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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
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE
AND SAVINGS PLAN
Commission File No. 1-12833
------------------------
TXU CORP.
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)
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<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 1998.......................................... 1
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 1999 and 1998...................... 2
Notes to Financial Statements......................................... 3
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes at End of Year,
December 31, 1999................................................... 9
Schedule of Reportable Transactions for the Year
Ended December 31, 1999............................................. 10
INDEPENDENT AUDITORS' REPORT.............................................. 11
SIGNATURE ............................................................... 12
EXHIBITS
The following exhibit is filed herewith:
Independent Auditors' Consent......................................... 13
<PAGE>
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
----------------------------
1999 1998
---------- --------
ASSETS
<S> <C> <C>
Cash and Short-term Investments.................. $ 306,637 $ 281,504
Investments , at fair value (Note 3)............. 65,483,315 66,024,759
Participant loans receivable..................... 1,079,990 988,776
Dividends and Interest receivable ............... 8,143 7,704
------------ ------------
Total assets........................ 66,878,085 67,302,743
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS.................. $66,878,085 $67,302,743
=========== ===========
</TABLE>
See Notes to Financial Statements
1
<PAGE>
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------
1999 1998
---- ----
<S> <C> <C>
NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR.......... $67,302,743 $73,295,268
------------ ------------
ADDITIONS:
Investment Income , Interest and dividends................ 3,882,588 3,273,524
------------ ------------
Contributions:
Participants' payroll deductions........................ 4,849,138 4,785,347
Participants' rollover transfers........................ - 32,321
Employer's matching contributions....................... 1,736,571 1,678,927
------------ ------------
Total contributions................................... 6,585,709 6,496,595
------------ ------------
Net unrealized and realized appreciation (depreciation) in
fair value of investments............................... (2,649,898) (6,144,968)
------------ ------------
Total additions....................................... 7,818,399 3,625,151
------------ ------------
DEDUCTIONS:
Distributions to withdrawing participants................. (8,348,285) (9,721,651)
Administrative expenses................................... -- (20,831)
------------ ------------
Total deductions...................................... (8,348,285) (9,742,482)
------------ ------------
TRANSFER BETWEEN FUNDS , NET.................................. 27,192 --
------------ ------------
OTHER ACTIVITY................................................ 78,036 124,806
------------ ------------
Net additions (deductions)............................ (424,658) (5,992,525)
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR................ $66,878,085 $67,302,743
============ ============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
1. DESCRIPTION OF THE PLAN
General - The ENSERCH Corporation Employee Stock Purchase and Savings
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Plan ("the Plan"), is a participant-directed defined contribution
combination employee stock ownership and profit sharing plan under Sections
401(a), 401(k), 401(m) and 4975(e)(7) of the Internal Revenue Code ("the
Code"). The Plan is subject to the applicable provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
In June 1999, ENSERCH Corporation's name was changed to TXU Gas
Company ("TXU Gas"); however, the Plan's name was not changed. In August
1997, ENSERCH Corporation ("ENSERCH" or "the Corporation") became a
wholly-owned subsidiary of Texas Utilities Company. In May 2000, Texas
Utilities Company changed its corporate name to TXU Corp. The merger was
immediately preceded by a distribution of Enserch Exploration, Inc. ("EEX")
(a majority-owned publicly traded subsidiary) shares to holders of ENSERCH
common stock. Under terms of the merger agreement, shares of the common
stock of TXU Corp. were exchanged for all of the outstanding shares of the
Corporation and company matching contributions were modified to be in the
form of TXU Corp. stock. Pursuant to the distribution of EEX shares,
approximately $12,395,000 of Plan assets were transferred to the EEX
Corporation Employee Stock Purchase and Savings Plan.
The following description is provided for general information only.
Reference should be made to the Plan document for more complete
information.
The Plan was established by ENSERCH and its divisions and
participating subsidiary companies to encourage and assist employees in
establishing an individual savings and investment program. A committee
appointed by the TXU Corp. Board of Directors is responsible for the
general administration, management and operation of the Plan. Chase Bank
("the Trustee"), a federally chartered bank, serves as trustee and is
custodian of the assets of the Plan.
Eligibility and Participation - Participation by eligible employees is
-----------------------------
voluntary. All salaried employees of ENSERCH and its participating
subsidiaries who were on the ENSERCH payroll for the last payroll period of
1997 were eligible to participate in the Plan, and those participating
remain eligible while employed by an affiliate of TXU Corp. Individuals
employed by TXU Gas and its subsidiaries subsequent to the last payroll
period of 1997 are eligible to participate in the Employees' Thrift Plan of
the Texas Utilities Company System.
Participants' Contributions - Under the Plan, a participant may invest
---------------------------
pre-tax and/or after-tax dollars through payroll deductions each pay period
in increments of one percent up to a maximum of 16 percent of base pay. The
Omnibus Budget Reconciliation Act of 1993 placed an annual limitation of
$160,000 in 1999 on the pay which can be used in computing benefits for
participants under the Plan. The maximum contribution for certain highly
compensated participants is subject to further reduction pursuant to
limitations under the Code.
