TXU delivered good results in 2005 with strong financials and some terrific operational successes. But we also know we can do better, and we will. To assess our progress, we compared the results from 2003 (prior to the turnaround) to our performance through 2005. We measure our progress against the hallmarks of successful industrial companies: operational excellence, market leadership, a strict risk/return mindset for all key business decisions, and a rigorous performance management system. We believe that executing against these elements is necessary to deliver top-quartile financial performance, shareholder return, and financial flexibility. A high-level version of the comprehensive scorecard we use to monitor our business performance appears above. The following pages note how we are doing, along with my grade on an A-F scale: Financial Performance, Operational Excellence, Market Leadership, Risk/Return Mindset, and Performance Management.

¹ Based on actual 2003 financial results including subsequently discontinued operations.
² See Regulation G financial definitions and reconciliations.
³ Nuclear generation operations refueled both units in 2005; 2005 results have been adjusted to approximate a single outage year.
⁴ System Average Interruption Duration Index: the number of minutes an average customer's power is out during a year.
⁵ Based on Lost Time Incident Rate: the number of injuries requiring time away from the job per 200,000 employee hours worked.
⁶ 2003 amount includes $477 million related to discontinued operations.
⁷ Includes non-variable operating costs and SG&A expenses, interest expense and related charges, and maintenance capital expenditures. All operating costs, SG&A expenses, interest expense and related charges, and capital expenditures totaled $4,704 million in 2003 and $4,055 million in 2005. Of this total 2003 amount, $903 million relates to discontinued operations.