Energy Future (TXU) 8-K Regulation FD Disclosure

2008 EEI Presentation

November 9-12, 2008

Exhibit 99.1

1

Safe Harbor Statement

This

presentation

contains

forward-looking

statements,

which

are

subject

to

various

risks

and

uncertainties.

Discussion

of

risks

and

uncertainties

that

could

cause

actual

results

to

differ

materially

from

management's

current

projections,

forecasts,

estimates

and

expectations

is

contained

in

EFH

Corp.'s

filings

with

the

Securities

and

Exchange

Commission

(SEC).

In

addition

to

the

risks

and

uncertainties

set

forth

in

EFH

Corp.'s

SEC

filings,

the

forward-looking

statements

in

this

presentation

regarding

the

company’s

long-

term

hedging

program

could

be

affected

by,

among

other

things:

any

change

in

the

ERCOT

electricity

market,

including

a

regulatory

or

legislative

change,

that

results

in

wholesale

electricity

prices

not

being

largely

driven

by

natural

gas

prices;

any

decrease

in

market

heat

rates

as

the

long-term

hedging

program

does

not

mitigate

exposure

to

changes

in

market

heat

rates;

the

unwillingness

or

failure

of

any

hedge

counterparty

or

the

lender

under

the

commodity

collateral

posting

facility

to

perform

its

obligations

under

a

long-term

hedge

agreement

or

the

facility,

as

applicable;

or

any

other

unforeseen

event

that

results

in

the

inability

to

continue

to

use

a

first

lien

to

secure

a

substantial

portion

of

the

hedges

under

the

long-term

hedging

program.

In

addition,

the

forward-looking

statements

in

this

presentation

regarding

the

on-line

dates

for

the

company’s

new

generation

plants

could

be

affected

by,

among

other

things,

EFH

Corp.’s

ability

to

timely

manage

the

construction

of

the

new

plants,

labor

strikes

or

labor

or

materials

shortages,

and

any

unexpected

judicial

rulings

with

respect

to

the

plants’

construction

permits.

Regulation G

This

presentation

includes

certain

non-GAAP

financial

measures.

A

reconciliation

of

these

measures

to

the

most

directly

comparable

GAAP

measures

is

included

in

the

appendix

to

this

presentation.

2

Energy Future Holdings Businesses

1,514

416

Capex

31,979

31,979

Debt

2,564

995

Adjusted EBITDA

YTD 08

Q3 08

2,179

615

Capex

43,903

43,903

Debt

3,596

1,402

Adjusted EBITDA

YTD 08

Q3 08

EFH’s three distinct businesses each have their own value drivers, as does EFH,

parent of Oncor and TCEH.

Texas Competitive Electric Holdings

Company LLC (“TCEH”)

Ring-fenced

654

189

Capex

5,385

5,385

Debt

1,021

405

Adjusted EBITDA

YTD 08

Q3 08

1

See Appendix for Regulation G reconciliations and definition.

1

1

1

3

2

nd

largest

non-regulated

electric generator in US

Largest lignite/coal and

nuclear baseload

generation fleet in Texas

Low-cost lignite reserves

Largest T&D utility in

Texas

High-growth service

territory

Constructive regulatory

conditions

Largest retail

electricity  provider in

Texas

15 consecutive months

of residential customer

growth

The

#1

transmission

and

distribution

utility,

retail

electricity

provider

and

power

generator in Texas.

EFH Corp. Overview

4

Oncor Overview

Value Drivers

Business Profile

Oncor focuses on maintaining safe operations, achieving a high level of reliability,

minimizing service interruptions and investing in its transmission and distribution

infrastructure to serve a growing customer base.

6    largest US transmission & distribution

company

Top quartile costs and reliability

No commodity position

Investing in advanced meters and smart grid

technology

$2.3 billion CREZ investment filing subject to 

PUC approval

Supportive regulatory environment

11.25% authorized ROE (10.75% requested)

Expedited cap ex recovery (transmission

and AMS)

High growth capital expenditure (rate base)

Top quartile operating costs per customer

Strong demand growth

Top quartile reliability (SAIDI) and safety

62

65

66

68

69

70

71

73

74

75

62

2006A

2007A

2008E

2009E

2010E

2011E

2012E

2013E

2014E

2015E

2016E

Source: ERCOT

Capital expenditure commitments

08E–12E;

$ billions

Projected peak demand growth exceeds US

average by 19%

1

Minimum capital spending of $3.6 billion over a five-year period; CREZ investment

filing subject to PUC approval and based on PUC estimates.

