Exhibit 99.2
TXU CORP. AND SUBSIDIARIES
SEGMENT CONSOLIDATING INCOME STATEMENT
Year to Date Ended: March 31, 2005
TXU
TXU Energy Electric Corporate Eliminations/
Holdings Delivery & Other Rounding Total
---------- ---------- ----------- ------------ --------
Operating revenues 1,803 550 6 (319) 2,040
--------------------------------------------------------
Direct costs and expenses
Cost of energy sold including delivery fees 1,056 - 1 (313) 744
Operating costs 152 181 1 (1) 333
Depreciation and amortization 78 105 2 (1) 184
--------------------------------------------------------
Total direct costs and expenses 1,286 286 4 (315) 1,261
--------------------------------------------------------
Gross margin 517 264 2 (4) 779
Other costs and expenses
Selling, general and administrative expenses 113 49 25 (4) 183
Non-operating depreciation and other amortization 1 - 2 - 3
Franchise and revenue-based taxes 26 57 1 1 85
Other income (2) (1) (47) (1) (51)
Other deductions 1 4 (2) - 3
Interest income (9) (15) (32) 37 (19)
Interest expense and related charges 91 68 74 (38) 195
--------------------------------------------------------
Total other costs and expenses 221 162 21 (5) 399
--------------------------------------------------------
Income (loss) from continuing operations before income taxes 296 102 (19) 1 380
Income tax expense (benefit) 93 31 (151) 1 (26)
--------------------------------------------------------
Income (loss) from continuing operations 203 71 132 - 406
Income (loss) from discontinued operations, net of tax effect (3) - 18 - 15
--------------------------------------------------------
Net income (loss) 200 71 150 - 421
Preference stock dividends - - 5 - 5
--------------------------------------------------------
Net income (loss) available to common shareholders 200 71 145 - 416
========================================================
Average shares of common stock outstanding, basic (millions) 238
Average shares of common stock outstanding, diluted (millions) 238
Per share of common stock:
Basic earnings:
Income (loss) from continuing operations 0.85 0.30 0.56 - 1.71
Preference stock dividends - - (0.02) - (0.02)
Net income available to common stockholders from continuing operations 0.85 0.30 0.54 - 1.69
Income (loss) from discontinued operations, net of tax effect (0.01) - 0.07 (0.00) 0.06
Net income (loss) available to common shareholders 0.84 0.30 0.61 (0.00) 1.75
Diluted earnings:
Income (loss) from continuing operations 0.85 0.30 (1.38)* (0.00) (0.23)
Preference stock dividends - - (0.02) - (0.02)
Net income available to common stockholders from continuing operations 0.85 0.30 (1.40) (0.00) (0.25)
Income (loss) from discontinued operations, net of tax effect (0.01) - 0.07 (0.00) 0.06
Net income (loss) available to common shareholders 0.84 0.30 (1.33) (0.00) (0.19)
Dividends declared 0.563
* Reflects the dilution adjustment of ($462) million .
TXU CORP. AND SUBSIDIARIES
SEGMENT CONSOLIDATING INCOME STATEMENT
Year to Date Ended: March 31, 2004
TXU
TXU Energy Electric Corporate Eliminations/
Holdings Delivery & Other Rounding Total
---------- ---------- ----------- ------------ --------
Operating revenues 1,957 523 5 (353) 2,132
-------------------------------------------------------
Direct costs and expenses
Cost of energy sold including delivery fees 1,254 - - (348) 906
Operating costs 167 175 1 - 343
Depreciation and amortization 82 83 - - 165
-------------------------------------------------------
Total direct costs and expenses 1,503 258 1 (348) 1,414
-------------------------------------------------------
Gross margin 454 265 4 (5) 718
Other costs and expenses
Selling, general and administrative expenses 148 49 39 (7) 229
Non-operating depreciation and other amortization 15 4 6 - 25
Franchise and revenue-based taxes 26 59 - - 85
Other income (1) (2) (7) 1 (9)
Other deductions 20 - (1) - 19
Interest income (2) (12) (4) 14 (4)
Interest expense and related charges 79 71 47 (13) 184
-------------------------------------------------------
Total other costs and expenses 285 169 80 (5) 529
-------------------------------------------------------
Income (loss) from continuing operations before income taxes 169 96 (76) - 189
Income tax expense (benefit) 53 30 (23) 1 61
-------------------------------------------------------
Income (loss) from continuing operations 116 66 (53) (1) 128
Income (loss) from discontinued operations, net of tax effect (3) - 53 - 50
