--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
EMPLOYEES' THRIFT PLAN OF THE
TEXAS UTILITIES COMPANY SYSTEM
Commission File No. 1-12833
------------------------
TXU CORP.
(Formerly known as Texas Utilities Company)
Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
--------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
FINANCIAL STATEMENTS
The following statements are furnished for the Plan:
Statements of Net Assets Available for Benefits,
December 31, 1999 and December 31, 1998.......................... 3
Statements of Changes in Net Assets Available for Benefits,
for the Year Ended December 31, 1999 and December 31, 1998....... 4
Notes to Financial Statements...................................... 5
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes at End of Year,
December 31, 1999.............................................. 12
Schedule of Reportable Transactions for the Year
Ended December 31, 1999........................................ 15
INDEPENDENT AUDITORS' REPORT.............................................. 16
SIGNATURE .............................................................. 17
EXHIBITS
The following exhibit is filed herewith:
Independent Auditors' Consent...................................... 18
2
<PAGE>
EMPLOYEES' THRIFT PLAN
OF THE TEXAS UTILITIES COMPANY SYSTEM
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1999 1998
---- ----
ASSETS
<S> <C> <C>
Investments , at fair value (Notes 2, 3, 4 and 5)..... $828,657,186 $924,854,830
Cash.................................................. 135,240 77,807
Contributions receivable from employer-corporations... 4,393,650 4,097,451
Dividends receivable.................................. 10,995,263 10,451,210
Interest receivable................................... 4,399 2,154
Loan receivable....................................... 24,232,105 21,722,716
------------- -------------
Total assets........................................ 868,417,843 961,206,168
LIABILITIES
Note payable (Note 3)................................. 248,941,000 249,806,000
Accrued interest payable.............................. 5,630,277 5,105,231
------------- -------------
Total liabilities................................... 254,571,277 254,911,231
NET ASSETS AVAILABLE FOR BENEFITS....................... $613,846,566 $706,294,937
============= =============
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
EMPLOYEES' THRIFT PLAN
OF THE TEXAS UTILITIES COMPANY SYSTEM
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1999 1998
---- ----
ADDITIONS
<S> <C> <C>
Income:
Dividends........................................... $ 50,066,466 $42,366,743
Interest.......................................... 6,241,038 5,737,226
------------- -------------
Total income...................................... 56,307,504 48,103,969
Contributions:
Participating employees' savings.................... 41,388,421 40,458,703
Employer-corporations............................... 17,887,755 16,539,122
------------- -------------
Total contributions............................... 59,276,176 56,997,825
Net appreciation (depreciation) in fair value of
investments 109,042,397) 93,830,331
------------- ------------
Total additions................................... 6,541,283 198,932,125
------------- ------------
DEDUCTIONS
Distributions to withdrawing participants............. 73,545,779 26,306,110
Interest expense and other fees (Note 2).............. 25,443,875 24,459,473
------------- -------------
Total deductions.................................. 98,989,654 50,765,583
------------- -------------
Net increase (decrease)........................... (92,448,371) 148,166,542
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year..................................... 706,294,937 558,128,395
------------- -------------
End of year........................................... $613,846,566 $706,294,937
============= =============
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
--------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description is provided for general information purposes
only. Reference should be made to the Plan document for more complete
information.
General - The Employees' Thrift Plan of the Texas Utilities Company System
-------
(Plan) is a defined contribution plan established in 1968 by TXU Corp. and its
subsidiaries, (Employer-corporations). The Employees' Thrift Plan Committee
manages the operation and administration of the Plan. Mellon Bank, N.A. serves
as trustee (Trustee) and is custodian of the assets of the Plan. Dreyfus
Retirement Services, a subsidiary of the trustee, serves as record-keeper for
the Plan. In 1990, the Plan was amended to establish a leveraged employee stock
ownership provision (See Note 3). The Plan was again amended effective as of
January 1, 1993. Such amendments to the Plan, among other things, established a
pre-tax deferral feature in accordance with Section 401(k) of the Internal
Revenue Code of 1986, as amended (Code). The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
The plan is intended to be a participant directed "individual account plan"
under ERISA Section 404(c). As such, the fiduciaries of the Plan are not liable
for any losses that are the direct and necessary result of participant
investment decisions. Participation in the Plan by employees of the
Employer-corporations who meet certain eligibility requirements is entirely
voluntary.
