<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                              ---------------------


                                    FORM 10-Q

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


                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

                                    -- OR --

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

                              ---------------------

                         Commission File Number 1-12833

                                    TXU Corp.

          A Texas Corporation              I.R.S. Employer Identification
                                                No. 75-2669310


            ENERGY PLAZA, 1601 BRYAN STREET, DALLAS, TEXAS 75201-3411
                                 (214) 812-4600

                              ---------------------


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
                                      ---    ---


Common Stock outstanding at May 8, 2002: 266,298,078 shares, without par value.

================================================================================

<PAGE>

TABLE OF CONTENTS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION                                                                   PAGE
                                                                                                ----

<S>                                                                                          <C>
     Item 1. Financial Statements

          Condensed Statements of Consolidated Income -
          Three Months Ended March 31, 2002 and 2001 .....................................    1

          Condensed Statements of Consolidated Comprehensive Income -
          Three Months Ended March 31, 2002 and 2001 .....................................    2

          Condensed Statements of Consolidated Cash Flows -
          Three Months Ended March 31, 2002 and 2001 .....................................    3

          Condensed Consolidated Balance Sheets -
          March 31, 2002 and December 31, 2001 ...........................................    4

          Notes to Financial Statements ..................................................    5

          Independent Accountants' Report ................................................   16

     Item 2.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations ..................................................   17

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk .................   31

PART II. OTHER INFORMATION

     Item 6.  Exhibits and Reports on Form 8-K ...........................................   32

SIGNATURE ................................................................................   33
</TABLE>

                                       (i)

<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                           TXU CORP. AND SUBSIDIARIES
                   CONDENSED STATEMENTS OF CONSOLIDATED INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                      Three Months Ended
                                                                                           March 31,
                                                                                      2002              2001
                                                                                      ----              ----
                                                                                       Millions of Dollars,
                                                                                     Except per Share Amounts

<S>                                                                                   <C>                <C>
Operating revenues ................................................................    $8,097            $8,375
                                                                                       ------            ------
Operating expenses
     Energy purchased for resale, fuel consumed and delivery costs ................     6,188             6,507
     Operation and maintenance ....................................................       810               704
     Depreciation and other amortization ..........................................       240               257
     Goodwill amortization ........................................................        --                55
     Taxes other than income ......................................................       182               182
                                                                                       ------            -------
          Total operating expenses ................................................     7,420             7,705
                                                                                       ------            ------

Operating income ..................................................................       677               670

Other income (deductions)-- net ...................................................       (17)               (3)
                                                                                       ------            ------
Income before interest, other charges, income taxes and
     extraordinary items ..........................................................       660               667
                                                                                       ------            ------

Interest income ...................................................................        12                37

Interest expense and other charges
     Interest .....................................................................       283               381
     Distributions on mandatorily redeemable, preferred
          securities of subsidiary trusts, each holding solely junior
          subordinated debentures of the obligated company:
               TXU Corp. obligated ................................................         8                 8
               Subsidiary obligated ...............................................         2                19
     Preferred stock dividends of subsidiaries ....................................         3                 3
     Distributions on preferred securities of subsidiary perpetual
          trust of TXU Europe .....................................................         4                 4
     Allowance for borrowed funds used during
          construction and capitalized interest ...................................        (3)               (5)
                                                                                       ------            ------
           Total interest expense and other charges ...............................       297               410
                                                                                       ------            ------

Income before income taxes and extraordinary items ................................       375               294

Income tax expense ................................................................       103                93
                                                                                       ------            ------

Income before extraordinary items .................................................       272               201

Extraordinary items, net of tax effect ............................................       (17)               --
                                                                                       ------            ------

Net income ........................................................................       255               201

Preference stock dividends ........................................................         5                 5
                                                                                       ------            ------

Net income available for common stock .............................................    $  250            $  196
                                                                                       ======            ======

Average shares of common stock outstanding (millions) .............................       265               257

Per share of common stock:
     Basic and diluted earnings
          Income before extraordinary items .......................................    $ 1.01            $ 0.76
          Extraordinary items, net of tax effect ..................................    $(0.07)           $   --
          Net income available for common stock ...................................    $ 0.94            $ 0.76
     Dividends declared ...........................................................    $ 0.60            $ 0.60
</TABLE>

See Notes to Financial Statements.


                                        1

<PAGE>

                           TXU CORP. AND SUBSIDIARIES
            CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                       Three Months Ended
                                                                                             March 31,
                                                                                      --------------------
                                                                                       2002          2001
                                                                                       ----          ----
                                                                                       Millions of Dollars

<S>                                                                                   <C>           <C>
Net income ........................................................................   $ 255          $ 201

Other comprehensive income (loss) --
    Net change during period, net of tax effects:
        Cumulative foreign currency translation adjustments .......................     (30)          (256)
        Unrealized holding gains ..................................................       -             55
        Reclassification of net gain realized on sale of investments to
             other income (deductions)-- net ......................................       -             (2)
        Cash flow hedges:
             Cumulative transition adjustment as of January 1, 2001 ...............       -           (132)
             Net change in fair value of derivatives ..............................       1            (42)
             Amounts realized in earnings during the period .......................      (7)             6
                                                                                      ------         ------
                  Total ...........................................................     (36)          (371)
                                                                                      ------         ------

Comprehensive income (loss) .......................................................   $ 219          $(170)
                                                                                      ======         ======
</TABLE>

See Notes to Financial Statements.


                                       2

<PAGE>

                           TXU CORP. AND SUBSIDIARIES
                 CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                     Three Months Ended
                                                                                                           March 31,
                                                                                                     ------------------
                                                                                                     2002          2001
                                                                                                     ----          ----
                                                                                                    Millions of Dollars

<S>                                                                                                 <C>          <C>
Cash flows - operating activities
     Net income ................................................................................    $  255       $  201
     Adjustments to reconcile net income to cash provided by operating activities:
         Loss on extraordinary items ...........................................................        17            -
         Depreciation and amortization .........................................................       275          343
         Deferred income taxes  and investment tax credits - net ...............................       (34)         101
         Gains from sale of  assets ............................................................         -           (9)
         Net effect of unrealized mark-to-market valuation losses/(gains) ......................       142          (47)
         Equity in losses of affiliates and joint ventures .....................................        10           12
         Other .................................................................................        (2)          19
         Changes in operating assets and liabilities ...........................................      (519)        (262)
                                                                                                   -------       ------
                  Cash provided by operating activities ........................................       144          358
                                                                                                   -------       ------

Cash flows - financing activities
     Issuances of securities:
        Long-term debt .........................................................................       171           59
        Common stock ...........................................................................         1            4
    Retirements/repurchases of securities:
        Long-term debt .........................................................................      (655)        (621)
    Change in notes payable:
        Commercial paper .......................................................................       749          209
        Banks ..................................................................................    (1,441)         (26)
    Cash dividends paid:
        Common stock ...........................................................................      (159)        (154)
        Preference stock .......................................................................        (5)          (6)
    Debt premium, discount, financing and reacquisition expenses ...............................       (40)          (3)
                                                                                                   -------       ------
                  Cash  used in financing activities ...........................................    (1,379)        (538)
                                                                                                   -------       ------

Cash flows - investing activities
    Capital expenditures .......................................................................      (313)        (319)
    Acquisitions of businesses .................................................................      (167)        (217)
    Proceeds from sale of assets ...............................................................     1,146          141
    Nuclear fuel ...............................................................................       (10)         (11)
    Other ......................................................................................       (27)         (70)
                                                                                                   -------       ------
                 Cash provided by (used in) investing activities ...............................       629         (476)
                                                                                                   -------       ------

Effect of exchange rates on cash and cash equivalents ..........................................       (28)         (18)
                                                                                                   -------       ------

Net change in cash and cash equivalents ........................................................      (634)        (674)

Cash and cash equivalents - beginning balance ..................................................     1,161        1,039
                                                                                                   -------       ------

Cash and cash equivalents - ending balance .....................................................   $   527       $  365
                                                                                                   =======       ======
</TABLE>

See Notes to Financial Statements.


                                       3

<PAGE>

                           TXU CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                                March 31,
                                                                                                  2002        December 31,
                                                                                               (Unaudited)       2001
                                                                                               -----------    -----------
                                                            ASSETS                                Millions of Dollars
<S>                                                                                             <C>              <C>
Current assets:
      Cash and cash equivalents ..........................................................      $    527         $  1,161
      Accounts receivable ................................................................         3,402            2,550
      Inventories-- at average cost ......................................................           489              522
      Prepayments ........................................................................           256              370
      Energy trading assets ..............................................................         1,444            1,680
      Other current assets ...............................................................           295              308
                                                                                                --------         --------
              Total current assets .......................................................         6,413            6,591
                                                                                                --------         --------

Investments ..............................................................................         2,083            2,199
Property, plant and equipment-- net ......................................................        20,763           22,480
Goodwill .................................................................................         6,891            7,247
Regulatory assets-- net ..................................................................         1,702            1,634
Energy trading assets ....................................................................           895              795
Derivative assets ........................................................................           464              448
Deferred debits and other assets .........................................................           894              881
                                                                                                --------         --------

              Total assets ...............................................................      $ 40,105         $ 42,275
                                                                                                ========         ========

                                     LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
       Notes payable:
            Commercial paper .............................................................      $  1,478         $    853
            Banks ........................................................................         1,037            2,369
       Long-term debt due currently ......................................................         1,285            1,308
       Accounts payable ..................................................................         2,656            2,466
       Energy trading liabilities ........................................................         1,360            1,545
       Other current liabilities .........................................................         1,480            1,440
                                                                                                --------         --------
              Total current liabilities ..................................................         9,296            9,981
                                                                                                --------         --------

Accumulated deferred income taxes ........................................................         3,483            3,796
Investment tax credits ...................................................................           473              479
Energy trading liabilities ...............................................................           687              521
Derivative liabilities ...................................................................           350              317
Other deferred credits and noncurrent liabilities ........................................         2,383            2,176
Long-term debt, less amounts due currently ...............................................        14,526           16,173

Mandatorily redeemable, preferred securities of subsidiary trusts, each holding
solely junior Subordinated debentures of the obligated company:
             TXU Corp. obligated .........................................................           368              368
             Subsidiary obligated ........................................................           147              147
Preferred securities of subsidiary perpetual trust of TXU Europe .........................           150              150
Preferred stock of subsidiaries:
            Not subject to mandatory redemption ..........................................           190              190
            Subject to mandatory redemption ..............................................            21               21

Contingencies (Note 7)

Shareholders' equity (Note 4) ............................................................         8,031            7,956
                                                                                                --------         --------

              Total liabilities and shareholders' equity .................................      $ 40,105         $ 42,275
                                                                                                ========         ========
</TABLE>

  See Notes to Financial Statements.


                                       4

<PAGE>

                           TXU CORP. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS

1.   BUSINESS

     TXU Corp. is a global energy services company that engages in electricity
generation, wholesale energy trading, retail energy marketing, energy delivery,
other energy-related services and, through a joint venture, telecommunications
services. TXU Corp. is a holding company whose principal United States (US)
operations are conducted through TXU US Holdings Company (US Holdings) and TXU
Gas Company (TXU Gas). TXU Corp.'s principal international operations are
conducted through TXU Europe Limited (TXU Europe) and TXU Australia Holdings
(Partnership) Limited Partnership (TXU Australia).

     Business Restructuring - Legislation was passed during the 1999 session of
the Texas Legislature that restructures the electric utility industry in Texas
(1999 Restructuring Legislation). As a result, TXU Corp. restructured certain of
its businesses effective January 1, 2002. In order to satisfy its obligations to
unbundle its business pursuant to the 1999 Restructuring Legislation and
consistent with its business separation plan as approved by the Public Utility
Commission of Texas (Commission), as of January 1, 2002, US Holdings
transferred:

     o    its electric transmission and distribution (T&D) assets to Oncor
          Electric Delivery Company (Oncor), which is a utility regulated by the
          Commission and a wholly-owned subsidiary of US Holdings,

     o    its electric power generation assets to subsidiaries of TXU Energy
          Company LLC (TXU Energy), which is the new competitive business and a
          wholly-owned subsidiary of US Holdings and

     o    its retail customers to a subsidiary retail electric provider (REP) of
          TXU Energy.

