value of open cash flow hedges (for the effective portion), based on current market conditions, and (ii) the value of dedesignated and terminated cash flow hedges at the
time of such dedesignation, less amortization, unless the hedged transactions become probable of not occurring. The effects of the hedge will be recorded in the statement of income as the hedged transactions are actually settled and affect earnings.

See Note 8 to Financial Statements.



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FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows  Cash flows provided by operating
activities for the three months ended March 31, 2006 totaled $1.0 billion for an increase of $849 million over the first quarter of 2005. The improvement reflected higher earnings (taking into account the noncash items identified in the
statement of cash flows) as well as the following:



| |  |  | $114 million of gas purchases in 2005 in connection with natural gas physical swap transactions (largely all of which was received back from counterparties later in 2005);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $95 million in higher accounts payable payments in 2005 due to increased purchased power accounts payable at year end 2004 related largely to unusually cold weather;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the 2005 settlement of the consolidated amended securities class action lawsuit, net of insurance recoveries, of $84 million; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | federal income tax payments in 2005 related to 2004 of $41 million, with no such tax payments in the current period.
| | - |  | --------------------------------------------------------------------------------------------------------------------

Cash flows used in financing activities totaled $561 million in 2006 compared to cash flows provided by financing activities of $44 million in 2005. The
activity reflected:



| |  |  | net issuances and repayments of borrowings resulting in cash inflows of $139 million in 2006 and $181 million in 2005;
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | net repurchases and issuances of common stock used funds totaling $506 million in 2006 and provided funds totaling $2 million in 2005;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | common stock dividends paid totaling $194 million in 2006 and $134 million in 2005; and
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | preference stock dividends paid totaling $5 million in 2005.
| | - |  | ------------------------------------------------------------

Cash flows used in investing activities totaled $504 million in 2006 compared to $248 million in 2005. The activity reflected:



| |  |  | capital expenditures, including nuclear fuel, totaling $323 million in 2006 and $249 million in 2005. The increase in capital expenditures in 2006 reflects investment in systems to
automate distribution system metering and transmission projects to relieve congestion;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | deposit into a trust of $99 million of funds restricted for funding of generation pollution control expenditures; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | payment of $69 million to purchase the owner participant interest in a trust established to lease combustion turbines to TXU Energy Holdings.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

Depreciation and amortization expense reported in the statement of cash flows exceeds the amount reported in the statement of income by $15 million for
2006. This difference represents amortization of nuclear fuel, which is reported as fuel cost in the statement of income consistent with industry practice.



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Investments in Future Power Generation  In April 2006, TXU Corp. announced a plan to
invest up to $10 billion in power generation assets to provide lower-cost, secure and stable power in Texas and to reduce emissions from its generation fleet. This plan includes constructing 11 new generation units at nine existing sites. Air permit
applications were filed with the TCEQ for eight of these units, totaling 6,400 megawatts (MW) of net capacity. These new units will be located at existing power plant sites. If approved, the new units are expected to be operational by 2010. The plan
includes two units comprising a new plant at the Oak Grove site and a new unit at the existing Sandow plant, both previously disclosed. These units are expected to be operational by 2009, adding 2,200 MW of net capacity. Further, TXU Corp. is
launching a renewable energy initiative involving investment in power facilities that is expected to double its renewable energy portfolio to 1,400 MW by 2011.

The plan includes up to $2 billion for the best available control technology to control emissions from the 11 new units, and $500 million for retrofits of existing equipment and other actions to voluntarily reduce
emissions. Overall, the actions are expected to result in a 20% reduction in mercury, sulfur dioxide and nitrogen oxide emissions from TXU Corp.s coal/lignite-fired generation fleet, including the 11 new units, from current levels.

In an initiative separate from but related to the planned generation development and emissions control investment spending, TXU Corp. expects to
invest up to $2 billion for the development and commercialization of cleaner power plant technology, including integrated gasification combined cycle technology that is based on coal gasification.

TXU Corp. is currently evaluating multiple financing strategies to fund these capital investments.

Long-term Debt Activity During the three months ended March 31, 2006, TXU Corp. issued, reacquired, or made scheduled
principal payments on long-term debt as follows (all amounts presented are principal):



|                                |  |           |     |             |   |    
|------------------------------- |  | --------- | --- | ----------- | - | ---
|                                |  | Issuances |     | Retirements
|TXU Corp.:                      |  |           |     |             |   |    
|Long-term debt                  |  | $         |    |             | $ | 5  
|                                |  |          
|TXU Energy Holdings:            |  |           |     |             |   |    
|Pollution control revenue bonds |  |           | 100 |             |   |   
|Floating rate debt              |  |           |    |             |   | 400
|                                |  |          
|TXU Electric Delivery:          |  |           |     |             |   |    
|Transition bonds                |  |           |    |             |   | 21 
|                                |  |          
|US Holdings:                    |  |           |     |             |   |    
|Long-term debt                  |  |           |    |             |   | 8  
|                                |  |           |     |             |   |    
|Total                           |  | $         | 100 |             | $ | 434
|                                |  |           |     |             |   |    

See Note 3 to Financial Statements for further detail of debt issuances and retirements and
financing arrangements.

In May 2006, TXU Energy Holdings repurchased all of the Brazos River Authority Pollution Control Revenue
(Refunding) Bonds Series 1994B and 1995A, in an aggregate principal amount of $89 million, at a price of 100% of the principal amount thereof, upon the scheduled mandatory tender date for these series. TXU Energy Holdings currently plans to remarket
the bonds in the future.



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Credit Facilities At May 2, 2006, TXU Corp. had access to credit
facilities totaling $5.0 billion of which $3.6 billion was unused. The facilities expire on various dates between June 2008 and June 2010. TXU Energy Holdings and TXU Electric Delivery can directly access under the facilities $5.0 billion and $3.6
billion, respectively. These credit facilities are used for working capital and general corporate purposes. See Note 3 to Financial Statements for details of the arrangements.

Short-term BorrowingsAt May 2, 2006, TXU Corp. had $1.5 billion of commercial paper outstanding and $495 million of
bank borrowings under the credit facilities. The commercial paper funds short-term liquidity requirements.

Common Stock RepurchaseIn November 2005, the TXU Corp. board of directors authorized the repurchase of up to 34 million shares of common stock through the end of 2006. As of May 3, 2006, 26 million of the 34 million shares
authorized have been repurchased.