-------------------------------------------------------
Net income (loss) 113 66 - (1) 178
Preference stock dividends - - 5 - 5
-------------------------------------------------------
Net income (loss) available to common shareholders 113 66 (5) (1) 173
=======================================================
Average shares of common stock outstanding, basic (millions) 323
Average shares of common stock outstanding, diluted (millions) 380
Per share of common stock:
Basic earnings:
Income (loss) from continuing operations 0.36 0.20 (0.16) 0.00 0.40
Preference stock dividends - - (0.02) - (0.02)
Net income available to common stockholders from continuing operations 0.36 0.20 (0.18) 0.00 0.38
Income (loss) from discontinued operations, net of tax effect (0.01) - 0.16 - 0.15
Net income (loss) available for common stock 0.35 0.20 (0.02) - 0.53
Diluted earnings:
Income (loss) from continuing operations 0.31 0.17 (0.11)* (0.00) 0.37
Preference stock dividends - - (0.01) - (0.01)
Net income available to common stockholders from continuing operations 0.31 0.17 (0.12) (0.00) 0.36
Income (loss) from discontinued operations, net of tax effect (0.01) - 0.14 - 0.13
Net income (loss) available for common stock 0.30 0.17 0.02 - 0.49
Dividends declared 0.125
* Reflects the dilution adjustment ($13 million dilution adjustment / 57 million
shares).
TXU CORP. AND SUBSIDIARIES
SEGMENT CONSOLIDATING INCOME STATEMENT - VARIANCE
Year to Date Ended March 31, 2005 vs March 31, 2004
TXU
TXU Energy Electric Corporate Eliminations/
Holdings Delivery & Other Rounding Total
---------- ---------- ----------- ------------ --------
Operating revenues (154) 27 1 34 (92)
--------------------------------------------------------
Direct costs and expenses
Cost of energy sold including delivery fees (198) - 1 35 (162)
Operating costs (15) 6 - (1) (10)
Depreciation and amortization (4) 22 2 (1) 19
--------------------------------------------------------
Total direct costs and expenses (217) 28 3 33 (153)
--------------------------------------------------------
Gross margin 63 (1) (2) 1 61
Other costs and expenses
Selling, general and administrative expenses (35) - (14) 3 (46)
Non-operating depreciation and other amortization (14) (4) (4) - (22)
Franchise and revenue-based taxes - (2) 1 1 -
Other income (1) 1 (40) (2) (42)
Other deductions (19) 4 (1) - (16)
Interest income (7) (3) (28) 23 (15)
Interest expense and related charges 12 (3) 27 (25) 11
--------------------------------------------------------
Total other costs and expenses (64) (7) (59) - (130)
--------------------------------------------------------
Income (loss) from continuing operations before income taxes 127 6 57 1 191
Income tax expense (benefit) 40 1 (128) - (87)
--------------------------------------------------------
Income (loss) from continuing operations 87 5 185 1 278
Income (loss) from discontinued operations, net of tax effect - - (35) - (35)
--------------------------------------------------------
Net income (loss) 87 5 150 1 243
Preference stock dividends - - - - -
--------------------------------------------------------
Net income (loss) available to common shareholders 87 5 150 1 243
=======================================================
Average shares of common stock outstanding, basic (millions) (85)
Average shares of common stock outstanding, diluted (millions) (142)
Per share of common stock:
Basic earnings:
Income (loss) from continuing operations 0.49 0.10 0.72 (0.00) 1.31
Preference stock dividends - - - - -
Net income available to common stockholders from continuing
operations 0.49 0.10 0.72 (0.00) 1.31
Income (loss) from discontinued operations, net of tax effect - - (0.09) (0.00) (0.09)
Net income (loss) available for common stock 0.49 0.10 0.63 (0.00) 1.22
Diluted earnings:
Income (loss) from continuing operations 0.54 0.13 (1.27) (0.00) (0.60)
Preference stock dividends - - (0.01) - (0.01)
Net income available to common stockholders from continuing
operations 0.54 0.13 (1.28) (0.00) (0.61)
Income (loss) from discontinued operations, net of tax effect - - (0.07) (0.00) (0.07)
Net income (loss) available for common stock 0.54 0.13 (1.35) (0.00) (0.68)
Dividends declared 0.438
TXU CORP. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
---------------------------
2005 2004
----------- -----------
(MILLIONS OF DOLLARS)
Cash flows - operating activities:
Income from continuing operations $ 406 $ 128
