8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported) – August 3, 2015

Energy Future Holdings Corp.

(Exact name of registrant as specified in its charter)

Texas	1-12833	46-2488810
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

Energy Future Intermediate Holding Company LLC

(Exact name of registrant as specified in its charter)

Delaware	1-34544	26-1191638
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

Energy Future Competitive Holdings Company LLC

(Exact name of registrant as specified in its charter)

Delaware	1-34543	75-1837355
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201

(Address of principal executive offices, including zip code)

214-812-4600

(Registrants’ telephone number, including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Introductory Note

On April 29, 2014, Energy Future Holdings Corp. (“EFH Corp.”) and the substantial majority of its direct and indirect subsidiaries, including Energy Future Intermediate Holding Company LLC (“EFIH”), Energy Future Competitive Holdings Company LLC (“EFCH”) and Texas Competitive Electric Holdings Company LLC (“TCEH” and collectively with EFH Corp., EFIH and EFCH, the “Companies”), but excluding Oncor Electric Delivery Holdings Company LLC (“Oncor Holdings”) and its direct and indirect subsidiaries, filed voluntary petitions for relief (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). During the pendency of the Bankruptcy Filing, EFH Corp. and its direct and indirect subsidiaries that are included in the Bankruptcy Filing (collectively, the “Debtors”) are operating their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code.

Item 7.01. Regulation FD Disclosure.

Discussions with Creditors

In May and June 2015, the Companies executed confidentiality agreements with certain holders of claims against the Debtors (collectively, the “Creditors”), including second lien claims against EFIH (“EFIH 2^nd Lien Creditors”), first lien claims against EFIH, unsecured claims against EFH Corp., first lien claims against TCEH and its subsidiaries, and unsecured claims against TCEH and its subsidiaries. These confidentiality agreements facilitated discussions between the Debtors and the Creditors concerning potential strategic activities or transactions involving the restructuring of the Debtors (the “Restructuring”). In addition to the Creditors, the Official Committees of Unsecured Creditors for each of (x) EFH Corp./EFIH and (y) TCEH participated in some of these discussions.

Pursuant to the confidentiality agreements, the Companies agreed to disclose publicly after a specified period if certain conditions were met that the Companies and the Creditors had engaged in negotiations with third parties concerning the Restructuring, information regarding such negotiations and certain confidential information concerning the Debtors and Oncor Electric Delivery Company LLC (“Oncor”) that the Companies had provided to the Creditors. The information included in this Current Report on Form 8-K is being furnished to satisfy the Companies’ public disclosure obligations under the confidentiality agreements.

Negotiations between representatives of the Companies and certain Creditors regarding the Restructuring are ongoing as of the date of this Current Report on Form 8-K. Attached hereto as Exhibit 99.1 is a summary of the material terms of proposed restructuring transactions that the Companies have received from the EFIH 2^nd Lien Creditors. There is no assurance that the proposed restructuring transactions described in Exhibit 99.1 will be implemented on the terms described therein or at all.

The Debtors continue to focus on formulating and implementing an effective and efficient plan of reorganization for each of the Debtors under Chapter 11 of the Bankruptcy Code that maximizes enterprise value, including identifying the best transaction to maximize value for the Debtors. In furtherance of those efforts, the Companies will continue to engage in discussions with their stakeholders regarding alternatives to maximize the value of the Debtors’ estates.

Financial Information

During negotiations regarding the Restructuring, the Companies provided certain Creditors and their respective advisors with the prospective financial information regarding Oncor set forth in Exhibit 99.2 attached hereto.

In addition to the prospective financial information set forth in Exhibit 99.2 attached hereto, the Companies also disclosed to certain Creditors that, as of June 30, 2016, Oncor’s net debt was projected to be approximately $6.63 billion and the EFH Corp./EFIH cash balance at emergence was projected to be approximately $354 million

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after payment of fees and expenses and consummation of certain emergence transactions associated with potential transactions proposed by the Debtors. The amount of cash at emergence is subject to change depending on, among other things, the nature of the emergence transactions.

EFH Corp. and its subsidiaries (including Oncor) generally do not publicly disclose detailed prospective financial information. However, in connection with the Debtors’ discussions with the Creditors and their respective advisors, the Debtors provided certain financial information, consisting largely of financial forecasts, to the Creditors and their respective advisors pursuant to confidentiality agreements. The Debtors provided financial forecasts for Oncor based upon information provided to EFH Corp. by Oncor. EFIH’s wholly owned subsidiary, Oncor Holdings owns approximately 80% of the equity interests of Oncor. The financial forecasts were not prepared with a view towards public disclosure and were not prepared in accordance with generally accepted accounting principles or published guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of “prospective financial information.”

The inclusion of the financial forecasts in this Current Report on Form 8-K should not be regarded as an indication that the Companies, Oncor or any other person considered, or now consider, this information to be necessarily predictive of actual future results, and does not constitute an admission or representation by any person that such information is material, or that the expectations, beliefs, opinions, and assumptions that underlie such forecasts remain the same as of the date of this Current Report on Form 8-K, and readers are cautioned not to place undue reliance on the prospective financial information.

None of the independent auditor of the Companies, the independent auditor of Oncor, or any other independent accountant has examined, compiled, or performed any procedures with respect to the prospective financial information contained herein and, accordingly, none has expressed any opinion or any other form of assurance on such information or its achievability and none assumes any responsibility for the prospective financial information.

The prospective financial information:

• is speculative by its nature and was based upon numerous expectations, beliefs, opinions, and assumptions, as further described below, which are inherently uncertain and many of which are beyond the control of the Companies, Oncor, and their respective subsidiaries and may not prove to be accurate;

• does not necessarily reflect current estimates or expectations, beliefs, opinions, or assumptions that the respective management of the Companies and Oncor may have about prospects for Oncor’s business, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the information was prepared;

• may not reflect current results or future performance, which may be significantly more favorable or less favorable than as set forth in the prospective financial information; and

• is not, and should not be regarded as, a representation that any of the expectations contained in, or forming a part of, the forecasts will be achieved. All of the financial information contained in this Item 7.01 and in Exhibit 99.2 attached hereto is forward-looking in nature. The information is subjective in many respects and thus subject to interpretation. Further, the information relates to multiple future years and such information by its nature becomes less predictive with each succeeding day. Neither the Companies nor Oncor can provide assurance that the financial projections will be realized; rather, actual future financial results may vary materially from the forward-looking information.

In addition, some of the prospective financial information is presented assuming the implementation of particular restructuring scenarios, and there is no assurance that any of these restructuring scenarios will be implemented. The prospective financial information is also presented in light of various material assumptions that may not be accurate or appropriate. Without limiting the foregoing, the prospective financial information reflects, among other assumptions, assumptions that may not be accurate or appropriate regarding the application of tax laws

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(particularly tax laws in the area of real estate investment trusts), the allocation of tangible and intangible property values, responsibility for certain liabilities and obligations, and matters within the purview of the Public Utility Commission of Texas.

Except as required by law, none of EFH Corp., EFCH or EFIH currently intends to update or revise publicly any of the prospective financial information to reflect circumstances or other events occurring after the date the financial projections were prepared or to reflect the occurrence of future events. These considerations should be taken into account in reviewing the financial projections, which were prepared as of an earlier date. For additional information on factors that may cause actual future financial results to vary materially from the prospective financial information, see the section entitled “Cautionary Note Regarding Forward-Looking Statements” below.

