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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
TEXAS UTILITIES COMPANY
Commission File No. 1-12833
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TEXAS UTILITIES COMPANY
(doing business as TXU Corp)
Energy Plaza, 1601 Bryan, Dallas, Texas 75201-3411
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
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TABLE OF CONTENTS
FINANCIAL STATEMENTS Page
The following financial statements are furnished for the Plan:
Statements of Financial Condition at June 30, 1999 and 1998. . . . 3
Statements of Income and Changes in Plan Equity for the
years ended June 30, 1999, 1998 and 1997 . . . . . . . . . . . . 4
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . 5
Schedules I, II and III have been omitted because the
required information is shown in the financial statements or notes,
or the information is not applicable to this Plan.
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . . . . . . . . . 7
PLAN ADMINISTRATOR'S SIGNATURE . . . . . . . . . . . . . . . . . . . . . 8
EXHIBIT
The following exhibit is filed herewith:
Independent Auditors' Consent. . . . . . . . . . . . . . 9
2
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<TABLE>
<CAPTION>
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
TEXAS UTILITIES COMPANY
STATEMENTS OF FINANCIAL CONDITION
June 30,
---------------------
ASSETS AND PLAN EQUITY 1999 1998
---- ----
<S> <C> <C>
Investment in Securities of Participating Employers -
Common stock of Texas Utilities Company,
At fair value as determined by quoted market prices
(Historical cost: 1999 - $1,206,365; 1998 - $1,208,438) (Note 4) . . . . . . . . . . . . . . $1,321,183 $1,351,626
Dividends receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,333 17,859
Interest Receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 -
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,209 123
---------- ----------
Total Assets and Plan Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,340,730 $1,369,608
========== ==========
<FN>
See accompanying Notes to Financial Statements.
</FN>
</TABLE>
3
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<TABLE>
<CAPTION>
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
TEXAS UTILITIES COMPANY
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
For The Year Ended June 30,
------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Additions (deductions):
Net investment income:
Dividends on common stock of Texas Utilities Company . . . . . . . . . . $ 73,547 $ 68,511 $ 41,604
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,097 490 424
-------- -------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . 74,644 69,001 42,028
-------- -------- --------
Appreciation (depreciation) of investments (Note 4). . . . . . . . . . . . 14,506 218,087 (162,918)
-------- -------- --------
Contributions and deposits (Note 5):
Participating directors' compensation deferrals. . . . . . . . . . . . . 225,000 183,750 187,500
Company matching . . . . . . . . . . . . . . . . . . . . . . . . . . . 225,000 183,750 187,500
-------- ---------- --------
Total contributions and deposits. . . . . . . . . . . . . . . . . . 450,000 367,500 375,000
-------- ---------- --------
Total additions . . . . . . . . . . . . . . . . . . . . . . . . . 539,150 654,588 254,110
-------- ---------- --------
Withdrawals, lapses and forfeitures:
Distributions to participants. . . . . . . . . . . . . . . . . . . . . 533,993 - -
Distributions to plan sponsor. . . . . . . . . . . . . . . . . . . . . 20 800 -
Reversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,015 - -
-------- ---------- --------
Total withdrawals, lapses and reversions. . . . . . . . . . . . . 568,028 800 -
-------- ---------- --------
Net additions (deductions) . . . . . . . . . . . . . . . . . . . . . (28,878) 653,788 254,110
Plan Equity, Beginning of Year. . . . . . . . . . . . . . . . . . . . . . 1,369,608 715,820 461,710
---------- ---------- --------
Plan Equity, End of Year. . . . . . . . . . . . . . . . . . . . . . . . . $1,340,730 $1,369,608 $715,820
========== ========== ========
<FN>
See accompanying Notes to Financial Statements.
</FN>
</TABLE>
4
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DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
TEXAS UTILITIES COMPANY
NOTES TO FINANCIAL STATEMENTS
1. Name Change -- In May 1999, Texas Utilities Company (TXU or the Company)
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adopted TXU Corp as its assumed name and began conducting business as TXU
Corp.
2. Plan Description -- The Deferred Compensation Plan for Outside Directors of
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Texas Utilities Company (Plan) was approved and authorized by the Board of
Directors of the Company on May 19, 1995, effective July 1, 1995. Members of
the Board of Directors of the Company who are not current or former officers
or employees of the Company or any of its subsidiaries (Outside Directors) are
eligible to participate in the Plan. The Plan allows Outside Directors of the
Company to defer a percentage of their compensation, which is defined as the
annual Board retainer. The Company will make a matching award equal to 100%
of such deferred compensation. The maturity period, elected by the
participants, is not fewer than 3 years and not more than 10 years. In the
event a participant's service is terminated because of death or disability,
all amounts in the participant's account shall mature upon such termination.
If the participant terminates service prior to the end of a Plan Year, the
deferred amount, the Company match and the dividend equivalent credits will be
recomputed as of the termination date. In the event a participant's
termination results for reasons other than death or disability, all amounts
credited to an account, except as provided in the event of a participant's
termination prior to the end of a Plan Year, shall mature at the end of the
applicable maturity period.
The number of participants at both June 30, 1999 and 1998 was 7 and 9
respectively.
3. Summary of Significant Accounting Policies:
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Basis of Accounting -- The financial statements of the Plan are prepared
- -------------------
under the accrual method of accounting.