Adjustments to reconcile income from continuing operations to cash provided
by operating activities:
Depreciation and amortization 203 208
Deferred income taxes and investment tax credits -- net (49) 63
Net effect of unrealized mark-to-market valuations of commodity contracts (90) 18
Decrease in accrued lease liability for out-of-service assets (15) -
Net gain from sale of assets (13) -
Change in regulatory-related liabilities (20) (20)
Litigation settlement insurance recovery (35) -
Charge for contract counterparty nonperformance 12 -
Stock-based compensation expense 10 1
Bad debt expense 11 26
Changes in operating assets and liabilities (223) (86)
----------- -----------
Cash provided by operating activities 197 338
----------- -----------
Cash flows - financing activities:
Issuances of securities:
Long-term debt 71 -
Common stock 2 8
Retirements/repurchases of securities:
Equity-linked debt (25) -
Other long-term debt (27) (723)
Change in notes payable:
Commercial paper - 1
Banks 185 175
Cash dividends paid:
Common stock (134) (40)
Preference stock (5) (5)
Debt premium, discount, financing and reacquisition expenses (23) (19)
----------- -----------
Cash provided by (used in) financing activities 44 (603)
----------- -----------
Cash flows - investing activities:
Capital expenditures (223) (147)
Nuclear fuel (26) (47)
Proceeds from sale of assets 7 1
Other (6) 7
----------- -----------
Cash used in investing activities (248) (186)
----------- -----------
Discontinued operations
Cash provided by (used in) operating activities (9) 74
Cash used in financing activities - (5)
Cash used in investing activities - (20)
Effect of exchange rates on cash - (6)
----------- -----------
Cash provided by (used in) discontinued operations (9) 43
----------- -----------
Net change in cash and cash equivalents (16) (408)
Cash and cash equivalents -- beginning balance 106 829
----------- -----------
Cash and cash equivalents -- ending balance $ 90 $ 421
=========== ===========
- --------------------------------------------------------------------------------
TXU CORP. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATING BALANCE SHEET
MARCH 31, 2005
(DOLLARS IN MILLIONS)
(UNAUDITED)
Electric Eliminations/
Energy Delivery Other Rounding Total
---------- -------- ----- ------------ --------
ASSETS
Current assets
Cash and cash equivalents 68 1 21 - 90
Restricted cash 6 46 - - 52
Advances to affiliates 844 - - (844) -
Accounts receivable - trade 766 76 307 (276) 873
Income taxes receivable - - 190 (151) 39
Accounts receivable - affiliates - 180 15 (195) -
Notes or other receivables due from affiliates - 32 - (32) -
Inventories 296 43 3 - 342
Commodity contract assets 1,047 - - - 1,047
Accumulated deferred income taxes 78 - 117 (33) 162
Other current assets 244 63 79 (7) 379
--------------------------------------------------------
Total current assets 3,349 441 732 (1,538) 2,984
--------------------------------------------------------
Investments
Restricted cash 15 13 4 - 32
Other investments 540 51 3,883 (3,795) 679
Property, plant and equipment - net 9,909 6,728 124 - 16,761
Notes or other receivables due from affiliates - 386 - (386) -
Goodwill 517 25 - - 542
Regulatory assets - net - 1,876 - - 1,876
Commodity contract assets 319 - - - 319
Cash flow hedge and other derivative assets 35 - - - 35
Other noncurrent assets 218 106 947 (941) 330
Assets held for sale 14 - 7 - 21
--------------------------------------------------------
Total assets 14,916 9,626 5,697 (6,660) 23,579
========================================================
LIABILITIES, PREFERRED SECURITIES OF SUBSIDIARIES
& SHAREHOLDERS' EQUITY
Current liabilities
Notes payable - banks 345 50 - - 395
Advances from affiliates - 142 703 (845) -
Long-term debt due currently 431 183 10 - 624
Accounts payable - trade 724 64 298 (277) 809
Accounts payable - affiliates 196 - - (196) -
Notes or other liabilities due to affiliates 32 - - (32) -
Commodity contract liabilities 810 - - - 810
Litigation and other settlement accruals 21 220 - 241
Other current liabilities 783 285 381 (190) 1,259
--------------------------------------------------------
Total current liabilities 3,321 745 1,612 (1,540) 4,138
--------------------------------------------------------
Accumulated deferred income taxes 1,970 1,533 - (903) 2,600
Investment tax credits 338 62 - - 400
Commodity contract liabilities 451 - - - 451
Cash flow hedge and other derivative liabilities 160 - 78 - 238