The Plan includes nine investment options, or funds:
o Common Stock of TXU (Common Stock) , invests exclusively in Common
Stock of TXU Corp. (Company);
o Interest Income Fund , invests in fixed-rate contracts with insurance
companies and other financial institutions;
o Bond Index Fund , purchases units in the Vanguard Bond Index Total
Institutional Fund;
o Balanced Fund , purchases units in the Hotchkis and Wiley Balanced
Income Fund, which consists primarily of investments in equity
securities, fixed income securities and money market obligations;
o Equity Income Fund , purchases units in the Fidelity Equity-Income
Fund, which consists primarily of income-producing equity securities;
o Equity Index Fund , purchases units in the Vanguard Institutional
Index Fund, which consists primarily of common stocks included in the
Standard & Poor's 500 Index;
o Equity Growth Fund , purchases units in the American Express IDS New
Dimensions Fund (Class Y), which invests primarily in common stocks of
companies showing potential for significant growth, and also invests
in foreign securities and futures transactions;
o Equity International Fund , purchases units in the American AAdvantage
International Institutional Fund, which invests primarily in equity
securities of foreign issuers;
o Equity Small Company Fund , purchases units in the MAS Small
Capitalization Institutional Fund, which invests primarily in equity
securities issued by companies with market capitalization within the
range of the Frank Russell 2000 Index.
Eligibility, Participation and Employee Savings - Effective January 1,
-----------------------------------------------
1998, any regular employee of an Employer-corporation, who was not on the TXU
Gas Company (formerly known as ENSERCH Corporation) payroll on December 31,
1997, is eligible to participate in the Plan upon employment.
5
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
--------------------------------------------------------------------------------
Under the Plan, except as limited by law, a participating employee may
invest, through pre-tax salary deferrals (Elective Deferrals) or after tax
payroll deductions (Payroll Deductions) each payroll period, a specified amount
ranging from 1% to 6% of regular salary or wages (Basic Employee Savings).
Participants electing the maximum Basic Employee Savings investment may also
invest, through Elective Deferrals or Payroll Deductions each payroll period, an
additional 1% to 10% of regular salary or wages (Supplemental Employee Savings).
Employer Matching Contributions - Matching contributions to participant
-------------------------------
accounts by the Employer-corporations are made based on the participants' Basic
Employee Savings and years of service as follows:
Less than 10 years.................................40%
10 years but less than 25 years....................50%
25 years or more...................................60%
No employer contributions are made with respect to Supplemental Employee
Savings.
Investment of Funds - All employer matching contributions are invested in
-------------------
Common Stock of the Company; however, effective April 1, 1998 each participant
may invest, in 1% increments, in the various nine investment options with
respect to the investment of Basic and Supplemental Employee Savings. All assets
of the Plan are held by the Trustee for the exclusive benefit of participants
and their beneficiaries. Separate account records for each participant are
maintained by the Trustee. The Trustee provides a summary of financial
performance by investment fund directly to Plan participants.
Effective April 1, 1998 a participant may change selected investment
options for Employee Savings at any time by liquidating the investments
attributable to Basic and Supplemental Employee Savings and reinvesting such
amounts in other investment options as may be permitted under the Plan.
A participant who has completed at least ten years of Plan participation
and attained age 55 may annually instruct the Trustee to diversify up to 25% of
such participant's employer contributions account (reduced by amounts previously
so diversified) in the same proportion as the participant may diversify such
Basic and Supplemental Employee Savings. At age 60 and thereafter, a participant
may annually diversify up to 50% of such employer contributions account (reduced
by amounts previously so diversified).
Unit Values - Participants do not have beneficial ownership in specific
-----------
securities or other assets in the various funds other than Common Stock, but
have an interest therein represented by units valued as of the close of each
business day. Generally, contributions to and withdrawal payments from each fund
are converted to units by dividing the amounts of such transactions by the unit
value as last determined, and the appropriate account is charged or credited
with the number of units properly attributable to the participant.
