<PAGE>
===============================================================================
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, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
EMPLOYEES' THRIFT PLAN OF THE
TEXAS UTILITIES COMPANY SYSTEM
Commission File No. 1-3591
-------------------------------------
TEXAS UTILITIES COMPANY
Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
FINANCIAL STATEMENTS
The following statements are furnished for the Plan:
Statement of Net Assets Available for Benefits,
December 31, 1994......................................... 1
Statement of Net Assets Available for Benefits,
December 31, 1993......................................... 2
Statement of Changes in Net Assets Available for Benefits,
for the Year Ended December 31, 1994...................... 3
Statement of Changes in Net Assets Available for Benefits,
for the Year Ended December 31, 1993...................... 4
Notes to Financial Statements............................... 5
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes,
December 31, 1994........................................ 12
INDEPENDENT AUDITORS' REPORT........................................ 16
EXHIBITS
The following exhibit is filed herewith:
Independent Auditors' Consent............................... 18
</TABLE>
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Bond Interest Equity Equity Equity
Stock Index Income Income Index Balanced Growth
Total Fund Fund Fund Fund Fund Fund Fund
------------ ------------ ---------- ----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments - at fair value
(Notes 3 and 4):
Common Stock of Texas Utilities
Company........................ $376,067,206 $376,067,206 $ -- $ -- $ -- $ -- $ -- $ --
Mutual funds.................... 71,498,883 -- 7,522,604 -- 25,329,111 7,113,169 11,444,419 20,089,580
Guaranteed contracts............ 43,254,159 -- -- 43,254,159 -- -- -- --
Money market funds.............. 6,061,223 357,044 -- 5,704,179 -- -- -- --
Federal National Mortgage
Association (FNMA)............. 3,890,589 -- -- 3,890,589 -- -- -- --
Participant loans receivable.... 3,644,676 1,448,229 157,942 496,456 326,338 219,629 369,074 627,008
------------ ------------ ---------- ----------- ---------- ----------- ----------- -----------
Total investments 504,416,736 377,872,479 7,680,546 53,345,383 25,655,449 7,332,798 11,813,493 20,716,588
Cash............................. 186,439 179,944 -- -- -- 135 -- 6,360
Contributions receivable from
Employer-corporations........... 3,725,694 1,902,701 124,228 428,580 323,922 173,679 244,266 528,318
Dividends receivable............. 10,633,250 10,633,250 -- -- -- -- -- --
Interest receivable.............. 35,583 9,189 -- 26,394 -- -- -- --
------------ ------------ ---------- ----------- ---------- ----------- ----------- -----------
Total assets................... 518,997,702 390,597,563 7,804,774 53,800,357 25,979,371 7,506,612 12,057,759 21,251,266
LIABILITIES:
Note payable (Note 3)............ 250,000,000 250,000,000 -- -- -- -- -- --
Accrued interest payable......... 5,654,375 5,654,375 -- -- -- -- -- --
------------ ------------ ---------- ----------- ---------- ----------- ----------- -----------
Total liabilities.............. 255,654,375 255,654,375 -- -- -- -- -- --
------------ ------------ ---------- ----------- ---------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS. $263,343,327 $134,943,188 $7,804,774 $53,800,357 $25,979,371 $7,506,612 $12,057,759 $21,251,266
============ ============ ========== =========== ========== =========== =========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
1
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond Interest Equity Equity Equity Unallocated
Common Index Income Income Index Balanced Growth Assets --
Total Stock Fund Fund Fund Fund Fund Fund SESCO
------------ ------------ ---------- ----------- ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments - at fair
value (Notes 3 and 4):
Common Stock of Texas
Utilities Company..... $482,991,911 $482,991,911 $ -- $ -- $ -- $ -- $ -- $ -- $ --
Mutual funds........... 58,433,516 -- 6,412,635 -- 22,268,584 4,965,861 10,046,850 14,739,586 --
Guaranteed contracts... 44,031,971 -- -- 44,031,971 -- -- -- -- --