Sale of Receivables  TXU Corp. has had an accounts receivable securitization program
in place for a number of years. The activity under this program is accounted for as a sale of accounts receivable in accordance with SFAS 140. Under the program, subsidiaries of TXU Corp. (originators) sell trade accounts receivable to TXU
Receivables Company, a consolidated wholly-owned bankruptcy remote direct subsidiary of TXU Corp., which sells undivided interests in the purchased accounts receivable for cash to special purpose entities established by financial institutions.
Effective June 2005, the program was extended until June 2008. All new trade receivables under the program generated by the originators are continuously purchased by TXU Receivables Company with the proceeds from collections of receivables
previously purchased. Funding under the program at March 31, 2006 and December 31, 2005 totaled $680 million and $671 million, respectively. See Note 3 to Financial Statements for a more complete description of the program including the
impact on the financial statements for the periods presented and the contingencies that could result in termination of the program.

Commodity Price Risk Management Program  As discussed in Quantitative and Qualitative Disclosure about Market Risk below, TXU Corp. has been supplementing its hedging and risk management portfolio with market
instruments that are expected to reduce exposure to changes in natural gas prices for the period from 2006 to 2011. This long-term hedging program could result in an increased demand on liquidity due to the potential need to post collateral with
commodity contract counterparties in the event natural gas prices increase. Such collateral can be in the form of cash or letters of credit. As part of its ongoing credit and cash management practices, TXU Corp. seeks to optimize the deployment of
cash and/or letters of credit in managing this program. For each $1.00 per MMBtu increase in natural gas prices and assuming all the transactions in the program relied on cash-based collateral, TXU Corp. could be required to post up to $625 to $675
million in additional cash collateral.

Commodity Contract Collateral Received  TXU Energy Holdings has the contractual
right, but not the obligation, to request collateral from certain counterparties based on the value of the contract and the credit worthiness of the counterparty. This collateral is typically held by TXU Energy Holdings in the form of cash or
letters of credit. Collateral received in cash is used for working capital and other corporate purposes, including reducing short-term borrowings under its credit facilities. As of March 31, 2006, TXU Energy Holdings held collateral from
counterparties in the form of cash of $104 million. Counterparties may elect to convert the cash collateral to letters of credit at their discretion.

Financial Covenants, Credit Rating Provisions and Cross Default Provisions  The terms of certain financing arrangements of subsidiaries of TXU Corp. contain financial covenants that require
maintenance of specified fixed charge coverage ratios and leverage ratios and/or contain minimum net worth covenants. As of March 31, 2006, TXU Corp. was in compliance with all such applicable covenants.



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Credit Ratings Current credit ratings for TXU Corp. and certain of its subsidiaries
are presented below:



|        |  |                    |  |                    |  |                      |  |                   
|------- |  | ------------------ |  | ------------------ |  | -------------------- |  | ------------------
|        |  | TXU Corp.          |  | US Holdings        |  | TXU ElectricDelivery |  | TXU EnergyHoldings
|        |  | (Senior Unsecured) |  | (Senior Unsecured) |  | (Senior Unsecured)   |  | (Senior Unsecured)
|S&P     |  | BB+                |  | BB+                |  | BBB-                 |  | BBB-              
|Moodys |  | Ba1                |  | Baa3               |  | Baa2                 |  | Baa2              
|Fitch   |  | BBB-               |  | BBB-               |  | BBB+                 |  | BBB               

Both S&P and Moodys currently maintain a stable outlook for TXU Corp., US Holdings, TXU
Energy Holdings and TXU Electric Delivery. Fitchs outlook is negative for TXU Corp., US Holdings and TXU Energy Holdings and stable for TXU Electric Delivery. These ratings are investment grade, except for Moodys and S&Ps
rating of TXU Corp.s senior unsecured debt and S&Ps rating of US Holdings senior unsecured debt, which are one notch below investment grade.

Commercial paper issued by TXU Energy Holdings and TXU Electric Delivery has been rated P2 by Moodys and F2 by Fitch and has not been rated by S&P.

A rating reflects only the view of a rating agency, and is not a recommendation to buy, sell or hold securities. Any rating can be revised upward or
downward at any time by a rating agency if such rating agency decides that circumstances warrant such a change.

Material Credit Rating Covenants

TXU Energy Holdings has provided a guarantee of the obligations under TXU Corp.s lease of its headquarters building. In the
event of a downgrade of TXU Energy Holdings credit rating to below investment grade, a letter of credit of approximately $104 million at March 31, 2006 would need to be provided within 30 days of any such rating decline.

Under the terms of a rail car lease with $52 million in remaining lease payments (principal amount as of March 31, 2006), if TXU Energy
Holdings credit rating were downgraded to below investment grade by any specified rating agency, TXU Energy Holdings could be required to sell the interest in the lease, assign the lease to a new obligor that is investment grade, post a letter
of credit or defease the lease.

TXU Energy Holdings has entered into certain commodity contracts that in some instances give the other
party the right, but not the obligation, to request TXU Energy Holdings to post collateral in the event that its credit rating falls below investment grade. Based on its commodity contract positions at March 31, 2006, in the event TXU Energy
Holdings were downgraded to one level below investment grade by specified rating agencies, counterparties would have the option, based on reduced credit thresholds, to request TXU Energy Holdings to post $137 million in additional collateral
requirements. Should TXU Energy Holdings be downgraded two levels below investment grade, counterparties would have the option to request additional collateral of up to approximately $43 million. The amount TXU Energy Holdings could be required to
post under these transactions depends in part on the value of the contracts at the time of any downgrade.

ERCOT also has rules in place to
assure adequate credit worthiness for parties that schedule power on the ERCOT System. Under those rules, if TXU Energy Holdings credit rating were downgraded to below investment grade by any specified rating agency, TXU Energy Holdings could
be required to post collateral of approximately $2 million as of March 31, 2006.

Other arrangements of TXU Corp., including credit
facilities and certain leases, contain terms pursuant to which the interest rates charged under the agreements may be adjusted depending on credit ratings.



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##### Table of Contents

Material Cross Default Provisions

Certain financing arrangements contain provisions that would result in an event of default if there were a failure under other financing arrangements to
meet payment terms or to observe other covenants that would result in an acceleration of payments due. Such provisions are referred to as cross default provisions.