Voting of Common Stock - Each participant may give the Trustee confidential
----------------------
written instructions with respect to the voting, at any meeting of shareholders,
of the Common Stock allocated to the participant's account. Effective January 1,
1993, the unallocated Common Stock held pursuant to the leveraged employee stock
ownership component of the Plan may be voted by the Trustee in its discretion
unless otherwise directed pursuant to a voting procedure agreement.
See accompanying Notes to Financial Statements.
6
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
--------------------------------------------------------------------------------
Withdrawal from the Plan - Withdrawals from the Plan are governed by
------------------------
applicable IRS regulations and provisions of ERISA. Penalties may apply in
certain instances.
A participant who terminates employment and has an account balance greater
than $5,000 may retain the funds in the Plan or withdraw them at any time.
Participants that terminate with balances equal to or less than $5,000 are
required to receive a distribution after termination. To avoid taxation, the
taxable portion of any withdrawal made upon termination may be rolled into an
IRA or a qualified retirement plan sponsored by another employer.
The IRS has established rules governing distributions from the Plan after
the participant has attained 70 1/2 years of age.
A participant may withdraw a portion of after-tax Basic and Supplemental
Employee Savings without necessitating a total withdrawal from the Plan and may
exercise the limited privilege of an after-tax partial withdrawal at any time.
Partial withdrawal may be in any amount up to 90% of the participant's Basic and
Supplemental Employee Savings, or 90% of market value, whichever is less.
In the event of an after-tax partial withdrawal, such amount will be paid
to the participant in cash or in shares of Common Stock to the extent such stock
is held in the participant's account for after-tax Basic and Supplemental
Employee Savings, at the option of the participant. No partial withdrawal may be
made of Elective Deferrals, Rollover Contributions, Employer matching
contributions, or income from such deferrals or contributions. A participant may
repay to the Trustee the amounts of any after-tax partial withdrawal made after
January 1, 1976, at any time. An after-tax Partial withdrawal by a participant
does not terminate participation in the Plan.
A participant may complete a total withdrawal from the aftertax account,
including a withdrawal of related Company matching contributions, at any time.
Distributions from the pretax and rollover accounts to active employees under
age 59 1/2 are permitted under the Internal Revenue Code Hardship Withdrawal
provisions. Participants who complete Hardship Withdrawals may not contribute to
the plan for a period of 12 months. Upon termination of employment or attainment
of age 59 1/2, a participant may complete a total withdrawal from the plan, to
include the values in the aftertax contribution and company match account,
pretax contribution and related match account and rollover account.
Effective January 1, 1998, participants are fully vested in all amounts in
their accounts (i.e., Elective Deferrals, Payroll Deductions, Employer Matching
Contributions, Rollover Contributions and all earnings and dividends thereon).
Participants making withdrawals, other than partial withdrawals, may choose
from the following optional forms of payment: (a) shares of Common Stock and/or
publicly traded Fund units (to the extent permitted by the Fund) credited to a
participant's account; (b) single lump sum cash payment; or (c) a combination of
(a) and (b).
See accompanying Notes to Financial Statements.
7
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
--------------------------------------------------------------------------------
In the event of a total withdrawal made after January 1, 1976, by a
participant who was not 100% vested prior to January 1, 1998, the participant
may repay to the Plan the amount of such distribution at any time prior to the
close of the Plan Year in which the participant has completed five consecutive
Break-in-Service years and any amounts previously forfeited will be restored to
the participant's account.
In addition, participants may, after meeting certain qualifications as
defined by the Internal Revenue Service (IRS), withdraw a portion of their
401(k) account balance based on a hardship qualification.
Federal Income Taxes - The Company has been advised by the IRS that the
--------------------
Plan meets the requirements of Section 401(a) of the Code, as to form; that the
Trust established thereunder is exempt from federal income taxes under Section
501(a) of the Code; and that employer contributions paid to the Trust under the
Plan are allowable federal income tax deductions to the Employer-corporations
subject to the conditions and limitations of Section 404 of the Code.
Based on the Code and regulations issued pursuant thereto:
(a) Employer contributions under the Plan, and dividends, interest and
other income from Trust Assets are not taxable to the participant when
received by the Trustee and credited to the participant's account.