     The T&D assets of TXU SESCO Company, a subsidiary of TXU Corp., also were
transferred to Oncor. In addition, as of January 1, 2002, US Holdings acquired
the following businesses from within the TXU Corp. system and transferred them
to TXU Energy: the REP of TXU SESCO Company; the energy trading business and the
unregulated commercial/industrial retail gas operations of TXU Gas; and the
energy management services businesses and other affiliates of TXU Corp.,
including the fuel procurement (TXU Fuel Company) and coal mining businesses
that service the generation operations.

     At December 31, 2001, TXU Corp. had five reportable operating segments as
reflected in TXU Corp.'s 2001 Form 10-K. Following TXU Corp.'s reorganization as
of January 1, 2002, TXU Corp. realigned its operations into three reportable
segments: North America Energy, North America Energy Delivery and International
Energy. (See Note 8 for further information concerning reportable business
segments.)

     Acquisitions - On March 1, 2002, TXU Europe acquired the United Kingdom
(UK) energy retail and trading business of Amerada Hess for $165 million in
cash. The business includes over 400,000 residential energy and
telecommunication accounts, a commercial and industrial natural gas retail
operation with 63 billion cubic feet (Bcf) in sales volumes as well as wholesale
gas marketing operations. Consolidated pro forma information for the periods
ended March 31, 2002 and 2001 reflecting this acquisition would not have
differed significantly from reported results.

     On May 2, 2002, TXU Europe was confirmed as the preferred bidder for the
purchase of a majority interest in Braunschweiger Versorgungs (BVAG), an
electricity, gas, heating and water supplier for 210,000 residential, commercial
and industrial customers in the German city of Braunschweig. BVAG is a
wholly-owned subsidiary of Stadwerke Braunschweig. TXU Europe has made a bid for
74.9% of the company; Stadwerke Braunschweig will retain the remaining 25.1%.
The acquisition is subject to the approval of the Town Council of Braunschweig.


                                       5

<PAGE>

     Dispositions - On January 18, 2002, TXU Europe completed the sale of its UK
electricity distribution (networks) business, including its 50% interest in the
24seven support operation, to London Electricity Group plc (LE Group) for $1.9
billion, consisting of a cash payment of $801 million (used to repay debt) and
the assumption by LE Group of $1.1 billion aggregate principal amount of debt.
TXU Europe recorded a loss on the sale of $125 million ($88 million after-tax),
after transaction costs, in the fourth quarter of 2001.

     On April 25, 2002, TXU Energy completed the sale of its Handley and
Mountain Creek steam electric generating plants in the Dallas-Ft. Worth area for
$443 million in cash. The transaction includes a tolling agreement for TXU
Energy to purchase power during summer months for the next five years. A pretax
gain on the sale of $146 million will be deferred and recognized over the five
years.

2.   SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation -- The condensed consolidated financial statements of
TXU Corp. and its subsidiaries have been prepared in accordance with accounting
principles generally accepted in the United States of America (US GAAP) and,
except for the adoption of Statement of Financial Accounting Standards (SFAS)
No. 142 "Goodwill and Other Intangible Assets" discussed below, on the same
basis as the audited financial statements included in its 2001 Annual Report on
Form 10-K. In the opinion of management, 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
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 Securities and Exchange Commission.
The results of operations for an interim period may not give a true indication
of results for a full year. Certain previously reported amounts have been
reclassified to conform to current classifications. All dollar amounts in the
financial statements and tables in the notes, except per share amounts, are
stated in millions of US dollars unless otherwise indicated.

     Changes in Accounting Standards -- SFAS No. 142, became effective for TXU
Corp. on January 1, 2002. SFAS No. 142 requires, among other things, the
allocation of goodwill to reporting units based upon the current fair value of
the reporting units and the discontinuance of goodwill amortization. The
amortization of TXU Corp.'s existing goodwill ($220 million annually) ceased
effective January 1, 2002.

     In addition, SFAS No. 142 requires completion of a transitional goodwill
impairment test within six months from the date of adoption. It establishes a
new method of testing goodwill for impairment on an annual basis or on an
interim basis if an event occurs or circumstances change that would reduce the
fair value of a reporting unit below its carrying value. Any goodwill impairment
loss during the transition period will be recognized as the cumulative effect of
a change in accounting principle. Subsequent impairments, if any, will be
recorded in operations. As part of its effort to implement SFAS No. 142, TXU
Corp. is in the process of completing the transitional impairment test.


                                       6

<PAGE>

     The table below reflects what reported income before extraordinary items
and net income (including basic and diluted earnings per share amounts) would
have been in the 2001 period exclusive of amortization expense recognized in
that period related to goodwill, compared to the 2002 period.

<TABLE>
<CAPTION>
                                                                                         Three Months Ended
                                                                                             March 31,
                                                                                       ------------------------
                                                                                       2002               2001
                                                                                       ----               ----
                                                                                         Millions of Dollars,
                                                                                       Except per Share Amounts

<S>                                                                                    <C>               <C>
Reported income before extraordinary items .......................................     $  272            $  201
Add back: goodwill amortization ..................................................         --                55
                                                                                       ------            ------
Adjusted income before extraordinary items .......................................        272               256
Extraordinary items, net of tax effect ...........................................        (17)               --
                                                                                       ------            -----
Adjusted net income ..............................................................        255               256
Preference stock dividends .......................................................          5                 5
                                                                                       ------            ------
Adjusted net income available for common stock ...................................     $  250            $  251
                                                                                       ======            ======

Basic and diluted earnings per share:
Reported income before extraordinary items .......................................     $ 1.01            $ 0.76
Add back: goodwill amortization ..................................................         --              0.21
                                                                                       ------            ------
Adjusted income before extraordinary items .......................................       1.01              0.97
Extraordinary items, net of tax ..................................................      (0.07)               --
                                                                                       ------            ------
Adjusted net income available for common stock ...................................     $ 0.94            $ 0.97
                                                                                       ======            ======
</TABLE>

     SFAS No. 143, "Accounting for Asset Retirement Obligations", will be
effective for TXU Corp. on January 1, 2003. SFAS No. 143 requires the
recognition of a fair value liability for any retirement obligation associated
with long-lived assets. The offset to any liability recorded is added to the
previously recorded asset and the additional amount is depreciated over the same
period as the long-lived asset for which the retirement obligation is
established. SFAS No. 143 also requires additional disclosures. TXU Corp. will
change its reporting for nuclear decommissioning costs to conform to the new
standard.

     SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets", became effective for TXU Corp. on January 1, 2002. SFAS No. 144
establishes a single accounting model, based on the framework established in
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of", for long-lived assets to be disposed of by
sale and resolves significant implementation issues related to SFAS No. 121. The
adoption of SFAS No. 144 by TXU Corp. has not affected its financial position or
results of operations.

     SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of
FASB Statement No. 13, and Technical Corrections", was issued in April 2002 and
is applicable to fiscal years beginning after May 15, 2002. One of the
provisions of this technical statement is the rescission of SFAS No. 4,
"Reporting Gains and Losses from Extinguishment of Debt", whereby any gain or
loss on the early extinguishment of debt that was classified as an extraordinary
item in prior periods in accordance with SFAS No. 4, which does not meet the
criteria of an extraordinary item as defined by APB Opinion 30, shall be
reclassified.

     For accounting standards not yet adopted or implemented, TXU Corp. is
evaluating the potential impact on its financial position and results of
operations.

     Earnings Per Share -- Basic earnings per share applicable to common stock
are based on the weighted average number of common shares outstanding during the
period reported. Diluted earnings per share include the effect of potential
issuances of common shares resulting from the assumed exercise of all
outstanding stock options and settlement of forward stock purchase agreements.
TXU Corp. has outstanding certain instruments that may be settled with common
stock that are considered in computing diluted earnings per share. The number of
shares of common stock added to the average shares outstanding for the purpose
of calculating diluted earnings per share was 403 thousand and 181 thousand for
the three months ended March 31, 2002 and 2001, respectively.


                                       7

<PAGE>

3.   FINANCING ARRANGEMENTS

     At March 31, 2002, TXU Corp. and its subsidiaries had credit facilities
(some of which provide for long-term borrowings) available as follows:

<TABLE>
<CAPTION>
                                                                                            Borrowings Under Facilities at
                                                                                                    March 31, 2002
                                                                                           ---------------------------------
                                                                                           Facility
Facility                                      Expiration Date      Borrowers                 Limit     Outstanding    Unused
--------                                      ---------------    -------------               ------    -----------    ------

<S>                                           <C>                <C>                         <C>        <C>          <C>
US Credit Agreements Facility A (a)(b) .....  April  2002        TXU Corp., US Holdings      $1,400     $    -       $1,400
US Credit Agreements Facility B (a)(b)(c) ..  February 2005      TXU Corp., US Holdings       1,400          -          901 (c)
US Credit Facility  ........................  June 2002          TXU Corp.                      700        700            -
Revolving Credit Facilities -
     Tranche A (d) .........................  November 2006      TXU Europe                   1,160        750          410
Senior Facility (e) ........................  October 2004       TXU Australia                  925        754          171
Commercial Paper Facility (e) ..............      N/A            TXU Australia                  126        126            -
Working Capital Facilities (f) .............      N/A            TXU Australia                   52          -           52
</TABLE>

(a)  US Holdings' borrowings under both facilities are limited to an aggregate
     amount outstanding at any one time of $2 billion. US Credit Agreements
     primarily support commercial paper borrowings of TXU Corp.
(b)  In February 2002, TXU Gas was removed as a borrower under these facilities.
     Short-term liquidity needs of TXU Gas are expected to be funded through
     advances from affiliates.
(c)  As of March 31, 2002, letters of credit outstanding under this agreement
     totaled $499 million, which effectively reduces the unused capacity by that
     amount.
(d)  As of March 31, 2002, the outstanding borrowings under the Revolving Credit
     Facility and the associated interest rates are as follows: Tranche A -
     (euro)564 million ($500 million) at 3.96% per annum, 700 million Norwegian
     kroner (NOK) ($78 million) at 7.21% per annum, and (pound)120 million ($171
     million) at 4.69%, all classified as long-term debt.
(e)  During the first quarter of 2002, TXU Australia repaid $121 million of its
     Senior Facility with proceeds received from the issuance of commercial
     paper under its new Commercial Paper Facility. The Subordinated Acquisition
     Facility at December 2001 was repaid and cancelled on March 26, 2002 and
     replaced with a Subordinated Loan from TXU Corp.
(f)  During the first quarter of 2002, $32 million previously drawn under the
     Working Capital Facilities was repaid.

     In April 2002, US Holdings, Oncor and TXU Energy entered into a joint $1.0
billion 364-day revolving credit facility with a group of banks that terminates
April 22, 2003. Up to $1.0 billion of letters of credit may be issued under the
facility. In May 2002, TXU Corp. entered into a $500 million 3-year revolving
credit facility with a group of banks that terminates May 1, 2005. These
facilities replaced the TXU Corp. and US Holdings $1.4 billion 364-day credit
facility (Facility A above). These facilities will be used for working capital
and general corporate purposes.

     During the second quarter of 2002, each of TXU Energy and Oncor expect to
begin selling commercial paper to fund their short-term liquidity requirements.
The new commercial paper programs will allow TXU Energy and Oncor to sell up to
$2.4 billion and $1.0 billion of commercial paper, respectively. The existing
TXU Corp. commercial paper program will be discontinued once the TXU Energy and
Oncor commercial paper programs have been established and outstanding TXU Corp.
commercial paper has been repaid. After its commercial paper program is
discontinued, TXU Corp. expects to borrow under its 3-year credit facility to
fund its working capital needs.

     The new credit facilities discussed above and the existing 5-year $1.4
billion credit facility (Facility B above) will provide back-up for outstanding
commercial paper under the TXU Energy and Oncor programs and the TXU Corp.
program until it is discontinued. TXU Corp., TXU Energy and Oncor do not expect
to sell commercial paper that, in the aggregate, is in excess of aggregate
available capacity under the back-up credit facilities.