Cautionary Note Regarding Forward-Looking Statements

This Current Report on Form 8-K, including the prospective financial information included in Item 7.01 and Exhibit 99.2 attached hereto, includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. All statements, other than statements of historical facts, are forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. Although we believe that in making any such forward-looking statement our expectations are based on reasonable assumptions, any such forward-looking statement involves uncertainties and is qualified in its entirety by reference to the discussion of risk factors under “Risk Factors” and the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed by each of EFH Corp., EFIH, EFCH and Oncor and the following important factors, among others, that could cause actual results to differ materially from those projected in such forward-looking statements:

• our ability to obtain the approval of the Bankruptcy Court with respect to motions, the plan of reorganization and disclosure statement filed in our Chapter 11 cases, and the outcomes of Bankruptcy Court rulings and our Chapter 11 cases in general

• the effectiveness of the overall restructuring activities pursuant to the Bankruptcy Filing and any additional strategies we employ to address our liquidity and capital resources;

• the actions and decisions of creditors, regulators and other third parties that have an interest in our Chapter 11 cases; and

• restrictions on us due to the terms of debtor-in-possession financing facilities and restrictions imposed by the Bankruptcy Court.

Any forward-looking statement speaks only at the date on which it is made, and except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of them; nor can we assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. As such, you should not unduly rely on such forward-looking statements.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Summary of Material Terms of EFIH 2nd Lien Proposal
99.2	Financial Information

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ENERGY FUTURE HOLDINGS CORP.
	/s/ Terry L. Nutt
Name:	Terry L. Nutt
Title:	Senior Vice President & Controller
ENERGY FUTURE INTERMEDIATE HOLDING COMPANY LLC
	/s/ Terry L. Nutt
Name:	Terry L. Nutt
Title:	Senior Vice President & Controller
ENERGY FUTURE COMPETITIVE HOLDINGS COMPANY LLC
	/s/ Terry L. Nutt
Name:	Terry L. Nutt
Title:	Senior Vice President & Controller

Dated: August 3, 2015

EX-99.1

Exhibit 99.1

KL Comments 7/27

Confidential

Subject to FRE 408 and Material Change

The ad hoc group of EFIH Second Lien Noteholders made various proposals since May 2015 on a potential restructuring. The last proposal (reflected below) contemplated a standalone restructuring where certain creditors of EFH and EFIH would receive equity in Reorganized EFH at an Oncor TEV of $18.2 billion. This proposal was jointly supported by certain holders of EFIH Unsecured Notes. Attached is a term sheet reflecting this proposal and an illustrative analysis reflecting equity splits and recoveries.

Advisors to the Indenture Trustee for the EFIH Second Lien Notes and the ad hoc group of EFIH Second Lien Noteholders and the ad hoc group of EFIH Unsecured Noteholders communicated this proposal to both the TCEH First Lien Creditors and the Debtors.

Restructuring Term Sheet

July [27], 2015

This term sheet (this “Term Sheet”) describes certain terms of a restructuring of: (a) Energy Future Holdings Corp., a Texas corporation (“EFH Corp.”); (b) EFH Corp.’s wholly owned direct subsidiary Energy Future Intermediate Holding Company LLC, a Delaware limited liability company (“EFIH”); and (c) EFIH’s wholly-owned direct subsidiary, EFIH Finance Inc., a Delaware corporation (such restructuring, the “Restructuring”), which commenced cases under chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on April 29, 2014.

The Supporting Creditors (as defined herein) are prepared to support the Restructuring under a plan of reorganization as agreed to by the Debtors and the Supporting Creditors (the “Plan”).

The proposed terms and conditions set forth in this Term Sheet are intended merely as an outline of certain material terms of a Restructuring, are provided for discussion purposes only and do not constitute an offer, agreement, or binding commitment by or on behalf of any party. In addition, this Term Sheet is subject to tax and accounting review. This Term Sheet is not a solicitation and is not a binding obligation to consummate the Restructuring. Any such obligation will be created only by definitive agreements, the provisions of which will supersede this Term Sheet, and any obligation to support and pursue a transaction on the terms set forth in this Term Sheet will be created only by a related support agreement pursuant to the terms of such support agreement.

This Term Sheet is a draft, is intended for discussions purposes, and is subject to Federal Rule of Evidence 408. The inclusion of any settlement amounts herein with respect to claims for post-petition interest, makewholes, and alleged claims (including by and among TCEH, EFH Corp., and EFIH) shall not be an admission or concession with respect to any such claims.

I. Assumptions

The Restructuring is premised on the following assumptions:

A. The reorganization of EFH Corp. and EFIH into Reorganized EFH and EFIH and the issuance to creditors of EFIH and EFH Corp. of equity of Reorganized EFH (“Reorganized EFH Common Stock”);

B. The consummation of the Plan under a standalone structure where Reorganized EFH Common Stock is distributed to certain creditors of EFH Corp., EFIH, and TCEH, including the Supporting Creditors. The equity splits of Reorganized EFH Common Stock is set forth on Exhibit A.

C. The commitment by certain of the Supporting Creditors to provide an equity investment (the “Equity Investment”),¹ in an amount sufficient, along with cash on hand at EFH Corp. and EFIH, to satisfy any potential cash distributions set forth in the Plan, and to the extent necessary, to pay a portion of the EFIH First Lien DIP Claims.² The parties shall seek to enter into, and obtain approval of, the Equity Investment as soon as reasonably practicable;

¹  NTD: Discuss the terms for the equity investment.

²  NTD: Do we want to provide for a cash raise to fund a buyout of the minority interest in Oncor Electric Delivery Company LLC (“Oncor”)]

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KL Comments 7/27

Confidential

Subject to FRE 408 and Material Change

D. The Debtors’ use of commercially reasonable efforts to enable the conversion of Reorganized EFH into a real estate investment trust (“REIT”), on terms to be agreed upon among the Debtors and the Supporting Creditors (as defined below). Notwithstanding anything to the contrary herein, the conversion of Reorganized EFH to a REIT, shall not be a condition to confirmation.³

E. A tax-free spin (the “Tax-Free Spin”) of Energy Future Competitive Holdings Company LLC (“EFCH”) and for EFCH’s wholly owned direct subsidiary, Texas Competitive Electric Holdings Company LLC (“TCEH”); and

F. The utilization by TCEH of substantially all of the net operating losses of EFH Corp. under the Plan (“NOLs”).⁴

II. Terms and Conditions

The Restructuring is predicated on the following terms and conditions:

A. The support of creditors holding certain amounts of EFIH Second Lien Note Claims and certain amounts of EFIH Unsecured Note Claims (the “Supporting Creditors”);⁵

B. Total Enterprise Value of Oncor of $18.2 billion and implied Reorganized EFH equity value of $[4.416] billion; and

C. Obtaining exit financing for Reorganized EFH in the amount of $[5.2] billion.

³  NTD: Need to discuss structure to optimize likelihood of a REIT.

⁴  NTD: Subject to further review.

⁵  NTD: Goal to have somewhere between 50% to 66% in amount of each of the EFIH Second Lien Note Claims and EFIH Unsecured Note Claims sign the PSA.

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KL Comments 7/27

Confidential

Subject to FRE 408 and Material Change

III. Maximum Asserted Claims Through June 30, 2016⁶

Issuance	Claim	Amount ($ in millions)
EFIH Second Lien Note Claims 7	Principal:	$	1,711
	Prepetition accrued interest:	$	0
	Postpetition accrued interest:	$	282
	Makewhole claim:	$	313
EFIH Unsecured Note Claims	Principal:	$	1,568
	Prepetition accrued interest:	$	81
	Postpetition accrued interest at Contract Rate:	$	509
	Makewhole claim:	$	120
EFH LBO Note Guaranty Claims	Principal:	$	60
	Prepetition accrued interest:	$	3
	Postpetition accrued interest:	$	17
	Makewhole claim:	$	0
EFH Legacy Note Claims	Principal:	$	587
	Prepetition accrued interest:	$	17
	Postpetition accrued interest:	$	89
	Makewhole claim:	$	195

⁶  Update to reflect claim numbers as of the Effective Date.

