Filed pursuant to Rule 424(b)(3)
Registration Nos. 333-12391 and 333-32831
P R O S P E C T U S
2,900,000 Shares
of
TEXAS UTILITIES COMPANY
COMMON STOCK
Without Par Value
______________________
The 2,900,000 shares covered by this Prospectus have
been reserved for issuance upon conversion of the 6-3/8%
Convertible Subordinated Debentures due 2002 of ENSERCH
Corporation (Debentures). The Debentures entitle the holder
thereof to convert such Debentures into that number of shares of
Texas Utilities Company's (Company) Common Stock, without par
value (Common Stock) obtained by dividing the principal amount of
such Debentures by $38.54, subject to adjustments under certain
conditions.
The Common Stock reserved for issuance upon conversion
of the Debentures is listed on the New York, Chicago and Pacific
stock exchanges.
All the Debentures have been called for redemption on
March 27, 1998. The right to convert Debentures into Common
Stock will terminate at the close of business on such date.
______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
February 25, 1997
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, which have been filed by the
Company or its predecessors with the Securities and Exchange
Commission (Commission) pursuant to the Securities Exchange Act
of 1934, as amended (1934 Act) are incorporated herein by
reference:
(a) Annual Report of Texas Energy Industries, Inc.,
formerly Texas Utilities Company (TEI) on Form 10-
K for the year ended December 31, 1996, File No.
1-3591 (1996 TEI 10-K).
(b) Quarterly Reports of TEI on Form 10-Q for the
Quarterly periods ended March 31, 1997, and June
30, 1997, File No. 1-3591 (TEI 10-Q's).
(c) Annual Report of ENSERCH Corporation (ENSERCH) on
Form 10-K for the year ended December 31, 1996,
File No. 1-3183 (1996 ENSERCH 10-K).
(d) Quarterly Reports of ENSERCH on Form 10-Q for the
Quarterly periods ended March 31, 1997, June 30,
1997, and September 30, 1997, File No. 1-3183
(ENSERCH 10-Q's).
(e) Current Reports of ENSERCH on Form 8-K dated
January 14, 1997, March 12, 1997, June 5, 1997,
July 3, 1997, and August 4, 1997, File No. 1-3183.
(f) Quarterly report of the Company on Form 10-Q for
the quarterly period ended September 30, 1997,
File No. 1-12833 (TUC 10-Q).
(g) Current Reports of the Company on Form 8-K dated
August 5, 1997, August 26, 1997, November 21, 1997
and December 17, 1997, File No. 1-12833.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Prospectus and prior to the termination of the offering hereunder
shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of
such documents. The documents which are incorporated by
reference in this Prospectus are sometimes hereinafter referred
to as the "Incorporated Documents."
Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO
EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF
THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY AND ALL OF THE
DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE
INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS
TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS FOR
SUCH COPIES SHOULD BE DIRECTED TO SECRETARY, TEXAS UTILITIES
COMPANY, 2001 BRYAN TOWER, DALLAS, TEXAS 75201, TELEPHONE NUMBER
(214) 812-4600.
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AVAILABLE INFORMATION
The Company is, and its predecessors have been, subject to
the informational requirements of the 1934 Act and in accordance
therewith the Company files, and its predecessors have filed,
reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information
filed by the Company and its predecessors can be inspected and
copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following Regional Offices of the Commission:
Chicago Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and New York Regional Office, 7 World
Trade Center, Suite 1300, New York, New York 10048. Copies of
such material can also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. In addition, the Commission
maintains a World Wide Web site (http://www.sec.gov) that
contains reports and other information filed by the Company and
its predecessors. The Common Stock is listed on the New York,
Chicago and Pacific stock exchanges, where reports, proxy
statements and other information concerning the Company may be
inspected. Reports, proxy statements and other information
concerning the Company's predecessors may be inspected at the New
York and Chicago stock exchanges and, in the case of TEI,
formerly Texas Utilities Company, also may be inspected at the
Pacific Stock Exchange.
THE COMPANY AND ITS SUBSIDIARIES
The Company is a Texas corporation organized in 1996 for the
purpose of becoming the holding company for TEI, formerly Texas
Utilities Company, and ENSERCH upon the mergers of TEI and
ENSERCH with wholly owned subsidiaries of the Company (Mergers).
On August 5, 1997, the Mergers became effective and, pursuant to
an Amended and Restated Agreement and Plan of Merger among the
Company, ENSERCH and TEI (Merger Agreement) (i) the Company
changed its name to Texas Utilities Company, (ii) TEI changed
its name from Texas Utilities Company to Texas Energy Industries,
Inc., (iii) all shares of common stock of TEI and of ENSERCH were
converted into shares of common stock, without par value, of the
Company and (iv) the Debentures became convertible into Common
Stock. See PLAN OF DISTRIBUTION.