Money market funds..... 8,031,404 484,549 -- 826,243 -- -- -- -- 6,720,612
Participant loans
receivable............ 511,153 178,411 26,352 67,012 48,661 37,901 53,690 99,126 --
------------ ------------ ---------- ----------- ----------- ---------- ---------- ----------- ----------
Total investments.... 593,999,955 483,654,871 6,438,987 44,925,226 22,317,245 5,003,762 10,100,540 14,838,712 6,720,612
Cash.................... 347,253 185,069 5 145,840 4,027 3 7,962 4,347 --
Contributions receivable
from Employer-
corporations........... 2,755,310 1,023,712 145,284 397,298 261,912 166,099 278,572 482,433 --
Dividends receivable.... 9,855,435 9,855,435 -- -- -- -- -- -- --
Interest receivable..... 9,102 8,852 -- 250 -- -- -- -- --
------------ ------------ ---------- ----------- ----------- ---------- ---------- ----------- ----------
Total assets.......... 606,967,055 494,727,939 6,584,276 45,468,614 22,583,184 5,169,864 10,387,074 15,325,492 6,720,612
LIABILITIES:
Note payable (Note 3)... 250,000,000 250,000,000 -- -- -- -- -- -- --
Accrued interest payable 5,654,375 5,654,375 -- -- -- -- -- -- --
------------ ------------ ---------- ----------- ----------- ---------- ---------- ----------- ----------
Total liabilities..... 255,654,375 255,654,375 -- -- -- -- -- -- --
------------ ------------ ---------- ----------- ----------- ---------- ---------- ----------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS............ $351,312,680 $239,073,564 $6,584,276 $45,468,614 $22,583,184 $5,169,864 $10,387,074 $15,325,492 $6,720,612
============ ============ ========== =========== =========== ========== =========== =========== ==========
</TABLE>
See accompanying Notes to Financial Statements.
2
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond Interest Equity Equity Equity Unallocated
Common Index Income Income Index Balanced Growth Assets --
Total Stock Fund Fund Fund Fund Fund Fund SESCO
------------ ------------- --------- ----------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE
FOR BENEFITS,
BEGINNING OF
YEAR............. $351,312,680 $239,073,564 $6,584,276 $45,468,614 $22,583,184 $5,169,864 $10,387,074 $15,325,492 $6,720,612
ADDITIONS
(REDUCTIONS):
Income:
Dividends...... 39,835,470 35,490,230 474,721 -- 2,382,317 241,995 345,998 900,209 --
Interest:
Investments... 3,849,474 61,372 -- 3,788,102 -- -- -- -- --
Loans......... 131,833 50,777 5,585 18,944 13,773 7,699 10,849 24,206 --
------------ ------------ ---------- ----------- ----------- ---------- ----------- ----------- ----------
Total
income..... 43,816,777 35,602,379 480,306 3,807,046 2,396,090 249,694 356,847 924,415 --
Contributions:
Participating
employees'
savings....... 34,662,008 11,869,239 1,693,673 5,075,508 3,885,922 2,166,789 3,317,053 6,653,824 --
Employer-
corporations
(less forfeit-
ures of
$84,265)...... 7,761,346 7,761,346 -- -- -- -- -- -- --
------------ ------------ ---------- ----------- ----------- ---------- ----------- ----------- ----------
Total
contribu-
tions....... 42,423,354 19,630,585 1,693,673 5,075,508 3,885,922 2,166,789 3,317,053 6,653,824 --
Net appreciation
(depreciation)
in fair value
of investments.. (130,695,901) (125,125,172) (631,415) -- (2,340,764) (169,729) (940,999) (1,487,822) --
------------ ------------ ---------- ----------- ----------- ---------- ----------- ----------- ----------
Total
additions
(reductions). (44,455,770) (69,892,208) 1,542,564 8,882,554 3,941,248 2,246,754 2,732,901 6,090,417 --
DEDUCTIONS:
Distributions to
withdrawing
participants.... 18,560,713 11,741,640 419,043 3,694,045 1,375,137 252,273 396,041 682,534 --
Interest expense
and other fees
(Note 3)........ 24,952,870 24,867,309 -- 85,561 -- -- -- -- --
------------ ------------ ---------- ----------- ----------- ---------- ----------- ----------- ----------
Total
deductions.. 43,513,583 36,608,949 419,043 3,779,606 1,375,137 252,273 396,041 682,534 --
TRANSFERS FOR
REINVESTMENTS
-- Net......... -- 2,370,781 96,977 3,228,795 830,076 342,267 (666,175) 517,891 (6,720,612)
------------ ------------ ---------- ----------- ----------- ---------- ----------- ----------- ----------
NET ASSETS
AVAILABLE FOR
BENEFITS, END
