SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
- OR -
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-15709-01
TXU Europe Capital I
I.R.S. Employer
Delaware Business Trust Identification No.
75 - 6578216
Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201-3411
(214) 812-4600
Commission File Number 333-82307-02
TXU Europe Funding I, L.P.
I.R.S. Employer
Delaware Limited Partnership Identification No.
75 - 2880490
2711 Centerville Road, Suite 400, Wilmington, Delaware 19808
Indicate by check mark whether the registrants (1) have filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) have been subject to such filing
requirements for the past 90 days.
Yes ___x__ No _____
<PAGE>
TABLE OF CONTENTS
Part I. Financialinformation Page
Item 1. Financial Statements
TXU Europe Capital I
Statements of Income -
Three and nine months ended September 30,2000. . . . 2
Statement of Cash Flows -
Nine months ended September 30, 2000. . . . . . . . . . 3
Balance Sheets -
September 30, 2000 and December 31, 1999. . . . . . . . 4
Notes to Financial Statements . . . . . . . . . . . . . 5
Independent Accountant's Reports. . . . . . . . . . . . 7
TXU Europe Funding I, L.P.
Statements of Income -
Three and nine months ended September 30, 2000 . . . 8
Statement of Cash Flows -
Nine months ended September 30, 2000. . . . . . . . . . 9
Balance Sheets -
September 30, 2000 and December 31, 1999. . . . . . . . 10
Notes to Financial Statements . . . . . . . . . . . . . 11
Independent Accountant's Reports . . . . . . . . . . . . 13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . 14
Item 3. Quantitative and Qualitative Disclosures
About Market Risk . . . . . . . . . . . . . . . . . . . 14
Part II. Other Information
Item 6.Exhibits and Reports on Form 8-K. . . . . . . . . . . 15
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TXU EUROPE CAPITAL I
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Nine
Months Months
Ended Ended
September 30, September 30,
2000 2000
----------- -----------
<S> <C> <C>
Income on preferred partnership $ - $ -
securities. . . . . . . . . . . . . . 3,656,250 8,531,250
Distribution expense on preferred
trust securities. . . . . . . . . . . (3,656,250) (8,531,250)
----------- -----------
Net income. . . . . . . . . . . . . . $ - $ -
=========== ===========
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
TXU EUROPE CAPITAL I
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine
Months
Ended
September 30,
2000
-------------
<S> <C>
Investing Activities
Investment in preferred partnership securities . . . $(150,000,000)
Income received from investment in
preferred partnership securities. . . . . . . . . . 4,875,000
-------------
Cash provided by investing activities. . . . . . (145,125,000)
-------------
Financing Activities
Issuance of preferred trust securities . . . . . . . 150,000,000
Distribution on preferred trust securities . . . . . (4,875,000)
-------------
Cash provided by financing activities. . . . . . 145,125,000
-------------
Net change in cash and cash equivalents. . . . . . . -
Cash and cash equivalents - beginning balance. . . . -
-------------
Cash and cash equivalents - ending balance . . . . . $ -
=============
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
TXU EUROPE CAPITAL I
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------ -----------
(unaudited)
ASSETS
<S> <C> <C>
Investment in preferred partnership securities . . . $150,000,000 $ -
Income receivable. . . . . . . . . . . . . . . . . . 3,656,250 -
------------ -----------
Total assets. . . . . . . . . . . . . . . . . . $153,656,250 $ -
============ ===========
CAPITALIZATION AND LIABILITIES
Stockholders equity
Preferred trust securities (9 3/4% Trust
Originated Preferred Securities;
6,900,000 authorized, 6,000,000
issued and outstanding; $25
liquidation amount per security) . . . . . . . . $150,000,000 $ -
Retained earnings. . . . . . . . . . . . . . . . . . - -
------------ -----------
Total stockholders' equity. . . . . . . . . . . 150,000,000 -
------------ -----------
Distribution payable . . . . . . . . . . . . . . . . 3,656,250 -
------------ -----------
Total capitalization and liabilities. . . . . . $153,656,250 $ -
============ ===========
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
TXU Europe Capital I
Notes to Financial Statements
1. Description of Business
TXU Europe Capital I (the Trust) is a statutory
business trust formed on November 22, 1999 under the laws
of the State of Delaware for the exclusive purpose of (i)
issuing Trust Originated Preferred Securities (Preferred
Trust Securities) representing undivided beneficial
ownership interests in the assets of the Trust, (ii)
purchasing Preferred Partnership Securities representing
the limited partnership interests of TXU Europe Funding I,
L.P. (the Partnership) with the proceeds from the sale of
the Preferred Trust Securities, and (iii) engaging in only
those other activities necessary or incidental thereto.