A default by TXU Energy Holdings or TXU Electric Delivery or any subsidiary thereof in respect of indebtedness in a principal amount in excess of $50
million would result in a cross default under joint credit facilities totaling $4.5 billion. Under these credit facilities, a default by TXU Energy Holdings or any subsidiary thereof would cause the maturity of outstanding balances under such
facility to be accelerated as to TXU Energy Holdings but not as to TXU Electric Delivery. Also, under these credit facilities, a default by TXU Electric Delivery or any subsidiary thereof would cause the maturity of outstanding balances under such
facility to be accelerated as to TXU Electric Delivery but not as to TXU Energy Holdings.

The accounts receivable securitization program
also contains a cross default provision with a threshold of $50 million applicable to each of the originators under the program. TXU Receivables Company and TXU Business Services Company each have a cross default threshold of $50 thousand. If either
an originator, TXU Business Services or TXU Receivables Company defaults on indebtedness of the applicable threshold, the facility could terminate.

TXU Corp. enters into energy-related and financial contracts, the master forms of which contain provisions whereby an event of default or acceleration of settlement would occur if TXU Corp. were to default under an obligation in respect of
borrowings in excess of thresholds, which vary, stated in the contracts.

Other arrangements, including leases, have cross default
provisions, the triggering of which would not result in a significant effect on liquidity.

Long-term Contractual Obligations and
Commitments  There have been no significant changes in contractual cash obligations of TXU Corp., since December 31, 2005 as disclosed in the 2005 Form 10-K.

OFF BALANCE SHEET ARRANGEMENTS, INCLUDING VARIABLE INTEREST ENTITIES

TXU Corp. has established an
accounts receivable securitization program. See discussion above under Sale of Receivables and in Note 3 to Financial Statements.

Also see Note 6 to Financial Statements regarding guarantees.

COMMITMENTS AND CONTINGENCIES

See Note 6 to Financial Statements for discussion of commitments and contingencies.



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REGULATION AND RATES

As previously disclosed, the discount on the October 2005 price-to-beat rate increase expired, resulting in a 12% increase in the average monthly residential bill effective January 1, 2006.

Between January and April of 2006, TXU Corp. announced the launch of several competitive product service offerings. The offerings contain varying terms
such as guaranteed pricing for fixed contract periods, variable rates indexed to market natural gas rates, time-of-use rates and several renewable power options.

In December 2005, the Commission staff issued an extensive list of questions regarding the price-to-beat rate mechanism, including transition away from the price-to-beat rate on January 1, 2007. TXU Energy
Holdings was instrumental in forming a coalition (the retail market coalition) including almost all of the major REPs in Texas. The retail market coalition drafted and submitted comments to the Commission detailing the public policy and legal
reasons that the price-to-beat rate-setting methodology should remain unchanged through 2006 and then expire as scheduled on January 1, 2007. However, other parties have submitted proposals to the Commission seeking changes to the price-to-beat
rules, and the Chairman of the Commission proposed sweeping reforms to the rule, including a price-to-beat reset effective in December 2006. Although the Commission voted down the proposed price-to-beat reset, a rule proposing changes to the
price-to-beat rule, mandating bill inserts and requiring the incumbent REPs to provide lists of their price-to-beat customers to competitors was published for comment. TXU Energy Holdings and certain members of the retail market coalition oppose
these proposed revisions. Final disposition of the proposed revisions is expected in mid-2006. In addition, certain Texas legislators have asked the Governor to open the Texas Legislatures special session, which commenced on April 17,
2006, to the issue of electricity prices. TXU Corp. is unable to predict the outcome of these issues.

To encourage competition in the
ERCOT region, each incumbent power generation company owning 400 MW or more of installed generating capacity must annually offer to sell at auction entitlements to 15% of the output of its installed generating capacity. Such auction sales cannot be
to an affiliated REP. The obligation of TXU Energy Holdings to sell capacity entitlements at auction was to continue until the earlier of January 1, 2007 or the date the Commission determined that 40% or more of the electric power consumed by
residential and small business customers within the affiliated delivery utility certificated service area before the onset of customer choice is provided by nonaffiliated REPs. These auctions have resulted in TXU Energy Holdings selling power at
prices below wholesale market prices. In October 2005, TXU Energy Holdings filed a petition with the Commission seeking an administrative determination by the Commission that this 40% threshold condition has been achieved. On March 8, 2006, the
Commission approved TXU Energy Holdings petition for the cessation of such capacity auctions.

Transmission Rates In February 2006, TXU Electric Delivery filed an application for an interim update of its wholesale transmission rate. The Commission approved the application at its April 28, 2006 open meeting, and the new rate is effective
immediately. Annualized revenues are expected to increase by approximately $19 million. Approximately $12 million of this increase is recoverable through transmission rates charged to wholesale customers, and the remaining $7 million is recoverable
from REPs through the retail transmission cost recovery factor (TCRF) component of TXU Electric Deliverys delivery rates charged to REPs.

Cities Rate Settlement  As previously disclosed, in January 2006 TXU Electric Delivery agreed with a steering committee representing 108 cities in Texas (Cities) to defer the filing of a system-wide rate case with the
Commission to no later than June 30, 2008 (based on a test year ending December 31, 2007), unless the Cities and TXU Electric Delivery mutually agree that such a filing is unnecessary. TXU Electric Delivery is currently in the process of
extending the benefits of the agreement to 291 nonlitigant cities. Based on the final agreements and assuming the remaining nonlitigant cities participate, expected payments to the cities are now estimated to total approximately $70 million,
including incremental franchise fees.



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This amount will be recognized ratably in earnings over the period from July 2006 through June 2008.
Payments under the agreement are expected to be made until new tariffs are effective, which based upon an assumed June 2008 rate case filing, is projected to be mid-2009. Payments under the agreement will total approximately $17 million in 2006, $30
million in 2007, $16 million in 2008 and $7 million in 2009.

Wholesale Market Design In August 2003, the Commission
adopted a rule that, when implemented, will alter the wholesale market design in ERCOT. The rule requires ERCOT:



| |  |  | to use a stakeholder process to develop a new wholesale market model;
| | - |  | ---------------------------------------------------------------------



| |  |  | to operate a voluntary day-ahead energy market;
| | - |  | -----------------------------------------------



| |  |  | to directly assign all congestion rents to the resources that caused the congestion;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | to use nodal energy prices for resources;
| | - |  | -----------------------------------------



| |  |  | to provide information for energy trading hubs by aggregating nodes;
| | - |  | --------------------------------------------------------------------



| |  |  | to use zonal prices for loads; and
| | - |  | ----------------------------------



| |  |  | to provide congestion revenue rights (but not physical rights).
| | - |  | ---------------------------------------------------------------

The Commission has determined that ERCOT will implement a market design that utilizes nodal pricing for resources and that this market design is to be implemented on or about January 1, 2009. In light of this decision, ERCOT filed a
set of Nodal Protocols for Commission approval that describes the operation of an ERCOT wholesale nodal market design. On March 30, 2006, the Commission approved the Nodal Protocols and set an implementation date of no later than
January 1, 2009. At this time, TXU Corp. is unable to predict the impact of the proposed nodal wholesale market design on its operations.

