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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 JUNE 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
TXU DEFERRED AND INCENTIVE COMPENSATION PLAN
Commission File No. 1-12833
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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<PAGE>
TABLE OF CONTENTS
PAGE
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FINANCIAL STATEMENTS
The following statements are furnished for the Plan:
Statements of Financial Condition at June 30, 2000 and 1999........ 3
Statements of Income and Changes in Plan Equity for the
years ended June 30, 2000, 1999 and 1998......................... 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................................................. 9
PLAN ADMINISTRATOR'S SIGNATURE............................................... 10
EXHIBIT
The following exhibit is filed herewith:
Independent Auditors' Consent...................................... 11
2
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TXU DEFERRED AND INCENTIVE COMPENSATION PLAN
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
June 30,
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ASSETS AND PLAN EQUITY 2000 1999
---- ----
<S> <C> <C>
Investment in Securities of Participating Employer --
Common stock of TXU Corp.,
At fair value as determined by quoted market prices
(Historical cost: 2000 -- $25,310,064; 1999 -- $21,739,933 (Note 4)........ $20,156,117 $24,529,573
Dividends receivable......................................................... 409,955 340,376
Interest receivable.......................................................... 174 54
Cash and cash equivalents.................................................... 31,881 13,023
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Total Assets and Plan Equity............................................ $20,598,127 $24,883,026
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</TABLE>
See accompanying Notes to Financial Statements.
3
<PAGE>
TXU DEFERRED AND INCENTIVE COMPENSATION PLAN
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
<TABLE>
<CAPTION>
For the Year Ended June 30,
--------------------------------------
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Additions (deductions):
Net investment income:
Dividends on common stock of TXU Corp. ..................$ 1,591,182 $ 1,340,506 $ 1,134,883
Interest................................................. 18,986 12,573 9,817
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Net investment income................................ 1,610,168 1,353,079 1,144,700
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Appreciation (depreciation) of investments (Note 4)........ (7,955,545) (168,243) 3,701,127
Contributions and deposits (Note 5):
Participating employees' salary deferrals................ 1,882,900 1,560,650 1,285,409
Employer matching and incentive awards................... 6,060,350 4,297,975 4,033,114
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Total contributions and deposits..................... 7,943,250 5,858,625 5,318,523
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Total additions.................................... 1,597,873 7,043,461 10,164,350
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Withdrawals, lapses and forfeitures:
Distributions to participants (Note 6)..................... 5,584,859 4,567,049 3,469,831
Distributions to plan sponsor.............................. -- 6,188 9,700
Reversions................................................. 297,913 18,244 104,595
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Total withdrawals, lapses and forfeitures............ 5,882,772 4,591,481 3,584,126
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Net additions (deductions)......................... (4,284,899) 2,451,980 6,850,224
Plan Equity, Beginning of Year............................... 24,883,026 22,431,046 15,850,822
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Plan Equity, End of Year ....................................$20,598,127 $24,883,026 $22,431,046
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</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
TXU DEFERRED AND INCENTIVE COMPENSATION PLAN
NOTES TO FINANCIAL STATEMENTS
1. Name Change -- In May 2000, Texas Utilities Company (TXU or the Company)
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changed its corporate name to TXU Corp. In connection with that change, the
Deferred and Incentive Compensation Plan of the Texas Utilities Company
System was changed to the TXU Deferred and Incentive Compensation Plan.