     On May 6, 2002, Oncor issued $1.2 billion aggregate principal amount of
Senior Secured Notes in two series in a private placement. One series of $700
million is due May 1, 2012 and bears an interest rate of 6.375%, and the other
series of $500 million is due May 1, 2032 and bears an interest rate of 7.0%.
Each series is secured by Oncor first mortgage bonds. Proceeds from the issuance
were used by Oncor to repay advances from US Holdings. US Holdings used the
repayments of advances from Oncor to repay advances from TXU Energy and TXU
Corp. TXU Energy used the repayments to redeem $865 million of the floating rate
debentures due May 20, 2003. TXU Corp. used the repayments to repay $335 million
of short-term borrowings.


                                       8

<PAGE>

     Europe -- In January 2002, TXU Europe repaid the (pound)190 million ($270
million) short-term portion of its Tranche A borrowings and (pound)560 million
($800 million) of the Tranche C bridge facility under the Revolving Credit
Facilities Agreement with proceeds received from the sale of UK generating
plants and the networks business. The Tranche C facility was cancelled in
February 2002. Other short-term bank borrowings at March 31, 2002 consisted of
TXU Europe's borrowings under its accounts receivable financing facility that is
collateralized by future receivables of a subsidiary through a short-term note
issue arrangement; a $45 million Euro term-loan facility with a commercial bank
to fund the investment in the Atro Oyj Nordic joint venture; and various other
short-term borrowings made mainly to provide for working capital needs.

     TXU Europe also has a (euro)2.0 billion ($1.8 billion) Euro Medium Term
Note (EMTN) program, under which TXU Europe may from time to time issue notes in
various currencies. As of March 31, 2002, a total of (pound)576 million ($821
million) was outstanding under the program at an average rate of 7.53%

     In January 2002, in connection with TXU Europe's sale of its UK networks
business, $1.072 billion of debt ($500 million due 2004, $286 million due 2012
and $286 million due 2025) was assumed by the purchaser, the LE Group, as part
of the sale agreement.

     US -- During the first quarter of 2002, TXU Corp. redeemed $114 million of
senior notes with rates ranging from 5.52% to 10.58% that were originally due
from 2002 to 2010, resulting in an extraordinary loss of $17 million (net of
income tax benefit of $9 million). TXU Mining redeemed $70 million of its 6.875%
senior notes due 2005 and $53 million of its 7.0% senior notes due 2003.

     Leases -- On February 14, 2002, TXU Corp. sold its interest in its
headquarters building in Dallas, Texas for $145 million, resulting in a deferred
gain of $106 million. Simultaneous with the sale of the property, TXU Corp.
entered into a twenty-year lease obligation for the property. TXU Corp. recorded
a capital lease obligation of $132 million. At the end of the initial
twenty-year term of the lease, TXU Corp. has the right, but not the obligation,
to renew the lease for three ten-year renewal terms under which rents will be
paid based on then-existing market conditions. The gain is being amortized into
income over the lease term.

     Sale of Receivables -- TXU Corp., through its subsidiaries, has several
facilities to provide financing through customer accounts receivable. All of the
facilities continually sell customer accounts receivables or undivided interests
therein to financial institutions on an ongoing basis to replace those
receivables that have been collected.

     Certain subsidiaries of TXU Corp. sell customer accounts receivable to a
wholly-owned bankruptcy remote subsidiary of TXU Corp. (TXU Receivables Company)
which sells undivided interests in accounts receivable it purchases to financial
institutions. As of January 1, 2002, the facility includes TXU Energy Retail
Company LP, TXU SESCO Energy Services Company, Oncor and TXU Gas as qualified
originators of accounts receivable under the program. TXU Receivables Company
may sell up to an aggregate of $600 million in undivided interests in the
receivables purchased from the originators under the program. As of March 31,
2002, subsidiaries of TXU Corp. had sold $1.185 billion face amount of
receivables to TXU Receivables Company under the program in exchange for cash of
$600 million and $580 million in subordinated notes, with $5 million
representing costs of the program. Annualized costs of the program approximated
3.7% of the cash proceeds from the receivables sales. The subordinated notes
receivable from TXU Receivables Company are included in accounts receivable in
the consolidated balance sheet.

     At March 31, 2002, (pound)260 million ($370 million) face amount of TXU
Europe's receivables were sold under an accounts receivable program with a
commercial bank. In addition, (pound)40 million ($57 million) of future
receivables collateralized additional borrowings reflected as other short-term
loans on the balance sheet. The short-term loan amounts bear interest at an
annual rate, which was 4.07% at March 31, 2002, based on commercial paper rates
plus a margin.


                                       9

<PAGE>

4.   SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                  March 31,
                                                                                    2002          December 31,
                                                                                  (Unaudited)         2001
                                                                                  -----------     ------------

<S>                                                                               <C>             <C>
     Shareholders' equity:
         Preference stock .....................................................    $    300        $   300
                                                                                   --------        -------

         Common stock without par value:
               Authorized shares-- 1,000,000,000
               Outstanding shares:  2002-- 266,124,117 and 2001--265,140,087 ..       6,580          6,560
         Retained earnings ....................................................       1,954          1,863
         Accumulated other comprehensive loss .................................        (803)          (767)
                                                                                   --------       --------
                   Total common stock equity ..................................       7,731          7,656
                                                                                   --------       --------

                   Total shareholders' equity .................................    $  8,031       $  7,956
                                                                                   ========       ========
</TABLE>


5.   TRUST SECURITIES

     TXU Corp. or Subsidiary Obligated, Mandatorily Redeemable, Preferred
Securities of Subsidiary Trusts, Each Holding Solely Junior Subordinated (Trust
Assets) of TXU Corp. or Related Subsidiary (Trust Securities) -- The statutory
business trust subsidiaries had Trust Securities and Trust Assets outstanding,
as follows:

<TABLE>
<CAPTION>
                                                 Trust Securities                                Trust Assets             Maturity
                               --------------------------------------------------------     ------------------------      --------
                                     Units (000's)                     Amount                      Amount
                               -------------------------       ------------------------     ------------------------
                               March  31,   December 31,       March 31,   December 31,     March 31,    December 31,
                                 2002          2001              2002         2001            2002          2001
                                 ----          ----              ----         ----            ----          ----
<S>                            <C>          <C>                <C>         <C>              <C>          <C>              <C>
TXU Corp.
---------

TXU Corp. Capital I
    (7.25% Series) .........      9,200          9,200           $ 223       $ 223          $ 237          $ 237             2029
TXU Corp. Capital II
    (8.7% Series) ..........      6,000          6,000             145         145            155            155             2034
                                 ------         ------           -----       -----          -----          -----
    Total TXU Corp. ........     15,200         15,200             368         368            392            392
                                 ------         ------           -----       -----          -----          -----

TXU Gas
-------

TXU Gas Capital I
    (Floating Rate Trust
    Securities)(a) .........        150            150             147         147            155            155             2028
                                 ------         ------           -----       -----          -----          -----

    Total ..................     15,350         15,350           $ 515       $ 515          $ 547          $ 547
                                 ======         ======           =====       =====          =====          =====
</TABLE>

(a)  Floating rate is determined quarterly based on LIBOR. Related interest rate
     swaps effectively fix the rates at 6.629% on $100 million and at 6.444% on
     $50 million to July 1, 2003.

     Each parent company owns the common trust securities issued by its
subsidiary trust and has effectively issued a full and unconditional guarantee
of such trust's trust securities.


                                       10

<PAGE>

6.   REGULATION AND RATES

     US -- On December 31, 2001, US Holdings filed a settlement plan with the
Commission that, if approved, will resolve all major pending issues related to
US Holdings' transition to competition and will supersede certain ongoing
proceedings that are related to the 1999 Restructuring Legislation. The
settlement plan has the endorsement of the major customer groups in the State of
Texas. Parties to the settlement include the Commission staff, the Office of
Public Utility Counsel, the coalition of cities served by Oncor, Texas
Industrial Energy Consumers, Texas Retailers Association, and a new retail
electric provider for the state. The settlement does not remove regulatory
oversight of Oncor's business nor does it eliminate TXU Energy's price-to-beat
rates and related possible fuel adjustments. TXU Corp. recorded the effects of
the settlement plan at December 31, 2001. The settlement plan must be approved
by the Commission, which has held hearings, has received briefs and has
requested additional evidence from the parties. The hearings are currently
scheduled to continue on May 30, 2002. TXU Corp. is unable to predict the
outcome of these proceedings. For additional discussion of the settlement plan
and related items, see Note 4 to Financial Statements in the TXU Corp. 2001 Form
10-K.

     On April 23, 2002, TXU Energy filed a request with the Commission to
increase the fuel factor component of its price-to-beat rates. The request, if
approved, would increase price-to-beat rates for residential and small
commercial customers by an average of 5%. Under a Commission rule, affiliated
REPs of utilities are allowed to petition the Commission for an increase in the
fuel factor component of its price-to-beat rates if an average of natural gas
futures prices increase more than 4% from the level used to set the previous
price-to-beat fuel factor rate. An evidentiary hearing on TXU Energy's request
was held before an administrative law judge on May 9, 2002. Commission action
has not been scheduled on TXU Energy's request. The Commission must act on the
application within 45 days unless the Commission finds good cause to extend its
decision beyond that time period. TXU Energy is unable to predict the outcome of
this proceeding.

7.   CONTINGENCIES

     Legal Proceedings -- UK -- On November 29, 2001, various subsidiaries of
Enron Corporation (Enron) went into Administration (bankruptcy) in the UK. Prior
to Enron's going into Administration, TXU Europe Energy Trading (TXUEET) had
certain energy purchase and sales contracts with Enron, which had been entered
into in the ordinary course of business. The terms of these contracts provided
that they terminated automatically upon a party going into Administration. Also,
on November 29, 2001 just prior to Enron going into Administration, TXUEET
received a notice from Enron purporting to terminate these contracts for cause.
TXUEET and the Administrator have had discussions regarding potential claims
relating to contract termination; in February 2002 TXUEET applied to the High
Court in London for permission to seek a judicial determination regarding
contract termination and, in March 2002, Enron filed an action in the High
Court, relating to interpretation of certain other contractual provisions. For
the more expeditious and economic resolution of the issue of the contract
termination, TXUEET and Enron agreed in May 2002 to Enron initiating proceedings
in the High Court to enable the parties to seek a judicial determination
regarding contract termination, which action would supersede the previous
actions. While the outcome of these matters cannot be predicted, TXUEET
believes, consistent with the advice of external legal advisors in the UK, that
the attempted termination of the contracts by Enron was without substance.
Accordingly, TXUEET believes any related claims by Enron would be without merit.

     General -- In addition to the above, TXU Corp. and other subsidiaries are
involved in various other legal and administrative proceedings, the ultimate
resolution of which, in the opinion of each, should not have a material effect
upon their financial position, results of operations or cash flows.

     Financial Guarantees -- US Holdings has entered into contracts with public
agencies to purchase cooling water for use in the generation of electric energy
and has agreed, in effect, to guarantee the principal, $19 million at March 31,
2002, and interest on bonds issued by the agencies to finance the reservoirs
from which the water is supplied. The bonds mature at various dates through 2011
and have interest rates ranging from 5-1/2% to 7%. US Holdings is required to
make periodic payments equal to such principal and interest, including amounts
assumed by a third party and reimbursed to US Holdings, of $4 million annually
for the years 2002 through 2003, $7 million for 2004 and $1 million for each of
2005 and 2006. In addition, US Holdings is obligated to pay certain variable
costs of operating and maintaining the reservoirs. US Holdings has assigned to a
municipality all


                                       11

<PAGE>

contract rights and obligations of US Holdings in connection with $30 million
remaining principal amount of bonds at March 31, 2002, issued for similar
purposes which had previously been guaranteed by US Holdings. US Holdings is,
however, contingently liable in the unlikely event of default by the
municipality.