OF YEAR.......... $263,343,327 $134,943,188 $7,804,774 $53,800,357 $25,979,371 $7,506,612 $12,057,759 $21,251,266 $ --
============ ============ ========== =========== =========== ========== =========== =========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
3
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond Interest Equity Equity Equity Unallocated
Common Index Income Income Index Balanced Growth Assets -
Total Stock Fund Fund Fund Fund Fund Fund SESCO
------------ ------------ ---------- ----------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE
FOR BENEFITS,
BEGINNING OF YEAR... $296,092,807 $217,594,728 $3,436,726 $55,083,409 $19,977,944 $ -- $ -- $ -- $ --
ADDITIONS:
Income:
Dividends......... 35,836,166 33,604,092 423,529 -- 706,185 140,377 254,434 707,549 --
Interest:
Investments...... 3,273,071 46,118 15,023 3,211,930 -- -- -- -- --
Loans............ 5,119 1,649 223 611 567 410 537 1,122 --
------------ ------------ ---------- ----------- ----------- ---------- ----------- ----------- ----------
Total income... 39,114,356 33,651,859 438,775 3,212,541 706,752 140,787 254,971 708,671 --
Contributions:
Participating
employees'
savings.......... 40,827,788 19,038,739 1,834,461 5,259,402 3,028,615 2,137,451 3,739,795 5,789,325 --
Employer-corporations
(less forfeitures
of $107,671)..... 12,181,860 5,461,248 -- -- -- -- -- -- 6,720,612
------------ ------------ ---------- ----------- ----------- ---------- ----------- ----------- ----------
Total contri-
butions......... 53,009,648 24,499,987 1,834,461 5,259,402 3,028,615 2,137,451 3,739,795 5,789,325 6,720,612
Net appreciation
(depreciation) in
fair value of
investments........ 10,965,168 7,482,528 (196,755) -- 2,702,941 176,624 184,035 615,795 --
------------ ------------ ---------- ----------- ----------- ---------- ----------- ----------- ----------
Total additions.. 103,089,172 65,634,374 2,076,481 8,471,943 6,438,308 2,454,862 4,178,801 7,113,791 6,720,612
DEDUCTIONS:
Distributions to
withdrawing
participants....... 22,913,358 16,781,570 147,481 3,604,761 1,448,460 166,899 385,540 378,647 --
Interest expense
and other fees
(Note 3)........... 24,955,941 24,868,371 48 87,299 223 -- -- -- --
------------ ------------ ---------- ----------- ----------- ---------- ----------- ----------- ----------
Total deductions. 47,869,299 41,649,941 147,529 3,692,060 1,448,683 166,899 385,540 378,647 --
TRANSFERS FOR
REINVESTMENTS --
Net................. -- (2,505,597) 1,218,598 (14,394,678) (2,384,385) 2,881,901 6,593,813 8,590,348 --
------------ ------------ ---------- ----------- ----------- ---------- ----------- ----------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS, END OF
YEAR................ $351,312,680 $239,073,564 $6,584,276 $45,468,614 $22,583,184 $5,169,864 $10,387,074 $15,325,492 $6,720,612
============ ============ ========== =========== =========== ========== =========== =========== ==========
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Employees' Thrift Plan of the Texas
Utilities Company System (Plan) is provided for general information purposes
only. Reference is made to the Plan document for more complete information.
General - The Plan is a defined contribution plan established by Texas
-------
Utilities Company and its subsidiaries (Employer-corporations). In 1990, the
Plan was amended to establish a leveraged employee stock ownership provision.
(See Note 3.) The Employees' Thrift Plan Committee manages the operation and
administration of the Plan. Mellon Bank, N.A. serves as trustee (Trustee) and
manages the assets of the Plan. The Plan was again amended effective as of
January 1, 1993. Such amendments to the Plan, among other things, established a
pre-tax funding feature in accordance with Section 401(k) of the Internal
Revenue Code of 1986, as amended (Code). The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
The plan is intended to be a participant directed "individual account plan"
under ERISA Section 404(c). As such, the fiduciaries of the Plan are not liable
for any losses that are the direct and necessary result of participant
investment decisions. Participation in the Plan by employees of the Employer-
corporation after meeting certain requirements is entirely voluntary.