The Trust has a perpetual existence, subject to certain
termination events as provided in its Amended and Restated
Trust Agreement.
The proceeds from the Trust's sale of the Preferred
Trust Securities were used to purchase the Preferred
Partnership Securities from the Partnership. Holders of
the Preferred Trust Securities have limited voting rights
and are not entitled to vote to appoint, remove or
replace, or to increase or decrease the number of,
Trustees, which voting rights are vested exclusively in
the holder of a control certificate.
TXU Europe Limited, the ultimate parent of the Trust
and the general partner of the Partnership, has paid
compensation to the underwriters of the offering of the
Preferred Trust Securities. TXU Europe Limited will pay
all fees and expenses related to the organization and
operations of the Trust (including any taxes, duties,
assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United
States or any other domestic taxing authority upon the
Trust) and the offering of the Preferred Trust Securities
and is responsible for all debts and other obligations of
the Trust (other than the Preferred Trust Securities).
TXU Europe Limited has also agreed to indemnify the
trustees and certain other persons.
2. Basis of Presentation and Significant Accounting Policies
The financial statements are prepared in conformity with
accounting principles generally accepted in the United
States of America (US GAAP).
Use of Estimates - The preparation of the Trust's
financial statements requires management to make estimates
and assumptions about future events that affect the
reporting and disclosure of assets and liabilities at the
balance sheet dates and the reported amounts of revenue
and expense during the periods covered by the financial
statements. In the event estimates and/or assumptions
prove to be different from actual amounts, adjustments are
made in subsequent periods to reflect more current
information.
Investments - The investment in Preferred Partnership
Securities represents a limited partnership interest in
the Partnership and is recorded at cost. As of September
30, 2000, the fair value of the investment approximates
its carrying value. Income on the Preferred Partnership
Securities is accrued when earned.
Comprehensive Income - Comprehensive income consists
only of net income.
Income Taxes - The Trust does not incur any income tax
liabilities. Such liabilities are incurred directly by
the security holders. Therefore no provision for income
taxes has been provided.
<PAGE>
TXU Europe Capital I
Notes to Financial Statements
3. Investment in Preferred Partnership Securities
The Trust holds $150 million of 9.75% Preferred
Partnership Securities, $25 liquidation preference per
security. The distribution payment dates and redemption
provisions of the Preferred Partnership Securities, which
are redeemable after March 2, 2005 at the option of TXU
Europe Limited, the general partner of the Partnership,
correspond to the distribution payment dates and redemption
provisions of the Preferred Trust Securities. Upon any
redemption of the Preferred Partnership Securities, the
Preferred Trust Securities will be redeemed. TXU Europe
Limited has guaranteed, on a subordinated basis, the
payment of distributions by the Partnership on the
Preferred Partnership Securities if, as, and when declared
out of funds legally available and payments upon
liquidation of the Partnership or the redemption of the
Preferred Partnership Securities to the extent of funds
legally available.
4. Stockholders' Equity
On March 2, 2000, the Trust issued to investors
6,000,000 units of 9 3/4% Preferred Trust Securities for
an aggregate of $150 million. The Preferred Trust
Securities have a liquidation preference of $25 per unit.