Summary Although TXU Corp. cannot predict future regulatory or legislative actions or any changes in economic and securities market conditions, no changes are expected in trends or commitments, other than those
discussed in this report, which might significantly alter its basic financial position, results of operations or cash flows.

CHANGES IN ACCOUNTING
STANDARDS

During the period ended March 31, 2006, there were no changes in accounting standards that impacted TXU Corp.



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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk is the risk that TXU
Corp. may experience a loss in value as a result of changes in market conditions affecting commodity prices and interest rates, which TXU Corp. is exposed to in the ordinary course of business. TXU Corp.s exposure to market risk is affected by
a number of factors, including the size, duration and composition of its energy and financial portfolio, as well as the volatility and liquidity of markets. TXU Corp. enters into instruments such as interest rate swaps to manage interest rate risks
related to its indebtedness, as well as exchange traded, over-the-counter contracts and other contractual commitments to manage commodity price risk as part of its wholesale activities.

RISK OVERSIGHT

TXU Corp.s wholesale business manages the market, credit and operational
risk related to commodity prices of the unregulated energy business within limitations established by senior management and in accordance with TXU Corp.s overall risk management policies. Interest rate risks are managed centrally by the
corporate treasury function. Market risks are monitored daily by risk management groups that operate and report independently of the wholesale commercial operations, utilizing industry accepted practices and analytical methodologies. These
techniques measure the risk of change in value of the portfolio of contracts and the hypothetical effect on this value from changes in market conditions and include, but are not limited to, Value at Risk (VaR) methodologies.

TXU Corp. has a corporate risk management organization that is headed by a Chief Risk Officer. The Chief Risk Officer, through his designees, enforces
all applicable risk limits, including the respective policies and procedures to ensure compliance with such limits and evaluates the risks inherent in the various businesses of TXU Corp. and their associated transactions. Key risk control activities
include, but are not limited to, credit review and approval, operational and market risk measurement, validation of transaction capture, portfolio valuation and daily portfolio reporting, including mark-to-market valuation, VaR and other risk
measurement metrics.

COMMODITY PRICE RISK

TXU Corp. is subject to the inherent risks of market fluctuations in the price of electricity, natural gas and other energy-related products marketed or purchased by TXU Corp. TXU Corp. actively manages its portfolio
of owned generation assets, fuel supply and retail sales load to mitigate the near-term impacts of these risks on its results of operations. TXU Corp., similar to other participants in the market, cannot fully manage the long-term value impact of
structural declines or increases in natural gas, power and oil prices and spark spreads (differences between the market price of electricity and its cost of production).

In managing energy price risk, TXU Corp. enters into a variety of market transactions including, but not limited to, short- and long-term physical contracts, exchange traded and over-the-counter financial contracts
and bilateral contracts with customers. TXU Corp.s wholesale operations incorporate hedging activities, the structuring of long-term contractual arrangements and proprietary trading. The operation continuously monitors the valuation of
identified risks and adjusts the portfolio based on current market conditions. Valuation adjustments or reserves are established in recognition that certain risks exist until full delivery of energy has occurred, counterparties have fulfilled their
financial commitments and related contracts have either matured or are closed out. TXU Corp. strives to use consistent assumptions regarding forward market price curves in evaluating and recording the effects of commodity price risk.



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Long-term Hedging Program Under a commodity price risk management program commenced
in October 2005, TXU Corp. has been supplementing its risk management portfolio with natural gas-related financial instruments that are expected to reduce exposure to the effects on power prices of changes in natural gas prices in future years. The
majority of these transactions are being accounted for as cash flow hedges.As of April 2006, TXU Corp. had outstanding forward contracts for the period from 2006 to 2011 representing 642 million MMBtu of natural gas, including a net
608 million MMBtu in instruments that are being accounted for as cash flow hedges of primarily future power sales. The values of the hedge instruments are based on natural gas prices, and power prices do not necessarily move in tandem with
natural gas prices. Given the size of the hedge program and the cross-commodity nature of the hedges, the program may result in greater volatility of net income due to hedge ineffectiveness gains and losses, as well as greater mark-to-market gains
and losses reported in other comprehensive income, than TXU Corp. has experienced in recent years. Based on the current size of the long-term hedging program, a parallel 0.1 (or 1%) change in market heat rate across each year of the program may
cause up to an estimated $60 million to $85 million in cash flow hedge ineffectiveness pretax gains or losses.

VaR
Methodology  A VaR methodology is used to measure the amount of market risk that exists within the portfolio under a variety of market conditions. The resultant VaR produces an estimate of a portfolios potential for loss given a
specified confidence level and considers among other things, market movements utilizing standard statistical techniques given historical and projected market prices and volatilities. Stress testing of market variables is also conducted to simulate
and address abnormal market conditions.

The use of this method requires a number of key assumptions, such as use of (i) an assumed
confidence level; (ii) an assumed holding period (i.e. the time necessary for management action, such as to liquidate positions); and (iii) historical estimates of volatility and correlation data.

VaR for Energy Contracts Subject to Mark-to-Market Accounting  This measurement estimates the potential loss in economic value, due
to changes in market conditions, of all energy-related contracts subject to mark-to-market accounting, based on a specific confidence level and an assumed holding period. Assumptions in determining this VaR include using a 95% confidence level and a
five-day holding period. A probabilistic simulation methodology is used to calculate VaR, and is considered by management to be the most effective way to estimate changes in a portfolios value based on assumed market conditions for liquid
markets.



|                           |  |               |    |                  |   |   
|-------------------------- |  | ------------- | -- | ---------------- | - | --
|                           |  | March 31,2006 |    | December 31,2005
|Period-end MtM VaR:        |  | $             | 9  |                  | $ | 19
|Average Month-end MtM VaR: |  | $             | 10 |                  | $ | 20

Earnings at Risk (EaR) EaR measures the estimated potential reduction of
expected pretax earnings for the year presented due to changes in market conditions. EaR metrics include the owned generation assets, estimates of retail load and all contractual positions except for accrual positions expected to be settled beyond
the fiscal year. Assumptions include using a 95% confidence level over a five-day holding period under normal market conditions. EaR excludes the effect of cash flow hedge ineffectiveness. See discussion above under Long-term Hedging
Program (in this Commodity Price Risk section).