The Plan includes seven investment options, or funds:
. Common Stock of Texas Utilities Company (Common Stock) -- invests
exclusively in Common Stock of Texas Utilities Company (Company);
. Investment Grade Bond Index Fund (Bond Index Fund) -- purchases units
in the Vanguard Bond Index Fund (Total Bond Market Portfolio);
. Interest Income Fund -- invests in fixed-rate contracts with insurance
companies and other financial institutions;
. Equity Income Fund -- purchases units in the Fidelity Equity-Income
Fund, which consists primarily of income-producing equity securities;
. Equity Index Fund -- purchases units in the Fidelity U. S. Equity
Index Portfolio, which consists primarily of common stocks included
in the Standard & Poor's 500 Index;
. Balanced Fund -- purchases units in the Phoenix Balanced Fund Series,
which consists primarily of investments in common stock and fixed
income securities; and
. Equity Growth Fund -- purchases units in the IDS New Dimensions Fund
(Class Y), which invests primarily in common stocks of companies
showing potential for significant growth, and also invests in foreign
securities and futures transactions.
Eligibility, Participation and Employee Savings - Any regular employee of
-----------------------------------------------
an Employer-corporation is eligible to participate in the Plan after completion
of at least six months of service prior to the date the employee's participation
is to be effective. An eligible employee has completed six months of service
after completing at least 500 hours of service during any six-month period.
Under the Plan, except as limited by law, a participating employee may
invest, through pre-tax salary deferrals (Salary Deferrals) or after tax payroll
deductions (Payroll Deductions) each payroll period, a specified amount ranging
from 1% to 6% of regular salary or wages (Basic Employee Savings). Participants
electing the maximum Basic Employee Savings investment may also invest, through
Salary Deferrals or Payroll Deductions each payroll period, an additional 1% to
10% of regular salary or wages (Supplemental Employee Savings).
5
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - Continued
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN - (continued)
Employer Matching Contributions - Matching contributions to participant
-------------------------------
accounts by the Employer-corporations are made based on the participants' Basic
Employee Savings and years of service as follows:
Less than 10 years..................... 40%
10 years but less than 25 years........ 50%
25 years or more....................... 60%
No employer contributions are made with respect to Supplemental Employee
Savings.
Investment of Funds - All employer matching contributions, except as
-------------------
provided below, are invested in Common Stock of the Company; however, each
participant has the following expanded options with respect to the investment of
Basic and Supplemental Employee Savings:
100% in Common Stock;
100% in Bond Index Fund;
100% in Interest Income Fund;
100% in Equity Income Fund;
100% in Equity Index Fund;
100% in Balanced Fund;
100% in Equity Growth Fund; and
Multiples (in 10% increments) of the investment options listed above.
A participant may change selected investment options for Employee Savings
as often as once a quarter by liquidating the investments attributable to Basic
and Supplemental Employee Savings and reinvesting such amounts in other
investment options as may be permitted under the Plan.
A participant who has completed at least ten years of Plan participation
and attained age 55 may annually instruct the Trustee to diversify up to 25% of
such participant's employer contributions account (reduced by amounts previously
so diversified) in the same proportion as the participant may diversify such
Basic and Supplemental Employee Savings. At age 60, a participant may annually
diversify up to 50% of such employer contributions account (reduced by amounts
previously so diversified).
Unit Values - Participants do not have beneficial ownership in specific
-----------
securities or other assets in the various funds other than Common Stock, but
have an interest therein represented by units valued as of the close of each
business day. Generally, contributions to and withdrawal payments from each
fund are converted to units by dividing the amounts of such transactions by the
unit value as last determined, and the appropriate account is charged or
credited with the number of units properly attributable to the participant.
