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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-3519
DEFERRED AND INCENTIVE COMPENSATION PLAN OF THE
TEXAS UTILITIES COMPANY SYSTEM
(Full Title of the Plan)
-----------------------------
TEXAS UTILITIES COMPANY
1601 Bryan, 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
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS Page
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<S> <C>
The following financial statements are furnished for the Plan:
Statements of Financial Condition at June 30, 1994 and 1993............ 3
Statements of Income and Changes in Plan Equity for the
years ended June 30, 1994, 1993 and 1992............................. 4
Notes to Financial Statements.......................................... 5-8
Schedules I, II and III have been omitted because the
required information is shown in the financial statements, 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
</TABLE>
2
<PAGE>
Deferred and Incentive Compensation Plan of
the Texas Utilities Company System
Statements of Financial Condition
<TABLE>
<CAPTION>
June 30,
---------------------------
ASSETS AND PLAN EQUITY 1994 1993
---- ----
<S> <C> <C>
Investment in Securities of Affiliated Employer --
Common stock of Texas Utilities Company,
At fair value as determined by quoted market prices
(Historical cost: 1994 -- $7,543,528; 1993 -- $8,097,392) (Note 2):..... $6,809,540 $10,904,123
Dividends receivable..................................................... 167,787 183,523
Cash and cash equivalents................................................ 1,652 2,425
---------- -----------
Total Assets and Plan Equity....................................... $6,978,979 $11,090,071
========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
3
<PAGE>
Deferred and Incentive Compensation Plan of
the Texas Utilities Company System
Statements of Income and Changes in Plan Equity
<TABLE>
<CAPTION>
Year Ended June 30,
------------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Additions (deductions):
Net Investment Income:
Dividends on common stock of Texas Utilities Company..... $ 652,141 $ 898,934 $ 864,963
Interest................................................. 473 5,283 5,528
----------- ----------- -----------
Net investment income............................... 652,614 904,217 870,491
----------- ----------- -----------
Changes in fair value of investments (Note 2):
Realized gain on investments............................. 9,168 273,686 20
Unrealized appreciation (depreciation) of investments.... (3,088,982) 1,530,544 1,246,529
----------- ----------- -----------
Total changes in fair value of investments.......... (3,079,814) 1,804,230 1,246,549
----------- ----------- -----------
Contributions and deposits (Note 3):
Participating employees' salary deferrals................ 762,560 774,450 779,760
Employer matching and incentive awards................... 1,660,840 2,905,784 1,776,640
----------- ----------- -----------
Total contributions and deposits.................... 2,423,400 3,680,234 2,556,400
----------- ----------- -----------
Total additions (deductions)...................... (3,800) 6,388,681 4,673,440
Withdrawals, lapses and forfeitures:
Distributions to participants (Note 4)................... 4,070,833 7,073,155 320,445
Forfeitures.............................................. 36,459 -- --
----------- ----------- -----------
Total withdrawals, lapses and forfeitures........... 4,107,292 7,073,155 320,445
----------- ----------- -----------
Net additions (deductions)........................ (4,111,092) (684,474) 4,352,995
Plan Equity, Beginning of Year............................. 11,090,071 11,774,545 7,421,550
----------- ----------- -----------
Plan Equity, End of Year................................... $ 6,978,979 $11,090,071 $11,774,545
=========== =========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
Deferred and Incentive Compensation Plan of
the Texas Utilities Company System
Notes to Financial Statements
1. Plan Description -- The Deferred and Incentive Compensation Plan of the
----------------
Texas Utilities Company System (Plan) was approved and authorized by the
Board of Directors of Texas Utilities Company (Company) on May 15, 1987, and
amended effective May 31, 1992. The Plan allows officers of the Company and
its subsidiaries (Companies) 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 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
Companies can also make incentive awards. In no event will the sum of all
incentive awards in any plan year exceed 25% of the aggregate compensation
of eligible employees. 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 will be paid in cash. 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
the 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 shall 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 the 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 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.
On June 1, 1992, the Companies announced an offer of enhanced voluntary
early retirement to approximately 3,700 of the Companies' 15,200 employees.