2. Plan Description -- The TXU Deferred and Incentive Compensation Plan (Plan)
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allows elected officers of the Company or a participating subsidiary of the
Company (Employer-Company) with the title of Vice President or above to
defer a percentage of their compensation not to exceed a maximum percentage
determined by the Organization and Compensation Committee of the Board of
Directors of the Company (the Committee) for each plan year and, in any
event, not to exceed 15% of the participant's compensation. The Companies
will make a matching award equal to 150% of the deferred compensation. In
addition, the Committee also provides awards under the Annual Incentive
Plan with 50% of any such awards treated as incentive awards under this
Plan. Amounts credited to a participant's account are invested in shares of
common stock of the Company. On the expiration of the applicable maturity
period (3 years for incentive awards and 5 years for deferrals and matching
awards) the value of the participant's account is paid in cash. To the
extent that the amounts maturing under the Plan combined with the eligible
employee's other remunerations exceeds $1,000,000, the maturity period
shall be extended. In the event a participant's employment is terminated
because of death or permanent and total disability, all amounts in the
participant's account shall mature immediately. If the participant
terminates employment prior to the end of a Plan Year, the deferred amount
and company match will be recomputed as of the termination date. In the
event a participant's employment is terminated by retirement, the
participant will receive a distribution of his account at the end of the
applicable maturity period. If the participant terminates employment by
retirement prior to the end of a Plan year, the participant may have
previously elected to accelerate the balance of salary reductions. In the
event a participant's employment is terminated because of reasons other
than death, disability or retirement, all rights to any performance units
for maturity periods not yet completed shall be forfeited to the Company
(as Plan Sponsor) except for amounts deferred by the participant and six
percent per annum interest on those amounts which is the minimum return for
all participants of the Plan.
The number of participants (current and former employees) at June 30, 2000,
1999 and 1998 were 75, 66 and 42, respectively.
3. Summary of Significant Accounting Policies:
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Basis of Accounting -- The financial statements of the Plan are prepared
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under the accrual method of accounting.
Use of Estimates -- The preparation of financial statements requires the
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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,
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except expenses incurred in the acquisition or liquidation of investments,
are paid by the Employer-Companies.
5
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TXU DEFERRED AND INCENTIVE COMPENSATION PLAN
NOTES TO FINANCIAL STATEMENTS
4. Plan Investments -- The cost, market value and appreciation (depreciation)
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of investments at and for the years ended June 30, 2000, 1999 and 1998 are
as follows:
<TABLE>
<CAPTION>
Number of Historical Market Appreciation
Shares Cost Value (Depreciation)
------ ---- ----- --------------
<S> <C> <C> <C> <C>
June 30, 2000:
Common stock of TXU Corp.................... 683,260(a) $25,310,064 $20,156,117 $(7,955,545)
June 30, 1999:
Common stock of TXU Corp.................... 591,960(b) $21,739,933 $24,529,573 $ (168,243)
June 30, 1998:
Common stock of TXU Corp.................... 531,845(c) $19,097,008 $22,138,005 $ 3,701,127
</TABLE>
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(a)Represents 0.26% of the outstanding shares of common stock of TXU Corp.
(264,078,369 at June 30, 2000), except expenses incurred in the acquisition
or disposition of investments.
(b)Represents 0.21% of the outstanding shares of common stock of TXU Corp.
(280,875,819 at June 30, 1999).
(c)Represents 0.19% of the outstanding shares of common stock of TXU Corp.
(279,572,743 at June 30, 1998).
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 prices 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 investment values at June 30, 2000, 1999 and 1998 were $29.50, $41.44
and $41.62 per unit, respectively.
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TXU DEFERRED AND INCENTIVE COMPENSATION PLAN
NOTES TO FINANCIAL STATEMENTS
5. Plan Contributions -- Contributions by Employer-Companies and participating
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employees' salary deferrals for the years ended June 30, 2000, 1999 and
1998 are as follows:
Participating Contributions
Employees' by Employer- Total
Employer-Companies Salary Deferrals Companies Contributions
-------------------- ---------------- --------- -------------
2000
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TXU Corp. ...................... $ 240,000 $ 999,000 $1,239,000
TXU Services and Others......... 1,103,500 3,406,750 4,510,250
TXU Electric Company............ 539,400 1,654,600 2,194,000
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Total....................... $1,882,900 $6,060,350 $7,943,250
========== ========== ==========
1999
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TXU Corp. ...................... $ 264,750 $ 874,625 $1,139,375
TXU Services and Others......... 871,950 2,294,925 3,166,875
TXU Electric Company............ 423,950 1,128,425 1,552,375
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Total....................... $1,560,650 $4,297,975 $5,858,625
========== ========== ==========
1998
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TXU Corp. ...................... $ 205,659 $ 783,489 $ 989,148
TXU Services and Others......... 515,150 1,568,225 2,083,375
TXU Electric Company............ 564,600 1,681,400 2,246,000
---------- ---------- ----------
Total....................... $1,285,409 $4,033,114 $5,318,523
========== ========== ==========
The contribution for incentive awards amounted to $3,236,000, $1,957,000
and $2,105,000 for the Plan Years ended June 30, 2000, 1999 and 1998,
respectively.