Notes or other liabilities due to affiliates 386 - - (386) -
Long-term debt, less amounts due currently 2,891 4,178 4,901 - 11,970
Other noncurrent liabilities and deferred credits 1,230 331 1,253 (18) 2,796
Liabilities held for sale 5 - - - 5
--------------------------------------------------------
Total liabilities 10,752 6,849 7,844 (2,847) 22,598
--------------------------------------------------------
Preferred securities of subsidiaries 515 - (477) - 38
Shareholders' equity
Preferred stock - not subject to mandatory redemption - - 300 - 300
Common stock - - (2,178) 2,180 2
Additional paid in capital 2,425 2,079 2,299 (3,995) 2,808
Retained earnings (deficit) 1,343 724 (1,564) (2,503) (2,000)
Accumulated other comprehensive income (loss) (119) (26) (527) 505 (167)
--------------------------------------------------------
Total shareholders' equity 3,649 2,777 (1,670) (3,813) 943
--------------------------------------------------------
Total liabilities, preferred securities of subsidiaries
& shareholders' equity 14,916 9,626 5,697 (6,660) 23,579
========================================================
- --------------------------------------------------------------------------------
TXU CORP. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2004
(DOLLARS IN MILLIONS)
(UNAUDITED)
Electric Eliminations/
Energy Delivery Other Rounding Total
---------- -------- ----- ------------ --------
ASSETS
Current assets
Cash and cash equivalents 70 - 36 - 106
Restricted cash 6 43 - - 49
Advances to affiliates 686 - 14 (700) -
Accounts receivable - trade 1,139 72 400 (337) 1,274
Income taxes receivable - - 234 (209) 25
Accounts receivable - affiliates 43 221 40 (304) -
Notes or other receivables due from affiliates - 49 - (49) -
Inventories 284 33 3 - 320
Commodity contract assets 546 - - - 546
Accumulated deferred income taxes 94 - 130 - 224
Other current assets 139 32 86 (8) 249
--------------------------------------------------------
Total current assets 3,007 450 943 (1,607) 2,793
--------------------------------------------------------
Investments
Restricted cash 15 13 19 - 47
Other investments 538 49 5,742 (5,665) 664
Property, plant and equipment - net 9,920 6,609 147 - 16,676
Notes or other receivables due from affiliates - 386 - (386) -
Goodwill 517 25 - - 542
Regulatory assets - net - 1,891 - - 1,891
Commodity contract assets 315 - - - 315
Cash flow hedge and other derivative assets 8 - (2) - 6
Other noncurrent assets 221 98 724 (760) 283
Assets held for sale 17 - 7 - 24
--------------------------------------------------------
Total assets 14,558 9,521 7,580 (8,418) 23,241
========================================================
LIABILITIES, PREFERRED SECURITIES OF SUBSIDIARIES
& SHAREHOLDERS' EQUITY
Current liabilities
Notes payable - banks 210 - - - 210
Advances from affiliates - 63 637 (700) -
Long-term debt due currently 31 182 15 1 229
Accounts payable - trade 861 58 369 (338) 950
Accounts payable - affiliates 234 28 43 (305) -
Notes or other liabilities due to affiliates 49 - - (49) -
Commodity contract liabilities 491 - - - 491
Litigation and other settlement accruals 21 370 - 391
Other current liabilities 898 393 369 (215) 1,445
--------------------------------------------------------
Total current liabilities 2,774 745 1,803 (1,606) 3,716
--------------------------------------------------------
Accumulated deferred income taxes 1,927 1,524 - (730) 2,721
Investment tax credits 342 63 - - 405
Commodity contract liabilities 346 - - 1 347
Cash flow hedge and other derivative liabilities 178 - 17 - 195
Notes or other liabilities due to affiliates 386 - - (386) -
Long-term debt, less amounts due currently 3,226 4,199 4,987 - 12,412
Other noncurrent liabilities and deferred credits 1,271 303 1,218 (30) 2,762
Liabilities held for sale 6 - - - 6
--------------------------------------------------------
Total liabilities 10,456 6,834 8,025 (2,751) 22,564
--------------------------------------------------------
Preferred securities of subsidiaries 511 - (473) - 38
Shareholders' equity
Preferred stock - not subject to mandatory redemption - - 300 - 300
Common stock - - (1,088) 1,090 2
Additional paid in capital 2,781 2,061 2,984 (5,020) 2,806
Retained earnings (deficit) 961 653 (1,815) (2,082) (2,283)
Accumulated other comprehensive income (loss) (151) (27) (353) 345 (186)
--------------------------------------------------------
Total shareholders' equity 3,591 2,687 28 (5,667) 639