The Preferred Trust Securities are subject to mandatory
redemption upon payment of the Preferred Partnership
Securities. Distributions on the Preferred Trust
Securities are cumulative from the date of original issue
(March 2, 2000) and are payable quarterly in arrears on
each March 31, June 30, September 30 and December 31,
commencing June 30, 2000, at an annual rate of 9.75% of
the stated liquidation amount per annum. Distributions
not paid on the scheduled payment date will accumulate and
compound quarterly at a rate per annum equal to 9.75%.
Holders of the Preferred Trust Securities have no voting
rights.
The Trust will use distributions it receives on the
Preferred Partnership Securities to make cash
distributions on the Preferred Trust Securities.
Distributions on the Preferred Trust Securities were made
on June 30 and October 2, 2000.
TXU Europe Limited has guaranteed, on a limited basis,
the payment in full of all distributions and other
payments on the Preferred Trust Securities to the extent
that the Trust has funds legally available. TXU Europe
Limited has also issued guarantees of the Preferred
Partnership Securities and the junior subordinated
debentures held by the Partnership. These guarantees are
subordinated to all other unsubordinated liabilities of
TXU Europe Limited.
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
TXU Europe Capital I
We have reviewed the accompanying balance sheet of TXU Europe
Capital I (the Trust) as of September 30, 2000, and the related
statements of income for the three months and nine months ended
September 30, 2000 and the statement of cash flows for the nine
months ended September 30, 2000. These financial statements are
the responsibility of the Trust's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in
accordance with auditing standards generally accepted in the
United States of America, the objective of which is the
expression of an opinion regarding the financial statements
taken as whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to such financial statements
for them to be in conformity with accounting principles
generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the balance
sheet of the Trust as of December 31, 1999, and in our report,
dated May 4, 2000, we expressed an unqualified opinion on that
balance sheet. In our opinion, the information set forth in the
accompanying balance sheet as of December 31, 1999, is fairly
stated in all material respects in relation to the balance sheet
from which it has been derived.
DELOITTE & TOUCHE
London, England
November 6, 2000
<PAGE>
TXU EUROPE FUNDING I, L.P.
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Nine
Months Months
Ended Ended
September 30, September 30,
2000 2000
------------ ------------
<S> <C> <C>
Interest income
Junior subordinated debentures. . . $4,258,456 $9,936,398
Other eligible debt securities. . . 31,454 64,907
Distribution expense
To limited partner . . . . . . . . (3,656,250) (8,531,250)
To general partner . . . . . . . . (602,206) (1,405,148)
------------ ------------
Net income . . . . . . . . . . . . . $ 31,454 $ 64,907
============ ============
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
TXU EUROPE FUNDING I, L.P.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended
September 30,
2000
-------------
<S> <C>
Operating Activities
Net income. . . . . . . . . . . . . . . . . . . $ 64,907
Adjustments to reconcile net income to
cash provided by operating activities:
Changes in operating assets and liabilities . . (9,696)
------------
Cash provided by operating activities . . . . 55,211
------------
Investing Activities
Investments in junior subordinated
debentures . . . . . . . . . . . . . . . . . (174,705,900)
Investment in eligible debt securities. . . . . (5,372,909)
Interest income received on investments
in junior subordinated debentures . . . . . . 5,677,942
Maturity of eligible debt securities. . . . . . 3,552,998
------------
Cash used in investing activities . . . . . . (170,847,869)
------------
Financing Activities
Issuance of preferred partnership securities . 150,000,000
Capital contributions from general partner. . . 26,470,600
Distributions paid to limited partner . . . . . (4,875,000)
Distributions paid to general partner . . . . . (802,942)
------------
Cash provided by financing activities . . . . 170,792,658
------------
Net change in cash and cash equivalents . . . . -
Cash and cash equivalents - beginning balance . -
------------
Cash and cash equivalents - ending balance. . . $ -
============
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
TXU EUROPE FUNDING I, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------ -----------
(unaudited)
ASSETS
<S> <C> <C>
Investments in junior subordinated debentures. . $174,705,900 $ -
Investment in other eligible debt securities . . 1,819,911 -
Income receivable - junior subordinated
debentures. . . . . . . . . . . . . . . . . . 4,258,456 -
Income receivable - other eligible
debt securities . . . . . . . . . . . . . . . 9,696 -
------------ --------
Total . . . . . . . . . . . . . . . . $180,793,963 $ -
============ ========
PARTNERS' CAPITAL AND LIABILITIES
Partners' capital
Limited partnership interest . . . . . . . . . $150,000,000 $ 85
General partnership interest . . . . . . . . . 26,470,600 15
------------ --------
176,470,600 100
Less: Receivables from partners for
subscribed partnership interests . . . . . . . - (100)
Retained earnings. . . . . . . . . . . . . . . . 64,907 -
------------ --------
Total partners' capital. . . . . . . . . 176,535,307 -
------------ --------
Distribution payable - limited partners . . . . 3,656,250 -
- general partner. . . . . 602,206 -
------------ --------
Total . . . . . . . . . . . . . . . . $180,793,963 $ -
============ ========
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
TXU EUROPE FUNDING I, L.P.