(b) Basic and Supplemental Employee Savings made by Payroll Deduction are
not deductible on the participant's federal income tax return.
(c) Basic and Supplemental Employee Savings which are Employee Elective
Deferrals reduce a participant's gross compensation as reported on
Form W-2 and are not taxable to the participant when received by the
Trustee and credited to the participant's account.
(d) Partial withdrawal of employee savings which were contributed to the
Plan through Payroll Deductions prior to January 1, 1987, represent a
return of employee savings and are not taxable to the participant when
withdrawn. Partial withdrawals of employee savings which were
contributed to the Plan through Payroll Deductions after December 31,
1986, are considered to include, for income tax purposes, an amount of
taxable income.
(e) A total withdrawal generally results in taxable income to the
participant equal to the gross distribution less Basic and
Supplemental Employee Savings made by Payroll Deduction. However, if
the total withdrawal meets the lump sum distribution requirements of
the Code, (i) any net unrealized appreciation in the value of
distributable Common Stock from the time of distribution will be tax
deferred; (ii) any additional appreciation in the value of Common
Stock from the time of distribution to the time of stock sale or
disposition will be treated as short-term or long-term capital gain
depending on the period the participant holds such stock; and (iii)
the taxable amount may be eligible for the special forward averaging
provisions of the Code.
(f) The taxable amount of a total or partial withdrawal may generally be
rolled over to an Individual Retirement Account (IRA) or other
qualified plan and payment of taxes may thereby be deferred, subject
to automatic income tax withholding of twenty percent (20%) on amounts
not distributed in Common Stock.
(g) The taxable amount of an account, subject to total and partial
withdrawal provisions, can be transferred directly to an IRA or other
qualified plan and payment of taxes may thereby be deferred.
See accompanying Notes to Financial Statements.
8
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
--------------------------------------------------------------------------------
Participants are encouraged to determine the effect on their federal income
tax liability of receiving distributions from the Plan.
Amendment, Modification, Suspension and Termination - It is the intention
---------------------------------------------------
of the Company to continue the Plan indefinitely; however, the Company, by
action of its Board of Directors, may amend, modify or suspend the Plan at any
time, or from time to time, and may terminate the Plan at any time; and any
Employer-corporation may withdraw from participation in the Plan at any time
upon thirty days notice.
In the event of termination of the Plan in whole or in part or termination
of participation of any Employer-corporation, each participant in the Plan
affected by such termination shall receive a distribution of the entire balance
in the participant's account, whether derived from Basic and Supplemental
Employee Savings or employer contributions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
Valuation of Investment Securities - Participant investments in all funds
----------------------------------
except for the Interest Income Fund are accounted for as units and stated at
fair value based upon closing sales prices on recognized securities exchanges on
the last business day of the fiscal year. The Interest Income Fund insurance
contracts and the financial institution investment contracts are valued at
contract value. Contract value represents contributions made by participants,
plus interest at the contract rates, less withdrawals or transfers by
participants. Fair value is estimated using discounted cash flows. Following is
additional information reported in the aggregate for the Interest Income Fund:
Contract Value of assets as of December 31, 1999: $57,739,456
Fair Value of assets as of December 31, 1999: $56,667,225
Average Yield of assets on December 31, 1999: 6.40%
Return on assets for 12 months ending December 31, 1999: 6.35%
The average yield of assets on December 31, 1998 was 6.42%. The return on assets
for 12 months ending December 31, 1998 was 6.60%.
Expenses - All costs and expenses of the Plan and its administration,
--------
except expenses incurred in the generation and administration of participant
loans and in the acquisition or disposition of investments, are paid by the
Employer-corporations.
Reclassification - Certain previously reported amounts have been
----------------
reclassified to conform to current presentations.
See accompanying Notes to Financial Statements.
9
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
--------------------------------------------------------------------------------
New Accounting Pronouncements - In June 1998, the Financial Accounting
-----------------------------
Standards Board issued Statement of Financial Accounting Standards Number 133
(SFAS 133) "Accounting for Derivative Instruments and Hedging Activities." This
statement, which is required to be adopted for annual periods beginning after
June 15, 2000, establishes standards for recognition and measurement of
derivative and hedging activities. The Plan has not yet determined the financial
statement impact, if any of SFAS 133.