--------------------------------------------------------
Total liabilities, preferred securities of subsidiaries
& shareholders' equity 14,558 9,521 7,580 (8,418) 23,241
========================================================
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TXU CORP. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATING BALANCE SHEET - VARIANCE
MARCH 31, 2005 VS DECEMBER 31, 2004
(DOLLARS IN MILLIONS)
(UNAUDITED)
Electric Eliminations/
Energy Delivery Other Rounding Total
---------- -------- ----- ------------ --------
ASSETS
Current assets
Cash and cash equivalents (2) 1 (15) - (16)
Restricted cash - 3 - - 3
Advances to affiliates 158 - (14) (144) -
Accounts receivable - trade (373) 4 (93) 61 (401)
Income taxes receivable - - (44) 58 14
Accounts receivable - affiliates (43) (41) (25) 109 -
Notes or other receivables due from affiliates - (17) - 17 -
Inventories 12 10 - - 22
Commodity contract assets 501 - - - 501
Accumulated deferred income taxes (16) - (13) (33) (62)
Other current assets 105 31 (7) 1 130
------------------------------------------------------
Total current assets 342 (9) (211) 69 191
------------------------------------------------------
Investments
Restricted cash - - (15) - (15)
Other investments 2 2 (1,859) 1,870 15
Property, plant and equipment - net (11) 119 (23) - 85
Notes or other receivables due from affiliates - - - - -
Goodwill - - - - -
Regulatory assets - net - (15) - - (15)
Commodity contract assets 4 - - - 4
Cash flow hedge and other derivative assets 27 - 2 - 29
Other noncurrent assets (3) 8 223 (181) 47
Assets held for sale (3) - - - (3)
------------------------------------------------------
Total assets 358 105 (1,883) 1,758 338
======================================================
LIABILITIES, PREFERRED SECURITIES OF SUBSIDIARIES
& SHAREHOLDERS' EQUITY
Current liabilities
Notes payable - banks 135 50 - - 185
Advances from affiliates - 79 66 (145) -
Long-term debt due currently 400 1 (5) (1) 395
Accounts payable - trade (137) 6 (71) 61 (141)
Accounts payable - affiliates (38) (28) (43) 109 -
Notes or other liabilities due to affiliates (17) - - 17 -
Commodity contract liabilities 319 - - - 319
Litigation and other settlement accruals - - (150) - (150)
Other current liabilities (115) (108) 12 25 (186)
------------------------------------------------------
Total current liabilities 547 - (191) 66 422
------------------------------------------------------
Accumulated deferred income taxes 43 9 - (173) (121)
Investment tax credits (4) (1) - - (5)
Commodity contract liabilities 105 - - (1) 104
Cash flow hedge and other derivative liabilities (18) - 61 - 43
Notes or other liabilities due to affiliates - - - - -
Long-term debt, less amounts due currently (335) (21) (86) - (442)
Other noncurrent liabilities and deferred credits (41) 28 35 12 34
Liabilities held for sale (1) - - - (1)
------------------------------------------------------
Total liabilities 296 15 (181) (96) 34
------------------------------------------------------
Preferred securities of subsidiaries 4 - (4) - -
Shareholders' equity
Preferred stock - not subject to mandatory redemption - - - - -
Common stock - - (1,090) 1,090 -
Additional paid in capital (356) 18 (685) 1,025 2
Retained earnings (deficit) 382 71 251 (421) 283
Accumulated other comprehensive income (loss) 32 1 (174) 160 19
------------------------------------------------------
Total shareholders' equity 58 90 (1,698) 1,854 304
------------------------------------------------------
Total liabilities, preferred securities of subsidiaries
& shareholders' equity 358 105 (1,883) 1,758 338
======================================================
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TXU CORP. REGULATORY SUMMARY
================================================================================
COMPANY SUMMARY/EVENTS
- --------------------------------------------------------------------------------
TXU Energy PRICE TO BEAT (PTB) applies to former franchise area
residential and small/medium business (< 1MW of load)
customers. Until 1/1/05 TXU Energy was permitted to
offer only one rate - the PTB -- to residential
customers. TXU Energy has been permitted to offer rates
other than the PTB to small/medium commercial customers
since 2004 and as of 1/1/05 can offer rates other than
the PTB to residential customers. TXU Energy must also
make service at the PTB price available until 1/1/07.