Notes to Financial Statements
1. Description of Business
TXU Europe Funding I, L.P. (the Partnership) is a
limited partnership that was formed under the Delaware
Revised Uniform Limited Partnership Act on November 22,
1999, for the exclusive purpose of (i) issuing the
Partnership interests, (ii) purchasing certain eligible
debt instruments, including debentures of TXU Eastern
Funding Company and one or more subsidiaries of TXU Europe
Limited and short-term eligible securities with the
proceeds from (a) the sale of Preferred Partnership
Securities to TXU Europe Capital I (the Trust) and (b) a
capital contribution from TXU Europe Limited in exchange
for the general partnership interest in the Partnership
(collectively, the Partnership Proceeds) and (iii)
engaging in only those other activities necessary and
incidental thereto.
Except as provided in the forms of Amended and Restated
Limited Partnership Agreement and Preferred Partnership
Securities Guarantee Agreement, and as otherwise provided
by law, the holders of the Preferred Partnership
Securities will have no voting rights.
The Partnership Proceeds were used initially to
purchase debt instruments from TXU Eastern Funding Company
and one or more eligible subsidiaries of TXU Europe
Limited and other eligible debt securities. (See Note 3.)
The Partnership will have a perpetual existence subject to
certain termination events. TXU Europe Limited is the
sole general partner of the Partnership and, in that
capacity, has agreed to pay all fees and expenses related
to the organization and operations of the Partnership
(including any taxes, duties, assessments or government
charges of whatever nature (other than withholding taxes)
imposed by the United States or any other domestic taxing
authority upon the Partnership) and the offering of the
Preferred Partnership Securities and be responsible for
all debts and other obligations of the Partnership (other
than with respect to the Preferred Partnership
Securities). TXU Europe Limited, as sole general partner,
has agreed to indemnify certain officers and agents of the
Partnership.
2. Basis of Presentation and Significant Accounting Policies
The financial statements are prepared in conformity
with accounting principles generally accepted in the
United States of America (US GAAP).
Use of Estimates - The preparation of the Partnership's
financial statements requires management to make estimates
and assumptions about future events that affect the
reporting and disclosure of assets and liabilities at the
balance sheet dates and the reported amounts of revenue
and expense during the period covered by the financial
statements. In the event estimates and/or assumptions
prove to be different from actual amounts, adjustments are
made in subsequent periods to reflect more current
information.
Investments - The Partnership's investment in junior
subordinated debentures of certain affiliates is recorded
at cost. As of September 30, 2000, the fair value of the
investment approximates its carrying value. Income on the
junior subordinated debentures is accrued when earned.
The investment in other eligible securities is limited by
the terms of the partnership including investments in
certain government obligations.
Comprehensive Income - Comprehensive income consists
only of net income.
Income Taxes - The Partnership does not incur any
income tax liabilities. Such liabilities are incurred
directly by the partners. Therefore no provision for
income taxes has been provided.
<PAGE>
TXU EUROPE FUNDING I, L.P.