0.7

3.6

T&D

AMS

CREZ

Total

2.3

6.6

1

th

5

Oncor

has

filed

to

invest

~$2.3

billion

over

next

5

years

on

new

transmission

lines…

…to support the continued buildout of

wind capacity in Texas

Oncor Wind Infrastructure

Oncor is an industry leader in investing

to support key renewable energy resources.

6

Oncor Demand-Side Management

Oncor is leading the largest smart-meter deployment in the US with an

initiative to have 3.1 million meters connected by 2012

With strong encouragement from the

PUC, Oncor expects to earn an attractive

rate of return on its investment

Customer monitoring of consumption

“Smart”

appliances

Dynamic pricing

Oncor is an industry leader in demand-side management initiatives.

Oncor to deploy ~$690 million of capital

for smart meters…

…that will enable key DSM initiatives

7

Oncor Key Initiatives

AMS

Full deployment of Advanced Meters expected by 2012

Capital investment of ~$690 million

Recovery through monthly surcharge over 11 years

($2.21 per month for average residential customer)

Plan approved by the PUC in August 2008

Rate Case

June 2008 filing required as part of merger-related settlement with PUC

Filing supports a $253 million increase in rates

Hearings expected to begin in January 2009 with final order projected no earlier

than June 2009

CREZ

Oncor jointly filed to build CREZ transmission facilities in September 2008

Joint applicants include Oncor, AEP North, AEP Central, Electric

Transmission

Texas, LCRA, Sharyland, Texas-New Mexico Power Company and South Texas

Electric Co-op

Oncor’s estimated portion of CREZ buildout pursuant to its application

is

approximately $2.3 billion based on ERCOT estimates

Hearings expected to begin in December 2008 with final order expected by

February 2009

8

TXU Energy Overview

TXU Energy is the leading electricity retailer in the ERCOT market.

Value Drivers

Brand recognition

•

9/30/08 Residential market share of 37%

•

9/30/08 Business market share of 26%

Balance Sheet

•

Risk management and capital structure

Back Office

•

Latest CRM/marketing technology (ROMP)

Margins (5–10% net)

Strong brand recognition

Innovative products and services

Committed to Low Income Assistance and Energy Aid

1.9

1.5

0.9

0.3

0.2

0.2

TXU Energy

RRI

Direct

Energy

Stream

Energy

First Choice

Gexa

Source: KEMA, latest available company filings, TXU Energy estimates.

Business Profile

Residential customers/meters

At 9/30/08; millions

Sources: NERC, ERCOT

1.6

1.9

US Average

ERCOT

19%

Projected annual demand growth

06A-16E, US avg. and ERCOT; CAGR

TXU Energy total residential customers

02-07, 9/30/08; end of period, thousands

2,477

2,207

2,145

1,982

1,871

1,875

1,927

2002

2003

2004

2005

2006

2007

Sept. 30, 2008

Merger Closed

TXU Energy has invested to create a new public image,

successfully reversing residential market share decline.

9

6%

66%

28%

Luminant Overview

Business Profile

Generation

Baseload around-the-clock assets that

dispatch at low heat rate levels

~2,200 MW of capacity under construction

Low-cost

lignite

reserves

-

Luminant

mines 

~20 million tons of lignite annually

Liquidity-light natural gas hedging program

intended to provide cash flow protection

Voluntary SO

2

and NO

x

emission reduction

program will reduce emissions below US

averages

Potential Comanche Peak expansion through

Mitsubishi partnership may provide low-cost

growth option

11%

50%

28%

11%

Coal

Gas

Nuclear

Generating capacity

2008 ; MW

Total generation

2008 ; GWh

1

Includes 1,329 MW of mothballed gas plants and 2,181 MW of new coal-fueled generation under construction that is expected to come online in 2009 and 2010.

2

At 9/30/08 or 12 months ended 9/30/08.

3

Does not include purchased power.

4

Lignite

and

PRB

costs

represent

cash

costs

adjusted

for

emissions

and

market

PRB

prices

for

coal

commodity,

and

therefore

do

not

represent

actual

costs

incurred

by

Luminant.

20,546 MW

69,842 GWh

New Build-Coal

Wholesale power prices

Safety

Baseload reliability

Mining operations

Fuel costs

O&M costs

Operational

excellence/continuous

improvement

Stable competitive market

Value Drivers

1.96

1.51

Lignite

Delivered

PRB

3.14

1.70

Lignite

Delivered

PRB

Lignite/coal

vs.