     In conjunction with various power purchase contracts requiring the payment
of annual capacity fees, at March 31, 2002, TXU Europe has provided a (pound)276
million ($394 million) guarantee (declining over time) representing
approximately one year's capacity payment, with its counterparty providing a
(pound)170 million ($242 million) guarantee.

     TXU Europe has guaranteed up to (pound)77 million ($110 million) at March
31, 2002 of certain liabilities that may be incurred and payable by the
purchasers of The Energy Group's (TEG) US and Australian coal business and US
energy marketing operations sold in 1998 prior to acquisition by TXU Corp. These
guarantees are with respect to the Peabody Holding Company Retirement Plan for
Salaried Employees, the Powder River Coal Company Retirement Plan and the
Peabody Coal UMWA Retirement Plan, subject to certain specified conditions.

     Obligations with Respect to Investments in Partnerships and Other
Unconsolidated Entities -- TXU Corp. has a 50% voting interest in Pinnacle One
Partners, L.P. (Pinnacle or joint venture), a joint venture with third-party
investors. TXU Corp.'s investment in Pinnacle is accounted for using the equity
method. Assets of the joint venture are not TXU Corp.'s and are not available to
pay creditors of TXU Corp. Pinnacle's principal investment is in TXU
Communications Ventures Company (TXU Communications). TXU Communications
operates a diversified telecommunications business, including regulated
incumbent local exchange carriers, a competitive telecommunications service
provider and a fiber optic transport business.

     In connection with its formation, Pinnacle issued $810 million in senior
secured notes due August 15, 2004. The notes are secured by all of Pinnacle's
assets, including its shares of TXU Communications. Total proceeds (net of
transaction costs), including the $150 million received from third-party
investors, were used to make a $600 million cash distribution to TXU Corp. and
fund a trust with $336 million. The principal and interest on the trust funds is
being used to pay interest on the senior secured notes and distributions to the
third-party investors. The trust invested in TXU Corp. debt securities. At March
31, 2002, the trust held $219 million principal amount of TXU Corp. debt
securities.

     TXU Corp. provides a $200 million revolving credit facility to TXU
Communications, expiring 2004, of which $151 million was outstanding as of March
31, 2002. In addition, TXU Corp. has made and may make future capital
contributions to Pinnacle to fund a portion of TXU Communications' capital
expenditures. TXU Corp. also provides administrative services to Pinnacle and
its affiliates at cost.

     In connection with the Pinnacle transaction, TXU Corp. issued 810,000
shares of Mandatorily Convertible Single Reset Preference Stock, Series C
(Series C Preference Stock) to Pinnacle One Share Trust, a consolidated trust
(Share Trust). The Series C Preference Stock is convertible into common stock of
TXU Corp. In the event of:

     a)   a default by Pinnacle in connection with its $810 million of senior
          secured notes,
     b)   a decline in the market price of TXU Corp. common stock below $21.93
          per share for ten consecutive trading days coupled with a decline in
          the credit rating for TXU Corp.'s unsecured, senior long-term
          obligations to or below BB by Standard & Poor's or Fitch or Ba by
          Moody's, or
     c)   Pinnacle's inability to raise sufficient cash to repay its senior
          secured notes 120 days prior to maturity through the sale of its
          shares of TXU Communications or the sale of assets of TXU
          Communications,

TXU Corp. would be required to sell equity or otherwise raise proceeds
sufficient to repay Pinnacle's senior secured notes. If TXU Corp. did not raise
sufficient proceeds, the Share Trust could be required to sell some or all of
the Series C Preference Stock. The dividend rate and conversion price of the
Series C Preference Stock would be reset at the time of sale to generate
proceeds sufficient to redeem the senior secured notes. TXU Corp. expects that
it would be able to sell equity or debt securities to satisfy its contingent
obligations to repay Pinnacle's debt.


                                       12

<PAGE>

     Had TXU Corp. been required to consolidate Pinnacle at March 31, 2002, TXU
Corp.'s debt would have increased by approximately $610 million. TXU Corp. does
not believe that a consolidation of Pinnacle would have had a material impact on
its liquidity or financial condition.

8.   SEGMENT INFORMATION

     At December 31, 2001, TXU Corp. had five reportable operating segments as
reflected in TXU Corp.'s 2001 Form 10-K. As a result of TXU Corp.'s
reorganization as of January 1, 2002, TXU Corp. realigned its operations into
three reportable segments: North America Energy, North America Energy Delivery
and International Energy. Quarterly amounts for the prior year have been
restated to conform to the new segments.

     North America Energy - operations involving the generation of electricity,
wholesale energy trading and risk management, and retail energy sales and
services in the US and parts of Canada. The segment consists of all operations,
other than the transmission and distribution business, of the former US Electric
segment and the former US Energy segment;

     North America Energy Delivery - operations involving the transmission and
distribution of electricity and the purchase, transmission, distribution and
sale of natural gas in Texas. The segment consists of the transmission and
distribution operations of the former US Electric segment and the operations of
the former US Gas segment; and

     International Energy - operations involving the generation of electricity,
wholesale energy trading and risk management and retail energy sales and
service, as well as electricity distribution in Europe and Australia and gas
storage in Australia. The segment consists of the operations of the former
Europe and Australia segments.

     All other - operations consist primarily of general corporate expenses,
equity earnings/losses of unconsolidated affiliates, including the
telecommunication joint venture, and interest on debt at the TXU Corp. level.
Affiliated revenues represent intercompany service charges.

     The prior year financial information for the North America Energy segment
and the electric delivery operations included in the North America Energy
Delivery segment includes information derived from the historical financial
statements of US Holdings. Reasonable allocation methodologies were used to
unbundle the financial statements of US Holdings between its generation and T&D
operations. Allocation of revenues reflected consideration of return on invested
capital, which continues to be regulated for the T&D operations. US Holdings
maintained expense accounts for each of its component operations. Costs of
energy and expenses related to operations and maintenance and depreciation and
amortization, as well as assets, such as property, plant and equipment,
materials and supplies and fuel, were specifically identified by component
operation and disaggregated. Various allocation methodologies were used to
disaggregate common expenses, assets and liabilities between US Holding's
generation and T&D operations. Interest and other financing costs were
determined based upon debt allocated. Had the unbundled operations of US
Holdings actually existed as separate entities in a deregulated environment,
their results of operations could have differed materially from those included
in the historical financial statements included herein.

     Effective January 1, 2002, TXU Energy incurs an electricity delivery fee
charged by Oncor, which TXU Energy passes on to its customers. This fee is
reflected in TXU Energy's revenues and cost of energy for the three months ended
March 31, 2002. For comparability purposes, affiliated electricity delivery fees
have been included in TXU Energy's revenues and cost of energy for the three
months ended March 31, 2001. TXU Energy's gross margin is not affected by the
inclusion of the electricity delivery fees.

                                       13

<PAGE>

<TABLE>
<CAPTION>
                                                                                 Three Months Ended
                                                                                     March 31,
                                                                            --------------------------
                                                                              2002              2001*
                                                                              ----              -----
<S>                                                                         <C>              <C>
   Operating revenues -

      North America Energy .............................................     $ 3,496        $  4,117
      North America Energy Delivery ....................................         419             684
      International Energy .............................................       4,153           3,545
      All other ........................................................          29              29
                                                                             -------        --------
            Consolidated ...............................................     $ 8,097        $  8,375
                                                                             =======        ========

   Affiliated revenues -

      North America Energy .............................................     $     7        $      -
      North America Energy Delivery ....................................         419             476
      International Energy .............................................           -               -
      All other ........................................................         119             112
      Eliminations .....................................................        (545)           (588)
                                                                             -------        --------
           Consolidated ................................................     $     -        $      -
                                                                             =======        ========

   Net income (loss) -

      North America Energy .............................................     $   180        $    122
      North America Energy Delivery ....................................         101              66
      International Energy .............................................          49              75
      All Other ........................................................         (75)            (62)
                                                                             -------        --------
            Consolidated ...............................................     $   255        $    201
                                                                             =======        ========
</TABLE>

------------------
*See footnotes on pages 20 and 22.

9.   SUPPLEMENTARY FINANCIAL INFORMATION

      Accounts receivable -- At March 31, 2002 and December 31, 2001, accounts
receivable are stated net of uncollectible accounts of $160 million and $96
million, respectively.

     Energy trading assets -- At March 31, 2002 and December 31, 2001, energy
trading assets are stated net of applicable credit and performance reserves of
$39 million and $26 million, respectively.

     Inventories by major category--

                                                    March 31,
                                                      2002         December 31,
                                                  (Unaudited)         2001
                                                  -----------         ----

Materials and supplies .......................        $244            $233
Fuel stock ...................................         127             131
Gas stored underground .......................         118             158
                                                      ----            ----
    Total inventories ........................        $489            $522
                                                      ====            ====


                                       14

<PAGE>

Property, plant and equipment--

<TABLE>
<CAPTION>
                                                                                     March 31,
                                                                                       2002         December 31,
                                                                                    (Unaudited)        2001
                                                                                    -----------     ------------
<S>                                                                                    <C>            <C>
US:
     North America Energy:
          Production ...............................................................   $16,601        $16,627
          Nuclear fuel (net of accumulated amortization: 2002- $805; 2001 - $787) ..       138            146
          Reserve for regulatory disallowances .....................................      (836)          (836)
     North America Energy Delivery:
          Transmission .............................................................     1,978          1,979
          Distribution .............................................................     6,181          6,110
          Gas distribution and pipeline ............................................     1,703          1,677
          General ..................................................................       872            578
     Other .........................................................................       330            328
                                                                                       -------        -------
          Total ....................................................................    26,967         26,609
     Less accumulated depreciation .................................................     9,588          9,397
                                                                                       -------        -------
          Net of accumulated depreciation ..........................................    17,379         17,212
     Construction work in progress .................................................       592            608
                                                                                       -------        -------
          Net US property, plant and equipment .....................................    17,971         17,820
International Energy:
          Europe - Electric and other (net of accumulated depreciation: 2002 - .....     1,122          3,062
               $351;  2001 - $514)
          Australia - Electric and gas distribution and generation (net of
          accumulated depreciation:
               2002 - $295;  2001 - $267) ..........................................     1,670          1,598
                                                                                       -------        -------
          Net property, plant and equipment ........................................   $20,763        $22,480
                                                                                       =======        =======
</TABLE>

     Capitalized software costs of $451 million at March 31, 2002 and $352
million at December 31, 2001 are included in plant and equipment. Amortization
expense of $22 million relating to these software costs was recorded for the
three months ended March 31, 2002.

     Goodwill -- At March 31, 2002 and December 31, 2001, goodwill is stated net
of accumulated amortization of $667 million and $710 million, respectively. The
change in amounts is due to goodwill associated with the UK networks business
that was sold in January 2002.

     Derivatives and Hedges -- During the first quarter of 2002, existing
accounting hedges of anticipated sales from baseload generation in North America
Energy became less effective due to changes in ERCOT market rules and
conditions. TXU Corp. experienced net hedge ineffectiveness of $8 million,
reported as a loss in revenues, for the period ended March 31, 2002, primarily
related to these contracts. Accounting hedges of interest rate and foreign
exchange risk remained highly effective during the period.

     As of March 31, 2002, it is expected that $31 million of after-tax net
losses accumulated in other comprehensive income will be reclassified into
earnings during the next twelve months. This amount represents the projected
value of the hedges over the next twelve months relative to what would be
recorded if the hedge transactions had not been entered into. The amount
expected to be reclassified is not a forecasted loss incremental to normal
operations, but rather it demonstrates the extent to which volatility in
earnings (which would otherwise exist) is mitigated through the use of cash flow
hedges.

     Supplemental cash flow information -- Noncash transactions for the three
months ended March 31, 2002 included $1.1 billion of debt assumed by the
purchaser of the UK networks business and $142 million of capital lease
obligations incurred in connection with the sale/leaseback of the headquarters
building and for office furniture.