⁷  Reflects March 2015 paydown.

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KL Comments 7/27

Confidential

Subject to FRE 408 and Material Change

IV. Treatment of Claims and Interests⁸

Claim	Treatment
EFIH First Lien DIP Claims	On the Effective Date, in full satisfaction of each allowed EFIH First Lien DIP Claim, each holder thereof shall receive payment in full in cash from the proceeds of EFH/EFIH exit financing, and to the extent necessary, the Equity Investment.
Administrative Claims	On the Effective Date, each holder of an allowed Administrative Claim shall receive, in full satisfaction of its allowed claim, payment in full in cash.
Priority Tax Claims	Each holder of an allowed Priority Tax Claim shall receive, in full satisfaction of its Claim, payments in cash in a manner consistent with section 1129(a)(9)(C) of the Bankruptcy Code.
EFIH First Lien Note Claims	On the Effective Date, all EFIH First Lien Note Claims shall receive no distribution and all such Claims shall be disallowed in their entirety; provided, however, if such Claims are Allowed in any amount by Final Order, each holder of EFIH First Lien Note Claim shall receive its pro rata share of such amount in cash.
EFIH Second Lien Note Claims	On the Effective Date, in full satisfaction, release and discharge of, and in exchange for, all EFIH Second Lien Note Claims, each holder of EFIH Second Lien Note Claims who votes in favor of the Plan shall receive, based on the allowed amount of the EFIH Second Lien Note Claims, its pro rata share of Reorganized EFH Common Stock; each holder of EFIH Second Lien Note Claims who does not vote in favor of the Plan shall receive cash, based on the allowed amount of the EFH Second Lien Note Claims. The reasonable and documented fees and expenses of the EFIH Second Lien Trustee shall be in paid in full in cash. With reference to the claim amounts set forth in Section III hereof, the EFIH Second Lien Note Claims shall be allowed in an amount equal to: (a) 100% of principal plus (b) 100% of prepetition accrued interest plus (c) 100% of post-petition interest at the Contract Rate (including, for the avoidance of doubt, “Additional Interest” as defined in the applicable indenture) plus (d) 5% of the makewhole claims. In addition, the EFIH Second Lien Note Claims includes the full amount of the reasonable and documented fees and expenses of the EFIH Second Lien Trustee.

⁸  An analysis showing the recoveries for each class of claims set forth in this Section IV is attached hereto as Exhibit A

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KL Comments 7/27

Confidential

Subject to FRE 408 and Material Change

Claim	Treatment
EFIH Unsecured Note Claims	On the Effective Date, in full satisfaction, release and discharge of, and in exchange for, all EFIH Unsecured Note Claims, each holder of EFIH Unsecured Note Claims shall receive, based on the allowed amount of the EFIH Unsecured Note Claims, its pro rata share of Reorganized EFH Common Stock. The reasonable and documented fees and expenses of the EFIH Unsecured Notes Trustee shall be paid in full in cash. With reference to the claim amounts set forth in Section III hereof, the EFIH Unsecured Note Claims shall be allowed in an amount equal to: (a) 100% of principal plus (b) 100% of prepetition accrued interest plus (c) [56.6]% of post-petition interest at the Contract Rate (including, for the avoidance of doubt, “Additional Interest” as defined in the applicable indenture) plus (d) 5% of the makewhole claims. In addition, the EFIH Unsecured Note Claims includes the full amount of the reasonable and documented fees and expenses of the EFIH Unsecured Notes Trustee.
EFH LBO Note Guaranty Claims	On the Effective Date, in full satisfaction, release and discharge of, and in exchange for, all EFH LBO Note Guaranty Claims, each holder of EFH LBO Note Guaranty Claims shall receive, based on the allowed amount of the EFH LBO Note Guaranty Claim, its pro rata share of Reorganized EFH Common Stock. With reference to the claim amounts set forth in Section III hereof, the EFH LBO Note Guaranty Claims shall be allowed in an amount equal to: (a) 100% of principal plus (b) 100% of prepetition accrued interest plus (c) [56.6]% of post-petition interest.

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KL Comments 7/27

Confidential

Subject to FRE 408 and Material Change

Claim	Treatment
EFH Legacy Note Claims	On the Effective Date, in full satisfaction, release and discharge of, and in exchange for, all EFH Legacy Note Claims, each holder of EFH Legacy Note Claims shall receive, based on the allowed amount of the EFH Legacy Note Claim, its pro rata share of Reorganized EFH Common Stock and, if the class votes in favor of the Plan, its pro rata share of warrants as set forth in Section V below. With reference to the claim amounts set forth in Section III hereof, the EFH Legacy Note Claims shall be allowed in an amount equal to: (a) 100% of principal plus; (b) 100% of prepetition accrued interest.
Legacy General Unsecured Claims Against the EFH Debtors	On the Effective Date, in full satisfaction of each Legacy General Unsecured Claim Against the EFH Debtors, each holder thereof shall, at the option of EFH Corp., and, with the consent of the Requisite Supporting Creditors,9 be reinstated or receive payment in full in cash.
Other General Unsecured Claims against EFH Corp.	On the Effective Date, in full satisfaction of each General Unsecured Claim against EFH Corp., EFH Swap Claim, EFH Unexchanged Note Claim, EFH Non-Qualified Benefit Claim, each holder thereof shall receive, based on the allowed amount of its claim, its pro rata share of Reorganized EFH Common Stock and, if the class votes in favor of the Plan, its pro rata share of warrants as set forth in Section V below.
EFH Interests	On the Effective Date, interests in EFH shall be canceled without any distribution on account of such interests.
EFIH Interests	On the Effective Date, interests in the EFIH Debtors shall be reinstated.
TCEH Settlement Claim	On the Effective Date, in full satisfaction, release and discharge of, and in exchange for, the TCEH Settlement Claim, TCEH shall receive, based on the allowed amount of the TCEH Settlement Claim, its pro rata share of Reorganized EFH Common Stock and, if the class votes in favor of the Plan, its pro rata share of warrants as set forth in Section V below. The TCEH Settlement Claim shall be allowed in an amount equal to $704 million (the “TCEH Settlement Claim”).

⁹  The “Requisite Supporting Creditors” shall mean [(a)              of the Supporting Creditors holding EFIH Second Lien Note Claims and (b)              of the Supporting Creditors holding EFIH Unsecured Note Claims.]

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KL Comments 7/27

Confidential

Subject to FRE 408 and Material Change

V. Warrant Terms¹⁰

1) 2.5% of the reorganized EFH equity struck at the equity value as implied by a $18.7 billion Total Enterprise Value (“TEV”) of Oncor

2) 5.0% of the reorganized EFH equity struck at the equity value as implied by a $19.2 billion TEV of Oncor

3) 5.0% of the reorganized EFH equity struck at the equity value as implied by a $19.7 billion TEV of Oncor

4) 2.5% of the reorganized EFH equity struck at the equity value as implied by a $20.2 billion TEV of Oncor

Warrants shall have a tenor of 2 years

¹⁰  NTD: Warrant issuance values may be subject to adjustment under circumstances to be determined.