PRB

fuel

cost

4

05-07 Average; $/MMBtu

13E; $/MMBtu

1

2

3

2

10

Luminant Generation And Capacity Factors

19,605

18,821

19,795

18,371

Lignite/coal production and capacity factors

GWh and percent

Nuclear production and capacity factors

GWh and percent

45,894

46,494

45,579

45,933

Luminant’s baseload plants continue to perform at consistently high levels.

90.9

89.4

89.1

89.8

93.5

97.1

98.8

91.5

2005

2006

2007

LTM

9/30/08

2005

2006

2007

LTM

9/30/08

11

Luminant’s Solid-Fuel Development Program Progressing

Sandow Unit 5

Rockdale, Texas

Oak Grove Steam Electric Station

Robertson County, Texas

~65%

Percent

complete

at

9/30/08

1

TX Lignite

Primary fuel

Late 2009/Mid 2010

Commercial operation date

1,600 MW

Estimated net capacity

~75%

Percent

complete

at

9/30/08

1

TX Lignite

Primary fuel

Mid 2009

Commercial operation date

581 MW

Estimated net capacity

Luminant’s construction of three new lignite-fueled generating units continues to

track on time and on budget with the majority of the costs fixed.

1

Estimates

related

to

construction

only.

Design

and

procurement

are

essentially

complete.

12

Luminant is Pursuing the Construction of a

Next-Generation Nuclear Facility

HEAVY INDUSTRIES, LTD.

…partnering with

…partnering with

a world-class

a world-class

equipment provider…

equipment provider…

Luminant

filed

a

combined

construction

and

operating

license

application

(COLA)

with

the

Nuclear

Regulatory

Commission

and

part

1

of

its

loan

guarantee

application

with

the

Department

of

Energy 

for

two

new

nuclear

generation

units,

having

approximately

1,700

MW

(gross)

each,

at

its

existing

Comanche

Peak

nuclear

generation

site. 

Luminant is…

…

…

and leveraging existing

and leveraging existing

site, water rights, and

site, water rights, and

leadership team.

leadership team.

13

EFH Corp. Debt Structure

1

Summary

diagram

excludes

subsidiaries

of

EFH

that

are

not

subsidiaries

of

Energy

Future

Intermediate

Holding

Company

or

Energy

Future

Competitive

Holdings

Company,

including

TXU

Receivables

Company,

which buys receivables from TXU Energy and sells undivided interest in such receivables under the TXU receivables program.  The existing debt amount for EFH includes a financing lease of an indirect subsidiary of

EFH not included in the diagram above.

2

Includes Deposit Letter of Credit Facility of $1,250 million that is shown as debt on TCEH’s balance sheet offset by $1,250 million of restricted cash.

3

Includes securitization bonds issued by Oncor Electric Delivery Transmission Bond Company LLC

Investor Group

EFH

$1.9 billion existing debt

Guarantor of $4.5 billion EFH Notes

$5.4 billion of debt

Energy Future

Intermediate

Holding

Company

Energy Future

Competitive

Holdings

Company

TCEH

Oncor Electric

Delivery Holdings

Ring-fenced entities

Guarantor of $11.25 billion TCEH/EFH Notes

Guarantor of TCEH Sr. Secured Facilities and

Commodity Collateral Posting Facility (CCP)

$0.1 billion of existing debt

Guarantor of $6.8 billion Cash Pay and

PIK Toggle TCEH Notes

Guarantor of TCEH Sr. Secured Facilities

and CCP

$6.8 billion Cash Pay/PIK Toggle TCEH Notes

$22.6 billion Sr. Secured Facilities

~20%

Minority

Investor

$4.5 billion Cash Pay/PIK Toggle EFH Notes

$1.7 billion of other debt

As of September 30, 2008

1

$1.0 billion of CCP

Debt Outstanding ($ billions)

EFH

$   6.4

EFCH

0.1

TCEH

32.0

Non-regulated

38.5

Oncor

5.4

Total debt

43.9

Cash and cash equivalents

(2.2)

Restricted cash

(1.3)

Net debt  

$40.4

3

2

14

EFH Corp. Liquidity Management

EFH

Corp.

and

TCEH

have

sufficient

liquidity

to

meet

their

anticipated

ongoing

liquidity

needs,

but

will

continue

to

monitor

dislocated

market

conditions

to

ensure

financial

flexibility.

EFH Corp. (excluding Oncor) available liquidity

As of 10/31/08; $ millions

1

Includes

cash

and

cash

equivalents

as

well

as

$242

million

of

similar

investments

in

U.S.

government

securities

that

are

in

the

process

of

liquidation.