Voting of Common Stock - Each participant may give the Trustee confidential
----------------------
written instructions with respect to the voting, at any meeting of shareholders,
of the Common Stock allocated to the participant's account. Effective January 1,
1993, the unallocated Common Stock held in the stock bonus component of the Plan
may be voted by the Trustee in its discretion unless otherwise directed pursuant
to a voting procedure agreement. Prior to January 1, 1993, the Trustee was
required to vote any unallocated Common Stock, as well as any Common Stock held
in a participant's account where the Trustee had not received written voting
instructions from the participant at least ten days prior to the date of the
meeting at which the vote was to be taken, provided that
6
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - Continued
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN -- (continued)
unallocated Common Stock held in the stock bonus component of the Plan would be
voted by the Trustee, to the extent permitted by law, in the same proportion as
the Common Stock allocated to participants' accounts was voted. There was no
change in the voting requirements for allocated shares where the Trustee was not
provided voting instructions by the participant.
Withdrawal from the Plan - A participant may withdraw a portion of Basic
------------------------
and Supplemental Employee Savings without necessitating a total withdrawal from
the Plan and may exercise the limited privilege of partial withdrawal at any
time after twelve months of participation in the Plan. Partial withdrawal may be
in any amount up to 90% of the current value of the participant's Basic and
Supplemental Employee Savings, or 90% of market value, whichever is less. A
further partial withdrawal by a participant may not be made until after the
expiration of twelve months following the last previous partial withdrawal.
In the event of a partial withdrawal, such amount will be paid to the
participant in cash or in shares of Common Stock to the extent such stock is
held in the participant's account for Basic and Supplemental Employee Savings,
at the option of the participant. No partial withdrawal may be made of Elective
Deferrals, Rollover Contributions, Employer matching contributions, or income
from such deferrals or contributions. A participant may repay to the Trustee
the amounts of any partial withdrawal made after January 1, 1976, at any time.
Partial withdrawal by a participant does not terminate participation in the
Plan.
A participant may withdraw entirely from the Plan at any time even though
the participant continues in the employ of an Employer-corporation, except that
Elective Deferrals and Rollover Contributions cannot be withdrawn until age 59-
1/2. Following total withdrawal, an employee will be ineligible to contribute
payroll deductions to the Plan for a period of twelve months. Total withdrawal
is also effected upon termination of employment. In the event of total
withdrawal, that portion of the participant's account which was derived from
Basic and Supplemental Employee Savings will be distributed in full to the
participant or, in case of death, to the participant's beneficiary. However,
if a participant, upon termination of employment, does not consent to a
distribution of all accounts, and the aggregate value of such accounts exceeds
$3,500, such accounts shall be liquidated and reinvested to be held in an
interest bearing account until distribution.
In the event of total withdrawal due to participant's retirement or due to
permanent and total disability or death of the participant, that portion of the
participant's account which was derived from employer matching contributions
will also be distributed in full to the participant or, in case of death, to the
participant's beneficiary.
In the event of total withdrawal by a participant who continues in the
employ of an Employer-corporation or terminates employment due to reasons other
than those discussed above, that portion of the participant's account which was
derived from employer matching contributions shall be distributed to the
participant only to the extent shown in the following Vesting Schedule which is
dependent upon the participant's years of service:
Years of Percentage of Total
Service Employer Contributions
-------- ----------------------
Under 3 ...................... None
3 ...................... 30%
4 ...................... 40%
5 ...................... 60%
6 ...................... 80%
7 ...................... 100%
7
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - Continued
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN - (continued)
Participants making withdrawals, other than partial withdrawals, may choose
from the following optional forms of payment: (a) shares of Common Stock and/or
publicly traded Fund units (to the extent permitted by the Fund) credited to a
participant's account; (b) single lump sum cash payment; or (c) a combination of
(a) and (b).
After a distribution in accordance with the above Vesting Schedule, any
remainder of employer matching contributions in the participant's account is
forfeited and used by the Employer-corporation to reduce the amount of future
employer contributions.
In the event of a total withdrawal made after January 1, 1976, by a
participant who is not 100% vested, the participant may repay to the Plan the
amount of such distribution at any time prior to the close of the Plan Year in
which the participant has completed five consecutive Break-in-Service years and
any amounts previously forfeited will be restored to the participant's account.
Participants may borrow a portion of their vested 401(k) account balance
and repay such amount according to a predetermined schedule. In addition,
participants may, after meeting certain qualifications as defined by the
Internal Revenue Service (IRS), withdraw a portion of their vested 401(k)
account balance based on a hardship qualification.