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KL Comments 7/27

Confidential

Subject to FRE 408 and Material Change

VI. General Provisions

Conditions Precedent to Confirmation

The following shall be conditions precedent to Confirmation: (i)     the Bankruptcy Court shall have entered the Confirmation Order consistent in all material respects with the Plan; (ii)    the Confirmation Order shall: a.      be in form and substance reasonably acceptable to the Requisite Supporting Creditors; b.      authorize the Debtors to take all actions necessary to enter into, implement, and consummate the contracts, instruments, releases, leases, indentures, and other agreements or documents created in connection with the Plan; c.      decree that the provisions of the Confirmation Order and the Plan are non-severable and mutually dependent; d.      authorize the Debtors and reorganized Debtors, as applicable/necessary, to: (i) implement the restructuring transactions; (ii) issue and distribute the securities to be issued under the Plan, all pursuant to the exemption from registration under the Securities Act provided by section 1145 of the Bankruptcy Code or other exemption from such registration or pursuant to one or more registration statements; (iii) make all distributions and issuances as required under the Plan; and (iv) enter into any agreements, transactions, and sales of property as set forth in the Plan and/or Plan Supplement; and e.      provide that, under section 1146 of the Bankruptcy Code, the assignment or surrender of any lease or sublease, and the delivery of any deed or other instrument or transfer order, in furtherance of, or in connection with the Plan, including any deeds, bills of sale, or assignments executed in connection with any disposition or transfer of assets contemplated under the Plan, shall not be subject to any stamp, real estate transfer, mortgage recording, or other similar tax.

Conditions Precedent to the Effective Date

The following shall be conditions precedent to the Effective Date, or otherwise waived by the Requisite Supporting Creditors: (i)     the Confirmation Order shall have been duly entered in form and substance acceptable to the Requisite Supporting Creditors and not subject to a stay pending appeal;

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(ii)    any waiting period applicable to the Tax-Free Spin under the HSR shall have been terminated or shall have expired and the Debtors shall have obtained all authorizations, consents, regulatory approvals, rulings, or documents that are necessary to implement and effectuate the Plan (including the Tax-Free Spin), including from the IRS and the PUCT (but not including, for the avoidance of doubt, any approval of the conversion of Oncor to a REIT);

(iii)  the Debtors shall have obtained (a) certain “Required Rulings”, and such rulings shall remain in full force and effect, or, in the event a Required Ruling is not provided, then (i) a ruling has been received from the IRS that, in the reasonable determination of EFH, EFIH, TCEH and the Requisite Consenting Creditors covers substantially the same subject matter as such Required Ruling; (ii) the IRS communicates that there is no substantial issue with respect to the Required Ruling; or (iii) a pre-filing agreement (including an agreement in accordance with Revenue Procedure 2009-14) or closing agreement with the IRS that addresses the subject matter of the Required Ruling has been received, provided that such agreement is both (a) binding on the IRS to the same degree as a private letter ruling or is otherwise acceptable to the Requisite Consenting Creditors in their reasonable discretion and (b) contains, in the reasonable determination of EFH, EFIH, TCEH and the Requisite Consenting Creditors conclusions that are substantially similar, and have substantially the same practical effect, to those contained in the Required Ruling;

(iv)   The accountants and any other professionals who previously certified or approved a reserve for Legacy General Unsecured Claims on the Debtors’ financial statements in the amount of $[14] million shall have reaffirmed such reserve in an amount not materially greater than $[14] million after taking into account all claims filed in respect of Legacy General Unsecured Claims, such reaffirmation to be in a form and substance reasonably acceptable to the Supporting Creditors in light of such filings;

(v)    the final version of the Plan Supplement and all of the schedules, documents, and exhibits contained therein shall have been filed in a manner consistent in all material respects with the Plan and shall be in form and substance acceptable to the Requisite Supporting Creditors;

(vi)   the Debtors shall have implemented the restructuring transactions in a manner consistent in all material respects with the Plan and Plan Supplement documents and in form and manner reasonably acceptable to the Requisite Supporting Creditors;

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KL Comments 7/27

Confidential

Subject to FRE 408 and Material Change

	(vii)        [the Bankruptcy Court decision disallowing the make-whole claim of the EFIH First Lien Notes shall not have been reversed on appeal]; (viii)       the reasonable and documented fees and expenses for advisors to the Supporting Creditors,11 the EFIH Second Lien Trustee and the EFIH Unsecured Notes Trustee shall be paid in full in cash.12
Governance	Corporate governance for Reorganized EFH and Reorganized EFIH, including charters, bylaws, operating agreements, or other organization or formation documents, as applicable, shall be consistent with section 1123(a)(6) of the Bankruptcy Code, as applicable, and in form and substance acceptable to the Requisite Supporting Creditors. The boards of Reorganized EFH and Reorganized EFIH will be appointed by the Supporting Creditors with designation rights to be agreed.
Exemption from SEC Registration	The issuance of all securities in connection with the Plan will be exempt from SEC registration to the fullest extent permitted by law.

¹¹  For the avoidance of doubt, the “reasonable and documented fees and expenses for the advisors to the Supporting Creditors” includes all outstanding fees and expenses, incurred as of the petition date, of the professionals and advisors of that certain ad hoc group of EFIH Unsecured Note Claim holders, including, without limitation, Akin Gump Strauss Hauer & Feld, LLP and Centerview. In addition, for the avoidance of doubt, the reasonable and documented fees and expenses for the advisors to the Supporting Creditors and the EFIH Second Lien Trustee includes, collectively, all outstanding fees and expenses of the professionals and advisors to the EFIH Second Lien Trustee as well as the ad hoc certain of EFIH Second Lien Note Claim holders, including, without limitation, Kramer Levin Naftalis & Frankel LLP, Rothschild Inc., Pachulski Stang Ziehl &Jones and Bryan Cave LLP.

¹²  Note: the PSA will provide that fees and expenses incurred to date will be paid upon approval of the PSA and future fees paid currently.

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Project Lone Star	Working Draft
	PRIVILEGED & CONFIDENTIAL - PREPARED AT REQUEST OF COUNSEL

	$18.2bn TEV
								($)
Setup TEV								$	18,200
Less: Oncor Net Debt									(6,627	)
Oncor Equity								$	11,573
Less: Minority Interest									(2,311	)
EFIH TEV								$	9,262
Less: Exit Facility								($	5,200	)
Plus: Est. cash									354
EFH / EFIH common equity value								$	4,416
	Claim ($)1							Equity
Equity splits	Full		Allowed2		PPI (%)			($)			(%)
EFIH 2L Notes	$	2,302	$	2,008		100.0	%	$	2,008			45.5	%
EFIH Unsecured Notes		2,278		1,943		56.6	%		1,943			44.0	%
EFH LBO Notes		81		73		56.6	%		73			1.7	%
Remaining value distributable to EFH									392
EFH Legacy Notes		888		604		—			181			4.1	%
EFH GUCs		48		48		—			14			0.3	%
Total equity to E-side creditors	$	5,597	$	4,676				$	4,220			95.6	%
Payment to TCEH		704		704		—			196			4.4	%
Total EFH / EFIH common equity	$	6,301	$	5,380				$	4,416			100.0	%
EFIH and EFH recoveries					Principal ($)			Equity ($)			Recovery (%)
EFIH 2L Notes					$	1,711		$	2,008			117.4	%
EFIH Unsecured Notes						1,568			1,943			123.9	%
EFH LBO Notes						60			73			122.1	%
EFH Legacy Notes						587			181			30.9	%
EFH GUCs						48			14			30.0	%
TCEH						704			196			27.8	%
Total					$	4,678		$	4,416

Notes:

¹  Claims as of 6/30/2016

²  Claims allowed reflect illustrative settlement amounts subject to ongoing negotiations

11

Project Lone Star	Working Draft
Illustrative Plan Sensitivity Analysis	PRIVILEGED & CONFIDENTIAL - PREPARED AT REQUEST OF COUNSEL