2

Cash

borrowings

of

$1.250

billion

were

drawn

on

this

facility

at

the

closing

of

the

Merger

and

have

been

retained

as

restricted

cash.

Letters

of

credit

are

supported

by the restricted cash.

3

Facility

to

be

used

for

letters

of

credit

and

borrowings

for

general

corporate

purposes.

4

Facility

to

be

used

during

the

two-year

period

commencing

on

date

of

merger

to

fund

expenditures

for

constructing

certain

new

generation

facilities

and

environmental

upgrades

of

existing

generation

facilities,

including

previously

incurred

expenditures

not

yet

funded

under

this

facility.

5

Availability

includes

undrawn

commitments

from

subsidiaries

of

Lehman

Brothers

Holdings

Inc.

(Lehman).

As

of

October

31,

2008,

undrawn

amounts

totaled

approximately

$134

million

under

the

TCEH

Revolving

Credit

Facility

and

approximately

$14

million

under

the

TCEH

Delayed

Draw

Term

Loan

Facility.

Availability

under

the

TCEH

Revolving

Credit

Facility

and

the

TCEH

Delayed

Draw

Term

Loan

Facility

excludes

approximately

$35

million

and

$2

million,

respectively,

of

requested

draws

by

TCEH

that

have

not

been

funded

by

the

Lehman

subsidiary

as

of

October

31,

2008.

4,100

3,256

842

2,700

1,499

1,166

1,250

893

357

1,562

Facility Limit

LOCs/Cash Borrowings

Availability

Cash and Equivalents

TCEH Letter of Credit Facility

TCEH Revolving Credit Facility

TCEH Delayed Draw Term Loan Facility

1

2

5

3,927

5,648

8,050

3

4

•

In

September

and

October,

TCEH

drew

an

aggregate

~$2.3

billion

of

its

Revolving

Credit Facility as a result of the credit crisis. 

As

of

October

31,

~$1.0

billion

had

been

repaid

due

to

improved

credit

market

conditions.

•

Lehman

is

a

defaulting

lender

under

the

TCEH Revolving Credit Facility.

•

On October 31, EFH Corp. and TCEH elected

to

use

the

PIK

feature

of

their

respective

Toggle

Notes

to

defer

payment

of

~$233

million

of

future

interest

payments

to

replace

the

loss

of

the

Lehman-related

liquidity

and

to

provide

additional

financial

flexibility.

•

On

November

5,

EFH

Corp.

closed

on

the

sale

of

a

minority

interest

in

Oncor

and

received

proceeds

of

approximately

$1.25

billion

(net

of

closing

costs).

15

EFH Corp. Debt Maturities

EFH Corp. annual long-term debt maturities

As of 9/30/08, 08-14 and thereafter; $ millions

Relatively low long-term debt maturities through 2013.

Oncor

2008

2009

2010

2011

50

340

354

901

1,015

951

20,399

16,918

19,381

7,819

6,099

3,000

1,018

283

650

700

299

EFH Corp./Other

TCEH

2012

2013

2014

Thereafter

1

Excludes borrowings under the TCEH Revolving Credit Facility maturing in 2013 , the short-term portion of the Commodity Collateral Posting Facility maturing in

2012, the Deposit Letter of Credit Facility maturing in 2014, Oncor Electric Delivery Transition Bonds, excess cash flow sweeps,

and unamortized discounts and

premiums.

1

16

EFH Corp. Stakeholder Commitments

Entity

Entity

Status

Status

Key Commitments

Key Commitments

We are honoring our commitments to key stakeholders.