SOP 99-3 - On September 15, 1999 the Accounting Standards Executive
Committee issued Statement of Position 99-3 (SOP 99-3) which simplifies
disclosures for certain investments held by a defined contribution plan. The
statement eliminates the previous requirement for a defined contribution plan to
present plan investments by general type for participant-directed investments in
the statement of net assets available for benefits. The statement also
eliminates the requirement for a defined contribution plan to disclose
participant-directed investment programs and eliminates the requirement to
disclose per-unit information for plans that assign units to participants. The
SOP provides for additional disclosures for nonparticipant-directed investments
including specific identification of nonparticipant-directed investments in
excess of five percent of net assets available for benefits. The plan must also
disclose nonparticipant-directed investments by general type and the significant
components of the changes in net assets relating to the nonparticipant-directed
investments. As a result of adopting SOP 99-3, comparative amounts in the
December 31, 1998 financial statements have been reclassified to conform to the
current year disclosure requirements.
3. LEVERAGED EMPLOYEE STOCK OWNERSHIP PROVISION
In 1990, the Trustee, on behalf of the Plan, borrowed $250,000,000 in the
form of a note payable from an outside lender and purchased 7,142,857 shares of
Common Stock of the Company in connection with the leveraged employee stock
ownership provision (LESOP) of the Plan. The note was purchased from the lender
by the Company later in 1990. The note payable requires repayment of principal
over 17 years beginning in 1998. At December 31, 1999 and 1998, the note payable
bore interest at a fixed rate of 9.81% following its conversion in January 1992
from a variable rate to a fixed rate. The note payable is collateralized by
4,902,009 unallocated shares held by the Trustee at December 31, 1999.
The LESOP shares are held by the Trustee until released and allocated to
participants' accounts proportionally based on current debt service payments
including interest to total debt service payments. Debt service payments are
made by the Plan from dividends received on the unallocated shares and, if
necessary, contributions from Employer-corporations. The market value of shares
released reduces the cash requirements of the Employer-corporations for their
funding obligation under the Plan. During the 1999 Plan year the number of LESOP
shares released and allocated to participant accounts was 239,520 and during the
1998 Plan year the number of LESOP shares released and allocated to participant
accounts was 233,629.
4. INVESTMENTS
Investments representing five percent or more of the plan's net assets are
as follows:
DECEMBER 31,
1999 1998
---- ----
TXU Corp. common stock (1999 , 12,428,714
shares; 1998 , 12,337,552 shares)* $441,996,142 $576,009,459
Equity Growth Fund 127,547,182 97,285,096
Guaranteed contracts 45,793,638 45,480,690
Equity income fund 82,283,585 84,526,781
Equity index fund 78,500,417 62,577,568
*Nonparticipant-directed
See accompanying Notes to Financial Statements.
10
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
--------------------------------------------------------------------------------
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated in
value by $109,042,397 as follows:
Common stock of TXU $(138,727,163)
Mutual funds 29,690,928
Guaranteed contracts (6,162)
--------------
$(109,042,397)
5. NONPARTICIPANT,DIRECTED INVESTMENTS
All employer matching contributions are invested in common stock of the
Company and considered to be nonparticipant-directed investments. Changes in net
assets relating to nonparticipant-directed investments is as follows:
DECEMBER 31,
1999 1998
---- ----
Net assets , common stock $441,996,142 $576,009,459
YEAR ENDED
DECEMBER 31, 1999
-----------------
Changes in net assets
Additions:
Contributions $ 26,150,434
Dividends 28,853,809
Interest 68,249
--------------
Total additions 55,072,492
--------------
Deductions:
Distributions to participants 35,513,953
Interest expense and other fees 24,821,686
Net depreciation in fair value 138,727,163
--------------
Total deductions 199,062,802
--------------
Transfers for reinvestments , net 11,076,663
Other transfers (1,099,670)
--------------
9,976,993
$(134,013,317)
==============
6. PARTICIPANT LOANS
The Plan includes a loan feature allowing participants to borrow from their
pretax employee savings and rollover accounts and repay the loan with after-tax
payroll deductions. Participants are eligible to borrow up to 50% of their
vested pretax and rollover account balances, including Company matching
contributions, with the minimum amount of a loan being $1,000 and the maximum
being $50,000. Participants may repay the loan back into their account(s) over a
period from 1 to 5 years for a general purpose loan, and the shorter of 15 years
or their remaining mortgage term for a primary home loan. The rate of interest
charged is the Trustee's current prime lending rate plus an additional 2%.