Scenario - 2.5% / 5% / 5% / 2.5%

			Setup			Illustrative TEV Range
TEV			$	18,200		$	18,700		$	19,200		$	19,700		$	20,200		$	20,700		$	21,200
Less: Oncor net debt				(6,627	)		(6,627	)		(6,627	)		(6,627	)		(6,627	)		(6,627	)		(6,627	)
Oncor Equity			$	11,573		$	12,073		$	12,573		$	13,073		$	13,573		$	14,073		$	14,573
Less: Minority Interest				(2,311	)		(2,411	)		(2,511	)		(2,611	)		(2,711	)		(2,810	)		(2,910	)
EFIH TEV			$	9,262		$	9,662		$	10,062		$	10,462		$	10,862		$	11,263		$	11,663
Less: Exit facility				(5,200	)		(5,200	)		(5,200	)		(5,200	)		(5,200	)		(5,200	)		(5,200	)
Plus: Cash				354			354			354			354			354			354			354
EFIH / EFH Equity Value			$	4,416		$	4,816		$	5,216		$	5,616		$	6,016		$	6,417		$	6,817
Common ($):
EFIH 2L Notes			$	2,008		$	2,135		$	2,197		$	2,247		$	2,347		$	2,503		$	2,659
EFIH Unsecured Notes				1,943			2,066			2,126			2,174			2,271			2,422			2,573
EFH LBO Notes				73			78			80			82			86			91			97
TCEH payment				196			208			214			219			229			244			259
EFH Legacy Notes				181			193			198			203			212			226			240
EFH GUCs				14			15			16			16			17			18			19
Subtotal			$	4,416		$	4,696		$	4,831		$	4,942		$	5,162		$	5,505		$	5,848
Warrants ($):
Tranche A				—		$	120		$	124		$	127		$	132		$	141		$	150
Tranche B				—			—			261			267			279			297			316
Tranche C				—			—			—			281			293			313			332
Tranche D				—			—			—			—			150			160			170
Subtotal				—		$	120		$	385		$	674		$	855		$	912		$	968
Total EFH / EFIH common equity			$	4,416		$	4,816		$	5,216		$	5,616		$	6,016		$	6,417		$	6,817
Common (%):
EFIH 2L Notes				45.5	%		44.3	%		42.1	%		40.0	%		39.0	%		39.0	%		39.0	%
EFIH Unsecured Notes				44.0	%		42.9	%		40.8	%		38.7	%		37.7	%		37.7	%		37.7	%
EFH LBO Notes				1.7	%		1.6	%		1.5	%		1.5	%		1.4	%		1.4	%		1.4	%
TCEH payment				4.4	%		4.3	%		4.1	%		3.9	%		3.8	%		3.8	%		3.8	%
EFH Legacy Notes				4.1	%		4.0	%		3.8	%		3.6	%		3.5	%		3.5	%		3.5	%
EFH GUCs				0.3	%		0.3	%		0.3	%		0.3	%		0.3	%		0.3	%		0.3	%
Subtotal				100.0	%		97.5	%		92.6	%		88.0	%		85.8	%		85.8	%		85.8	%
Warrants (%):
Tranche A				—			2.5	%		2.4	%		2.3	%		2.2	%		2.2	%		2.2	%
Tranche B				—			—			5.0	%		4.8	%		4.6	%		4.6	%		4.6	%
Tranche C				—			—			—			5.0	%		4.9	%		4.9	%		4.9	%
Tranche D				—			—			—			—			2.5	%		2.5	%		2.5	%
Subtotal				—			2.5	%		7.4	%		12.0	%		14.2	%		14.2	%		14.2	%
Total EFH / EFIH common equity				100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Recovery (%):	Principal ($)
EFIH 2L Notes	$	1,711		117.4	%		124.8	%		128.4	%		131.4	%		137.2	%		146.3	%		155.4	%
EFIH Unsecured Notes		1,568		123.9	%		131.8	%		135.6	%		138.7	%		144.8	%		154.5	%		164.1	%
EFH LBO Notes		60		122.1	%		129.9	%		133.6	%		136.7	%		142.7	%		152.2	%		161.7	%
TCEH payment		704		27.8	%		29.6	%		30.4	%		31.1	%		32.5	%		34.7	%		36.8	%
EFH Legacy Notes		587		30.9	%		32.9	%		33.8	%		34.6	%		36.1	%		38.5	%		40.9	%
EFH GUCs		48		30.0	%		31.9	%		32.9	%		33.6	%		35.1	%		37.4	%		39.8	%
EFH Recovery incl. warrants ($):
TCEH payment	$	704	$	196		$	268		$	407		$	556		$	656		$	700		$	743
EFH Legacy Notes		587		181			197			213			228			243			260			276
EFH GUCs		48		14			71			194			328			413			440			468
EFH Recovery incl. warrants (%):
TCEH payment	$	704		27.8	%		38.1	%		57.7	%		79.0	%		93.2	%		99.4	%		105.6	%
EFH Legacy Notes		587		30.9	%		42.4	%		64.2	%		87.8	%		103.6	%		110.4	%		117.3	%
EFH GUCs		48		30.0	%		41.2	%		62.4	%		85.3	%		100.6	%		107.3	%		114.0	%

12

EX-99.2

Oncor Electric Delivery Company

CONFIDENTIAL

Exhibit A –

Financial Information

Exhibit 99.2

1

CONFIDENTIAL

This presentation 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 filings

made

by

Oncor

with

the

Securities

and

Exchange

Commission.

Specifically,

Oncor

makes

reference

to

the section entitled “Risk Factors” in its annual and quarterly reports.  Any forward-looking statement

speaks

only

as

of

the

date

on

which

it

is

made,

and

Oncor

undertakes

no

obligation

to

update

any

forward-looking statement to reflect events or circumstances after the date on which it is made or to

reflect the occurrence of unanticipated events.

Oncor

does not take any position on the appropriateness of any assumption or asset treatment reflected

in the scenarios contained in this presentation, nor does it provide any opinion with regard to any legal,

regulatory, or administrative issues implicit in the underlying use of the REIT structure, including, but not

limited

to,

application

of

tax

laws

or

matters

within

the

purview

of

the

PUCT.

In

addition,

Oncor

does

not

opine on the likelihood of achieving any of the financial results reflected in these scenarios.

The views and information contained in this presentation are subject to change, are preliminary and

limited in nature, and should not be considered to provide legal, tax, financial or accounting advice. 

2

CONFIDENTIAL

Capital investment ramps up from approximately $1B annually to $1.5B by 2017 with emphasis on

system growth, distribution automation and distribution maintenance.

–

Assume ongoing use of TCOS tracker but use of rate cases for recovery of distribution investment

(not distribution tracker filings).

Rate case related revenue increase beginning mid-2017 based on a 2015 test year. Additional revenue

increase in 2019 (resulting from second rate case based on a 2017 test year) and in 2021 (resulting from

third rate case based on a 2019 test year).

Pension funding accounted for in plan from 2015 through 2022.

–

Driven by actuarial estimates utilizing revised mortality tables.

–

Cash impact is back-loaded due to extension of tax legislation.

A brief technical termination of the Oncor partnership (due to change of control) results in restarting

asset lives for tax depreciation resulting in higher taxable income and higher cash taxes during the plan

period.

If the reorganization of EFH does not result in a technical termination, cash tax distributions would be lower,

partially offset by an increase in dividends.

The impact of bonus depreciation legislation (applicable only to 2014) has been included in this forecast.

Base Distribution premise growth estimated at 1.5% for 2015 and 2016, increasing to 1.7% annually

thereafter.