Create a Sustainable Energy Advisory Board (SEAB) to advise the

company on environmental policies

Maintain employee compensation, health benefits and retirement

programs through end of 2008

Voluntarily filed for PUC review of LBO with regard to Oncor

Minimum capital spending of $3.6 billion over a five-year period

Demand reduction program including an additional 5-year, $100 million

investment in conservation and energy efficiency

Deliver 15% residential price cut to legacy PTB customers

Guarantee price protection against rising electricity costs through

December 2008 for those customers

Five-year commitment, through 2012, to invest $100 million in

innovative energy efficiency and conservation approaches, including

new tools for customers to manage their own electricity usage

Terminate eight planned coal-fueled units

Provide increased investment in alternative energy

Double wind energy purchases to 1,500 MW, and maintain status as

the largest buyer of wind power in Texas

17

EFH Corp. Key Areas Of Focus

•

On-time, on-budget completion of new coal plants and licensing of CP 3 & 4

•

Continued operational and safety excellence at plants and mines

•

Effective and efficient hedging program to secure cash flows

•

Prudent implementation of $6 billion capital expenditure plan for Smart Grid,

automated meters and wind transmission

•

Continued top quartile operational, reliability and safety performance

•

Timely, compliant regulatory filings

•

Continued focus on profitable customer growth

•

World class procurement and risk management

•

Preparation for smart meter rollout and energy efficiency initiatives

•

Financial discipline and cost management

•

Continued focus on liquidity management

•

Effective enterprise wide risk management

Appendix –

Additional Slides and

Regulation G Reconciliations

19

0

4

8

12

16

20

0

20

40

60

80

Cumulative GW

Luminant nuclear plant

Luminant lignite/coal plants

Luminant gas plants

Legend

Summer 2009 ERCOT supply stack -

indicative

Luminant

plants

are

typically

on

the

“book-ends”

of

the

supply

stack.

ERCOT Supply Stack

Sources: ERCOT

and Energy Velocity ®, Ventyx.

20

ERCOT Average Daily Profile Of Load And Wind

0

10,000

20,000

30,000

40,000

50,000

60,000

0

4

8

12

16

20

24

Hour

Load

(G W)

0

200

400

600

800

1,000

1,200

1,400

1,600

Wind

Output

(MW)

Average

Load

Average

Wind

Output

Sources: Cambridge Energy Research Associates, ERCOT.

ERCOT average daily profile of load and wind output

August 07; mixed measures

21

Texas Wind Additions

Source: Cambridge Energy Research Associates, Energy Velocity ®, Ventyx.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Pre-01

01

02

03

04

05

06

07

08E

09E

10E

CERA Forecast

RPS Target

of 2,880 MW

by 2009

RPS Target

of 5,880 MW

by 2015

CREZs

Designated

Cumulative wind capacity additions in Texas

Pre-01-10E; MW

22

ERCOT forecast reserve margins indicate new peaking or base load

resources are required by 2013.

ERCOT resource mix

02A-13E; GW

ERCOT Capacity, Demand, Reserve Margin

02A-13E; GW

Reserve

Margin¹

Peak

Demand

Capacity

12%

70.2

78.7

2013

15%

15%

17%

17%

17%

15%

13%

15%

29%

26%

30%

68.8

67.7

66.4

65.0

62.2

62.2

62.3

60.2

58.5

60.0

56.0

78.8

77.9

77.9

75.7

72.5

71.8

70.5

69.4

75.3

75.6

72.7

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

50

60

70

80

02

03

04

05

06

07

08

09

10

11

12

13

Firm Load Forecast

Resources

Reserve Margin Requirement

Historical

Forecast

ERCOT Capacity, Demand And Reserve Margin

1

(Resources –

Firm Load Forecast) / Firm Load Forecast

Source: ERCOT

23

US Power Companies SO

2

And NO

x

Emissions

Source:  Energy Velocity ®, Ventyx

SO

2

emissions ranked by company

07; per unit (lbs/MWh)

NO

x

emissions ranked by company

07; per unit (lbs/MWh)

1.0

1.1

1.5

1.6

1.7

1.8

2.0

2.2

2.2

2.4

2.7

2.7

2.8

2.9

2.9

3.0

3.0

3.1

3.1

3.2

3.3

3.3

3.3

3.4

3.4

3.4

3.5

3.5

3.5

3.8

4.0

4.0

EFH with retrofit

CC

BB

AA

Z

EFH today

Y

X

W

V

U

T

S

R

Q

US average

P

O

N

M

L

K

J

I

H

G

F

E

D

C

B

A

4.2

4.4

4.7

4.7

4.7

5.2

5.3

5.7

6.3

6.4

6.5

7.5

7.6

8.1

8.2

8.4

8.6

9.1

9.4

10.0

10.7

10.7

10.9

11.3

11.4

12.7

14.3

14.4

15.2

18.5

19.4

20.6

CC

BB

AA

Z

Y

X

W

V

U

EFH with retrofit

T

S

R

Q

P

US average

O

N

M

L

K

J

EFH today

I

H

G

F

E

D

C

B

A

24%

67%

Voluntary SO2

and NO

x

emissions reduction program expected to reduce emissions below US averages.