All other regular full-time employees were offered a voluntary severance
program. The offers together constitute the voluntary separation program
(Separation Program). Certain enhanced benefits were provided to eligible
participants who elected to retire or voluntarily terminate their
employment. Under the Separation Program, a participant who provided
notice, between July 1, 1992 and September 1, 1992, of such participant's
election to retire or terminate such participant's employment on October 1,
1992 or November 1, 1992, and who retired or terminated employment on either
date, was entitled to receive, in addition to any other benefits to which
the participant was entitled, a lump sum payment, not to exceed $85,000
(Additional Matching Amount). The Additional Matching Amount was fifty
percent of the present value, calculated at a discount rate equal to six and
one-half percent per annum, of the Matching Awards for such participant
which would have accrued over a ten year period assuming such participant
would have deferred twelve percent of such participant's salary in each of
the ten years and assuming such participant's annual salary would have been
the same as it was on the last day of May 1992. The Additional Matching
Amount was paid as soon as practicable after the participant's retirement or
termination of employment. Additionally, all amounts credited to the
account of a participant who terminated employment under the Separation
Program was deemed vested so that the forfeitures described above under
termination of employment for reasons other than death, disability, or
retirement did not apply. Amounts credited to such participant's account
under the Plan are payable at the end of the applicable maturity periods.
There were 14 participants in the Plan who elected to participate in one of
the options under the Separation Program.
The number of participants (current and former employees) at June 30, 1994,
1993 and 1992 were 52, 41, and 40, respectively.
Certain amounts in the 1992 and 1993 Statements of Income and Changes in
Plan Equity have been reclassified to conform with the presentation in the
1994 financial statements.
5
<PAGE>
Deferred and Incentive Compensation Plan of
the Texas Utilities Company System
Notes to Financial Statements
(Continued)
2. Plan Investments -- The cost, market value and unrealized appreciation of
----------------
investments at June 30, 1994, 1993 and 1992 are as follows:
<TABLE>
<CAPTION>
Unrealized
Number of Historical Market Appreciation
Shares Cost Value (Depreciation)
---------- ---------- ----------- --------------
<S> <C> <C> <C> <C>
June 30, 1994:
Common Stock of Texas Utilities Company....... 217,905/1/ $7,443,618 $6,809,540 $(634,078)
June 30, 1993:
Common Stock of Texas Utilities Company....... 238,341/2/ $8,097,392 $10,904,123 $2,806,731
June 30, 1992:
Common Stock of Texas Utilities Company....... 295,072/3/ $9,493,970 $11,544,696 $2,050,726
</TABLE>
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/1/ Represents 0.10% of the outstanding shares of Common Stock of Texas
Utilities Company (225,841,037 at June 30, 1994).
/2/ Represents 0.11% of the outstanding shares of Common Stock of Texas
Utilities Company (220,211,618 at June 30, 1993).
/3/ Represents 0.14% of the outstanding shares of Common Stock of Texas
Utilities Company (214,050,439 at June 30, 1992).
The investment in Texas Utilities Company common stock (stated in terms of
performance units for each participant) is stated at market value based upon
closing sales 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. All costs and expenses of the Plan and its administration,
except expenses incurred in the acquisition or disposition of investments,
are paid by the Plan sponsors.
Net plan investments value at June 30, 1994, 1993 and 1992 is $31.25, $45.75
and $39.125 per unit, respectively.
3. Plan Contributions -- Contributions by employer-corporations and
------------------
participating employees' salary deferrals for the years ended June 30, 1994,
1993 and 1992 are as follows:
1994
----
<TABLE>
<CAPTION>
Contributions
Participating Contributions by Employer-
Employees' by Employer- Corporations Total
Employer-Corporations Salary Deferrals Corporations Additional Contributions
------------------------- ---------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Texas Utilities Company........... $162,000 $ 468,000 $ -- $ 630,000
Texas Utilities Services Inc.
and Others....................... 313,760 608,640 -- 922,400
Texas Utilities Electric Company 286,800 584,200 -- 871,000
-------- ---------- --------- ----------
Total.......................... $762,560 $1,660,840 $ -- $2,423,400
======== ========== ========= ==========
</TABLE>
1993
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<TABLE>
<CAPTION>
Contributions
Participating Contributions by Employer-
Employees' by Employer- Corporations Total
Employer-Corporations Salary Deferrals Corporations Additional Contributions
------------------------- ---------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Texas Utilities Company........... $147,000 $ 445,500 $ -- $ 592,500
Texas Utilities Services Inc.