This plan includes the impact of increased reliability-related O&M beginning in 2015. This O&M is offset

by additional revenue by mid 2017.

Financial Plan Key Drivers

3

CONFIDENTIAL

15E

16E

17E

18E

19E

20E

21E

22E

1

Revenues

3,748

3,890

4,066

4,225

4,426

4,555

4,702

4,827

2

Base O&M/SG&A

566

583

591

609

626

643

660

679

3

Energy Efficiency

47

50

51

52

53

54

55

56

4

Rate Case Cost Of Service

70

70

85

100

100

100

100

100

5

Third Party Transmission

788

856

900

935

982

1,013

1,040

1,068

6

Ad Valorem Taxes

170

175

185

197

208

220

230

240

7

Local Gross Receipts Taxes

266

271

275

279

284

290

294

298

8

Other (Income)/Deductions

11

1

1

1

1

1

1

1

9

EBITDA

(1)

1,831

1,884

1,977

2,053

2,171

2,234

2,321

2,384

10

Depreciation & Amortization

807

824

848

882

903

938

972

1,020

11

Interest Expense, Net

331

344

364

377

393

420

437

452

12

Income Tax Expense

255

269

287

299

328

330

343

345

13

Net Income

438

446

478

495

546

546

569

568

Adjusted EBITDA/Net Income (excl Securitization and Purchase Accounting Impacts)

15E-22E; $ millions

Oncor Business Plan Summary (LRP)

4

CONFIDENTIAL

15E

16E

17E

18E

19E

20E

21E

22E

1

Revenues

3,748

3,890

4,066

4,225

4,426

4,555

4,702

4,827

2

Base O&M/SG&A

580

597

605

621

638

655

672

691

3

Reg Asset Amortization in O&M

50

49

64

78

78

78

78

78

4

Energy Efficiency

47

50

51

52

53

54

55

56

5

Rate Case Cost Of Service

70

70

85

100

100

100

100

100

6

Third Party Transmission

788

856

900

935

982

1,013

1,040

1,068

7

Ad Valorem Taxes

170

175

185

197

208

220

230

240

8

Local Gross Receipts Taxes

266

271

275

279

284

290

294

298

9

Other (Income)/Deductions

12

2

2

2

2

2

2

2

10

EBITDA

(1)

1,767

1,820

1,899

1,961

2,080

2,143

2,231

2,293

11

Depreciation & Amortization

757

775

784

804

825

859

893

941

12

Interest Expense, Net

331

344

364

377

393

420

437

452

13

Income Tax Expense

250

264

283

294

324

325

339

340

14

Net Income

429

437

468

487

538

538

561

560

GAAP EBITDA/Net Income (excl Securitization and Purchase Accounting Impacts)

15E-22E; $ millions

Oncor Business Plan Summary (LRP)

5

CONFIDENTIAL

15E

16E

17E

18E

19E

20E

21E

22E

1

Total Capital Expenditures

(2)

1,116

1,363

1,536

1,546

1,556

1,556

1,556

1,556

2

Dividends

436

213

248

174

303

302

337

356

3

Cash Tax Distributions

91

323

243

221

244

251

253

255

4

Total Distributions

(3)

527

536

492

395

547

553

590

610

5

Pension Contributions

45

4

106

126

126

105

92

82

6

OPEB Contributions

31

31

31

31

31

31

31

35

7

Rate Base

10,641

11,351

12,015

12,616

13,213

13,741

14,255

14,722

8

Shareholders Equity (EMR)

3,776

4,000

4,220

4,533

4,768

5,005

5,229

5,433

9

Short Term Debt (Face Value)

622

627

699

676

669

701

701

701

10

Long Term Debt (Face Value)

5,709

6,043

6,373

6,770

7,197

7,550

7,881

8,195

11

Total Debt (Excl. BondCo)

6,331

6,670

7,072

7,446

7,867

8,251

8,582

8,896

Other Key Business Plan Items (excl Securitization and Purchase Accounting Impacts)

15E-22E; $ millions

Oncor Business Plan Summary (LRP)

6

CONFIDENTIAL

Endnotes

Oncor Business Plan Summary (LRP)

(1) EBITDA means net income (loss) before interest expense and related charges, income tax expense (benefit) and

depreciation and amortization (including amortization of regulatory assets reported in operation and maintenance expense)

and other income related to purchase accounting. EBITDA is also adjusted for certain noncash and unusual items, none of

which is material in the years presented. EBITDA is a financial measure not calculated in accordance with GAAP. EBITDA is

not intended to be an alternative to net income as a measure of operating performance, an alternative to cash flows from

operating activities as a measure of liquidity or an alternative to any other measure of financial performance presented in

accordance with GAAP, nor is it intended to be used as a measure of free cash flow available for discretionary use, because

the measure excludes certain cash requirements such as interest payments, tax payments and other debt service

requirements. EBITDA as presented in the table reflects EFH Corp.’s calculations of EBITDA for Oncor on a basis consistent

with EFH Corp.’s prior public disclosures, except for the exclusion of amortization of regulatory assets reported in operation

and maintenance expense. Accordingly, and because not all companies use identical calculations, EBITDA may not be

comparable to EBITDA as calculated by Oncor or to similarly titled measures of other companies.

(2) Capital expenditures include expenditures for transmission facilities, infrastructure maintenance, information technology

initiatives, distribution facilities to serve new customers and other general investments.

(3) Reflects 100% of distributions from Oncor (excluding tax sharing payments). EFIH’s wholly owned subsidiary Oncor

Holdings owns approximately 80% of the equity interests of Oncor. Accordingly, distributions to EFIH will be approximately

80% of each distribution, excluding any portion of the distribution retained by Oncor Holdings to settle its obligations under its

tax sharing agreement.

Oncor Electric Delivery Company

CONFIDENTIAL

REIT Scenarios

Oncor Electric Delivery Company

CONFIDENTIAL

Scenario A: LRP Capex With Intangibles /

Regulatory Assets In Non-REIT Sub

9

CONFIDENTIAL

2015 –

2020 LRP provided in December 2014 is basis for financial projections

LRP is allocated to Property Company and Operating Company (and, in certain scenarios, Non-REIT

Subsidiary, which is assumed to be a subsidiary of Property Company) based on preliminary review of asset

and operational qualifications

2015 cash taxes are impacted by the impact of 2014 bonus depreciation and 2016 cash taxes are

impacted by tax depreciation restart

Tangible property allocated to Property Company

Intangible property (primarily IT Systems) and regulatory assets allocated to Non-REIT subsidiary of

Property Company.

–

Earnings associated portion of rate base including intangible property and regulatory assets are

taxable

Remaining assets allocated to Operating Company

Triple net lease assumed (Operating Company is responsible for cost of operating and maintaining

Property Company’s assets)

Rent is paid from Operating Company to Property Company

–

Estimated as a percent of total revenue without regard to how a lease might operate

Operating Company is responsible for pension and other post-retirement employee benefit contributions

Key Assumptions

10

CONFIDENTIAL

All long-term debt (current and amounts expected to be issued) is assigned to (remain with) Property

Company and tangible property

For regulatory purposes, assumes legal entities are reviewed on a consolidated basis (identical to

current Oncor legal structure) with identical results on recovery of costs and investment

–

Rate setting on a consolidated basis

–

Maintenance of 60/40 debt / equity ratio applied to each legal entity

No additional friction costs (ex: sales tax) for intercompany transactions between Operating Company

and Property Company

Please note that Oncor does not take any position on the appropriateness of any assumption or

asset treatment reflected in these scenarios, nor does it provide any opinion with regard to any

legal, regulatory, or administrative issues implicit in the underlying use of the REIT structure,

including, but not limited to, application of tax laws or matters within the purview of the PUCT.  In

addition, Oncor does not opine on the likelihood of achieving any of the financial results reflected in

these scenarios.