7. OTHER ITEMS
During 1998, The Internal Revenue Service ("IRS") notified the Plan
committee that the Plan would be under examination. The Plan years subject to
examination are the Plan years ending with or within the tax years ending
December 31, 1994, 1995, and 1996. The examination is currently in a preliminary
state and no findings have been communicated to the Plan committee.
See accompanying Notes to Financial Statements.
11
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM - SUPPLEMENTAL
---------------------------------------------------------------------------
SCHEDULES
---------
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR,
DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description of Investment,
Identity of Issue, Including Collateral, Rate of
Borrower, Lessor, Interest, Maturity Date, Shares,
or Similar Party Units, Par or Maturity Value Cost Current Value(1)
----------------------- -------------------------------- ---- ----------------
(Dollars)
<S> <C> <C> <C>
COMMON STOCK
Common Stock 4
------------
TXU(2) 12,428,714 shares $481,383,480 $441,996,142
Money Market Funds
------------------
Mellon Bank, N.A.(2) Cash management fund -
748,353 units 748,353
-----------
TOTAL COMMON STOCK 442,744,495
-----------
BOND INDEX FUND
Vanguard Bond Index
Fund - Total Bond
-------------------
Market Portfolio 1,170,282 units 11,187,900
-----------
INTEREST INCOME FUND
Value of Interest in General Accounts
-------------------------------------
Business Men's Assurance
Co. of America Contract No. 1207, 6.90%, due 2001 2,593,094
Safeco Life
Insurance Company Contract No. LP-1052795, 6.09%, due 2001 1,259,385
New York Life
Insurance Company Contract No. GA-30839, 6.19%, due 2005 1,105,084
Jackson National Life
Insurance Company Contract No. G-1004-1, 5.81%, due 2001 2,092,108
John Hancock
Life Insurance Company Contract No. GAC-8897, 7.01%, due 2003 1,275,549
Deutsche Bank Contract No. 95-810, 7.59%, due 2005 417,915
Protective Life
Insurance Company Contract No. GA-1427, 5.96%, due 2002 2,034,459
Life of Virginia Contract No. GS-3154, 6.07%, due 2002 2,582,042
Principle Mutual Life Contract No. 4368431, 5.95%, due 2003 2,106,288
Combined Life Insurance
Company of America Contract No. CG-1113, 6.02%, due 2003 2,093,405
Rabobank Nederland Contract No. 089901, 6.68%, due 2003 1,473,592
</TABLE>
See accompanying Notes to Financial Statements.
12
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM - SUPPLEMENTAL
---------------------------------------------------------------------------
SCHEDULES
---------
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR,
DECEMBER 31, 1999 (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description of Investment,
Identity of Issuer, Including Collateral, Rate of
Borrower, Lessor, Interest, Maturity Date, Shares,
or Similar Party Units, Par or Maturity Value Current Value(1)
----------------------- -------------------------------- ----------------
(Dollars)
<S> <C> <C>
Ohio National Life
Insurance Company Contract No. GP-5258, 5.81%, due 2002 2,004,957
Travelers
Insurance Company Contract No. GR-17065, 5.32%, due 2003 2,527,846
Metropolitan Life
Insurance Company Contract No. GAC-24686, 6.88%, due 2005 3,149,339
Transamerica Occidental
-----------------------
Insurance Company Contract No. 51492, 6.33%, due 2001 2,519,413
-----------
Total Value of Interest in General Accounts 29,234,476
Money Market Funds
------------------
Mellon Bank, N.A.(2) Cash management fund -
500,255 units 500,255
-----------
United States Government Obligations
------------------------------------
FNMA/FHLMC 9,554,056 units 9,554,056
-----------
Other
-----
Monumental Manager
Trust Contract No. BDA-00284TR, 6.53%:
NTQA Multiple Mortgage - Backed Securities
Bond Index Fund 3,702,209
NTQA Multiple Asset-Backed Securities
Bond Index Fund 5,546,889
NTQA Multiple Long-Term
Government Bond Index Fund 743,578
NTQA Multiple Intermediate
Government Bond Index Fund 3,850,675
NTQA Multiple Intermediate
Corporate Bond Index Fund 4,607,318
-----------
18,450,669
-----------
TOTAL INTEREST INCOME FUND 57,739,456
-----------
</TABLE>
See accompanying Notes to Financial Statements.