Federal Income Taxes - The Company has been advised by the IRS that the
--------------------
Plan meets the requirements of Section 401(a) of the Code, as to form; that the
Trust established thereunder is exempt from federal income taxes under Section
501(a) of the Code; and that employer contributions paid to the Trust under the
Plan are allowable federal income tax deductions to the Employer-corporations
subject to the conditions and limitations of Section 404 of the Code.
Based on the Code and regulations issued pursuant thereto:
(a) Employer contributions under the Plan, and dividends, interest and
other income from Trust Assets are not taxable to the participant when
received by the Trustee and credited to the participant's account.
(b) Basic and Supplemental Employee Savings made by Payroll Deduction are
not deductible on the participant's federal income tax return.
(c) Basic and Supplemental Employee Savings which are Employee Elective
Deferrals reduce a participant's gross compensation as reported on Form
W-2 and are not taxable to the participant when received by the Trustee
and credited to the participant's account.
(d) Partial withdrawal of employee savings which were contributed to the
Plan through Payroll Deductions prior to January 1, 1987, represent a
return of employee savings and are not taxable to the participant when
withdrawn. Partial withdrawals of employee savings which were
contributed to the Plan through Payroll Deductions after December 31,
1986, are considered to include, for income tax purposes, an amount of
taxable income.
(e) A total withdrawal generally results in taxable income to the
participant equal to the gross distribution less Basic and Supplemental
Employee Savings made by Payroll Deduction. However, if the total
withdrawal meets the lump sum distribution requirements of the Code,
(i) any net unrealized appreciation in the value of distributable
Common Stock from the time of distribution
8
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - Continued
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN - (concluded)
will be tax deferred; (ii) any additional appreciation in the value of
Common Stock from the time of distribution to the time of stock sale or
disposition will be treated as short-term or long-term capital gain
depending on the period the participant holds such stock; and (iii) the
taxable amount may be eligible for the special forward averaging
provisions of the Code.
(f) The taxable amount of a total or partial withdrawal may generally be
rolled over to an Individual Retirement Account (IRA) or other
qualified plan and payment of taxes may thereby be deferred, subject to
automatic income tax withholding of twenty percent (20%) on amounts not
distributed in Common Stock.
(g) The taxable amount of an account, subject to total and partial
withdrawal provisions, can be transferred directly to an IRA or other
qualified plan and payment of taxes may thereby be deferred.
Participants are encouraged to determine the effect on their federal income
tax liability of receiving distributions from the Plan.
Other Events -- The Employee Stock Ownership Plan of the Texas Utilities
------------
Company System (ESOP) was terminated on December 31, 1988. The ESOP had all
remaining assets transferred to the Plan on November 29, 1993. In addition, the
Savings Plan and Trust Agreement for Employees of Southwestern Electric Service
Company (SESCO Plan) was merged into the Plan effective January 1, 1994.
However, the SESCO Plan was actually liquidated and all remaining assets were
transferred to the Plan on December 29, 1993. Such assets were invested by
individual participants effective January 4, 1994. Included in money market
funds of the Plan for the year 1993 was $6,720,612 reflecting such SESCO assets.
Neither event had a material effect on the Plan.
Amendment, Modification, Suspension and Termination - It is the intention
---------------------------------------------------
of the Company to continue the Plan indefinitely; however, the Company, by
action of its Board of Directors, may amend, modify or suspend the Plan at any
time, or from time to time, and may terminate the Plan at any time; and any
Employer-corporation may withdraw from participation in the Plan at any time
upon thirty days notice.
In the event of termination of the Plan in whole or in part or termination
of participation of any Employer-corporation, each participant in the Plan
affected by such termination shall receive a distribution of the entire balance
in the participant's account, whether derived from Basic and Supplemental
Employee Savings or employer contributions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investment Securities - Participant investments in Common
----------------------------------
Stock, Bond Index Fund, Equity Income Fund, Equity Index Fund, Balanced Fund and
Equity Growth Fund are accounted for as units and stated at fair value based
upon closing sales prices on recognized securities exchanges on the last
business day of the fiscal year. The Interest Income Fund insurance contracts
and the financial institution investment contracts are valued at contract value,
which approximates fair value. Contract value represents contributions made by
participants, plus interest at the contract rates, less withdrawals or transfers
by participants.