Key Assumptions (Cont’d)

11

CONFIDENTIAL

Financial Summary ($MM)

____________________________________

Note: Taxable Income, Dividends and Cash Tax Distributions reflect 100% of Oncor solely for illustrative purposes.

For Illustrative Purposes Only --

Not To Be Used Or Relied Upon For Any Purpose

PropCo Financial Summary

2015

2016

2017

2018

2019

2020

2021

2022

Rent Income

$1,749

$1,815

$1,897

$1,971

$2,065

$2,125

$2,194

$2,252

Total Revenue

1,753

1,819

1,901

1,976

2,069

2,129

2,198

2,257

Depreciation & Amortization Expenses

742

764

780

804

825

859

893

941

Other Expenses

48

48

63

78

78

78

78

78

PropCo Taxable Income

678

850

582

555

570

575

561

549

PropCo Dividends

436

213

248

174

303

302

337

356

PropCo Cash Tax Distributions

116

297

204

194

200

201

196

192

Cash Taxes Related to Taxable REIT Subsidiary

10

24

32

40

42

44

43

46

Capital Expenditures

1,133

1,369

1,548

1,575

1,587

1,588

1,589

1,589

Total PropCo Debt

6,398

6,765

7,175

7,503

7,910

8,270

8,603

8,910

PropCo Interest Expense

331

348

368

379

392

417

434

448

OpCo Financial Summary

2015

2016

2017

2018

2019

2020

2021

2022

Revenue

$3,745

$3,886

$4,062

$4,221

$4,421

$4,550

$4,697

$4,823

EBITDA

67

50

61

64

89

92

111

115

Net Income

20

6

17

21

36

40

51

47

OpCo Dividends

-

-

-

-

-

-

-

-

OpCo Cash Tax Distributions

(34)

2

8

-

-

0

4

17

Capital Expenditures

1

(0)

(0)

(0)

(0)

(0)

(0)

(0)

Total OpCo Debt

(85)

(110)

(114)

(54)

(42)

(22)

(33)

(25)

OpCo Interest Expense

2

1

1

2

5

7

8

8

Oncor Electric Delivery Company

CONFIDENTIAL

Scenario B: LRP Capex With Intangibles /

Regulatory Assets In OpCo

13

CONFIDENTIAL

2015 –

2020 LRP provided in December 2014 is basis for financial projections

LRP is allocated to Property Company and Operating Company (and, in certain scenarios, Non-REIT

Subsidiary, which is assumed to be a subsidiary of Property Company) based on preliminary review of asset

and operational qualifications

2015 cash taxes are impacted by the impact of 2014 bonus depreciation and 2016 cash taxes are

impacted by tax depreciation restart

Tangible property allocated to Property Company

Intangible property and regulatory assets allocated to Operating Company

Triple net lease assumed (Operating Company is responsible for cost of operating and maintaining

Property Company’s assets)

Rent is paid from Operating Company to Property Company

–

Estimated as a percent of total revenue without regard to how a lease might operate

Operating Company is responsible for pension and other post-retirement employee benefit contributions

Key Assumptions

14

CONFIDENTIAL

All long-term debt (current and amounts expected to be issued) is assigned to (remain with) Property

Company and tangible property

For regulatory purposes, assumes legal entities are reviewed on a consolidated basis (identical to

current Oncor legal structure) with identical results on recovery of costs and investment

–

Maintenance of 60/40 debt / equity ratio applied to each legal entity

No additional friction costs (ex: sales tax) for intercompany transactions between Operating Company

and Property Company

Please note that Oncor does not take any position on the appropriateness of any assumption or

asset treatment reflected in these scenarios, nor does it provide any opinion with regard to any

legal, regulatory, or administrative issues implicit in the underlying use of the REIT structure,

including, but not limited to, application of tax laws or matters within the purview of the PUCT.  In

addition, Oncor does not opine on the likelihood of achieving any of the financial results reflected in

these scenarios.

Key Assumptions (Cont’d)

15

CONFIDENTIAL

Financial Summary ($MM)

For Illustrative Purposes Only --

Not To Be Used Or Relied Upon For Any Purpose

____________________________________

Note: Taxable Income, Dividends and Cash Tax Distributions reflect 100% of Oncor solely for illustrative purposes.

PropCo Financial Summary

2015

2016

2017

2018

2019

2020

2021

2022

Rent Income

$1,629

$1,690

$1,767

$1,836

$1,923

$1,979

$2,043

$2,098

Total Revenue

1,633

1,694

1,771

1,840

1,928

1,984

2,048

2,102

Depreciation & Amortization Expenses

648

671

690

710

727

758

797

837

Other Expenses

-

-

-

-

-

-

-

-

PropCo Taxable Income

696

864

605

592

603

608

585

576

PropCo Dividends

327

160

186

131

227

226

253

267

PropCo Cash Tax Distributions

122

302

212

207

211

213

205

202

Capital Expenditures

1,056

1,312

1,478

1,508

1,519

1,521

1,522

1,523

Total PropCo Debt

6,317

6,694

7,112

7,470

7,876

8,237

8,566

8,867

PropCo Interest Expense

330

347

366

377

392

417

434

447

OpCo Financial Summary

2015

2016

2017

2018

2019

2020

2021

2022

Revenue

$3,745

$3,886

$4,062

$4,221

$4,421

$4,550

$4,697

$4,823

EBITDA

139

126

128

121

153

160

183

191

Net Income

8

(3)

3

(3)

13

12

29

29

OpCo Dividends

109

53

62

44

76

75

84

89

OpCo Cash Tax Distributions

(31)

21

32

13

33

38

49

53

Capital Expenditures

79

57

70

67

67

67

66

67

Total OpCo Debt

(1)

(37)

(49)

(33)

(17)

7

9

24

OpCo Interest Expense

3

3

3

3

5

7

8

9

Oncor Electric Delivery Company

CONFIDENTIAL

Scenario C: T-REIT with D-Corp (OpCo in D-

Corp)

17

CONFIDENTIAL

2015 –

2020 LRP provided in December 2014 is basis for financial projections

LRP is allocated to Transmission Property Company and Distribution Utility. These projections assume

the Distribution Utility will also act as operator of the Transmission Property Company’s assets.

2015 cash taxes are impacted by the impact of 2014 bonus depreciation and 2016 cash taxes are

impacted by tax depreciation restart

–

Consolidated assumptions are consistent with the LRP. However, as a result of calculating certain

aspects of the projections for each entity on a standalone basis (primarily federal income taxes),

consolidated projection output does not match LRP projections.

Asset allocation methodology

–

Tangible transmission property allocated to Transmission Property Company based on approximate

net plant percentages

–

Remaining assets are allocated to Distribution Utility / Operating Company

Triple net lease assumed (Distribution Operating Company is responsible for cost of operating and

maintaining Transmission Property Company’s assets)

Rent is paid from Distribution Operating Company to Transmission Property Company

–

Estimated as a percent of gross Network Transmission Service (NTS) revenue expected to be

recovered in NTS tracker filings

–

Distribution Operating Company will retain a portion of NTS revenue as compensation for operating

the transmission assets

Key Assumptions

18

CONFIDENTIAL

Long-term debt (current and amounts expected to be issued) is assigned to each company to remain

consistent with the consolidated debt to capital ratios in the LRP

Deferred income tax liabilities are initially allocated based on net plant and separately calculated

thereafter

For regulatory purposes, assumes legal entities are reviewed on a consolidated basis (identical to

current Oncor legal structure) with identical results on recovery of costs and investment

–

Rate setting on a consolidated basis

–

Maintenance of 60/40 debt / equity ratio applied to each legal entity

Projections do not reflect any intercompany friction costs (ex: sales tax, gross margin tax, etc.) for

intercompany transactions between Operating Company and Property Company

Projections do not reflect additional transaction costs required to separate transmission and distribution

(ex: separation of debt)

Please note that Oncor does not take any position on the appropriateness of any assumption or

asset treatment reflected in these scenarios, nor does it provide any opinion with regard to any

legal, regulatory, or administrative issues implicit in the underlying use of the REIT structure,

including, but not limited to, application of tax laws or matters within the purview of the PUCT.  In

addition, Oncor does not opine on the likelihood of achieving any of the financial results reflected in

these scenarios.