24

BBB

Baa3

BBB+

Oncor (Senior Secured)

BBB+

CCC

CCC

B+

CCC

CCC

B-

S&P

BBB-

Baa3

Oncor (Senior Unsecured)

B-

Caa1

TCEH (Unsecured)

B+

B3

TCEH (Senior Unsecured)

BB

Ba3

TCEH (Senior Secured)

CCC+

Caa1

EFC Holdings (Senior Unsecured)

CCC+

Caa1

EFH Corp. (Unsecured)

B+

B3

EFH Corp. (Senior Unsecured)

Fitch

Moody’s

Debt Security

1

EFH Corp. Cash Pay Notes and EFH Corp. Toggle Notes.

2

TCEH Cash Pay Notes and TCEH Toggle Notes.

3

On November 3, 2008, following EFH Corp.’ s and TCEH’s election to exercise their PIK option with respect to their EFH Corp. and TCEH PIK Toggle Notes,

Moody’s changed the rating outlook for EFH Corp. and TCEH to negative from stable. Moody’s ratings outlook for Oncor was not affected by this action and

remains stable.

Credit ratings for EFH Corp. and its subsidiaries

As of 11/03/08; rating agencies credit ratings

EFH Corp. Debt Ratings

2

1

3

25

Free cash flow and net debt

YTD 9/30/08; $ millions

Capital expenditures

6

Q3 08 and YTD 08; $ millions

EFH Corp. liquidity;

12/31/07 to 10/31/08; $ billions

EFH Corp. Cash Flow And Liquidity

47

Financing activities not reflected in change in net debt

45

Other investing activities

39,201

Net debt at 12/31/07

(1,222)

Free cash flow

(1,193)

Increase in net debt

(63)

Non-cash changes in net debt

(2,179)

Capital expenditures (including nuclear fuel)

40,394

Net debt at 9/30/08

957

Cash provided by operating activities

YTD 08

Description

650

187

Oncor

539

10

342

37

11

294

8

41

114

131

Q3 08

37

TCEH other

42

TXU Energy

1,215

Total Luminant

1,294

Total TCEH

114

Environmental retrofit program

24

Other

372

Existing fleet

1,954

Total capital expenditures

10

Corp. & other

705

New build

YTD 08

Description

1

See Appendix –

Regulation G Reconciliations for definition and reconciliation.

2

Includes capitalized interest of $225 million.

3

Excludes investment in money market fund of $242 million.

4

Includes cash provided by common stock transactions of $33 million and a commodity contract deemed to have a significant financing component under GAAP of $33 million, net of

debt

discounts and issuance costs of $(19) million. 

5

Principally amortization of debt fair value adjustment due to purchase accounting.

6

Excludes capitalized interest of $76 million for Q3 08 and $225 million for YTD 08.

0.2

(1.0)

4.7

3.9

12/31/07 Available

Liquidity

Delayed Draw Term

Loan Facility

PCRBs

10/31/08 Available

Liquidity

286

Oncor

(200)

EFH Corp. Senior Notes Series C

(123)

TCEH Initial Term Loan Facility

226

All other

1,004

Delayed Draw Term Loan Facility

40,394

Net debt at 9/30/08

39,201

Net debt at 12/31/07

YTD 08

Description

Net debt¹

reconciliation

12/31/07 to 9/30/08; $ millions

1

2

3

4

5

26

Financial Definitions

Debt

less

cash

and

cash

equivalents,

investments

held

in

a

money

market

fund

and

restricted

cash.

Net Debt (non-GAAP)

Generally accepted accounting principles

GAAP

Income

(loss)

from

continuing

operations

before

interest

expense

and

related

charges,

income

tax

expense

(benefit)

and

depreciation

and

amortization. 

EBITDA

(non-GAAP)

Long-term

debt,

including

amounts

due

currently,

and

short-term

borrowings

.

Debt (GAAP)

EBITDA

adjusted

to

exclude

interest

income,

non-cash

items,

unusual

items

and

other

adjustments

allowable

under

the

EFH

Corp.

Senior

Notes

bond

indenture.

Adjusted

EBITDA

plays

an

important

role

in

respect

of

certain

covenants

contained

in

the

EFH

Corp.

Senior

Notes.

Adjusted

EBITDA

is

not

intended

to

be

an

alternative

to

net

income

as

a

measure

of

operating

performance

or

an

alternative

to

cash

flows

from

operating

activities

as

a

measure

of

liquidity

or

an

alternative

to

any

other

measure

of

financial

performance

presented

in

accordance

with

GAAP,

nor

is

it

intended

to

be

used

as

a

measure

of

free

cash

flow

available

for

EFH’s

discretionary

use,

as

the

measure

excludes

certain

cash

requirements

such

as

interest

payments,

tax

payments

and

other

debt

service

requirements.