13
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM - SUPPLEMENTAL
---------------------------------------------------------------------------
SCHEDULES
---------
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR,
DECEMBER 31, 1999 (continued)
--------------------------------------------------------------------------------
Current Value 1
-------------
(Dollars)
EQUITY INCOME FUND
Fidelity Equity -
Income Fund 1,538,586 units 82,283,585
EQUITY INDEX FUND
Vanguard Institutional
Index Fund 585,780 units 78,500,417
EQUITY INTERNATIONAL FUND
American AAdvantage
International Fund 125,555 units 2,460,877
EQUITY SMALL COMPANY FUND
MAS Small Cap Value
Institutional Fund 75,743 units 1,529,250
BALANCED FUND
Hotchkis and Wiley Balanced
Income Fund 24,664,024
1,495,696 units
EQUITY GROWTH FUND
American Express IDS New
Dimensions Fund 3,561,776 units 127,547,182
LOAN FUND
Participant Loans
Receivable(3) 24,232,105 units 24,232,105
TOTAL ALL FUNDS $852,889,291
============
(1) Current value for the Interest Income Fund is based on contract value.
(2) Party-in-Interest
(3) The rate of interest charged is the Trustee's current
prime lending rate plus an additional 2%. During 1999, the rate of interest
charged ranged from 9.75% to 10.50%. Maturities range from 1 to 5 years for
general purpose loans and up to 15 years for a primary home loan.
(4) Non Participant-Directed
See accompanying Notes to Financial Statements.
14
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM - SUPPLEMENTAL
---------------------------------------------------------------------------
SCHEDULES
---------
SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
Transactions involving an amount in excess of 5% of the fair value of beginning
plan assets.
<TABLE>
<CAPTION>
Current Value
Of Asset
Identity of Description Purchase Selling Expense Incurred Cost of on Transaction
Party Involved of Asset Price Price With Transaction Asset Date Net Gain
-------------- ---------- -------- ------- ---------------- ----- --------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Exceeding 5%
of Plan Assets (in
the Aggregate):
Series of
Transactions:
Various TXU Stock 48,143,890 - - 48,143,890 48,143,890 -
</TABLE>
See accompanying Notes to Financial Statements.
15
<PAGE>
INDEPENDENT AUDITORS' REPORT
EMPLOYEES' THRIFT PLAN COMMITTEE
EMPLOYEES' THRIFT PLAN OF THE
TEXAS UTILITIES COMPANY SYSTEM:
We have audited the accompanying statements of net assets available for benefits
of the Employees' Thrift Plan of the Texas Utilities Company System (the "Plan")
as of December 31, 1999 and 1998, and the related statements of changes in net
assets available for benefits for the years then ended. 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 auditing standards generally accepted
in the United States of America. 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1999
and 1998, and the changes in net assets available for benefits for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of (1) assets held for investment purposes at year end at December 31, 1999 and
(2) reportable transactions for the year ended December 31, 1999 are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. Supplemental schedules are
the responsibility of the Plan's management. Supplemental schedules have been
subjected to the auditing procedures applied in our audit of the basic 1999
financial statements and, in our opinion, are fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
DELOITTE & TOUCHE LLP
Dallas, Texas
June 27, 2000
See accompanying Notes to Financial Statements.
16
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employees' Thrift Plan Committee has duly caused this annual report to be signed
on its behalf by the undersigned thereunto duly authorized.
EMPLOYEES' THRIFT PLAN OF THE
TEXAS UTILITIES COMPANY SYSTEM
By /s/ Robert L. Turpin
--------------------------
Robert L. Turpin, Assistant Secretary
Employees' Thrift Plan Committee
June 28, 2000
See accompanying Notes to Financial Statements.
17