The fuel component of the PTB can be changed twice per
year if gas prices (20-day average of NYMEX 12-month
strip) change by more than 5% (10% after 11/15 of any
year) from the current price upon which PTB fuel factor
is based. Changes in the PTB fuel factor are initiated
by TXU Energy through a filing with the PUC.
PUC NO. 31004 - Application of TXU Energy Retail Company
to Increase Price to Beat Fuel Factor filed April 15,
2005
+ Requesting 20.8% increase in PTB fuel factor.
+ Would result in a 9.9% increase to residential
customers using 1,000 kWh per month.
+ Approval by the PUC is expected within approximately
45 days of filing.
TXU Electric TXU ELECTRIC DELIVERY GENERAL RATE CASE: Authorized ROE
Delivery of 11.25%, Capital structure of 60% Debt, 40% Equity.
Reports are filed annually for review with the PUC.
Certain cities within TXU Electric Delivery's historical
service territory, acting in their role as a regulatory
authority (with original jurisdiction), initiated
inquiries to determine if the rates of TXU Electric
Delivery, which have been established by the Public
Utility Commission, are just and reasonable. 23 cities
passed such resolutions (and 11 passed resolutions
supporting the other cities). TXU Electric Delivery has
the right to appeal any city action to the Public
Utility Commission. In the fourth quarter of 2004, TXU
Electric Delivery recorded a $21 million charge,
reported in other deductions, for estimated settlement
payments arising from the resolution of these inquiries.
The settlement agreement, which was finalized February
22, 2005, avoids any immediate rate actions, but
requires TXU Electric Delivery to file a rate case in
2006, based on a 2005 test year, unless the Cities and
TXU Electric Delivery mutually agree that such a filing
is unnecessary. The final settlement amount is
undetermined; however, TXU Electric Delivery believes it
will approximate the amount accrued.
PUC NO. 30655 - Petition of TXU Electric Delivery
Company for Approval of Transmission Cost Recovery
Factor (TCRF) Update
+ The PUC approved TXU Electric Delivery's proposed TCRF
on February 23, 2005 (with new TCRF rates effective
March 1, 2005)
+ The increase will recover an additional $1.6 million
in annual revenue
.
PUC NO. 30802 - Application of TXU Electric Delivery
Company for Interim Update of Wholesale Transmission
Rates filed February 28, 2005
+ New rate approved and effective April 29, 2005
+ Total annualized revenue increase of $23 million
TXU CORP. SUMMARY OF SIGNIFICANT LEGAL PROCEEDINGS
================================================================================
- --------------------------------------------------------------------------------------------------------------------------
DATE FILED CASE INFORMATION SUMMARY AND STATUS (1)
- --------------------------------------------------------------------------------------------------------------------------
July 7, 2003 TEXAS COMMERCIAL ENERGY V. TXU Filing made by an ERCOT market participant (Texas Commercial Energy
ENERGY, INC., ET AL.; Civil or TCE) against TXU Energy and other wholesale market participants
Action No. C-03-249; United in ERCOT asserting antitrust and other claims. TXU Energy maintains
States District Court for the the claims are without merit and filed a motion to dismiss which
Southern District of Texas the Court granted. The dismissal has been appealed to the Fifth
Circuit by the Plaintiff. The appeal remains pending and is
scheduled for oral argument on May 10, 2005.
- --------------------------------------------------------------------------------------------------------------------------
April 28, 2003 WILLIAM J. MURRAY V. TXU Filing made by a former employee claiming breach of contract and
CORP., TXU ENERGY COMPANY, LLC employment termination under Section 806 of the Sarbanes-Oxley Act
AND TXU PORTFOLIO MANAGEMENT of 2002. The TXU Defendants believe the claims are without merit
COMPANY, LP F/K/A TXU ENERGY but cannot predict the outcome of this action. Discovery in this
TRADING COMPANY LP; Cause No. case is ongoing and the Court has set the case for trial in June
3-03-CV-0888-P; United States 2005.