Because

not

all

companies

use

identical

calculations,

EFH

Corp.’s

presentation

of

Adjusted

EBITDA

may

not

be

comparable

to

similarly

titled

measures

of

other

companies. 

Adjusted EBITDA

(non-GAAP)

Definition

Measure

27

Table 1: EFH Corp. Adjusted  EBITDA Reconciliation

Q3 08, Q3 07, YTD 08 and YTD 07

$ millions

1

-

-

-

Equity losses of unconsolidated affiliate engaged in broadband 

over power lines

-

1

-

1

Severance expense

23

24

10

14

Non-cash compensation expenses (FAS 123R)

(24)

-

(13)

-

Income from discontinued operations, net of tax effect

28

22

10

9

Losses on sale of receivables

-

325

-

80

Purchase accounting adjustments

812

512

17

503

Impairment of assets and inventory write down

(53)

(22)

(18)

(9)

Interest income

50

55

20

20

Amortization of nuclear fuel

703

221

(479)

(6,142)

Unrealized net (gain) or loss resulting from hedging transactions

Adjustments to EBITDA (pre-tax):

(995)

(1,088)

(393)

(429)

Oncor EBITDA

251

213

75

78

Oncor distributions/dividends

644

2,505

226

831

Interest expense and related charges

1,933

209

506

992

Q3 07

2,277

1,217

(462)

(983)

YTD 08

615

3,617

Net income (loss)

212

2,001

Income tax expense (benefit)

612

431

Depreciation and amortization

2,083

6,880

EBITDA

YTD 07

Q3 08

Description

Note: Table and footnotes to this table continue on following page  

1

2

3

4

28

Table 1: EFH Corp. Adjusted  EBITDA Reconciliation (continued from previous page)

Q3 08, Q3 07, YTD 08 and YTD 07

$ millions

15

38

3

14

Transition and business optimization costs

5

87

44

10

18

Transaction and merger expenses

6

4

100

-

-

Expenses incurred to upgrade or expand a generation station

8

1,458

321

1,137

(38)

Q3 07

3,596

842

2,754

32

YTD 08

(33)

26

Restructuring and other

7

3,712

1,402

Adjusted EBITDA per Restricted Payments Covenants

760

339

Add back Oncor adjustments

2,952

1,063

Adjusted EBITDA per Incurrence Covenant

YTD 07

Q3 08

Factor

1

Purchase

accounting

adjustments

include

amortization

of

the

intangible

net

asset

value

of

retail

and

wholesale

power

sales

agreements,

environmental

credits,

coal

purchase

contracts

and

power

purchase

agreements

and

the

stepped

up

value

of

nuclear

fuel.

Also

included

are

certai

n

credits

not

recognized

in

net

income

due

to

purchase

accounting.

2

Impairment

of

assets

includes

the

impairment

of

emission

allowances

(SO2

and

NO

X

)

and

charges

related

to

the

impairment

of

assets

and

transportation

and

storage

of

materials

related

to

canceled

coal-fueled

generation

facilities.

3

Non-cash

compensation

expenses

exclude

capitalized

amounts.

4

Severance expense includes amounts incurred related to outsourcing, restructuring and other amounts deemed to be in excess of normal recurring

amounts.

5

Transition

and

business

optimization

costs

include

professional

fees

primarily

for

retail

billing

and

customer

care

systems

enhancements

and

incentive

compensation. 

6

Transaction and merger expenses include costs related to the Merger, abandoned strategic transactions and a terminated joint venture.  Also include

administrative

costs

related

to

the

canceled

program

to

develop

coal-fueled

generation

facilities,

the

management

fees

paid

to

EFH

Corp.’s

owners

and

costs

related

to

certain

growth

initiatives

7

Restructuring

and

other

includes

a

litigation

accrual

and

a

charge

related

to

the

Lehman

bankruptcy.

2007

periods

include

credits

related

to

impaired

combustion

turbine

leases

and

other

restructuring

and

non-recurring

activities.

8

Expenses

incurred

to

upgrade

or

expand

a

generation

station

reflect

non-capital

outage

costs.

