LIQUIDITY AND CAPITAL RESOURCES Cash flows provided by operating activities for 2001 were $2.3 billion compared to $1.7 billion for 2000. The increase in 2001 of $584 million, or 35 percent, was primarily driven by collections of the prior year’s under-recovered fuel costs in the US Electric segment. Due to the significant increase in natural gas costs in 2000, the US Electric segment did not recover through customer billings all of its fuel costs incurred. Subsequent regulatory proceedings resulted in approved rate increases that allowed substantial cost recovery during 2001. Cash flows used in financing activities for 2001 were $2.2 billion. Retirements and repurchases of debt and equity securities totaled $8.5 billion and issuances totaled $7.1 billion. As a result of the restructuring of our US Electric operations, there were substantial retirements and issuances of long-term debt and retirements of preferred securities in 2001. Cash flows from financing activities in 2000 were $13 million. Cash dividends paid approximated $640 million each year. Cash flows provided from investing activities for 2001 totaled $67 million compared to $1.2 billion used in investing activities in 2000. Acquisition activity declined to $225 million in 2001 compared to $809 million in 2000. Proceeds from the sale of assets were $1.5 billion in 2001 compared to $832 million in 2000. Capital expenditures were $1.6 billion for 2001 compared to $1.4 billion for 2000. Included in cash flows for 2001 was $509 million of restricted cash that was released upon the transfer of certain UK power plants under leasing agreements. Our capital expenditures are estimated at $1.6 billion for 2002 and are expected to be funded by cash flows from operations. Approximately $800 million of this is for maintenance and organic growth of existing operations, and the balance represents discretionary spending on potential business opportunities. Approximately 34 percent is planned for our US energy business, 23 percent for our international energy business, 37 percent for our US energy delivery business, and 6 percent for other activities. The remaining $800 million of developmental or growth capital expenditures will be allocated globally based on anticipated returns. It is expected that 25 to 50 percent will be in the international energy business, primarily in Europe, and the rest in the US, primarily in the energy business. In April 2001, we repurchased approximately 1.3 million shares of our common stock for $44 million under an equity purchase agreement. During 2000, we repurchased approximately 18.6 million shares of our common stock for $596 million through open market purchases. No additional repurchases are planned in 2002. TXU Corp. and TXU US Holdings Company have joint US dollar-denominated lines of credit under revolving credit facility agreements that support our US commercial paper program. The first facility, which terminates in April 2002, provides for short-term borrowings aggregating up to $1.4 billion outstanding at any one time at variable interest rates. The second facility, which terminates in February 2005, is also for $1.4 billion at variable interest rates. This facility also provides for the issuance of up to $500 million of letters of credit, of which $468 million was outstanding at December 31, 2001. At December 31, 2001, there were no borrowings outstanding under these facilities. We intend to renew these or comparable, appropriately sized facilities. Under the commercial paper program, $853 million was outstanding at December 31, 2001. In connection with the restructuring of our US Electric operations, in December 2001 TXU Corp. entered into a fully drawn $700 million credit facility with a financial institution that matures June 30, 2002. We currently expect to repay this bridge facility with proceeds from capital markets transactions by our subsidiaries. At December 31, 2001, TXU Europe had a $1.8 billion Euro Medium Term Note program, under which TXU Europe may from time to time issue notes in various currencies. Borrowings outstanding at December 31, 2001, aggregated $836 million. Additionally, TXU Europe and TXU Australia have several short-term facilities with commercial banks. At December 31, 2001, outstanding borrowings under these short-term facilities aggregated $2.8 billion.