District Court for the
Northern District of Texas,
Dallas Division
- --------------------------------------------------------------------------------------------------------------------------
February 3, 2004 PATRICK GOODENOUGH, JAMES Three ERISA lawsuits consolidated and a putative class action
BRANT HARGRAVE, KARI LYN SMITH filing made on February 3, 2004. Plaintiffs seek to represent a
AND CARL PFEIL, ON BEHALF OF class of participants in employee benefit plans during the period
THE TXU THRIFT PLAN, AND ALL between April 26, 2001 and October 11, 2002. The TXU Defendants
OTHER PERSONS SIMILARLY believe the claims are without merit but cannot predict the outcome
SITUATED, VS. TXU CORP. ET of this action. Initial class action certification related
al.; Case No. discovery has been completed and the Plaintiffs' initial class
3:02-CV-2573-K; United States certification motion was denied without prejudice. A second class
District Court for the certification motion is pending before the Court for decision.
Northern District of Texas,
Dallas Division
- --------------------------------------------------------------------------------------------------------------------------
March 10, 2003 KIMBERLY PAIGE KILLEBREW, ON Filing made by an alleged retail consumer of electricity asserting
BEHALF OF HERSELF AND ALL defendants engaged in manipulation of the wholesale electric market
SIMILARLY-SITUATED INDIVIDUALS and violation of antitrust and other laws. The TXU Defendants
V. TXU CORP. AND TXU PORTFOLIO believe the claims are without merit but cannot predict the outcome
MANAGEMENT COMPANY LP,; Cause of this action. The case has been stayed pending the final ruling
No. 3:04cv806; United States in the appeal of the TCE litigation described above.
District Court for the
Northern District of Texas,
Dallas Division
- --------------------------------------------------------------------------------------------------------------------------
October 23, 2002 BRUCE GIRDAUSKAS, DERIVATIVELY Derivative filing made by a purported shareholder alleging breach
ON BEHALF OF TXU CORP. VS. TXU of fiduciary duty. TXU Corp. believes the claims are without merit
CORP. ET AL; Cause No. but cannot predict the outcome of this action. Plaintiff failed to
02-10191; 116th Judicial make a pre-suit demand upon the directors as required by law, and
District Court of Dallas the case is currently stayed. The Plaintiff filed a motion to lift
County, Texas the stay which was granted solely to order the case to mediation.
- --------------------------------------------------------------------------------------------------------------------------
January 2003, RICHARD SCHWARTZ, ET AL., V. A number of lawsuits were filed and consolidated, and an amended
October 2002, TXU CORP ET AL.; Civil Action consolidated complaint was filed on July 21, 2003. The complaint
November 2002, No.: 3:02-CV-2243-K; United alleges violations of the Securities Act of 1933 and the Securities
December 2002 States District Court for the Exchange Act of 1934, all relating to alleged materially false and
Northern District of Texas, misleading statements. On January 20, 2005 a memorandum of
Dallas Division understanding was signed pursuant to which the case will be settled
in exchange for payment of $150 million, at least $101 million of
which will be paid by TXU's D&O insurance carriers. The Court
granted preliminary approval of the settlement and set a hearing on
final approval for June 23, 2005.
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OTHER ITEMS
- --------------------------------------------------------------------------------------------------------------------------
October, 2003 TXU EUROPE CLAIMS TXU Corp. received notice from certain creditors and administrators
of TXU Europe regarding potential claims against the directors and
officers for allegedly failing to minimize the potential losses to
the creditors of TXU Europe. On January 28, 2005, TXU entered into
a settlement agreement providing for payment of approximately $220
million to the administrators of TXU Europe Ltd in order to resolve
the claims of the TXU Europe companies and creditors of those
companies. The settlement agreement was contingent in part upon
creditor approval of the bankruptcy scheme presented by the
administrators (CVAs). While such approval has been received, two
creditor groups subsequently filed an application in UK court
objecting to the CVAs. TXU Corp. expects that these objections
will be resolved by the administrators but that completion of the
settlement agreement will be delayed until the third or fourth
quarter of 2005.
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(1) Detailed descriptions of these proceedings are available in the company's
10-K and 10-Q filings with the SEC.