Distributions Payable to Participants -- In 1993, the Plan changed its
-------------------------------------
method of accounting for distributions payable to participants to comply with
the 1993 AICPA Audit and Accounting Guide, "Audits of
9
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - Continued
- -------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (concluded)
Employee Benefit Plans". The new guidance requires that benefits payable to
participants who have withdrawn from participation in a defined contribution
plan remain as a part of the net assets available for benefits rather than be
recorded as a liability of the Plan. The effect of this change in accounting
did not materially increase net assets available for benefits.
Expenses - All costs and expenses of the Plan and its administration,
--------
except expenses incurred in the acquisition or disposition of investments, are
paid by the Employer-corporations.
Reclassification - Certain financial statement items for 1993 have been
----------------
reclassified to conform to the 1994 presentation.
3. LEVERAGED EMPLOYEE STOCK OWNERSHIP PROVISION
In 1990, the Trustee, on behalf of the Plan, borrowed $250,000,000 in the
form of a note payable from an outside lender and purchased 7,142,857 shares of
Common Stock of the Company in connection with the leveraged employee stock
ownership provision (LESOP) of the Plan. The note was purchased from the lender
by the Company later in 1990. The note payable requires repayment of principal
over 17 years beginning in 1998. At December 31, 1994 and 1993, the note
payable bore interest at a fixed rate of 9.81% following its conversion in
January 1992 from a variable rate to a fixed rate. The note payable is
collateralized by 6,071,386 unallocated shares held by the Trustee at December
31, 1994.
The LESOP shares are held by the Trustee until released and allocated to
participants' accounts proportionally based on current debt service payments
including interest to total debt service payments. Debt service payments are
made by the Plan from dividends received on the unallocated shares and, if
necessary, contributions from Employer-corporations. The market value of shares
released reduces the cash requirements of the Employer-corporations for their
funding obligation under the Plan. The number of LESOP shares released and
allocated to participant accounts during the 1994 plan year was 231,865 and
263,758, respectively, and during the 1993 plan year was 231,865 and 225,014,
respectively.
10
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- Concluded
- -------------------------------------------------------------------------------
4. UNIT VALUES
Units in each fund at December 31, 1994 and 1993, and net asset value per
unit, are presented below. Net asset value per share for Common Stock excludes
amounts for the market value of unreleased LESOP shares and the related note
payable. The Common Stock at December 31, 1994 includes 1,303 shares to be
allocated to individual accounts. The Common Stock at December 31, 1993
included 19,994 shares to be allocated to individual accounts and 31,893 shares
to be allocated through the Employer-corporations funding obligation in the
subsequent period.
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Common Stock:
Number of shares 5,682,017 4,864,191
Net asset value per share* $33.55 $44.50
Bond Index Fund:
Number of units 851,120 637,438
Net asset value per unit $ 9.17 $10.33
Interest Income Fund:
Number of units 11,786,176 10,728,790
Net asset value per unit $ 4.56 $ 4.24
Equity Income Fund:
Number of shares 825,054 658,055
Net asset value per share $31.49 $34.32
Equity Index Fund:
Number of shares 420,649 287,543
Net asset value per share $17.85 $17.98
Balanced Fund:
Number of shares 771,707 626,753
Net asset value per share $15.62 $16.57
Equity Growth Fund:
Number of shares 1,511,632 1,027,864
Net asset value per share $14.06 $14.91
</TABLE>
- -------------------
*The calculation of net asset value per share for Common Stock includes the
value of the LESOP note net of the value of the unallocated LESOP shares.