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Cash Flow at Risk (CFaR)  CFaR measures the estimated potential loss of expected cash
flow over the next six months, due to changes in market conditions. CFaR metrics include all owned generation assets, estimates of retail load and all contractual positions that impact cash flow during the next six months. Assumptions include using
a 99% confidence level over a six-month holding period under normal market conditions. CFaR excludes the effect of collateral requirements related to the long-term hedging program. See discussion above under Commodity Price Risk Management
Program (in the Liquidity and Capital Resources section).



|     |  |               |     |                  |   |   
|---- |  | ------------- | --- | ---------------- | - | --
|     |  | March 31,2006 |     | December 31,2005
|EaR  |  | $             | 21  |                  | $ | 32
|CFaR |  | $             | 147 |                  | $ | 71

INTEREST RATE RISK

See Note 3 to Financial Statements for a discussion of debt-related activity since December 31, 2005.

CREDIT RISK

Credit Risk Credit risk relates to the risk of loss associated with nonperformance by counterparties. TXU
Corp. maintains credit risk policies with regard to its counterparties to minimize overall credit risk. These policies require an evaluation of a potential counterpartys financial condition, credit rating and other quantitative and qualitative
credit criteria and specify authorized risk mitigation tools including, but not limited to, use of standardized agreements that allow for netting of positive and negative exposures associated with a single counterparty. TXU Corp. has standardized
documented processes for monitoring and managing its credit exposure including methodologies to analyze counterparties financial strength, measurement of current and potential future credit exposures and standardized contract language that
provides rights for netting and set-off. Credit enhancements such as parental guarantees, letters of credit, surety bonds and margin deposits are also utilized. Additionally, individual counterparties and credit portfolios are managed to preset
limits and stress tested to assess potential credit exposure. This evaluation results in establishing credit limits or collateral requirements prior to entering into an agreement with a counterparty that creates credit exposure to TXU Corp.
Additionally, TXU Corp. has established controls to determine and monitor the appropriateness of these limits on an ongoing basis. Any prospective material adverse change in the payment history or financial condition of a counterparty or downgrade
of its credit quality will result in the reassessment of the credit limit with that counterparty. This process can result in the subsequent reduction of the credit limit or a request for additional financial assurances.

Credit Exposure  TXU Corp.s gross exposure to credit risk related to trade accounts receivable, as well as commodity contract
assets and other derivative assets that arise primarily from hedging and commercial activities, totaled $2 billion at March 31, 2006.

A large share of gross assets subject to credit risk represents accounts receivable from the retail sale of electricity to residential and small business customers. The risk of material loss (after consideration of allowances) from
nonperformance by these customers is unlikely based upon historical experience. Allowances for uncollectible accounts receivable are established for the potential loss from nonpayment by these customers based on historical experience and market or
operational conditions. In addition, TXU Electric Delivery has exposure to credit risk as a result of nonperformance by nonaffiliated REPs.



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Most of the remaining trade accounts receivable is with large business customers and wholesale
counterparties. These counterparties include major energy companies, financial institutions, electric utilities, independent power producers, oil and gas producers, local distribution companies and energy trading and marketing companies. The
exposure to credit risk from these customers and counterparties, excluding credit collateral, as of March 31, 2006, is $1.5 billion net of standardized master netting contracts and agreements that provide the right of set-off of positive and
negative credit exposures with individual customers and counterparties. When considering collateral currently held by TXU Corp. (cash, letters of credit and other security interests), the net credit exposure is $1.2 billion. Of this amount, 84% of
the associated exposure is with investment grade customers and counterparties, as determined using publicly available information including major rating agencies published ratings and TXU Corp.s internal credit evaluation process. Those
customers and counterparties without an S&P rating of at least BBB- or similar rating from another major rating agency are rated using internal credit methodologies and credit scoring models to estimate an S&P equivalent rating. TXU Corp.
routinely monitors and manages its credit exposure to these customers and counterparties on this basis.

TXU Corp. is also exposed to
credit risk related to the Capgemini put option with a carrying value of $177 million. Subject to certain terms and conditions, Cap Gemini North America, Inc. and its parent, Cap Gemini S.A., have guaranteed the performance and payment obligations
of Capgemini under the services agreements with TXU Energy Holdings and TXU Electric Delivery, as well as the payment in connection with a put option. S&P currently maintains a BB+ rating with a stable outlook for Cap Gemini S.A.

The following table presents the distribution of credit exposure as of March 31, 2006, for trade accounts receivable from large business customers,
commodity contract assets and other derivative assets that arise primarily from hedging and commercial activities, by investment grade and noninvestment grade, credit quality and maturity.



|                    |  |                                |       |   |                  |   |     |             |  |   |                          |   |                   |   |                    |  |       |     |  |   |     |  |   |      
|------------------- |  | ------------------------------ | ----- | - | ---------------- | - | --- | ----------- |  | - | ------------------------ | - | ----------------- | - | ------------------ |  | ----- | --- |  | - | --- |  | - | -----
|                    |  |                                |       |   |                  |   |     |             |  |   | Net Exposure by Maturity
|                    |  | ExposurebeforeCreditCollateral |       |   | CreditCollateral |   |     | NetExposure |  |   | 2 years orless           |   | Between 2-5 years |   | Greaterthan 5years |  | Total
|Investment grade    |  | $                              | 1,186 |   |                  | $ | 201 |             |  | $ | 985                      |   |                   | $ | 685                |  | $     | 134 |  | $ | 166 |  | $ | 985  
|Noninvestment grade |  |                                | 280   |   |                  |   | 89  |             |  |   | 191                      |   |                   |   | 168                |  |       | 17  |  |   | 6   |  |   | 191  
|                    |  |                                |       |   |                  |   |     |             |  |   |                          |   |                   |   |                    |  |       |     |  |   |     |  |   |      
|Totals              |  | $                              | 1,466 |   |                  | $ | 290 |             |  | $ | 1,176                    |   |                   | $ | 853                |  | $     | 151 |  | $ | 172 |  | $ | 1,176
|                    |  |                                |       |   |                  |   |     |             |  |   |                          |   |                   |   |                    |  |       |     |  |   |     |  |   |      
|Investment grade    |  |                                | 81    | % |                  |   | 69  | %           |  |   | 84                       | % |                   |   |                    |  |       |     |  |   |     |  |   |      
|Noninvestment grade |  |                                | 19    | % |                  |   | 31  | %           |  |   | 16                       | % |                   |   |                    |  |       |     |  |   |     |  |   |      

TXU Corp. is exposed to credit risk related to its long-term hedging program. Of the transactions
in the hedge program, over 90% of the volumes are with counterparties with an A credit rating or better, with the remainder at least investment grade.