TEI, a Texas corporation, is a holding company whose
principal subsidiary, Texas Utilities Electric Company (TU
Electric), is an operating public utility company engaged in the
generation, purchase, transmission, distribution and sale of
electric energy in the north central, eastern and western
portions of Texas, an area with a population estimated at
5,890,000. Two other subsidiaries of TEI are engaged directly or
indirectly in electric utility operations: (i) Southwestern
Electric Service Company, which is engaged in the purchase,
transmission, distribution and sale of electric energy in ten
counties in eastern and central parts of Texas, with a population
estimated at 126,900 and (ii) Texas Utilities Australia Pty.
Ltd., which holds the common stock of Eastern Energy Limited, a
company engaged in the purchase, distribution, marketing and sale
of electric energy to approximately 481,000 customers in the
Melbourne area of Australia. Neither Southwestern Electric
Service Company nor Eastern Energy Limited generates any
electricity. Another subsidiary of TEI, Lufkin-Conroe
Communications Co. was acquired by the Company in November 1997
and operates, through its subsidiaries, a local exchange
telephone company and other telecommunications businesses in the
Alto, Conroe and Lufkin areas of Southern Texas. TEI also has
other wholly owned subsidiaries which perform specialized
functions within the Texas Utilities Company system.
ENSERCH, a Texas corporation, is an integrated company
focused on natural gas. Its major business segments are natural
gas pipeline, processing and marketing; natural gas distribution,
and power generation. Through these business segments, ENSERCH
is engaged in (i) owning and operating interconnected natural gas
transmission lines, underground storage reservoirs, compressor
stations and related properties in Texas; gathering and
processing natural gas to remove impurities and extract liquid
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hydrocarbons for sale, and the wholesale and retail marketing of
natural gas in several areas of the United States, (ii) owning
and operating approximately 550 local gas utility distribution
systems in Texas, and (iii) developing, financing and operating
electric power generating plants and cogeneration facilities
worldwide and operating thermal energy plants for large building
complexes, such as universities and medical centers, in Texas,
and developing gas distribution systems in Mexico and South
America.
Texas Utilities Services Inc. (TU Services) provides
financial, accounting, information technology, environmental
services, customer services, personnel, procurement and other
administrative services at cost to the Texas Utilities Company
system. TU Services, acting under the name of Texas Utilities
Shareholder Services, is transfer agent, registrar and dividend
paying agent with respect to the Common Stock and the preferred
stock and preferred securities of TU Electric and is also agent
for participants under the Company's Direct Stock Purchase and
Dividend Reinvestment Plan.
The principal executive offices of the Company are located
at 1601 Bryan Street, Dallas, Texas 75201-3411; the telephone
number is (214) 812-4600.
USE OF PROCEEDS
The Common Stock reserved for issuance upon conversion of
Debentures will be either issued and outstanding shares purchased
by or on behalf of ENSERCH in the open market or original issue
shares acquired by ENSERCH directly from the Company.
FEDERAL INCOME TAX MATTERS
The following discussion of federal income tax
considerations, representing the opinion of Reid & Priest LLP, of
counsel to the Company, summarizes certain federal income tax
considerations based upon the tax law as in effect on the date
hereof. The discussion does not describe all the tax
considerations that apply to taxpayers based on their particular
circumstances or on account of their special tax status, such as
foreign persons, persons not holding the Debentures as capital
assets, banks or other taxpayers subject to particular income tax
regimes.
Common Stock issued hereunder is to be made available
to ENSERCH by the Company for the purpose of satisfying ENSERCH's
obligation to deliver Common Stock upon the conversion of
Debentures. Holders of Debentures exercising such conversion
rights will be deemed to have made a taxable exchange of their
Debentures for the Common Stock received. The value of Common
Stock, if any, received in respect of accrued interest will be
treated as ordinary income to the holder. The value of Common
Stock received in respect of the principal amount of Debentures
will be treated as an amount realized upon the sale or exchange
of such Debentures. Gain or loss will be recognized on that
exchange to the extent the fair market value of the Common Stock
exceeds or is less than the adjusted tax basis of such
Debentures. Such gain or loss will be capital gain or loss
eligible for the preferential long term capital gains rates to
the extent the Debentures have been held for the long term
capital gains holding period. For any holder who has acquired
Debentures by purchase, a taxable exchange or deemed taxable
exchange would commence a new holding period with respect to the
Debentures on the date of such acquisition or exchange. In this
regard, consideration should be given to whether the alteration
of the conversion rights of the Debentures in connection with the
Mergers may have represented such an exchange. Under the Tax
Relief Act of 1997, for exchanges occurring after August 5, 1997,
the long term capital gains rates may be 28 percent or 20
percent, depending upon whether the property disposed of was
considered to have been held for more than 12 months or more than
18 months, respectively.