                                       15

<PAGE>

INDEPENDENT ACCOUNTANTS' REPORT

TXU Corp.:

We have reviewed the accompanying condensed consolidated balance sheet of TXU
Corp. and subsidiaries as of March 31, 2002, and the related condensed
statements of consolidated income, comprehensive income and cash flows for the
three-month periods ended March 31, 2002 and 2001. These financial statements
are the responsibility of TXU Corp.'s management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in accordance with
auditing standards generally accepted in the United States of America, 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 review, we are not aware of any material modifications that should
be made to such condensed consolidated 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 auditing standards generally
accepted in the United States of America, the consolidated balance sheet of TXU
Corp. as of December 31, 2001, and the related statements of consolidated
income, comprehensive income, cash flows and shareholders' equity for the year
then ended (not presented herein); and in our report, dated January 31, 2002, 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, 2001, is fairly stated in all
material respects in relation to the consolidated balance sheet from which it
has been derived.

As discussed in Note 2 to the Notes to Financial Statements, TXU Corp. changed
its method of accounting for goodwill amortization in 2002 in connection with
the adoption of Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets".



DELOITTE & TOUCHE LLP

Dallas, Texas
May 9, 2002



                                       16

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

BUSINESS

     TXU Corp. is a global energy services company that engages in electricity
generation, wholesale energy trading, retail energy marketing, energy delivery,
other energy-related services and, through a joint venture, telecommunications
services.

     In connection with the restructuring of the Texas electric industry,
certain businesses of TXU Corp. were reorganized as of January 1, 2002, into
three reportable segments: North America Energy, North America Energy Delivery
and International Energy. (See Note 8 to Financial Statements for information
concerning reportable business segments.)

     Certain segment comparisons in this report have been affected by the
restructuring of TXU Corp.'s US business in connection with deregulation, TXU
Europe's sale of its UK electricity distribution (networks) business and its 50%
interest in the 24seven joint venture operation to London Electricity Group plc
(LE Group) on January 18, 2002, as well as the discontinuance of goodwill
amortization under new accounting rules.

     The following exchange rates have been used to convert foreign currency
denominated amounts into US dollars, unless they were determined using exchange
rates on the date of a specific event:

                                                             Income Statements
                                                              (Average Rates)
                                    Balance Sheet            -----------------
                              --------------------------       Three Months
                              March 31,     December 31,      Ended March 31,
                              ---------     ------------     -----------------
                                 2002           2001           2002      2001
                                 ----           ----           ----      ----
UK pounds sterling ((pound))   $1.4262        $1.4515        $1.4276   $1.4599
Australian dollars (A$)        $0.5339        $0.5115        $0.5188   $0.5325
Euro ((euro))                  $0.8759        $0.8860        $0.8773   $0.9247


Three Months Ended March  31, 2002 Compared to Three Months Ended March 31, 2001
--------------------------------------------------------------------------------

     TXU Corp.'s operating revenues decreased $278 million, or 3%, to $8.1
billion in 2002. The decrease in revenue was driven by the North America Energy
and North America Energy Delivery (Energy Delivery) segments primarily due to
lower natural gas prices and volumes. Revenue growth in the International Energy
segment was primarily due to increased wholesale sales volumes and acquisitions,
partially offset by the loss of revenues from the UK networks business which was
sold in 2002.

     Gross margin (operating revenue less energy purchased for resale, fuel
consumed and delivery costs) increased $41 million, or 2%, to $1.9 billion in
2002. The gross margin increase reflected higher margins in the North America
Energy segment, driven by commercial/industrial retail operations, partially
offset by a decline in the International Energy segment due primarily to lower
wholesale margins. Consolidated revenues and gross margins in 2002 were
negatively impacted by a $142 million net effect of mark-to-market valuations of
trading positions, compared to a positive impact of $47 million in 2001.

     Operation and maintenance expense increased $106 million, or 15%, to $810
million in 2002. The increase was driven by the North America Energy segment,
reflecting higher bad debt expense and costs of retail operations and expansion
of wholesale trading activities in connection with deregulation of the Texas
electricity market.

                                       17

<PAGE>

     Other operating expenses decreased $72 million, or 15%, to $422 million in
2002, primarily reflecting a $55 million impact from the discontinuance of
goodwill amortization pursuant to the adoption of Statement of Financial
Accounting Standard (SFAS) No. 142, "Goodwill and Other Intangible Assets".
Lower expenses also reflected reduced depreciation expense in the International
Energy segment due to the sale of the UK networks business and generation plant
dispositions in the latter part of 2001.

     Operating income increased $7 million, or 1%, to $677 million in 2002,
reflecting higher gross margin and lower depreciation and amortization expense,
including the effect of the discontinuance of goodwill amortization, partially
offset by higher operation and maintenance expense discussed above.

     Other income (deductions)- net reflected a deduction of $17 million in 2002
compared to a deduction of $3 million in 2001. The change was due primarily to a
gain of $9 million in the 2001 period on the sale of gas properties in the
International Energy segment. This line item includes equity losses in the
telecommunications joint venture ($11.6 million in 2002 and $13.8 million in
2001).

     Interest income declined $25 million, or 68%, to $12 million in 2002, due
largely to lower restricted cash balances in Europe, the recovery of
under-collected fuel revenue on which interest income had been accrued under
regulation, and lower interest rates.

     Interest expense and other charges decreased $113 million, or 28%, to $297
million in 2002, reflecting lower debt levels and lower interest rates.

     The effective income tax rate before the extraordinary loss was 27.5% in
2002 compared to 31.6% in 2001. The change was driven by the effect of the
discontinuance of nondeductible goodwill amortization.

     Net income available for common stock increased $54 million, or 28%, to
$250 million in 2002. Earnings per share rose $.18, or 24%, to $.94 per share in
2002. Results for 2002 included an extraordinary loss of $17 million (net of
income tax benefit of $9 million), or $.07 per share, related to the
reacquisition of debt. Earnings per share in 2002 benefited by approximately
$.20 from the discontinuance of goodwill amortization. Earnings per share growth
in 2002 was hampered by a $.03 per share impact from a 3.1% increase in average
shares outstanding. Net income growth reflected increases in the North America
Energy and Energy Delivery segments partially offset by decline in the
International Energy segment. These performances are discussed below under
Segments.

ENERGY TRADING ACTIVITIES

     The table below summarizes the changes in energy trading assets and
liabilities for the period ended March 31, 2002. The net change, excluding
"other activity" as described below, of $142 million represents the net
unfavorable effect of mark-to-market accounting on earnings for the three months
ended March 31, 2002 (in millions).

<TABLE>
<CAPTION>
<S>                                                                                   <C>
     Balance of net trading assets/(liabilities) at December 31, 2001 ............... $ 409

     Settlements of positions included in the opening balance (1) ...................  (112)

     Unrealized mark-to-market valuations of positions held at period-end (2) .......   (30)

     Other activity (3) .............................................................    25
                                                                                      -----

     Balance of net trading assets/(liabilities) at March 31, 2002 .................. $ 292
                                                                                      =====


</TABLE>

(1)  Represents unrealized mark-to-market valuations of these positions
     recognized in earnings as of December 31, 2001.

(2)  Includes unrealized gains of $13 million associated with large commercial
     and industrial retail sales contracts, recognized upon origination in
     accordance with SFAS No. 133. There were no significant changes in fair
     value attributable to changes in valuation techniques.

(3)  Includes initial values of positions assumed in acquisitions or involving
     the receipt or payment of cash, such as option premiums, and amortization
     of such positions originating in prior periods. This activity has no effect
     on unrealized mark-to-market valuations.

                                       18

<PAGE>

     The above table includes all commodity contracts that are marked to market
in net income, for both trading and non-trading purposes.

     Of the net trading asset balance above at March 31, 2002, the amount
representing unrealized mark-to-market net gains that have been recognized in
current and prior years' earnings is $369 million. The remaining ($77 million)
of the March 31, 2002 balance consists of the initial values, net of
amortization, of positions assumed in acquisitions or involving the receipt or
payment of cash, including option premiums. The following table presents the
unrealized mark-to-market balance at March 31, 2002 scheduled by contractual
settlement dates of the underlying positions (in millions).

<TABLE>
<CAPTION>
                                            Maturity dates of unrealized net mark-to-market balances at March 31, 2002
                                            --------------------------------------------------------------------------
                                            Maturity                                         Maturity in
                                            less than     Maturity of     Maturity of         Excess of
    Source of fair value                     1 year        1-3 years       4-5 years           5 years          Total
    --------------------                    ---------     -----------     -----------        -----------        -----
<S>                                         <C>           <C>             <C>                <C>                <C>
    Prices actively quoted ...............    $  40           $(19)           $ -                 $ -            $ 21
    Prices provided by other
        external sources .................      139             96             30                   7             272
    Prices based on models ...............       15             26             13                  22              76
                                              -----           ----            ---                 ---            ----
    Total ................................    $ 194           $103            $43                 $29            $369
                                              =====           ====            ===                 ===            ====
    Percentage of total ..................       52%            28%            12%                  8%            100%
</TABLE>

     As the above table indicates, approximately 80% of the unrealized
mark-to-market valuations at March 31, 2002 mature within three years. This is
reflective of the terms of the positions and the conservative 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 through 2004 in the US and in
certain European markets through 2011. The "prices provided by other external
sources" category represents forward commodity positions at locations for which
over-the-counter (OTC) broker quotes are available. OTC quotes for natural gas
and power generally extend through 2010 and 2008, respectively, in the US, and
2011 in Europe. This category also includes values of large commercial and
industrial retail sales contracts. The "prices based on models" category
contains the value of all non-exchange 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 by TXU Corp. 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.

                                       19

<PAGE>

SEGMENTS

North America Energy
--------------------

<TABLE>
<CAPTION>
                                                                                  Three Months Ended
                                                                                       March 31,
                                                                                  -------------------
                                                                                   2002         2001*
                                                                                  ------       ------
                                                                                  Millions of Dollars
<S>                                                                               <C>          <C>
Operating revenues ............................................................   $3,503       $4,117
                                                                                  ------       ------
Operating expenses
      Energy purchased for resale, fuel consumed and delivery costs ...........    2,650        3,561
      Operation and maintenance ...............................................      358          208
      Depreciation and amortization ...........................................      114          101
      Taxes other than income .................................................       59           27
                                                                                  ------       ------
            Total operating expenses ..........................................    3,181        3,897
                                                                                  ------       ------

Operating income ..............................................................      322          220

Other income (deductions) - net ...............................................       (1)          (1)
                                                                                  ------       ------

Income before interest, other charges, and income taxes .......................      321          219

Interest income ...............................................................       14           22

Interest expense and other charges ............................................       69           69
                                                                                  ------       ------

Income before income taxes ....................................................      266          172

Income tax expense ............................................................       86           50
                                                                                  ------       ------
Net income ....................................................................   $  180       $  122
                                                                                  ======       ======
</TABLE>
-----------------
     * The North America Energy segment was created as a result of the
     deregulation of the electric utility industry in Texas, which became
     effective January 1, 2002. The North America Energy segment includes the
     generation and certain retail operations of US Holdings, the energy trading
     business and unregulated commercial/industrial retail gas operations of TXU
     Gas Company and other energy related business of TXU Corp., which were
     transferred to the North America Energy segment effective January 1, 2002.

     Prior period data is included above for the purpose of providing historical
     financial information about the North America Energy segment after giving
     effect to the US Electric restructuring transactions and allocations
     described in the Notes to Financial Statements. Had the North America
     Energy segment existed as a separate segment, its results of operations and
     financial position could have differed materially from those reflected
     above. Additionally, future results of the North America Energy segment's
     operations and financial position could differ materially from the
     historical information presented.