Eligible employees can roll over to the Plan distributions received
from other qualified retirement plans. Individual Retirement Account
("IRA") distributions are not eligible for rollover into the Plan.
3
<PAGE>
Each participant is entitled to direct the allocation of his or her
pretax, after-tax and rollover accounts among the common stock of TXU Corp.
or other mutual fund investment options as offered. As of December 31, 1999
the mutual fund investment options included: the American AAdvantage
International Institutional, Dreyfus-Certus Stable Value, Fidelity
Equity-Income, Hotchkis & Wiley Balanced, IDS New Dimensions Y-Class, MAS
Small Capitalization, Vanguard Bond Index Total Institutional and the
Vanguard Institutional Index. A participant can change investment elections
for future contributions and can transfer (or exchange) any existing mutual
fund balances among the offered investment options at any time, in
accordance with the Plan guidelines.
Employer Matching Contributions ("company matching") - The maximum
-------------------------------
participant contribution eligible for matching is 6% of the participant's
eligible compensation. Company matching contributions as a percentage of
participant contributions are at a rate of 40%, 50% or 60% depending on
length of service. Employees are 100% vested in the matching contributions.
Company matching contributed to the Plan prior to the merger was invested
at the participant's direction, in any of the Plan's investment options.
Subsequent to the merger date, all Company matching contributions are in
TXU Corp. common stock.
Investment of Funds - 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.
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.
Withdrawal from the Plan - Withdrawals from the Plan are governed by
------------------------
applicable Internal Revenue Service ("IRS") regulations and provisions of
ERISA. Penalties may apply in certain instances.
Employees may make full withdrawals from either their after-tax or
company matching accounts at any time and for any reason. Employees may
also make partial or full withdrawals from their rollover accounts at any
time and for any reason. Employees may make withdrawals from pre-tax
accounts after meeting certain qualifications as defined by the IRS based
on certain hardship rules.
A participant who terminates employment and has an account balance of
more than $5,000 can 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 can
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.
4
<PAGE>
Unclaimed Terminated Participants' Accounts - The plan has a
-------------------------------------------
segregated account of amounts payable to terminated participants of the
former Tax Reduction Act Stock Ownership Plan ("TRASOP") whom the Plan
administrators have been unable to locate for more than one year from the
date of termination. Included in net assets available for benefits as of
December 31, 1999 and 1998, were $778,618 and $982,396, respectively, of
TRASOP unclaimed terminated participants' benefits. As of December 31, 1999
and 1998, there was $308,474 and $274,471 respectively, invested in the
Chase Bank Short Term Investment Fund, representing unclaimed dividends
payable to terminated participants of the TRASOP. The Plan remains
contingently liable to terminated participants for unclaimed cash and
shares.
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
Corporation 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) Employee after-tax contributions are not deductible on the
participant's federal income tax return.
(c) Only pre-tax contributions 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) A total withdrawal generally results in taxable income to the
participant equal to the gross distribution less any after-tax
employee contribution. However, if the total withdrawal meets the
lump sum distribution requirement 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.
5
<PAGE>
Termination of the Plan - It is the intention of the Corporation to
-----------------------
continue the Plan indefinitely; however, the Corporation, 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.
In the event of termination of the Plan in whole or in part, each
participant in the Plan shall receive a distribution of the entire balance
in the participant's account. Participants are 100% vested in their
accounts at all times.
2. SUMMARY OF 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.
Investment Valuation and Income Recognition - The Plan's investments
-------------------------------------------
are stated at fair value. Investments in common stock are valued at their
quoted market value. Investments in mutual funds are valued at quoted net
asset value of the respective funds reflecting the closing sales price of
the underlying securities. Security transactions are recorded on the trade
date.
Expenses - All charges and expenses incurred in the administration of
--------
the Plan and fees and expenses of the Trustee are paid by the Corporation.
New Accounting Pronouncements - Statement of Financial Accounting
-----------------------------
Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities", as amended, is effective for the Plan beginning
January 1, 2001. SFAS 133 establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires the
recognition of derivatives as either assets or liabilities in the statement
of financial position and the measurement of those instruments at fair
value. The Plan is currently evaluating the impact the adoption of this
standard will have on its financial statements.
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.
6
<PAGE>
3. INVESTMENTS
The following presents investments that represent 5 percent or more of
the Plan's net assets.