Use of Estimates -- The preparation of financial statements requires the use
- ----------------
of significant estimates and assumptions by management. Actual results could
differ from those estimates.
Expenses -- All costs and expenses of the Plan and its administration, except
- --------
expenses incurred in the acquisition or disposition of investments, are paid
by the Company (Plan Sponsor).
4. Plan Investments -- The cost, market value and appreciation (depreciation)
----------------
of investments at and for the years ended June 30, 1999, 1998 and 1997 are as
follows:
<TABLE>
<CAPTION>
Number of Historical Market Appreciation
Shares Cost Value (Depreciation)
--------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
Common stock of Texas Utilities Company--June 30, 1999 . . . . . 31,884 (a) $1,206,365 $1,321,183 $14,506
Common stock of Texas Utilities Company--June 30, 1998 . . . . . 32,472 (b) 1,208,438 1,351,626 218,087
Common stock of Texas Utilities Company--June 30, 1997 . . . . . 20,462 (c) 779,569 704,652 (162,918)
<FN>
(a)Represents 0.0114% of the outstanding shares of common stock of Texas
Utilities Company (280,875,819 at June 30, 1999).
(b)Represents 0.0116% of the outstanding shares of common stock of Texas
Utilities Company (279,572,743 at June 30, 1998).
(c)Represents 0.0091% of the outstanding shares of common stock of Texas
Utilities Company (224,649,557 at June 30, 1997).
</FN>
</TABLE>
The investment in the Company's common stock (stated in terms of performance
units for each participant) is stated at market value based upon the last
reported sale price on recognized exchanges on the last business day of the
Plan Year. The cost basis of plan investments is determined on an average
cost basis.
Net plan investments values at June 30, 1999, 1998 and 1997 were $41.44,
$41.63 and $34.44 per unit, respectively.
5
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DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
TEXAS UTILITIES COMPANY
NOTES TO FINANCIAL STATEMENTS
5. Plan Contributions -- Contributions by the Company and participants'
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compensation deferrals for the years ended June 30, 1999, 1998 and 1997 were
as follows:
<TABLE>
<CAPTION>
Participating
Directors' Contributions Total
Company Compensation Deferrals by Company Contributions
------------- ---------------------- ------------- -------------
<S> <C> <C> <C>
Texas Utilities Company
June 30, 1999 $225,000 $225,000 $450,000
June 30, 1998 $183,750 $183,750 $367,500
June 30, 1997 $187,500 $187,500 $375,000
</TABLE>
6. Distributions Payable -- During the Plan year ended June 30, 1999,
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distributions were made for maturing Director deferrals and matching awards
for the Plan year ended June 30, 1996 in the amount of $307,067.
Additionally, payments were made to the designated beneficiaries of retired
and/or deceased Directors in the amounts of $226,926. A reversion resulted in
a return to the Company in the amount of $34,015.
Maturing in 1999, Director deferrals and matching awards for the Plan year
ended June 30, 1997 total $173,584.
7. Federal Income Taxes -- The Plan does not, and is not intended to, meet
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the requirements of a tax-qualified plan under Section 401(a) of the Internal
Revenue Code (Code). Therefore, the trust which the Company has established
under the Plan in order to provide Plan benefits is not exempt from federal
income taxes under Section 501 (a) of the Code.
Based on the Code and the regulations thereunder as currently in effect:
(a) A participant's elective deferrals under the Plan, matching awards,
incentive awards, and any dividends, interest or other income thereon will not
be subject to federal income tax until the year such amounts are paid or
otherwise made available to the participant.
(b) Elective deferrals under the Plan are not deductible by the
participant on his or her federal income tax return, since elective deferrals
are not includable in the participant's income.
(c) Amounts distributed under the Plan will be taxable as ordinary income
to the participant in the year of such distribution.
8. Amendment or Termination -- The Company's Board of Directors may amend,
------------------------
terminate, or suspend the Plan at any time. An amendment or modification of
the Plan may affect active participants as well as future participants, but no
amendment or modification of the Plan for any reason may diminish any
participant's account as of the effective date thereof. Upon termination of
the Plan, the deferred amount, matching award, and dividend equivalent credits
will be recomputed as of the date of termination.
6
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INDEPENDENT AUDITORS' REPORT
Organization and Compensation Committee,
Deferred Compensation
Plan for Outside Directors of Texas Utilities Company:
We have audited the statements of financial condition of the Deferred
Compensation Plan for Outside Directors of Texas Utilities Company as of June
30, 1999 and 1998 and the related statements of income and changes in plan
equity for each of the three years in the period ended June 30, 1999. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of the Plan at June 30, 1999
and 1998 and the related plan income and changes in plan equity for each of
the three years in the period ended June 30, 1999, in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Dallas, Texas
September 3, 1999
7
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Organization and Compensation Committee has duly caused this annual report to
be signed on its behalf by the undersigned thereunto duly authorized.
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS
OF TEXAS UTILITIES COMPANY
By /s/ Peter B. Tinkham
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Plan Administrator
Organization and Compensation Committee
September 21, 1999
8
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
Texas Utilities Company:
We consent to the incorporation by reference in Registration Statement No.
333-32833 on Form S-8 of our report dated September 3, 1999, appearing in this
Annual Report on Form 11-K of the Deferred Compensation Plan for Outside
Directors of Texas Utilities Company for the year ended June 30, 1999.
DELOITTE & TOUCHE LLP
Dallas, Texas
September 21, 1999
9