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Holders of Debentures should consult with their own tax
advisors for the tax consequences of the transaction to them.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of
Common Stock, of which 246,484,559 shares were outstanding at
November 30, 1997, and serial preference stock, par value $25 per
share, none of which has been issued. The following statements
with respect to such capital stock of the Company are a summary
of certain rights and privileges attaching to the stock under the
laws of the State of Texas and the Restated Articles of
Incorporation and the Bylaws of the Company, as amended. This
summary does not purport to be complete and is qualified in its
entirety by reference to such laws, the Restated Articles of
Incorporation and the Bylaws of the Company, as amended, for
complete statements.
Each holder of shares of the Common Stock is entitled to one
vote for each share of Common Stock held on all questions
submitted to holders of shares and to cumulative voting at all
elections of directors. The Common Stock has no preemptive or
conversion rights. Upon issuance and sale of the shares offered
hereby, such shares will be fully paid and nonassessable.
The holders of the shares of the preference stock are not
accorded voting rights, except that, when dividends thereon are
in default in an amount equivalent to four full quarterly
dividends, the holders of shares of the preference stock are
entitled to vote for the election of one-third of the Board of
Directors or two directors, whichever is greater, and, when
dividends are in default in an amount equivalent to eight full
quarterly dividends, for the election of the smallest number of
directors necessary so that a majority of the full Board of
Directors shall have been elected by the holders of the shares of
the preference stock. The Company must also secure the approval
of the holders of two-thirds of the outstanding shares of the
preference stock prior to effecting various changes in its
capital structure.
After the payment of full preferential dividends on the
shares of any outstanding preference stock, holders of shares of
the Common Stock are entitled to dividends when and as declared
by the Board of Directors. After payment to the holders of
shares of any outstanding preference stock of the preferential
amounts to which they are entitled, the remaining assets to be
distributed, if any, upon any dissolution or liquidation shall be
distributed to the holders of shares of the Common Stock. Each
share of the Common Stock is equal to every other share of the
Common Stock with respect to dividends and also with respect to
distributions upon any dissolution or liquidation. (Reference is
made to Notes 4 and 5 to Consolidated Financial Statements of TEI
contained in the 1996 TEI 10-K.)
The Common Stock is listed on the New York, Chicago and
Pacific stock exchanges.
The transfer agent for the Common Stock is TU Services,
Dallas, Texas.
PLAN OF DISTRIBUTION
The shares of Common Stock to which this Prospectus relates
are issuable upon conversion of the Debentures pursuant to the
terms of a Fiscal Agency Agreement dated as of April 1, 1987, as
supplemented by a Supplemental Fiscal Agency Agreement, dated as
of August 5, 1997 (Agreement), between ENSERCH and Citibank, N.A.
(Fiscal Agent). Pursuant to the terms of the Merger Agreement,
the Company has authorized and reserved for issuance the shares
of Common Stock to be delivered upon conversion of the Debentures.
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Certain statements under this heading are summaries of and are
subject to, the detailed provisions of the Debentures, the
Agreement and the Merger Agreement, which have been filed as
exhibits to the registration statements of which this Prospectus
constitutes a part. Copies of the Agreement (including therein
the forms of Debentures) are available for inspection at the
corporate trust office of the Fiscal Agent in New York City which
is located at Citibank, N.A., Corporate Trust Services, 111 Wall
Street, 5th Floor, New York, NY 10043 and at the offices of the
other conversion agents referred to below. All capitalized terms
used in this section but not defined herein have the meanings
ascribed to them in the Agreement.
Pursuant to the Agreement, the conversion rights of the
Debentures have been adjusted to reflect the effect of the
Mergers and of the distribution immediately prior to the Mergers
of ENSERCH's interests in Lone Star Energy Plant Operations, Inc.
and Enserch Exploration, Inc. to its shareholders (Distribution).
As a result, the Debentures are convertible into that number of
whole shares of Common Stock obtained by dividing the principal
amount of the Debentures to be converted by $38.54. A cash
payment will be made in lieu of any fractional share. Accrued
and unpaid interest will not be payable with respect to
Debentures delivered for conversion.
