Tri Tran helps operate the Torrens Island generating plant near Adelaide, South Australia. The plant supplies local markets and allows TXU Energy to be a national wholesale energy trader. NO. 1 PORTFOLIO MANAGER IN AUSTRALIA TXU Energy’s business in Australia is very different today from the government-owned electricity distribution business we purchased in 1995. We are now the No. 1 portfolio manager in the national energy market and have fully implemented the business model with production, merchant energy trading, and retail. With a statewide retail footprint, we sell electricity and natural gas across Victoria, Australia’s second-most populous state, to 960,000 customers. Since January 2002, all of Victoria’s 2.5 million households and businesses have been free to choose their electricity supplier. Full natural gas competition is expected in the fourth quarter of 2002. Our retail strategy is keenly focused on retaining and attracting high-value customers and giving them a range of incentives to stay over the long term. The goal is to be positioned as the best value retailer. More Victorians are aware of us, and, more important, they talk more positively about us than about any other energy supplier. We have a progressive approach to service and sales, enviable dual-fuel capabilities, a secure source of competitively priced gas, and exceptional skills in managing the volatility of power prices. The Torrens Island power station, acquired in 2000, continues to strengthen our portfolio and national presence. Bolstered by 50 megawatts of increased capacity in 2001, the 1,330-megawatt facility provides almost 40 percent of South Australia’s electricity supply during times of high demand. The plant also allowed us to become the largest new electricity retailer to enter South Australia, a wholesale electricity trader on the national market, and a provider of hedging and capacity contracts to other retailers and generators. Our upstream production assets and contracts provide a hedge to downstream retail commitments. A long-term contract associated with over 960 megawatts of peaking electric generation in Victoria helps hedge electricity prices. Access to almost a third of Victoria’s natural gas supply and ownership of Australia’s first commercial underground gas storage and processing facility act as hedges against fluctuations in gas prices. In addition, the processing and storage capability enables us to contract with new producers in the rapidly developing Otway Gas Basin to commercialize its reserves. Using our portfolio management approach, which is unique in Australia, the trading group optimizes the upstream and downstream positions and sells risk-management products to others to help them hedge their energy prices. In addition to our presence in Victoria, South Australia, and in the national energy trading market, we are continuing to grow our energy trading operations and retailing to industrial and commercial customers in the states of both New South Wales and Queensland. TXU Energy: We’re not your average merchant energy business. We’re energizing the world today and for a long time to come!