                                       20

<PAGE>

Segment Highlights

<TABLE>
<CAPTION>
                                                                              Three Months Ended
                                                                                   March 31,
                                                                            ---------------------
                                                                              2002         2001*
                                                                            --------     --------
<S>                                                                         <C>          <C>
Operating Statistics:
Retail sales volumes:
      Electric (gigawatt-hours - GWh) .....................................   22,386       23,256
      Large commercial and industrial gas (billion cubic feet - Bcf) ......       50           66

Wholesale energy sales volumes (physically settled):
      Electric (GWh) ......................................................   40,884        6,529
      Gas (Bcf) ...........................................................      159          208

Customers (end of period and in thousands):
      Electric ............................................................    2,756        2,689
      Gas .................................................................        3            4
                                                                            --------     --------
            Total customers ...............................................    2,759        2,693

 Physical and financial wholesale trades
      Electric  (GWh) .....................................................  582,717       14,976
      Gas (Bcf) ...........................................................    4,613        1,341

Operating revenues (million of dollars):
Electric:
      Residential ......................................................... $    689     $    765
      Commercial and industrial ...........................................    1,021          910
      Other ...............................................................        7           93
                                                                            --------     --------
            Total electric ................................................    1,717        1,768
Large commercial and industrial gas .......................................      207          506
Wholesale energy sales (gas and electric) .................................    1,570        1,764
Other revenues ............................................................        9           79
                                                                            --------     --------
            Total operating revenues ...................................... $  3,503     $  4,117
                                                                            ========     ========

Weather (average for service area)
      Percent of normal:
            Cooling degree days ...........................................       94%          18%
            Heating degree days ...........................................      101%         109%
</TABLE>
--------------------------
*See footnote on previous page.

     Effective January 1, 2002, TXU Energy incurs an electricity delivery fee
charged by Oncor, which TXU Energy passes on to its customers. This fee is
reflected in TXU Energy's revenues and cost of energy for the three months ended
March 31, 2002. For comparability purposes, affiliated electricity delivery fees
have been included in TXU Energy's revenues and cost of energy for the three
months ended March 31, 2001. TXU Energy's gross margin is not affected by the
inclusion of the electricity delivery fees.

     The North America Energy segment's operating revenues decreased $614
million, or 15%, in 2002. Retail natural gas revenues from large commercial and
industrial customers declined $299 million, or 59%, on both lower prices and
volumes. Retail gas sales volumes declined 24% as certain geographical markets
were exited. Retail electricity revenues declined $51 million, or 3%, on a 3.7%
decline in overall volumes, which reflected the opening of the Texas market to
competition. Wholesale sales of gas and electricity declined $194 million, or
11%, as lower gas prices and volumes traded were partially offset by increased
electricity volumes traded.

     Gross margin increased $297 million, or 53%, to $853 million in 2002. This
growth was due primarily to higher average prices in the electric
commercial/industrial retail business and low fuel costs in generation
operations in the early part of the quarter. As competition intensifies in the
Texas deregulated market, gross margins may come under

                                       21

<PAGE>

increasing pressure. Revenues and gross margins in 2002 were negatively impacted
by a $146 million net effect of mark-to-market valuations of commodity
positions, compared to a positive impact of $17 million in 2001.

     Net income for the segment increased $58 million, or 48%, to $180 million
in 2002. The improvement was driven by the higher gross margin, partially offset
by growth in operating expenses. Higher operation and maintenance (O&M) expense
reflected increased bad debt expense ($66 million) and increased staffing and
other administrative and marketing costs ($57 million) related to the
development of retail sales operations and expansion of trading activities, all
reflective of the opening of the Texas electricity market to competition.
Increased depreciation and amortization expense was primarily due to expansion
of administrative facilities and investments in computer systems. Taxes other
than income rose due to state gross receipts taxes that were reported in the
Energy Delivery segment in 2001. Interest income declined $8 million due to the
recovery of undercollected fuel revenue, on which interest income had been
accrued under regulation. The effective income tax rate increased to 32.3% in
2002 from 29.1% in 2001, due to, among other items, the discontinuance of
amortization of excess deferred taxes related to deregulation and higher state
income taxes.

North America Energy Delivery
-----------------------------

<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                                                        March 31,
                                                                   -------------------
                                                                    2002         2001*
                                                                   ------       ------
                                                                   Millions of Dollars
<S>                                                                <C>          <C>
Operating revenues ..............................................  $  838       $1,160
                                                                   ------       ------
Operating expenses
      Gas purchased for resale ..................................     181          495
      Operation and maintenance .................................     240          252
      Depreciation and amortization .............................      79           78
      Taxes other than income ...................................     114          146
                                                                   ------       ------
            Total operating expenses ............................     614          971
                                                                   ------       ------

Operating income ................................................     224          189

Other income (deductions) - net .................................      (3)           1
                                                                   ------       ------

Income before interest, other charges, and income taxes .........     221          190
                                                                   ------       ------

Interest income .................................................      11            4

Interest expense and other charges ..............................      80           93
                                                                   ------       ------

Income before income taxes ......................................     152          101

Income tax expense ..............................................      51           35
                                                                   ------       ------

Net income ......................................................  $  101       $   66
                                                                   ======       ======
</TABLE>
------------------------
     *The North America Energy Delivery segment was created as a result of the
     deregulation of the electric utility industry in Texas, which became
     effective January 1, 2002. The North America Energy Delivery segment
     includes the electric transmission and distribution business of US Holdings
     and the natural gas pipeline and distribution operations of TXU Gas.

     Prior period data is included above for the purpose of providing historical
     financial information about the North America Energy Delivery segment after
     giving effect to the US Electric restructuring transactions and allocations
     described in the Notes to Financial Statements. Had the North America
     Energy Delivery segment existed as a separate segment, its results of
     operations and financial position could have differed materially from those
     reflected above. Additionally, future results of the North America Energy
     Delivery segment's operations and financial position could differ
     materially from the historical information presented.

                                       22

<PAGE>

Segment Highlights

<TABLE>
<CAPTION>
                                                                     Three Months Ended
                                                                          March 31,
                                                                    --------------------
                                                                      2002        2001*
                                                                    --------    --------
<S>                                                                 <C>         <C>
Operating Statistics:
Electric energy delivered (GWh) ...................................   23,909      23,239
                                                                    ========    ========
Gas distribution (Bcf):
      Residential .................................................       41          46
      Commercial ..................................................       22          25
      Industrial and electric generation ..........................        3           3
                                                                    --------    --------
           Total gas sales ........................................       66          74
                                                                    ========    ========
Pipeline transportation (Bcf) .....................................      166         158
                                                                    ========    ========
Gas distribution customers and electric points of delivery
  (end of period and in thousands):
     Gas distribution customers ...................................    1,459       1,444
     Electric points of delivery ..................................    2,955       2,805

Operating revenues (million of dollars):

Electric delivery:
     North America Energy ......................................... $    416    $    476
     Non-affiliated ...............................................       78           -
                                                                    --------    --------
           Total electric energy delivery .........................      494         476
                                                                    --------    --------
Gas distribution:
     Residential ..................................................      223         420
     Commercial ...................................................       98         215
     Industrial and electric generation ...........................        8          26
                                                                    --------    --------
           Total gas ..............................................      329         661
Pipeline transportation ...........................................       33          38
Other revenues, net of eliminations ...............................      (18)        (15)
                                                                    --------    --------
           Total gas and pipeline transportation ..................      344         684
                                                                    --------    --------
           Total operating revenues ............................... $    838    $  1,160
                                                                    ========    ========
</TABLE>

--------------------------
*See footnote on previous page.

     Operating revenues for the Energy Delivery segment decreased $322 million,
or 28%, to $838 million in 2002. Natural gas distribution revenues declined $340
million, or 50%, reflecting lower gas costs and sales volumes due to milder
winter weather. Gas sales volumes declined 11%. Electric transmission and
distribution (T&D) revenue rose $18 million, or 4%, on a 3% increase in volumes
delivered.

     Gross margin in the gas distribution business decreased $26 million, or
14%, in 2002. Gross margin for the segment relates only to the gas distribution
business. The electric T&D operation does not buy and sell electricity; its
revenues consist primarily of T&D fees. The decline in gross margin was
primarily due to lower revenue related to taxes billed to customers (such taxes
payable are reported in operating expenses) and the effect of reduced sales
volumes, partially offset by rate increases.

     Net income increased by $35 million, or 53%, to $101 million in 2002. This
performance reflected increased net income of $47 million in the electric T&D
business offset by a decline of $11 million in the gas distribution business.
The improvement in electric T&D operations was driven by the effect of state
gross receipts taxes that are reflected in the North America Energy segment
effective 2002, interest income on regulatory-related assets charged to the
North America Energy segment effective 2002 and reduced interest expense due to
lower average debt balances and rates. The decline in net income in the gas
distribution business was driven by the lower gross margin, partially offset by
reductions in several expense categories, including bad debts, goodwill
amortization and revenue related taxes. The segment's effective tax rate was
33.5% in 2002 and 34.7% in 2001. The decline was due primarily to the
discontinuance of nondeductible goodwill amortization.

                                       23

<PAGE>

International Energy
--------------------

<TABLE>
<CAPTION>
                                                                             Three Months Ended
                                                                                  March 31,
                                                                            ---------------------
                                                                              2002         2001
                                                                            --------     --------
                                                                             Millions of Dollars
<S>                                                                         <C>          <C>
Operating revenues .......................................................  $  4,153     $  3,545
                                                                            --------     --------
Operating expenses
      Energy purchased for resale, fuel consumed and delivery costs ......     3,738        2,897
      Operation and maintenance ..........................................       218          232
      Depreciation and amortization ......................................        40           80
      Goodwill amortization ..............................................         -           50
                                                                            --------     --------
            Total operating expenses .....................................     3,996        3,259
                                                                            --------     --------

Operating income .........................................................       157          286

Other income (deductions) - net ..........................................        (5)           3
                                                                            --------     --------

Income before interest and income taxes ..................................       152          289

Interest income ..........................................................         6           18

Interest expense and other charges .......................................       112          191
                                                                            --------     --------

Income before income taxes ...............................................        46          116

Income tax expense (benefit) .............................................        (3)          41
                                                                            --------     --------

Net income ...............................................................  $     49     $     75
                                                                            ========     ========
</TABLE>

Segment Highlights

<TABLE>
<CAPTION>
                                                                             Three Months Ended
                                                                                  March 31,
                                                                            ---------------------
                                                                              2002         2001
                                                                            --------     --------
<S>                                                                         <C>          <C>
Operating Statistics:
Retail sales volumes:
    Electric (GWh) .......................................................    16,202       14,434
    Gas (Bcf) ............................................................        72           77

Wholesale energy sales (physically settled):
    Electric (GWh) .......................................................    37,657       20,124
    Gas (Bcf) ............................................................       476          391

Retail Customers (end of period and in thousands):
    Electric .............................................................     4,913        5,005
    Gas ..................................................................     2,045        1,645

Physical and financial wholesale energy trades:
    Electric (GWh) .......................................................   245,396      333,252
    Gas (Bcf) ............................................................     1,101        1,380

Revenues (millions of dollars):
    Electric .............................................................  $  1,062     $  1,022
    Gas ..................................................................       342          301
    Wholesale energy sales ...............................................     2,446        1,840
    Intra-segment eliminations and other .................................       303          382
                                                                            --------     --------

       Total .............................................................  $  4,153     $  3,545
                                                                            ========     ========
</TABLE>
                                       24

<PAGE>

     The International Energy segment's operating revenues increased $608
million, or 17%, to $4.2 billion in 2002. Europe's revenue rose $576 million, or
17%, primarily due to increased wholesale energy trading in Continental Europe.
Acquisitions of the UK gas retailing arm of Amerada Hess in the 2002 quarter and
the Ares retail energy business in Germany in mid 2001 contributed $172 million
to the growth in revenues, which was partially offset by a $38 million effect of
the sale of the UK networks business in 2002. Revenues in Australia increased
$32 million, or 18%.

     The International Energy segment's gross margin fell $233 million, or 36%,
to $415 million in 2002. Europe's gross margin fell $294 million, or 52%. The
decrease was driven by the UK wholesale operations, as mild winter weather
resulted in lower price levels and volatility. Wholesale electricity prices
declined 15%, and natural gas prices fell 32%. This pricing environment
negatively impacted wholesale results, as the portfolio positions anticipated
the normal increase in prices during winter. Portfolio positions for the balance
of the year are expected to benefit from lower prices. Gross margin was also
negatively impacted by a $95 million effect of the sale of the UK networks
business. Europe's revenues and gross margins were negatively impacted by a $23
million net effect of mark-to-market valuations of trading positions, compared
to a positive impact of $31 million in 2001. Australia's gross margin rose $61
million, or 77%, reflecting higher retail pricing, the favorable impact of
wholesale price movements on portfolio positions and the cancellation of a
contract by the customer. Australia had a $27 million positive net effect of
mark-to-market valuations in 2002, compared to a negligible effect in 2001.