The Debentures are convertible at any time prior to
redemption or maturity thereof. The right to convert Debentures
called for redemption or tendered by the holder thereof for
redemption will terminate at the close of business on the date
fixed for redemption pursuant to the Agreement and will be lost
if not exercised prior to that time. All the Debentures have
been called for redemption on March 27, 1998.
The Debentures have been issued in bearer form in the
denomination of $5,000 each with interest coupons attached
(Bearer Debentures) and in the form of fully registered
Debentures in denominations of $5,000 or integral multiples
thereof without interest coupons (Registered Debentures).
The right of conversion attaching to any Debenture may be
exercised by the holder by delivering such Debenture at the
office of the Fiscal Agent or other conversion agents specified
below, accompanied by a duly signed and completed notice of
conversion in the appropriate form of the notices attached as
Exhibit A and B to this Prospectus. The conversion date will be
the date on which the Debenture and the duly signed and completed
notice of conversion are so delivered. Each Bearer Debenture
delivered for conversion must be delivered with all unmatured
coupons appurtenant thereto as provided in the Agreement. A
holder delivering a Debenture for conversion will not be required
to pay any taxes or duties payable in respect of the issue or
delivery of Common Stock on conversion but will be required to
pay any tax or duty which may be payable in respect of any
transfer involved in the issue or delivery of the Common Stock in
a name other than that of the holder of the Debenture.
Certificates representing shares of Common Stock will not be
issued or delivered unless all taxes and duties, if any, payable
by the holder have been paid.
The Registered Debentures may be surrendered for conversion
at the corporate trust office of the Fiscal Agent in New York
City. Bearer Debentures may be surrendered for conversion,
subject to applicable laws and regulations, by hand, only at one
of the following conversion agents:
Citibank, N.A. Citicorp Investment Bank
Citibank House (Luxembourg) S.A.
336 Strand 16 Avenue Maria Therese
London WC2R 1HB Luxembourg.
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EXPERTS AND LEGALITY
The consolidated financial statements included in the 1996
TEI 10-K, incorporated herein by reference, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their
report included in the 1996 TEI 10-K, and have been incorporated
by reference herein in reliance upon such report given upon the
authority of that firm as experts in accounting and auditing.
With respect to the unaudited condensed consolidated interim
financial information included in the TEI 10-Q's and the TUC 10-Q
that are incorporated herein by reference, Deloitte & Touche LLP
has applied limited procedures in accordance with professional
standards for reviews of such information. As stated in their
reports included in the TEI 10-Q's and the TUC 10-Q, they did not
audit and they did not express an opinion on such interim
financial information. Deloitte & Touche LLP is not subject to
the liability provisions of Section 11 of the Securities Act of
1933, as amended (Act), for their reports on such unaudited
interim financial information because such reports are not
"reports" or a "part" of the Registration Statements filed under
the Act with respect to the Common Stock offered hereby
(Registration Statements), that were prepared or certified by an
accountant within the meaning of Sections 7 and 11 of such Act.
The consolidated financial statements included in the 1996
ENSERCH 10-K, incorporated herein by reference, have been audited
by Deloitte & Touche LLP, independent auditors, as stated in
their report included in such 1996 ENSERCH 10-K, and have been
incorporated by reference herein in reliance upon such report
given upon the authority of that firm as experts in accounting
and auditing.
With respect to the unaudited condensed consolidated interim
financial information included in the ENSERCH 10-Q's incorporated
herein by reference, Deloitte & Touche LLP has applied limited
procedures in accordance with professional standards for reviews
of such information. As stated in their reports included in the
ENSERCH 10-Q's, they did not audit and they do not express an
opinion on such interim financial information. Deloitte &
Touche LLP is not subject to the liability provisions of Section
11 of the Act for their reports on such unaudited interim
financial information because such reports are not "reports" or a
"part" of the Registration Statements prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the Act.
The statements made as to matters of law and legal
conclusions in this Prospectus under DESCRIPTION OF CAPITAL STOCK
and in the 1996 TEI 10-K under Part I, Item 1 Business-
Regulation and Rates, and Environmental Matters, incorporated
herein by reference, have been reviewed by Worsham, Forsythe &
Wooldridge, L.L.P., Dallas, Texas, General Counsel for the
Company. All of such statements are set forth, or have been
incorporated by reference herein in reliance upon the opinion of
that firm given upon their authority as experts. At November 30,
1997, members of the firm of Worsham, Forsythe & Wooldridge,
L.L.P., owned approximately 41,200 shares of the Common Stock.
The statements of law and legal conclusions under the
caption FEDERAL INCOME TAX MATTERS have been reviewed by Reid &
Priest LLP, New York, New York, of counsel to the Company, and
such statements are made upon their authority as experts.
_________________
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
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BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES
OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
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