TXU Corp. had credit exposure to one counterparty having an exposure greater than 10% of the net exposure of $1.2 billion at March 31, 2006. This counterparty represented 12% of the net exposure. TXU Corp. views
its exposure with this counterparty to be within an acceptable level of risk tolerance. Additionally, approximately 73% of the credit exposure, net of collateral held, has a maturity date of two years or less. TXU Corp. does not anticipate any
material adverse effect on its financial position or results of operations due to nonperformance by any customer or counterparty.



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FORWARD-LOOKING STATEMENTS

This report and other presentations made by TXU Corp. contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, that are included in this report, or made in presentations, in response to questions or otherwise, that address activities, events or developments that TXU Corp. expects or anticipates to occur in the future,
including such matters as projections, capital allocation and cash distribution policy, future capital expenditures, business strategy, competitive strengths, goals, future acquisitions or dispositions, development or operation of power production
assets, market and industry developments and the growth of TXU Corp.s business and operations (often, but not always, through the use of words or phrases such as will likely result, are expected to, will
continue, is anticipated, estimated, projection, target, outlook), are forward-looking statements. Although TXU Corp. believes that in making any such forward-looking statement its
expectations are based on reasonable assumptions, any such forward-looking statement involves uncertainties and is qualified in its entirety by reference to the discussion of risk factors discussed under Risk Factors and the following
important factors, among others, that could cause the actual results of TXU Corp. to differ materially from those projected in such forward-looking statements:



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



| |  |  | allowed prices;
| | - |  | ---------------



| |  |  | allowed rates of return;
| | - |  | ------------------------



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



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



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



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



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



| |  |  | decommissioning costs;
| | - |  | ----------------------



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



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



| |  |  | changes in and compliance with environmental and safety laws and policies;
| | - |  | --------------------------------------------------------------------------



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



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



| |  |  | general industry trends;
| | - |  | ------------------------



| |  |  | TXU Corp.s ability to attract and retain profitable customers;
| | - |  | ---------------------------------------------------------------



| |  |  | delays in implementing any future price-to-beat fuel factor adjustments;
| | - |  | ------------------------------------------------------------------------



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



| |  |  | with respect to TXU Corp.s new publicly announced lignite/coal generation capacity development program, more specifically, TXU Corp.s ability to fund such investments,
delays in approval of, or failure to obtain, air and other environmental permits, changes in competitive market rules, changes in environmental laws or regulations, changes in electric generation and emissions control technologies, changes in
projected demand for electricity in Texas, the ability of TXU Corp. to attract and retain skilled labor for planning and constructing new generating units, changes in wholesale electricity prices or energy commodity prices, changes in the cost and
availability of materials necessary for the construction program and the ability of TXU Corp. to manage the significant construction program to a timely conclusion with limited cost overruns.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Any forward-looking statement speaks only as of the date on which it is made, and TXU Corp. undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for TXU Corp. to predict all of them; nor can TXU
Corp. assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.

Item 4. CONTROLS AND PROCEDURES.

An evaluation was performed under the supervision and with the
participation of TXU Corp.s management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of the disclosure controls and procedures in effect as of the end of the
current period included in this quarterly report. Based on the evaluation performed, TXU Corp.s management, including the principal executive officer and principal financial officer, concluded that the disclosure controls and procedures were
effective. During the most recent fiscal quarter covered by this quarterly report, there has been no change in TXU Corp.s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, TXU
Corp.s internal control over financial reporting.



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PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

Reference is made to the discussion in Note 6 regarding legal proceedings.

Item 1A. RISK FACTORS.

Other than risk factors presented below, there have been no material changes from
the risk factors disclosed under the heading Risk Factors in Item 1A of the 2005 Form 10-K. The risk factors below update, and should be read in conjunction with, the risk factors disclosed in the 2005 Form 10-K.

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

TXU Corp.s businesses operate in changing market environments influenced by various state
and federal legislative and regulatory initiatives regarding the restructuring of the energy industry, including the deregulation of the production and sale of electricity. TXU Corp. will need to adapt to these changes. For example, the Texas
electricity market was deregulated as of January 1, 2002, and competition has resulted in, and may continue to result in, declines in customer counts and sales volumes.

TXU Corp.s businesses are subject to changes in laws (including PURA, the Federal Power Act, the Atomic Energy Act, the Public Utility Regulatory
Policies Act of 1978, the Clean Air Act and the Energy Policy Act of 2005) and changing governmental policy and regulatory actions (including those of the Commission, the Texas Railroad Commission, the TCEQ, the FERC, the EPA and the NRC) with
respect to matters including, but not limited to, market structure and design, operation of nuclear power facilities, construction and operation of other power generation facilities, construction and operation of transmission facilities,
acquisition, disposal, depreciation and amortization of regulated assets and facilities, recovery of costs and investments, decommissioning costs, and return on invested capital for TXU Corp.s regulated businesses, and present or prospective
wholesale and retail competition. Changes in, revisions to or reinterpretations of existing laws and regulations (particularly with respect to prices at which TXU Corp. may sell power), together with new laws and regulations, may have an adverse
effect on TXU Corp.s businesses.

TXU Energy Holdings, along with other market participants, is subject to electricity pricing
constraints and market behavior and other competition-related rules and regulations under PURA that are administered by the Commission.

TXU
Corp.s revenues and results of operations may be negatively impacted by decreases in market prices for power, decreases in commodity prices, such as natural gas, and decreases in market heat rates.