Key Assumptions (Cont’d)

19

CONFIDENTIAL

Financial Summary ($MM)

For Illustrative Purposes Only --

Not To Be Used Or Relied Upon For Any Purpose

____________________________________

Note: Taxable Income, Dividends and Cash Tax Distributions reflect 100% of Oncor solely for illustrative purposes.

REIT Financial Summary

2015

2016

2017

2018

2019

2020

2021

2022

Rent Income

$713

$765

$767

$727

$783

$838

$887

$938

Depreciation & Amortization Expenses

193

205

221

237

254

270

286

302

PropCo Taxable Income

266

444

322

241

255

276

284

297

PropCo Dividends

253

166

156

77

130

142

165

189

PropCo Cash Tax Distributions

(29)

155

113

84

89

97

99

104

Capital Expenditures

473

584

609

631

635

636

637

637

Total PropCo Debt

2,576

2,830

3,061

3,281

3,520

3,730

3,927

4,111

PropCo Interest Expense

141

148

156

163

172

186

196

205

Utility Corp/OpCo Financial Summary

2015

2016

2017

2018

2019

2020

2021

2022

Revenue

$3,748

$3,890

$4,066

$4,225

$4,426

$4,555

$4,702

$4,827

EBITDA

1,059

1,056

1,133

1,234

1,297

1,305

1,343

1,356

Net Income

187

170

217

277

309

293

301

284

OpCo Dividends

183

47

92

98

173

160

172

167

OpCo Cash Tax Distributions

99

169

132

137

156

156

155

152

Capital Expenditures

662

785

939

943

952

952

952

952

Total OpCo Debt

3,659

3,745

3,917

4,070

4,250

4,421

4,554

4,682

OpCo Interest Expense

191

200

210

213

221

234

242

247

Oncor Electric Delivery Company

CONFIDENTIAL

Scenario D: T-REIT with D-Corp (Separate

T-OpCo)

21

CONFIDENTIAL

Key Assumptions

2015 –

2020 LRP provided in December 2014 is basis for financial projections

LRP is allocated to Transmission Property Company, Transmission Operating Company, and Distribution

Utility.  These projections assume the Transmission Operating Company will act as operator of the

Transmission Property Company’s assets.

2015 cash taxes are impacted by the impact of 2014 bonus depreciation and 2016 cash taxes are

impacted by tax depreciation restart

–

Consolidated assumptions are consistent with the LRP.  However, as a result of calculating certain

aspects of the projections for each entity on a standalone basis (primarily federal income taxes),

consolidated projection output does not match LRP projections.

Asset allocation methodology

–

Tangible transmission property is allocated to Transmission Property Company based on

approximate net plant percentages

–

A portion of intangible assets and regulatory assets (pension/OPEB and storm insurance reserve)

are allocated to the Transmission Operating Company

–

Remaining assets are allocated to Distribution Utility / Operating Company

Triple net lease assumed (Transmission Operating Company is responsible for cost of operating and

maintaining Transmission Property Company’s assets)

Rent is paid from Transmission Operating Company to Transmission Property Company

–

Estimated as a percent of gross Network Transmission Service (NTS) revenue expected to be

recovered in NTS tracker filings

–

Transmission Operating Company will retain a portion of NTS revenue as compensation for

operating the transmission assets

22

CONFIDENTIAL

Operating costs are allocated to the Transmission Operating Company

Deferred income tax liabilities are initially allocated based on net plant and separately calculated

thereafter

Long-term debt (current and amounts expected to be issued) is assigned to only Transmission Property

Company and Distribution Utility Company

For regulatory purposes, assumes Transmission Operating Company and Transmission Property

Company  are reviewed on a consolidated basis, separate from Distribution Utility Company

–

Maintenance of 60/40 debt / equity ratio applied to Consolidated transmission companies and to the

Distribution Utility Company

Projections do not reflect any intercompany friction costs (ex: sales tax, gross margin tax, etc.) for

intercompany transactions between Operating Company and Property Company

Projections do not reflect additional transaction costs required to separate transmission and distribution

(ex: separation of debt)

Summaries do not include assumed costs or amounts of holding company debt

Please note that Oncor does not take any position on the appropriateness of any assumption or

asset treatment reflected in these scenarios, nor does it provide any opinion with regard to any

legal, regulatory, or administrative issues implicit in the underlying use of the REIT structure,

including, but not limited to, application of tax laws or matters within the purview of the PUCT.  In

addition, Oncor does not opine on the likelihood of achieving any of the financial results reflected in

these scenarios.

Key Assumptions (Cont’d)

23

CONFIDENTIAL

Financial Summary ($MM)

For Illustrative Purposes Only --

Not To Be Used Or Relied Upon For Any Purpose

____________________________________

Note: Taxable Income, Dividends and Cash Tax Distributions reflect 100% of Oncor solely for illustrative purposes.

REIT Financial Summary

2015

2016

2017

2018

2019

2020

2021

2022

Rent Income

$713

$765

$767

$727

$783

$838

$887

$938

Depreciation & Amortization Expenses

193

205

221

237

254

270

286

302

PropCo Taxable Income

266

444

323

244

260

283

292

308

PropCo Dividends

266

160

149

70

121

136

162

157

PropCo Cash Tax Distributions

(29)

155

113

85

91

99

102

108

Capital Expenditures

473

584

609

631

635

636

637

637

Total PropCo Debt

2,589

2,836

3,060

3,270

3,497

3,698

3,886

4,030

PropCo Interest Expense

141

147

155

161

167

180

188

194

OpCo Financial Summary

2015

2016

2017

2018

2019

2020

2021

2022

Revenue

$955

$1,013

$1,036

$1,019

$1,082

$1,144

$1,200

$1,256

EBITDA

19

18

31

43

41

39

37

34

Net Income

3

(3)

4

10

7

4

1

(3)

OpCo Dividends

-

-

-

-

-

-

-

-

OpCo Cash Tax Distributions

3

3

4

6

5

4

3

1

Capital Expenditures

17

10

12

12

11

14

12

12

Total OpCo Debt

86

133

164

179

191

203

218

235

OpCo Interest Expense

2

4

7

9

10

11

12

13

Utility Corp Financial Summary

2015

2016

2017

2018

2019

2020

2021

2022

Revenue

$3,094

$3,197

$3,357

$3,527

$3,686

$3,774

$3,884

$3,973

EBITDA

1,040

1,038

1,101

1,191

1,257

1,266

1,307

1,322

Net Income

183

171

210

263

297

283

292

277

Corp Dividends

170

53

99

105

182

166

175

199

Corp Cash Tax Distributions

95

164

126

129

148

148

148

145

Capital Expenditures

644

775

927

931

940

938

940

940

Total Corp Debt

3,584

3,629

3,779

3,928

4,110

4,280

4,408

4,561

Corp Interest Expense

190

197

205

208

217

230

239

246