     Net income for the International Energy segment declined $26 million, or
35%, to $49 million. Excluding the results of the disposed UK networks business
from both periods, net income was about even. These results reflected a decline
in Europe offset by an improvement in Australia. Excluding the UK networks
business, Europe posted a net loss of $19 million in 2002, compared to net
income of $32 million in 2001. Australia posted net income of $59 million,
compared to net income of $8 million in 2001. Europe's results were driven by
the decline in gross margin, partially offset by lower interest expense ($75
million) and the discontinuance of goodwill amortization ($45 million). The
decline in interest expense was due to debt reduction from the sale last year of
generating plants and the sale in January 2002 of the networks business.
Australia's results were driven by the higher gross margin. The effective tax
rate for the International Energy segment was slightly negative in 2002 compared
to 35.3% in 2001, reflecting the discontinuance of nondeductible goodwill
amortization and the shift in the mix of income to Australia, which benefits
from foreign tax credits and other foreign permanent differences in Australia.

Comprehensive Income
--------------------

     The losses from currency translation adjustments for both periods reflect
the movement in exchange rates between the US dollar and the UK pound sterling
and the Australian dollar.

     TXU Corp. has historically used, and will continue to use, derivatives that
are effective in offsetting future cash flow volatility in interest rates,
currency exchange rates and energy commodity prices. The fair value of
derivatives that are effective as cash flow hedges are recorded as derivative
assets or liabilities with an offset in other comprehensive income. During the
first quarter of 2002, positive changes in the fair value of effective cash flow
hedges in Europe were offset by changes in North America.

     The amounts included in other comprehensive income reflect the value of the
cash flow hedges, based on current market conditions, to be used in the future
to offset the impact on related payments of expected changes in prices. The
effects of the hedge will be recorded in the statement of income as the related
transaction is actually settled.

FINANCIAL CONDITION

Liquidity and Capital Resources

     For information concerning liquidity and capital resources, see Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations in TXU Corp.'s 2001 Form 10-K. No significant changes or events that
might affect the financial condition of TXU Corp. have occurred subsequent to
year-end other than as disclosed herein.

                                       25

<PAGE>

     Cash Flows -- Cash flows provided by operating activities for the first
quarter of 2002 were $144 million compared to $358 million for 2001. The
decrease in 2002 of $214 million, or 60%, was primarily driven by the change in
operating assets and liabilities, which reflect an increase of accounts
receivable in 2002 due to the temporary impact of transitional issues regarding
customer switching and billing with the opening of the Texas electricity market
to competition.

     Cash flows provided from investing activities for 2002 totaled $629 million
compared to $476 million used for investing activities in 2001. Acquisitions in
2002, primarily Amerada Hess in the UK, were $167 million, compared to $217
million in 2001, which was primarily the Stadtwerke Kiel acquisition in Germany.
Proceeds from the sale of assets (the UK networks business, the final payment
from a UK generating plant sold in 2001 and the sale of TXU Corp's headquarters
building in Texas) were $1.146 billion in 2002 compared with $141 million in
2001. Capital expenditures were $313 million for 2002, compared with $319
million for 2001.

     Cash flows used in financing activities for 2002 were $1.4 billion,
primarily reflecting the repayment of debt in Europe with the proceeds from the
sale of assets. Retirements and repurchases of debt securities totaled $655
million and issuances totaled $171 million. Premiums paid to retire certain of
the debt in the US in conjunction with the unbundling of electric operations
resulted in an extraordinary loss of $17 million after-tax. Net redemptions of
commercial paper and notes payable to banks totaled $692 million. Cash dividends
paid were $164 million and $160 million for 2002 and 2001, respectively. An
additional $1.1 billion of debt in the UK was assumed by the purchaser of the UK
networks business.

     On January 18, 2002, TXU Europe completed the sale of its UK networks
business and its 50% interest in 24seven to London Electricity Group plc (LE
Group) for $1.9 billion, consisting of a cash payment of $801 million (used to
repay debt) and the assumption by LE Group of $1.1 billion aggregate principal
amount of debt.

     On April 25, 2002, US Holdings completed the sale of its Handley and
Mountain Creek steam electric generating plants in the Dallas-Ft. Worth area for
$443 million in cash. The transaction includes a tolling agreement for TXU
Energy Trading to purchase power during summer months for the next five years. A
pretax gain on the sale of $146 million will be deferred and recognized over the
five years.

     Capitalization -- External funds of a permanent or long-term nature are
obtained through the issuance of common stock, preference and preferred stock,
trust securities and long-term debt by TXU Corp. and subsidiaries. The
capitalization ratios of TXU Corp. at March 31, 2002 consisted of 5.8%
equity-linked debt securities, 56.0% all other long-term debt, 2.8% preferred
securities of subsidiary trusts, 0.9% preference and preferred stock, and 34.3%
common stock equity. This does not reflect $520 million of restricted cash
classified as investments on the balance sheet.

     In the first quarter of 2002, TXU Europe sold newly authorized ordinary
shares to TXU Corp. for approximately $140 million in cash and an additional $70
million payable later this year.

     At the annual shareholders meeting on May 10, 2002, shareholders voted to
amend the Restated Articles of Incorporation, which would allow the board of
directors the option to split the common stock of TXU Corp. on or before
December 31, 2003.

     Registered Financing Arrangements -- TXU Corp., US Holdings, TXU Gas and
other subsidiaries of TXU Corp. may issue and sell additional debt and equity
securities as needed, including the possible future issuance and sale: (i) by
TXU Corp. of up to an aggregate of $2 billion of common stock, preference stock,
equity units, debt securities and/or preferred securities of subsidiary trusts;
(ii) by US Holdings of up to $25 million of Cumulative Preferred Stock and up to
an aggregate of $924 million of additional Cumulative Preferred Stock, First
Mortgage Bonds, debt securities and/or preferred securities of subsidiary trusts
and (iii) by TXU Gas of up to an aggregate of $400 million of debt securities
and/or preferred securities of subsidiary trusts, all of which are currently
registered with the Securities and Exchange Commission for offering pursuant to
Rule 415 under the Securities Act of 1933.

     In order to finance acquisitions and other investment opportunities, TXU
Corp. may issue common equity securities.

                                       26

<PAGE>

     Issuances and Retirements -- During the three months ended March 31, 2002,
TXU Corp. issued, redeemed, reacquired or made scheduled principal payments on
preference stock, long-term debt and trust securities, as follows:

                                                       Issuances    Retirements
                                                       ---------    -----------

TXU Corp.:
      Long-term debt ...............................     $   -        $   68

US Holdings:
      First mortgage bonds .........................         -           150
      Medium term notes ............................         -            55
      Senior notes .................................         -           123

TXU Europe:
      Revolving Credit Facility (Tranche A) ........       171             -
      Long-term debt ...............................         -            51

TXU Australia:
      Long-term debt ...............................         -           121

All other subsidiaries .............................         -            87
                                                        ------        ------

       Total .......................................    $  171        $  655
                                                        ======        ======

     In January 2002, in connection with TXU Europe's sale of its UK networks
business, $1.072 billion of debt ($500 million due 2004, $286 million due 2012
and $286 million due 2025) was assumed by the purchaser, the LE Group, as part
of the sale agreement.

                                       27

<PAGE>

     Financing and Liquidity Facilities -- At March 31, 2002, TXU Corp. and its
subsidiaries had credit facilities (some of which provide for long-term
borrowings) available as follows:

<TABLE>
<CAPTION>
                                                                                        Borrowings Under Facilities at
                                                                                                 March 31, 2002
                                                                                       --------------------------------
                                                                                       Facility
Facility                                     Expiration Date        Borrowers            Limit    Outstanding    Unused
--------                                     ---------------  ----------------------   --------   -----------    ------
<S>                                          <C>              <C>                      <C>        <C>            <C>
US Credit Agreements Facility A (a)(b) ...... April 2002      TXU Corp., US Holdings    $1,400      $    -       $1,400
US Credit Agreements Facility B (a)(b)(c) ... February 2005   TXU Corp., US Holdings     1,400           -          901 (c)
US Credit Facility .......................... June 2002       TXU Corp.                    700         700            -
Revolving Credit Facilities -
  Tranche A (d) ............................. November 2006   TXU Europe                 1,160         750          410
Senior Facility (e) ......................... October 2004    TXU Australia                925         754          171
Commercial Paper Facility (e) ...............      N/A        TXU Australia                126         126            -
Working Capital Facilities (f) ..............      N/A        TXU Australia                 52           -           52
</TABLE>

(a)  US Holdings' borrowings under both facilities are limited to an aggregate
     amount outstanding at any one time of $2 billion. US Credit Agreements
     primarily support commercial paper borrowings of TXU Corp.
(b)  In February 2002, TXU Gas was removed as a borrower under these facilities.
     Short-term liquidity needs of TXU Gas are expected to be funded through
     advances from affiliates.
(c)  As of March 31, 2002, letters of credit outstanding under this agreement
     totaled $499 million, which effectively reduces the unused capacity by that
     amount.
(d)  As of March 31, 2002, the outstanding borrowings under the Revolving Credit
     Facility and the associated interest rates are as follows: Tranche A -
     (euro)564 million ($500 million) at 3.96% per annum, 700 million Norwegian
     kroner (NOK) ($78 million) at 7.21% per annum, and (pound)120 million ($171
     million) at 4.69%, all classified as long-term debt.
(e)  During the first quarter of 2002, TXU Australia repaid $121 million of its
     Senior Facility with proceeds received from the issuance of commercial
     paper under its new Commercial Paper Facility. The Subordinated Acquisition
     Facility at December 2001 was repaid and cancelled on March 26, 2002 and
     replaced with a Subordinated Loan from TXU Corp.
(f)  During the first quarter of 2002, $32 million previously drawn under the
     Working Capital Facilities was repaid.

     In April 2002, US Holdings, Oncor and TXU Energy entered into a joint $1.0
billion 364-day revolving credit facility with a group of banks that terminates
April 22, 2003. Up to $1.0 billion of letters of credit may be issued under the
facility. In May 2002, TXU Corp. entered into a $500 million 3-year revolving
credit facility with a group of banks that terminates May 1, 2005. These
facilities replaced the TXU Corp. and US Holdings $1.4 billion 364-day credit
facility (Facility A above). These facilities will be used for working capital
and general corporate purposes.

     During the second quarter of 2002, each of TXU Energy and Oncor expect to
begin selling commercial paper to fund their short-term liquidity requirements.
The new commercial paper programs will allow TXU Energy and Oncor to sell up to
$2.4 billion and $1.0 billion of commercial paper, respectively. The existing
TXU Corp. commercial paper program will be discontinued once the TXU Energy and
Oncor commercial paper programs have been established and outstanding TXU Corp.
commercial paper has been repaid. After its commercial paper program is
discontinued, TXU Corp. expects to borrow under its 3-year credit facility to
fund its working capital needs.

     The new credit facilities discussed above and the existing 5-year $1.4
billion credit facility (Facility B above) will provide back-up for outstanding
commercial paper under the TXU Energy and Oncor programs and the TXU Corp.
program until it is discontinued. TXU Corp., TXU Energy and Oncor do not expect
to sell commercial paper that, in the aggregate, is in excess of aggregate
available capacity under the back-up credit facilities.

     During 2002, TXU Corp. and its subsidiaries will have financing needs to
fund ongoing working capital requirements and maturities of long-term debt and
to refinance bridge facilities entered into in connection with the financial
restructuring of US Holdings in 2001. TXU Corp. and its subsidiaries have funded
or intend to fund these financing needs through the issuance of long-term debt
or other securities. Other sources of funding include proceeds from asset sales,
issuance of commercial paper, bank borrowings, and loans from other
subsidiaries. If these options become unavailable for any reason, TXU Corp. and
its subsidiaries could borrow under their credit facilities. During 2002, TXU
Corp. may repurchase certain debt securities classified as long term as of March
31, 2002. Such classification is based on TXU Corp.'s ability and intent to fund
such repurchases through issuances of long-term debt.