and Others....................... 201,720 435,580 425,000 1,062,300
Texas Utilities Electric Company 425,730 835,595 764,109 2,025,434
-------- ---------- ---------- ----------
Total.......................... $774,450 $1,716,675 $1,189,109 $3,680,234
======== ========== ========== ==========
</TABLE>
6
<PAGE>
Deferred and Incentive Compensation Plan of
the Texas Utilities Company System
Notes to Financial Statements
(Continued)
3. Plan Contributions -- (concluded)
------------------
1992
----
<TABLE>
<CAPTION>
Contributions
Participating Contributions by Employer-
Employees' by Employer- Corporations Total
Employer-Corporations Salary Deferrals Corporations Additional Contributions
------------------------- ---------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Texas Utilities Company........... $147,000 $ 395,500 $ -- $ 542,500
Texas Utilities Services Inc.
and Others....................... 228,660 482,990 -- 711,650
Texas Utilities Electric Company 404,100 898,150 -- 1,302,250
-------- ---------- --------- ----------
Total.......................... $779,760 $1,776,640 $ -- $2,556,400
======== ========== ========= ==========
</TABLE>
The contribution for the Incentive Award of the Plan amounted to $517,000,
$555,000, and $607,000 for the years ended June 30, 1994, 1993 and 1992,
respectively.
4. Plan Distributions -- In June 1994, the Incentive Award of the plan year
------------------
ended June 30, 1992 matured. The distribution payable for the matured
incentive award for the plan year ended June 30, 1992 of $686,633 is
computed from the net plan investments value at June 30, 1994 of $31.25.
Cash distributions to participants for these matured accounts were made in
July 1994.
The 1989 Employee Deferral and Company match and the 1991 Incentive Award
matured in June 1993. The distribution of the matured salary deferral and
matching awards for the plan year ended June 30, 1989 and for the incentive
award for the plan year ended June 30, 1991 of $4,053,358 is computed from
the net plan investments value at June 30, 1993 of $45.75. Cash
distributions to participants for these matured accounts were made in July
1993.
The Plan was amended in November 1992 to change the maturity periods for
the 1990 Employee Deferral and Company match and the 1992 Employee Deferral
and Company match to mature in November 1992. The distribution of the
matured salary deferrals and matching awards for the plan years ended June
30, 1990 and 1992 is recorded at the net plan investments value of $41.407.
Cash distributions to participants for these matured accounts were made in
December 1992.
In June 1992, the Incentive Awards of the plan year ended June 30, 1990
matured. The distribution payable for the matured incentive awards for the
plan year ended June 30, 1990 of $564,893 is computed from the net plan
investments value at June 30, 1992 of $39.125. Cash distributions to
participants for these matured accounts were made in July 1992.
5. Federal Income Taxes -- The Plan is not intended to, and the Company has
--------------------
been advised 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.
7
<PAGE>
Deferred and Incentive Compensation Plan of
the Texas Utilities Company System
Notes to Financial Statements
(Concluded)
5. Federal Income Taxes -- (concluded)
--------------------
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.
(c) Amounts distributed under the Plan will be taxable as ordinary income
to the participant in the year of such distribution.
8
<PAGE>
INDEPENDENT AUDITORS' REPORT
Organization and Compensation Committee,
Deferred and Incentive Compensation
Plan of the Texas Utilities Company
System:
We have audited the statements of financial condition of the Deferred and
Incentive Compensation Plan of the Texas Utilities Company System as of June 30,
1994 and 1993, and the related statements of income and changes in plan equity
for each of the three years in the period ended June 30, 1994. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of the Plan at June 30, 1994 and
1993, and the changes in its financial condition for each of the three years in
the period ended June 30, 1994, in conformity with generally accepted accounting
principles.
/s/ Deloitte & Touche LLP
Dallas, Texas
September 21, 1994
9
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Organization and Compensation Committee has duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly authorized.
DEFERRED AND INCENTIVE COMPENSATION PLAN
OF THE TEXAS UTILITIES COMPANY SYSTEM
By /s/ Peter B. Tinkham
Plan Administrator
Organization and Compensation Committee
September 21, 1994
10
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EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
Texas Utilities Company:
We consent to the incorporation by reference in Registration Statement No.
33-48880 on Form S-8 of our report dated September 21, 1994, appearing in this
Annual Report on Form 11-K of the Deferred and Incentive Compensation Plan of
the Texas Utilities Company System for the year ended June 30, 1994.
/s/ Deloitte & Touche LLP
Dallas, Texas
September 21, 1994
11