29

Table 2: TCEH Adjusted  EBITDA Reconciliation

Q3 08, Q3 07, YTD 08 and YTD 07

$ millions

12

30

-

12

Transition and business optimization costs

5

-

1

-

1

Severance expense

4

7

8

3

5

Non-cash compensation expenses (FAS 123R)

28

22

10

9

Losses on sale of receivables

-

290

-

68

Purchase accounting adjustments

-

502

-

500

Impairment of assets and inventory write down

(260)

(45)

(97)

(20)

Interest income

50

55

20

20

Amortization of nuclear fuel

703

221

(479)

(6,142)

Unrealized net (gain) or loss resulting from hedging transactions

Adjustments to EBITDA (pre-tax):

310

1,756

117

581

Interest expense and related charges

1,676

84

501

974

Q3 07

1,347

827

(425)

(811)

YTD 08

1,180

3,629

Net income (loss)

529

2,010

Income tax expense (benefit)

245

296

Depreciation and amortization

2,264

6,516

EBITDA

YTD 07

Q3 08

Description

Note: Table and footnotes to this table continue on following page  

1

2

3

30

Table 2: TCEH Adjusted  EBITDA Reconciliation (continued from previous page)

Q3 08, Q3 07, YTD 08 and YTD 07

$ millions

-

1

-

(6)

Transaction and merger expenses

6

4

100

-

-

Expenses incurred to upgrade or expand a generation station

8

1,096

(37)

Q3 07

2,564

32

YTD 08

(32)

32

Restructuring and other

7

2,776

995

Adjusted EBITDA

YTD 07

Q3 08

Factor

1

Purchase

accounting

adjustments

include

amortization

of

the

intangible

net

asset

value

of

retail

and

wholesale

power

sales

agreements,

environmental

credits,

coal

purchase

contracts

and

power

purchase

agreements

and

the

stepped

up

value

of

nuclear

fuel.

Also

included

are

certain

credits

not

recognized

in

net

income

due

to

purchase

accounting.

2

Impairment

of

assets

includes

the

impairment

of

emission

allowances

(SO

2

and

NO

X

)

and

charges

related

to

the

transportation

and

storage

of

materials

related

to

canceled

coal-fueled

generation

facilities.

3

Non-cash

compensation

expenses

exclude

capitalized

amounts.

4

Severance

expense

includes

amounts

incurred

related

to

outsourcing,

restructuring

and

other

amounts

deemed

to

be

in

excess

of

normal

recurring

amounts.

5

Transition

and

business

optimization

costs

include

professional

fees

primarily

for

retail

billing

and

customer

care

systems

enhancements

and

incentive

compensation. 

6

Transaction

and

merger

expenses

include

costs

related

to

the

Merger,

abandoned

strategic

transactions

and

a

terminated

joint

venture.

Also

include

administrative

costs

related

to

the

canceled

program

to

develop

coal-fueled

generation

facilities

and

costs

related

to

certain

growth

initiatives.

7

Restructuring

and

other

includes

a

litigation

accrual

and

a

charge

related

to

the

Lehman

bankruptcy.

2007

periods

include

credits

related

to

impaired

combustion

turbine

leases

and

other

restructuring

and

non-recurring

activities.

8

Expenses

incurred

to

upgrade

or

expand

a

generation

station

reflect

non-capital

outage

costs.

31

5

1

2

-

Transaction and merger expenses3

3

1

-

-

Transition and business optimization costs

3

-

1

-

Non-cash compensation expenses (FAS 123R)

-

(33)

-

(10)

Purchase accounting adjustments1

6

1

2

-

Losses on sale of receivables

995

1,087

393

427

EBITDA

233

229

79

80

Interest expense and related charges

353

370

120

128

Depreciation and amortization

145

179

70

80

Income tax expense (benefit)

(42)

(34)

(14)

(12)

Interest income

384

124

Q3 07

405

139

Q3 08

970

1,021

Adjusted EBITDA

264

309

Net income

YTD 07

YTD 08

Description

1

Purchase

accounting

adjustments

include

accretion

of

the

reduction

in

value

of

certain

regulatory

assets

as

a

result

of

purchase

accounting.

2

Non-cash compensation expenses exclude capitalized amounts.

3

Transaction and merger expenses include costs related to the Merger and a terminated joint venture. 

Table 3: Oncor Adjusted  EBITDA Reconciliation

Q3 08, Q3 07, YTD 08 and YTD 07

$ millions

2

32

Table 4: EFH Corp. Net Debt Reconciliation

As of September 30, 2008 and December 31,2007

$ millions

39,201

40,934

Net debt

(1,352)

(1,351)

Restricted cash

(281)

(1,916)

Cash and cash equivalents

-

(242)

Investments held in a money market fund

Less:

38,603

40,867

Long-term debt, less amounts due currently

1,718

2,620

Short-term borrowings

513

416

Long-term debt due currently

40,834

43,903

Total debt

12/31/07

9/30/08

Description