                                       28

<PAGE>

     On May 6, 2002, Oncor issued $1.2 billion aggregate principal amount of
Senior Secured Notes in two series in a private placement. One series of $700
million is due May 1, 2012 and bears an interest rate of 6.375%, and the other
series of $500 million is due May 1, 2032 and bears an interest rate of 7.0%.
Each series is secured by Oncor first mortgage bonds. Proceeds from the issuance
were used by Oncor to repay advances from US Holdings. US Holdings used the
repayments of advances from Oncor to repay advances from TXU Energy and TXU
Corp. TXU Energy used the repayments to redeem $865 million of the floating rate
debentures due May 20, 2003. TXU Corp. used the repayments to repay $335 million
of short-term borrowings.

     See Notes 3 and 5 to Financial Statements for further details concerning
financing arrangements, and trust securities.

     Summary -- TXU Corp.'s goal is to continue to maintain credit ratings
necessary to allow TXU Corp. or its subsidiaries to access the commercial paper
market. If TXU Corp. and its subsidiaries were to experience a substantial
downgrade of their respective credit ratings, which they do not anticipate,
access to the commercial paper markets could no longer be possible, resulting in
the need to borrow under committed bank lines or seek other liquidity sources.

     In order to borrow under the 3-year credit facility, TXU Corp. must be in
compliance with the applicable covenants, including financial covenants, and
certain other conditions. In order for TXU Corp. or US Holdings to borrow under
the 5-year credit facility, both must be in compliance with the applicable
covenants, including financial covenants applicable to TXU Corp., and certain
other conditions. In the case of both of these facilities, the financial
covenants consist of a total debt to capitalization ratio and a fixed charge
coverage ratio. In order for US Holdings, TXU Energy or Oncor to borrow under
the 364-day credit facility, the relevant borrower must be in compliance with
the covenants applicable to it, including financial covenants, and certain other
conditions. The financial covenants consist principally of a total debt to
capitalization ratio (applicable to all three borrowers) and a fixed charge
coverage ratio (applicable to US Holdings only). In addition, for US Holdings to
be able to borrow, certain events of default relating to TXU Energy or Oncor
cannot have occurred or be continuing, and, for TXU Energy to borrow, US
Holdings must be in compliance with its fixed charge coverage ratio.

     Under all three facilities, incremental borrowings that would increase the
outstanding principal amount borrowed would be prohibited if a material adverse
change, as defined in the applicable agreements, occurred. Each of TXU Corp., US
Holdings, TXU Energy and Oncor are in compliance with the applicable financial
covenants as of March 31, 2002 and meet the required conditions and anticipate
that they will remain in compliance. In the event that any of TXU Corp., US
Holdings, TXU Energy or Oncor were not in compliance with the applicable
covenants and other conditions, they may need to pursue alternative sources of
funding.

     TXU Corp. and its subsidiaries may also from time to time utilize these
short-term facilities to temporarily fund maturities and early redemptions of
long-term debt and other securities, as well as its short-term requirements. If
TXU Corp and its subsidiaries were unable to access the capital markets to
refund these short-term borrowings, additional liquidity sources would be
necessary.

     Capital Leases -- On February 14, 2002, TXU Corp. sold its interest in its
headquarters building in Dallas, Texas for $145 million, resulting in a deferred
gain of $106 million. Simultaneous with the sale of the property, TXU Corp.
entered into a twenty-year lease obligation for the property. TXU Corp. recorded
a capital lease obligation of $132 million. At the end of the initial
twenty-year term of the lease, TXU Corp. has the right, but not the obligation,
to renew the lease for three ten-year renewal terms under which rents will be
paid based on then-existing market conditions. The gain is being amortized into
income over the lease term.

     Sale of Receivables -- TXU Corp., through its subsidiaries, has several
facilities to provide financing through sales of customer accounts receivable.
All of the facilities continually sell customer accounts receivables or
undivided interests therein to financial institutions on an ongoing basis to
replace those receivables that have been collected.

                                       29

<PAGE>

     Certain subsidiaries of TXU Corp. sell customer accounts receivable to a
wholly-owned bankruptcy remote subsidiary of TXU Corp. (TXU Receivables Company)
which sells undivided interests in accounts receivable it purchases to financial
institutions. As of January 1, 2002, the facility includes TXU Energy Retail
Company LP, TXU SESCO Energy Services Company, Oncor and TXU Gas as qualified
originators of accounts receivable under the program. TXU Receivables Company
may sell up to an aggregate of $600 million in undivided interests in the
receivables purchased from the originators under the program. As of March 31,
2002, subsidiaries of TXU Corp. had sold $1.185 billion face amount of
receivables to TXU Receivables Company under the program in exchange for cash of
$600 million and $580 million in subordinated notes, with $5 million
representing costs of the program. Annualized costs of the program approximated
3.7% of the cash proceeds from the receivables sales. The subordinated notes
receivable from TXU Receivables Company are included in accounts receivable in
the consolidated balance sheet.

     At March 31, 2002, (pound)260 million ($370 million) face amount of TXU
Europe's receivables were sold under an accounts receivable program with a
commercial bank. In addition, (pound)40 million ($57 million) of future
receivables collateralized additional borrowings reflected as other short-term
loans on the balance sheet. The short-term loan amounts bear interest at an
annual rate, which was 4.07% at March 31, 2002, based on commercial paper rates
plus a margin.

     Regulatory Asset Securitization -- The regulatory settlement plan filed
with the Commission, if approved, would provide for Oncor to receive a financing
order authorizing it to issue securitization bonds in the aggregate amount of
$1.3 billion to monetize and recover generation-related regulatory assets. The
settlement plan provides that there will be an initial issuance of
securitization bonds in the amount of up to $500 million upon approval of the
settlement followed by a second issuance for the remainder after 2003.

     Equity -- TXU Corp. or its predecessor have declared common stock dividends
payable in cash in each year since incorporation in 1945. The Board of Directors
of TXU Corp., at its May 2002 meeting, declared a quarterly dividend of $0.60 a
share, payable July 1, 2002 to shareholders of record on June 7, 2002. Future
dividends may vary depending upon TXU Corp.'s profit levels and capital
requirements as well as financial and other conditions existing at the time.

CONTINGENCIES

     See Note 7 to financial statements for discussion of contingencies.

REGULATION AND RATES

     US -- TXU Gas employs a continuing program of rate review for all classes
of customers in its regulatory jurisdictions. During the first quarter of 2002,
rate cases supporting $55.5 million in annualized revenue increases have been
filed in 147 cities. In addition, TXU Gas filed gas cost reconciliations
covering periods between November 1997 and June 30, 2001 seeking to recover
$29.3 million of under-recovered gas costs.

     On December 31, 2001, US Holdings filed a settlement plan with the
Commission that, if approved, will resolve all major pending issues related to
US Holdings' transition to competition and will supersede certain ongoing
proceedings that are related to the 1999 Restructuring Legislation. The
settlement plan has the endorsement of the major customer groups in the State of
Texas. Parties to the settlement include the Commission staff, the Office of
Public Utility Counsel, the coalition of cities served by Oncor, Texas
Industrial Energy Consumers, Texas Retailers Association, and a new retail
electric provider for the state. The settlement does not remove regulatory
oversight of Oncor's business nor does it eliminate TXU Energy's price-to-beat
rates and related possible fuel adjustments. TXU Corp. recorded the effects of
the settlement plan at December 31, 2001. The settlement plan must be approved
by the Commission, which has held hearings, has received briefs and has
requested additional supporting evidence from the parties. The hearings are
currently scheduled to continue on May 30, 2002. TXU Corp. is unable to predict
the outcome of these proceedings. For additional discussion of the settlement
plan and related items, see Note 4 to Financial Statements in the TXU Corp. 2001
Form 10-K.

                                       30

<PAGE>

     On April 23, 2002, TXU Energy filed a request with the Commission to
increase the fuel factor component of its price-to-beat rates. The request, if
approved, would increase price-to-beat rates for residential and small
commercial customers by an average of 5%. Under a Commission rule, affiliated
REPs of utilities are allowed to petition the Commission for an increase in the
fuel factor component of its price-to-beat rates if an average of natural gas
futures prices increase more than 4% from the level used to set the previous
price-to-beat fuel factor rate. An evidentiary hearing on TXU Energy's request
was held before an administrative law judge on May 9, 2002. Commission action
has not been scheduled on TXU Energy's request. The Commission must act on the
application within 45 days unless the Commission finds good cause to extend its
decision beyond that time period. TXU Energy is unable to predict the outcome of
this proceeding.

     Europe -- Although the electricity and gas markets in the UK are now fully
open to competition, there were certain price restrictions on rates that could
be charged and other price restrictions for electricity supply businesses. These
restrictions, which affected TXU Europe's electricity supply business, were
removed in April 2002. TXU Europe's natural gas supply business is not subject
to price regulation.

     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

     Changes in Accounting Standards -- See Note 2 to Financial Statements for
discussion of changes in accounting standards.

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. Although TXU Corp. believes that in making
such statement its expectations are based on reasonable assumptions, any such
statement involves uncertainties and is qualified in its entirety by reference
to factors contained in the Forward-Looking Statements section of Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations in TXU Corp.'s 2001 Form 10-K, as well as general industry trends;
implementation of the Texas electricity deregulation legislation and other
legislation; power costs and availability; changes in business strategy,
development plans or vendor relationships; availability of qualified personnel;
changes in, or the failure or inability to comply with, governmental
regulations, including, without limitation, environmental regulations; changes
in tax laws; and access to adequate transmission facilities to meet changing
demands, among others, that could cause the actual results of TXU Corp. to
differ materially from those projected in such forward-looking statements.

     Any forward-looking statement speaks only as of the date on which such
statement is made, and TXU Corp. undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement 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 such factors, nor can it 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 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The information required hereunder is not significantly different from the
information set forth in Item 7A. Quantitative and Qualitative Disclosures About
Market Risk included in TXU Corp.'s 2001 Form 10-K and is therefore not
presented herein.

                                       31

<PAGE>

PART II.  OTHER INFORMATION

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

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

          3(a)* Amended and Restated Articles of Incorporation, filed as Exhibit
                4(a) to Registration Statement No. 333-79221.

          3(b)* Articles of Amendment to the Amended and Restated Articles of
                Incorporation of TXU Corp., filed as Exhibit 3 to Form 8-K,
                filed May 16, 2000, File Number 1-12833.

          3(c)* Restated bylaws of TXU Corp., as amended, filed at Exhibit 4(c)
                to Registration Statement No. 333-37652.

          4     Sixty-fourth Supplemental Indenture, dated as of May 1, 2002, to
                the Oncor Mortgage and Deed of Trust, dated December 1, 1983.

          10(a) Amendments to US Facility B, dated as of April 24, 2002.

          10(b) 364 -Day Revolving Credit Agreement, dated as of April 24, 2002,
                among TXU Energy, Oncor, US Holdings, JP Morgan Chase, as
                Administrative Agent, and the financial institutions named
                therein.

          10(c) Three-year Revolving Credit Agreement, dated as of May 1, 2002,
                among TXU Corp., Citibank, N.A., as administrative agent, and
                the financial institutions named therein.

          15    Letter From Independent Accountants as to Unaudited Interim
                Financial Information.

          99    Condensed Statements of Consolidated Income - Twelve Months
                Ended March 31, 2002.

          -------------------
          *     Incorporated by reference

     (b)  Reports on Form 8-K filed since December 31, 2001:

               Date of Report             Item Reported
               --------------             -------------

               January 16, 2002           Item 5.  Other items

                                       32

<PAGE>

                                    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/ Biggs C. Porter
                                                       -------------------------

                                                            Biggs C. Porter
                                                        Controller and Principal
                                                           Accounting Officer

Date:  May 14, 2002

                                       33