6. Plan Distributions -- During the year ended June 30, 2000, two participants
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terminated from the Plan and one retired. The value of performance units
including dividend credits was distributed to the terminated participants
in the amount of $61,767. A reversion of the account due to retirements
resulted in a return to the Company in the amount of $297,913. Maturing in
June 2000 were employee salary deferrals and matching awards for the Plan
Year ended June 30, 1996 and the incentive awards made for the Plan Year
ended June 30, 1998. The distribution of matured deferrals and/or awards of
$4,877,636 represents the net proceeds obtained by the Trustee upon sale of
the associated assets (common stock of the Company) in July 2000.
Maturing in June 1999 were employees' salary deferrals and matching awards
made for the Plan Year ended June 30, 1995 and the incentive awards made
for the Plan Year ended June 30, 1996.
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TXU DEFERRED AND INCENTIVE COMPENSATION PLAN
NOTES TO FINANCIAL STATEMENTS
The distribution of matured deferrals and/or awards of $5,523,092
represents the net proceeds obtained by the Trustee upon sale of the
associated assets (common stock of the Company) in July 1999. Terminations
from the Plan resulted in net reversions for the Plan of $18,244.
Maturing in June 1998 were employees' salary deferrals and matching awards
made for the Plan Year ended June 30, 1994 and the incentive awards made
for the Plan Year ended June 30, 1996. The distribution of matured
deferrals and/or awards of $4,086,849 represents the net proceeds obtained
by the Trustee upon sale of the associated assets (common stock of the
Company) in July 1998. Terminations from the Plan resulted in net
reversions for the Plan of $104,595.
7. Federal Income Taxes -- It is intended, and the Company has been advised,
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that: the Plan does not meet the requirements of a tax-qualified plan under
Section 401(a) of the Internal Revenue Code; the Trust established
thereunder is not exempt from federal income taxes under Section 501(a);
and the Company will be provided a corresponding federal income tax
deduction for the amount of income recognized by the participant by reason
of distributions under the Plan.
Based on the Internal Revenue Code and regulations promulgated thereunder:
(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 until paid or
otherwise made available to the participant.
(c) Amounts distributed under the Plan will be taxable as ordinary income
to the participant in the year of such distribution.
8. Plan Termination -- The Company's Board of Directors may amend, terminate,
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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 amendment's effective date. Upon Plan
termination, all amounts credited to a participant's account shall be
deemed to have matured, as described in the Plan document.
8
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INDEPENDENT AUDITORS' REPORT
Organization and Compensation Committee,
TXU Deferred and Incentive Compensation Plan:
We have audited the statements of financial condition of the TXU Deferred and
Incentive Compensation Plan (the "Plan") as of June 30, 2000 and 1999, and the
related statements of income and changes in plan equity for each of the three
years in the period ended June 30, 2000. 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, the financial statements referred to above present fairly, in
all material respects, the financial condition of the Plan at June 30, 2000 and
1999, and the related plan income and changes in plan equity for each of the
three years in the period ended June 30, 2000, in conformity with accounting
principles generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Dallas, Texas
August 17, 2000
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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.
TXU DEFERRED AND INCENTIVE COMPENSATION PLAN
By /s/ Peter B. Tinkham
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Plan Administrator
Organization and Compensation Committee
September 27, 2000
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