TXU Corp. is not guaranteed any rate of return on its capital investments in competitive businesses. TXU Corp. markets and trades power and gas, including
power from its own production facilities, as part of its wholesale markets management operation. TXU Corp.s results of operations are likely to depend in large part upon market prices for electricity, gas, lignite and coal in its regional
market and other competitive markets and upon prevailing retail rates, which are set in part by regulatory authorities. Market prices may fluctuate substantially over relatively short periods of time. Demand for electricity can fluctuate
dramatically, creating periods of substantial under- or over-supply. During periods of over-supply, prices might be depressed. Also, at times there may be political pressure, or pressure from regulatory authorities with jurisdiction over wholesale
and retail energy commodity and transportation rates, to impose price limitations, bidding rules and other mechanisms to address volatility and other issues in these markets. As a result of Hurricane Katrina, such pressures in September and October
of 2005 played a role in TXU Energy Holdings decision to moderate the implementation of a price increase in November and December 2005 and to voluntarily not raise its price-to-beat rate from January 1, 2006 through April 1, 2006.



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Some of the fuel for TXU Corp.s power production facilities is purchased under short-term contracts
or on the spot market. Prices of fuel, including natural gas, may also be volatile, and the price TXU Corp. can obtain for power sales may not change at the same rate as changes in fuel costs. In addition, TXU Corp. purchases and sells natural gas
and other energy related commodities, and volatility in these markets may affect TXU Corp.s costs incurred in meeting its obligations.

Volatility in market prices for fuel and electricity may result from the following:



| |  |  | 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,
| | - |  | ----------------------------------------------------



| |  |  | changes in power production generation and market heat rates,
| | - |  | -------------------------------------------------------------



| |  |  | outages at TXU Corp.s power generation facilities or those of its competitors,
| | - |  | -------------------------------------------------------------------------------



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



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



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

All of TXU Corp.s facilities for power production are located in the ERCOT region, a market with limited interconnections to other markets.
Wholesale electricity prices in the ERCOT market generally move with the price of natural gas because marginal demand is generally supplied by gas-fired generation plants. Wholesale electricity prices also move with market heat rates, which could
fall if power prices fall relative to natural gas prices or if excess generation facilities are built in ERCOT. Accordingly, the contribution to earnings and the value of TXU Corp.s baseload (lignite/coal and nuclear) power production, which
provided a substantial portion of TXU Corp.s supply volumes in 2005, is dependent in significant part upon the price of natural gas and market heat rates. As a result, TXU Corp.s baseload power production could significantly decrease in
value if natural gas prices fall or if market heat rates fall.

TXU Corp.s growth strategy, including its investment in lignite/coal generation
facilities, may not be executed as planned which could adversely impact its financial condition and results of operations.

There can be
no guarantee that the execution of TXU Corp.s growth strategy will be successful. As discussed below, TXU Corps growth strategy is dependent upon many factors. Unanticipated changes in laws, regulations, markets, costs or other factors
could negatively impact the execution of TXU Corp.s growth strategy, including causing management to change the strategy. Even if TXU Corp. is able to execute its growth strategy, it may take longer than expected at costs higher than expected.

With respect to TXU Corp.s generation capacity development (new build) program, there can be no guarantee that the execution of such
program will be successful. While TXU Corp. has vast experience in operating lignite/coal generation facilities, TXU Corp. has limited experience in developing such facilities. To the extent construction is not managed efficiently and to a timely
conclusion, cost overruns may occur resulting in the overall program costing significantly more than anticipated. While TXU Corp. believes it can acquire the resources needed to effectively execute its new development program, TXU Corp. is exposed
to the risk that it may not be able to attract and retain skilled labor for developing and constructing the new lignite/coal generation facilities.



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TXU Corp.s new build program is subject to changes in laws, regulations and policies that are
beyond TXU Corp.s control. TXU Corp. may not be able to obtain in a timely manner, if at all, all of the permits necessary to develop and operate these new facilities. Also, any unanticipated change in law, regulation or policy regarding
commodity prices, power prices, electric competition or lignite/coal generation facilities or other related matters could adversely impact TXU Corp.s new build program. As a result of recent natural disasters, such as Hurricane Katrina, global
warming has received significant media attention. Any unanticipated change in environmental law, regulation or policy, such as regulations of emissions of carbon dioxide, if not implemented in a manner that focuses on technology, incentives and a
functioning wholesale market, could adversely impact TXU Corp.s new build program.

TXU Corp.s new build program is subject to
changes in the Texas electricity market, primarily ERCOT, that are beyond TXU Corp.s control. If demand growth in Texas is less than expected or if other generation companies build new generation assets in Texas, TXU Corp.s new build
program could impact market prices of power such that the new generation capacity becomes uneconomic. In addition, any unanticipated reduction in wholesale electricity prices, market heat rates and natural gas prices, which could occur for a variety
of reasons, could adversely impact TXU Corp.s new build program. Even if TXU Corp. enters into hedges to reduce such exposures, TXU Corp. would still be subject to the credit risk of its counterparties.

TXU Corp.s new build program is subject to other risks that are beyond TXU Corp.s control. For example, TXU Corp. is exposed to the risk that
a change in technology for electric generation facilities and/or emissions control technologies may make other generation facilities less costly and more attractive than TXU Corp.s new lignite/coal facilities. TXU Corp. is also exposed to
changes in the cost and availability of materials necessary for the development and construction of the new facilities. TXU Corp. is also exposed to the risk that its contractors may default on their obligations to TXU Corp. and damages received, if
any, will not cover TXU Corp.s losses. In addition, TXU Corp. could be subject to capital markets and bank markets risk, including unanticipated changes in interest rates and lack of capacity, as it proceeds with financing the program.

With respect to TXU Corp.s capital deployment program for its electric delivery facilities, there can be no guarantee that the
execution of such program will be successful. There can be no assurance that the capital investments TXU Corp. intends to make in connection with its electric delivery business will produce the desired reductions in cost and improvements to service
and reliability.

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

The implementation of performance improvement initiatives identified by management may not produce the desired
reduction in costs and may result in disruptions arising from employee displacements and the rapid pace of changes to organizational structure and operating practices and processes. Specifically, TXU Corp. is subject to the risk that the joint
venture outsourcing arrangement with Capgemini or other comparable arrangements may not produce the desired cost savings. Should TXU Corp. wish to terminate or modify the arrangements with Capgemini or other providers as a result of cost or quality
issues, or if Capgemini or those other providers become financially unable to perform their obligations, TXU Corp. would incur transition costs, which would likely be significant, to switch to another vendor.



