TXU Corp. Agrees to Settle Shareholder Class Action Litigation

TXU Corp. (NYSE: TXU) announced today that it reached a comprehensive settlement regarding the consolidated amended securities class action lawsuit initially filed against the company in October 2002. The agreement, in which TXU Corp. denies any liability, includes
a one-time payment of $150 million to the class members, which are purchasers
of TXU Corp. securities between April 26, 2001 and October 11, 2002, and,
subject to Board of Directors approval, the adoption of certain corporate
governance initiatives.

TXU Corp. has reached agreement with certain of its directors' and
officers' insurance carriers for the payment of $66 million of the settlement
amount and expects to recover additional amounts from other carriers. The
remaining $84 million is less than the amount previously reserved for the
settlement of litigation cases. As a result, the expense accrual of
$100 million ($65 million after tax) recorded in the second quarter will be
reduced by $16 million ($10 million after tax) in the fourth quarter of 2004.
As with the second quarter 2004 expense, the benefit resulting from the
reduction in the accrual will not affect the company's operational earnings(1)
expectations. The accrual could be reduced further if additional amounts are
received under insurance policies as expected. The payment is expected to be
placed in trust within 60 days and will be sourced from the insurance carriers
and from TXU Corp. cash on hand and available credit facility capacity.

As part of the settlement, TXU Corp.'s Board of Directors will consider
for adoption several new corporate governance initiatives, consistent with the
Company's ongoing commitment to governance excellence. The governance
initiatives to be considered by TXU Corp.'s Board of Directors as part of the
settlement include:

* Criteria for determining director independence that are more stringent
than the current NYSE criteria previously adopted by the Company;

* Annual review of director compensation by TXU Corp.'s Organization
and Compensation Committee;

* A policy requiring majority shareholder approval prior to the adoption
of any stock option plan; and

* Establishment of stock ownership guidelines for directors.

Additionally, consistent with TXU Corp.'s ongoing governance initiatives,
the TXU Corp. Board of Directors will replace at least two directors no later
than May 2006 with candidates who meet pre-defined independence criteria.

C. John Wilder, TXU Corp.'s Chief Executive Officer, stated, "Settling
this litigation now removes the distractions, expense and uncertainty that
accompany such litigation and enables us to look ahead and focus on delivering
on our restructuring plan and improving the performance and competitiveness of
our core businesses. Shareholders will also benefit from governance
initiatives that are adopted as part of this settlement. These initiatives
will complement TXU's ongoing commitment to governance excellence."

The parties are finalizing the settlement agreement before submitting it
to the Court. The settlement agreement is subject to various conditions,
including preliminary approval by the Court, notice to the class, and final
approval and judgment by the Court. TXU Corp. denies any liability or
violation of law but has agreed to settle to avoid the burden, distractions,
costs and uncertainties of such litigation. Terms of the settlement and the
procedures which class members may follow will be set forth in a notice to be
sent to the class by their attorneys.

TXU Corp., a Dallas-based energy company, manages a portfolio of
competitive and regulated energy businesses in North America, primarily in
Texas. In TXU Corp.'s unregulated business, TXU Energy Retail provides
electricity and related services to more than 2.5 million competitive
electricity customers in Texas, more customers than any other retail electric
provider in the state. TXU Power has over 18,300 megawatts of generation in
Texas, including 2,300 MW of nuclear-fired and 5,837 MW of lignite/coal-fired
generation capacity. TXU Corp. is also the largest purchaser of wind-generated
electricity in Texas and among the top five purchasers in North America. TXU
Corp.'s regulated electric distribution and transmission business, TXU
Electric Delivery Company, complements the competitive operations, using asset
management skills developed over more than one hundred years, to provide
reliable electricity delivery to consumers. TXU Electric Delivery operates the
largest distribution and transmission system in Texas, providing power to
2.9 million electric delivery points over more than 98,000 miles of
distribution and 14,000 miles of transmission lines. Visit
http://www.txucorp.com for more information about TXU Corp.

This release 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 TXU Corp.'s
SEC filings on Forms 10-K and 10-Q. In addition to the risks and
uncertainties set forth in the company's SEC filings, the forward-looking
statements in this release could be affected by the parties of the settlement
to achieve the various conditions of the settlement, including, but not
limited to, attaining approval and judgment for the settlement from the Court.

(1) Operational earnings is a non-GAAP measure defined as per
share (diluted) income from continuing operations, excluding special
items and net of preference share dividends. TXU believes that
operational earnings is a useful measure of underlying results
because of the magnitude and scope of TXU Corp.'s performance
improvement program and the significant effect of the special items
on reported results. TXU relies on operational earnings for
evaluation of performance and believes that analysis of the business
by external users is enhanced by visibility to both reported GAAP
earnings and operational earnings. Special items are unusual charges
related to the implementation of the performance improvement program
and other charges, credits or gains that are unusual or nonrecurring.

(2) Plaintiff attorney fees estimated at 20 percent of settlement amount.
Actual amount will be set by the Court.