December 31,
------------------------
1999 1998
---- ----
IDS New Dimensions Y-Class Funds, 473,465 and
439,191 units, respectively................. $16,954,797 $12,668,470
TXU Corp. Common Stock Fund, 428,601 and
382,794 shares, respectively................ 15,242,140* 17,871,713*
Vanguard Institutional Index Fund, 85,668 and
71,913 units, respectively.................. 11,480,381 8,115,432
Hotchkis & Wiley Balanced Fund, 478,428 and
608,582 units, respectively................. 7,889,270 11,343,974
Fidelity Equity - Income Fund, 96,629 and
100,212 units, respectively................. 5,167,694 5,566,765
Dreyfus-Certus Stable Value Fund, 4,690,184 and
4,040,768 units, respectively............... 4,690,184 4,040,769
EEX Common Stock Fund, 427,579 and
526,662 shares, respectively................ 1,256,026 3,686,634
------------------------
*Nonparticipant-directed
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 $2,649,898 as follows:
Mutual funds..................................... $ 3,505,951
Common stock..................................... (6,155,849)
------------
$(2,649,898)
============
7
<PAGE>
4. NONPARTICIPANT- DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investment is
as follows:
December 31,
------------------------
1999 1998
---- ----
Net Assets:
Common stock......................... $15,242,140 $17,871,713
Year Ended
December 31, 1999
-----------------
Changes in Net Assets:
Contributions........................ $2,564,675
Dividends............................ 898,986
Net appreciation (depreciation)...... (4,572,582)
Benefits paid to participants.......... (1,702,683)
Transfers between funds , net.......... 168,962
Other activity......................... 13,069
--------------
$(2,629,573)
5. PARTICIPANT LOANS
Participants may borrow up to 50% of the market value of their pre-tax
employee contribution account and any rollover account; however, the loan
cannot exceed $50,000 less the maximum outstanding loan balance in the
previous one year period. The interest rate on the loan is equal to the
prime interest rate of the Trustee that is in effect on the date the loan
is made. The interest rate on loans outstanding at the end of the year
ranged from 6% to 9%. Loans are funded by withdrawals from the individual's
investment accounts. The maximum term of a loan cannot exceed 5 years or,
if earlier, severance from service, except mortgage loans may have a
maximum term of 15 years or, if earlier, severance from service. A
participant may have a maximum of two concurrent loans. Loans may be
repaid, in full, at any time.
8
<PAGE>
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - SUPPLEMENTAL
SCHEDULES
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR,
DECEMBER 31, 1999
DESCRIPTION OR FAIR
IDENTITY OF ISSUER INVESTMENT COST VALUE
------------------ ---------- ---- -----
EEX COMMON STOCK FUND 427,579 shares, $1,256,026
par value at $1.00
per share
TXU COMMON STOCK FUND 1,2 428,601 shares, 16,103,287 15,242,140
no par value
AMERICAN AADVANTAGE
INTERNATIONAL INSTITUTIONAL 18,634 units 365,229
DREYFUS-CERTUS STABLE VALUE 4,690,184 units 4,690,184
FIDELITY EQUITY-INCOME 96,629 units 5,167,694
FIDELITY RETIREMENT
GOVERNMENT MONEY MARKET 557 units 557
HOTCHKIS & WILEY BALANCED 478,428 units 7,889,270
IDS NEW DIMENSIONS Y-CLASS 473,465 units 16,954,797
MAS SMALL CAPITALIZATION 12,017 units 242,614
SSgA SMALL CAPITALIZATION 1 unit 13
VANGUARD BOND INDEX TOTAL
INSTITUTIONAL 229,541 units 2,194,410
VANGUARD INSTITUTIONAL INDEX 85,668 units 11,480,381
LOANS TO PARTICIPANTS 1
Interest Rate - Ranges from
6% - 9% (Based on Prime on
date of loan)
Maturity Dates -
Various, from January 2000
to May 2014
Term of Loans - Not less than
one year or more than
five years, except mortgage loans
may not exceed 15 years 1,079,990 units 1,079,990
-----------
TOTAL $66,563,305
===========
1 Party-in-Interest.
2 Nonparticipant-directed.
9
<PAGE>
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - SUPPLEMENTAL
SCHEDULES
SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1999
PURCHASES
------------------------------
IDENTITY OF NUMBER OF
PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS AMOUNT
-------------- -------------------- ------------ ------
CHASE BANK TXU CORP. COMMON STOCK 200 $4,586,987
VANGUARD MUTUAL FUNDS VANGUARD INSTITUTIONAL
INDEX FUND 160 4,231,895
IDS MUTUAL FUNDS IDS NEW DIMENSIONS 154 3,733,169
Y-CLASS FUND
<TABLE>
<CAPTION>
SALES
------------------------
CURRENT
VALUE OF
ASSET ON REALIZED
IDENTITY OF NUMBER OF SELLING COST TRANSACTION GAIN
PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS PRICE OF ASSET DATE (LOSS)
--------------- -------------------- ------------- ------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
HOTCHKIS & WILEY HOTCHKIS & WILEY
BALANCED FUND 186 $4,584,690 $4,656,916 $4,584,690 $(72,226)
</TABLE>
10
<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 ENSERCH Corporation Employee Stock Purchase and Savings Plan ("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 end of year 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. Such 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.
/s/ DELOITTE & TOUCHE LLP
Dallas, Texas
June 26, 2000
11
<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.
ENSERCH CORPORATION
EMPLOYEE STOCK PURCHASE AND
SAVINGS PLAN
By /s/ Robert L. Turpin
-------------------------------------
Robert L. Turpin, Assistant Secretary
Employees' Thrift Plan Committee
June 28, 2000
12