Notes to Financial Statements
3. Investments
The Partnership holds junior subordinated debentures of
TXU Eastern Funding Company and TXU Europe Group plc, both
subsidiaries of TXU Europe Limited. The junior
subordinated debentures have a term of approximately 20
years and bear interest at 9.75% per annum. The interest
payment dates and redemption provisions of the debentures,
which are redeemable at the option of TXU Europe Limited on
or after March 2, 2005, correspond to the distribution
payment dates and redemption provisions of the Preferred
Partnership Securities. Interest and redemption payments
on the subsidiary debentures are guaranteed by TXU Europe
Limited on a subordinated basis.
In addition, as of September 30, 2000, the Partnership
had invested in short-term commercial paper securities.
The commercial paper purchased was issued at a discount and
interest will be accrued as the commercial paper approaches
maturity. Earnings on these and other eligible securities
previously invested in through September 30, 2000 are being
accumulated and rolled over into principal as the
securities mature as the general partner has not yet
declared a distribution of those earnings.
4. Partners Capital
On March 2, 2000, the Partnership issued 6,000,000
units of 9.75% Preferred Partnership Securities to the
Trust representing the limited partnership interests of
the Partnership in exchange for $150 million. The
Preferred Partnership Securities have a liquidation
preference of $25 per security and may be redeemed at the
option of TXU Europe Limited, the general partner, in
whole, or in part, at any time on or after March 2, 2005.
Distributions on the Preferred Partnership Securities are
cumulative from the date of original issue (March 2, 2000)
and are payable quarterly if, as, and when declared by the
general partner, at an annual rate of 9.75% of the stated
liquidation amount per annum. Holders of Preferred
Partnership Securities have no voting rights.
Also on March 2, 2000, the Partnership received a
capital contribution of approximately $26 million from TXU
Europe Limited representing the sole general partner
interest in the Partnership. The proceeds from the
issuance of the Preferred Partnership Securities and the
general partners' capital contribution were used to
purchase the junior subordinated debentures issued by TXU
Eastern Funding Company and TXU Europe Group plc and other
eligible securities.
TXU Europe Limited has guaranteed, on a limited basis,
the payment of distributions by the Partnership on the
Preferred Partnership Securities if, as, and when declared
out of funds legally available and payments upon
liquidation to the Partnership or the redemption of the
Preferred Partnership Securities to the extent of funds
legally available. TXU Europe Limited has also issued
guarantees of the junior subordinated debentures held by
the Partnership. These guarantees are subordinated to all
other unsubordinated liabilities of TXU Europe Limited.
Distributions on the Preferred Partnership Securities
and the general partnership interest were declared on June
30 and September 29 and paid on June 30 and October 2,
2000.
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
TXU Europe Funding I, L.P.
We have reviewed the accompanying balance sheet of TXU Europe
Funding I, L.P. (the Partnership) as of September 30, 2000, and
the related statements of income for the three months and nine
months ended September 30, 2000 and the statement of cash flows
for the nine months ended September 30, 2000. These financial
statements are the responsibility of the Partnership's
management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in
accordance with auditing standards generally accepted in the
United States of America, the objective of which is the
expression of an opinion regarding the financial statements
taken as whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to such financial statements
for them to be in conformity with accounting principles
generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the balance
sheet of the Partnership as of December 31, 1999, and in our
report, dated May 4, 2000, we expressed an unqualified opinion
on that balance sheet. In our opinion, the information set
forth in the accompanying balance sheet as of December 31, 1999,
is fairly stated in all material respects in relation to the
balance sheet from which it has been derived.