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Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY
SECURITIES



|                                     |  |                                  |  |                             |       |                                                                             |            |                                                                                |           
|------------------------------------ |  | -------------------------------- |  | --------------------------- | ----- | --------------------------------------------------------------------------- | ---------- | ------------------------------------------------------------------------------ | ----------
|Period                               |  | Total Number of Shares Purchased |  | Average PricePaid per Share |       | Total Number ofShares Purchasedas Part ofPubliclyAnnounced Plansor Programs |            | MaximumNumber
ofShares That MayYet be PurchasedUnder the Plans or Programs (a)
|January 1, 2006  January 31, 2006   |  |                                 |  | $                           |      |                                                                             |           |                                                                                |          
|February 1, 2006  February 28, 2006 |  | 8,097,526                        |  |                             | 50.31 |                                                                             | 8,097,526  |                                                                                |          
|March 1, 2006  March 31, 2006       |  | 2,010,100                        |  |                             | 49.75 |                                                                             | 2,010,100  |                                                                                |          
|                                     |  |                                  |  |                             |       |                                                                             |            |                                                                                |           
|Total                                |  | 10,107,626                       |  | $                           | 50.20 |                                                                             | 10,107,626 |                                                                                | 11,892,374
|                                     |  |                                  |  |                             |       |                                                                             |            |                                                                                |           

---

|(a) | As of May 3, 2006, TXU Corp. has purchased an additional 4,239,589 shares at an average price of $47.25 per share. All of these share purchases were under a November 2005
authorization by TXU Corp.s board of directors for the purchase of up to 34 million shares between November 2005 and year end 2006. The maximum number of shares that may yet be repurchased under the board authorization is 7,652,785
shares.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Item 6. Exhibits

(a) Exhibits filed or furnished as part of Part II are:



|         |  |                                                     |  |           |  |   |  |                                                                                                                                                  
|-------- |  | --------------------------------------------------- |  | --------- |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  | Previously FiledWith FileNumber*                    |  | AsExhibit |  |   |  |                                                                                                                                                  
|(10)     |  | Material Contracts                                  |  |           |  |   |  |                                                                                                                                                  
|         |  |                                                     |  |          
|10(a)    |  |                                                     |  |           |  |  |  | Election of David P. Poole as Executive Vice President and General Counsel of TXU Corp.                                                          
|         |  |                                                     |  |          
|10(b)    |  |                                                     |  |           |  |  |  | Employment Agreement of David P. Poole, Executive Vice President and General Counsel of TXU Corp.                                                
|         |  |                                                     |  |          
|10(c)    |  | 1-12833 Form 8-K (filed April 6, 2006)              |  | 10.1      |  |  |  | Form of Non-Disclosure, Non-Solicitation and Non-Competition Agreement entered into between TXU Corp. and certain executive officers of TXU Corp.
|         |  |                                                     |  |          
|10(d)    |  | 1-12833 Form 8-K (filed February 22, 2006)          |  | 10.1      |  |  |  | TXU Salary Deferral Program, as amended and restated, dated February 16, 2006.                                                                   
|         |  |                                                     |  |          
|10(e)    |  | 1-12833 Form 8-K (filed February 22, 2006)          |  | 10.2      |  |  |  | TXU Deferred and Incentive Compensation Plan, as amended and restated, dated February 16, 2006.                                                  
|         |  |                                                     |  |          
|10(f)    |  | 1-12833 Form 8-K (filed February 22, 2006)          |  | 10.3      |  |  |  | TXU Deferred Compensation Plan for Outside Directors, as amended and restated, dated February 16, 2006.                                          
|         |  |                                                     |  |          
|10(g)    |  | 1-12833 Form 8-K (filed February 22, 2006)          |  | 10.4      |  |  |  | TXU Deferred Compensation Plan for Directors of Subsidiaries, as amended and restated, dated February 16, 2006.                                  
|         |  |                                                     |  |          
|10(h)    |  | 1-12833 Form 8-K (filed February 22, 2006)          |  | 10.5      |  |  |  | TXU Second Supplemental Retirement Plan, as amended and restated, dated February 16, 2006.                                                       
|         |  |                                                     |  |          
|10(i)    |  | 1-12833 Form 8-K (filed February 22, 2006)          |  | 10.6      |  |  |  | Determination of the Organization and Compensation Committee of the Board of Directors of TXU Corp., dated February 15, 2006.                    
|         | 
|(15)     |  | Letter re: Unaudited Interim Financial Information.
|         |  |                                                     |  |          
|15       |  |                                                     |  |           |  |  |  | Letter from independent registered public accounting firm as to unaudited interim financial information.                                         



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##### Table of Contents

|         |  |                                              |  |           |  |   |  |                                                                                                                                                                                                                                                                     
|-------- |  | -------------------------------------------- |  | --------- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  | Previously Filed With File Number*           |  | AsExhibit |  |   |  |                                                                                                                                                                                                                                                                     
|(31)     |  | Rule 13a  14(a)/15d  14(a) Certifications. |  |          
|         |  |                                              |  |          
|31(a)    |  |                                              |  |           |  |  |  | Certification of C. John Wilder, President and Chief Executive of TXU Corp., pursuant to Rule 13a-14(a)/15d  14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.                                   
|         |  |                                              |  |          
|31(b)    |  |                                              |  |           |  |  |  | Certification of David A. Campbell, Executive Vice President and Acting Chief Financial Officer of TXU Corp., pursuant to Rule 13a  14(a)/15d  14(a) of the Securities Exchange Act of
1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|         |  |                                              |  |          
|(32)     |  | Section 1350 Certifications.                 |  |           |  |   |  |                                                                                                                                                                                                                                                                     
|32(a)    |  |                                              |  |           |  |  |  | Certification of C. John Wilder, President and Chief Executive of TXU Corp., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.                                                                              
|         |  |                                              |  |          
|32(b)    |  |                                              |  |           |  |  |  | Certification of David A. Campbell, Executive Vice President and Acting Chief Financial Officer of TXU Corp., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.                                             
|         |  |                                              |  |          
|(99)     |  | Additional Exhibits.                         |  |           |  |   |  |                                                                                                                                                                                                                                                                     
|         |  |                                              |  |          
|99       |  |                                              |  |           |  |  |  | Condensed Statements of Consolidated Income  Twelve Months Ended March 31, 2006.                                                                                                                                                                                   

---

|* | Incorporated here by reference.
|- | -------------------------------



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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



TXU CORP.By

/s/ Stan SzlauderbachStan Szlauderbach Senior Vice President and Controller


Date: May 5, 2006



66