DELOITTE & TOUCHE
London, England
November 6, 2000
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The Registrants' activities are limited to issuing securities
and investing the proceeds as follows:
The Trust exists for the exclusive purpose of (i) issuing a
control certificate, which entitles the holder to administrative
and appointment powers with respect to the Trust, and 9 3/4% Trust
Originated Preferred Securities (Preferred Trust Securities)
representing undivided beneficial ownership interest in the
assets of the Trust, (ii) investing the gross proceeds from the
issuance of the Preferred Trust Securities in 9.75% Preferred
Partnership Securities of the Partnership representing the
limited partnership interests of the Partnership and (iii)
engaging in only those other activities necessary or incidental
thereto. The Trust has a perpetual existence, subject to
certain termination events as provided in its Amended and
Restated Trust Agreement. The Partnership is managed by the
general partner and exists for the exclusive purpose of (i)
issuing its Partnership interests, (ii) purchasing certain
eligible debt instruments of TXU Eastern Funding Company and TXU
Europe Group plc with the proceeds from (a) the sale of its
9.75% Preferred Partnership Securities, representing limited
partnership interests in the Partnership, to the Trust and (b) a
capital contribution from TXU Europe Limited in exchange for the
general partnership interest in the Partnership (collectively,
the Partnership Proceeds).
Since the Trust was organized on November 22, 1999, its
activities, as specified in its Amended and Restated Trust
Agreement, have been limited to the issuance of $150 million of
9 3/4% Preferred Trust Securities and the investing of the
proceeds in the Preferred Partnership Securities, and the
accrual and payment of distributions on the Preferred Trust
Securities in accordance with their terms.
Since the Partnership was organized on November 22, 1999, its
activities, as specified in its agreement of limited
partnership, have been limited to the issuance of the Preferred
Partnership Securities, the receipt of a $26 million capital
contribution from TXU Europe Limited, as general partner, the
investment of the Partnership Proceeds in junior subordinated
debentures and short-term eligible securities (primarily US
Treasury bills and commercial paper), and the accrual and
payment of distributions on the Preferred Partnership
Securities. Through the nine months ended September 30, 2000,
interest earned on short-term eligible securities that have
matured has not been paid to the Partnership but has been rolled
over into the purchase of other eligible securities as the
general partner has not yet declared a distribution of those
earnings.
On June 30, 2000, the first distributions on the Preferred
Trust Securities and the Preferred Partnership Securities,
cumulative from the March 2, 2000 issuance date, were declared
and paid to the respective holders of those securities. An
additional distribution was made on October 2, 2000.
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
On March 2, 2000, the Trust invested the gross proceeds from
the sale of the Preferred Trust Securities in the Preferred
Partnership Securities (the Trust Assets). The Partnership, in
turn, invested the proceeds from the sale of the Preferred
Partnership Securities and a $26 million capital contribution
from TXU Europe Limited and TXU Europe Group plc in junior
subordinated debentures and eligible debt securities (the
Partnership Assets). To the extent the Partnership has funds
available from the Partnership Assets, the general partner of
the Partnership (TXU Europe Limited) may declare distributions
to the Trust, as holder of the Preferred Partnership Securities.
The Trust's ability to pay distributions to the holders of the
Preferred Trust Securities is dependent upon its receipt of
distributions on the Trust Assets from the Partnership.
Therefore, upon the receipt by the Partnership of payments from
the Partnership Assets and the distribution thereof to the
Trust, the Trust will pass through such payments to the holders
of the Preferred Trust Securities.
On June 30, 2000, the first distributions on the Preferred
Trust Securities and the Preferred Partnership Securities,
cumulative from the March 2, 2000 issuance date, were declared
and paid to the respective holders of those securities.
An additional distribution was declared on September 30, 2000 and
paid on October 2, 2000.
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)Exhibits filed as a part of Part II are:
27(a) Financial Data Schedule - TXU Europe Capital I
27(b) Financial Data Schedule - TXU Europe Funding I,L.P.
(b) Reports on Form 8-K filed since June 30, 2000, are as
follows:
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrants have duly caused this report to be
signed on their behalf by the undersigned hereunto duly
authorized.
TXU EUROPE CAPITAL I
By : /s/ Kirk Oliver
------------------
Name: Kirk Oliver
Administrative Trustee
By : /s/ Laura Conn
------------------
Name: Laura Conn
Administrative Trustee
Date: November 13, 2000
TXU EUROPE FUNDING I, L.P.
By: /s/ Paul Marsh
---------------------
Name: Paul Marsh
Principal Financial Officer
and Director of the General
Partner
Date: November 13, 2000