11
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM - SUPPLEMENTAL
- ---------------------------------------------------------------------------
SCHEDULES
- ---------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES, DECEMBER 31, 1994
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description of Investment,
Identity of Issuer, Including Collateral, Rate of
Borrower, Lessor, or Interest, Maturity Date, Shares,
Similar Party Units, Par or Maturity Value Cost Fair Value
- -------------------- ---------------------------- ------------- ------------
<S> <C> <C> <C>
COMMON STOCK
Common Stock
- ------------
Texas Utilities
Company* 11,752,100 shares $407,385,748 $376,067,206
Money Market Funds
- ------------------
Mellon Bank, N.A.* Cash management fund -
357,044 units 357,044 357,044
Other
- -----
Participant Loans
Receivable 1,448,229 units 1,448,229 1,448,229
------------ ------------
TOTAL COMMON STOCK $409,191,021 $377,872,479
------------ ------------
BOND INDEX FUND
Vanguard Bond Index
Fund Group 851,120 units $ 8,112,880 $ 7,522,604
Participant Loans
Receivable 157,942 units 157,942 157,942
------------ ------------
TOTAL BOND INDEX FUND $ 8,270,822 $ 7,680,546
------------ ------------
INTEREST INCOME FUND
Value of Interest in Pooled Separate Accounts
- ---------------------------------------------
Allstate Life
Insurance
Company Contract No. GA-5019, $ 1,113,801 $ 1,113,801
9%, due 1996
Allstate Life
Insurance
Company Contract No. GA-5101, 4,180,627 4,180,627
8.75%, due 1996
Allstate Life
Insurance
Company Contract No. GA-5138, 2,147,476 2,147,476
8.55%, due 1996
Allstate Life
Insurance
Company Contract No. GA-5183, 2,091,345 2,091,345
8.53%, due 1996
</TABLE>
12
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM - SUPPLEMENTAL
- ---------------------------------------------------------------------------
SCHEDULES
- ---------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES, DECEMBER 31, 1994 -
- --------------------------------------------------------------------------------
(continued)
- -----------
<TABLE>
<CAPTION>
Description of Investment,
Identity of Issuer, Including Collateral, Rate of
Borrower, Lessor, or Interest, Maturity Date, Shares,
Similar Party Units, Par or Maturity Value Cost Fair Value
- -------------------- ---------------------------- ------------- ------------
<S> <C> <C> <C>
Commonwealth Life
Insurance Company Contract No. ADA00241 FR, $ 1,680,651 $ 1,680,651
9.10%, due 1995
Equitable Life
Assurance Company Contract No. AC-6571-90, 2,925,270 2,925,270
9.45%, due 1995
Hartford Life
Insurance Company Contract No. GA-9190, 2,120,285 2,120,285
8.80%, due 1997
Hartford Life
Insurance Company Contract No. GA-9260, 2,549,780 2,549,780
7.92%, due 1997
Hartford Life
Insurance Company Contract No. GA-9283, 1,964,676 1,964,676
7.57%, due 1997
Hartford Life
Insurance Company Contract No. GA-8888, 1,612,395 1,612,395
9.18%, due 1995
Metropolitan Life
Insurance Company Contract No. GAC-18567-B, 2,246,128 2,246,128
9.35%, due 1998
Metropolitan Life
Insurance Company Contract No. 18563-B, 2,036,680 2,036,680
8.45%, due 1998
Ohio National Life
Insurance Company Contract No. GA-5367, 3,151,472 3,151,472
8.12%, due 1997
Principal Mutual Life
Insurance Company Contract No. 4-1498, 1,242,645 1,242,645
6.50%, due 1997
Provident National
Assurance Company Contract No. 027-05094, 3,028,376 3,028,376
7.86%, due 1997
Provident National
Assurance Company Contract No. 027-05094-02A, 2,393,003 2,393,003
7.60%, due 1997
Travelers
Insurance Company Contract No. GR15815, 1,064,874 1,064,874
8.42%, due 1997
Travelers
Insurance Company Contract No. GR-15713, 3,256,432 3,256,432
8.59%, due 1996
Wells Fargo Contract No. 343504624, 2,448,243 2,448,243
9.86%, due 1995
------------ ------------
Total Value of Interest in Pooled Separate
Accounts 43,254,159 43,254,159
</TABLE>
13
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM - SUPPLEMENTAL
- ---------------------------------------------------------------------------
SCHEDULES
- ---------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES, DECEMBER 31, 1994 -
- -------------------------------------------------------------------------------
(concluded)
- -----------
<TABLE>
<CAPTION>
Description of Investment,
Identity of Issuer, Including Collateral, Rate of
Borrower, Lessor, or Interest, Maturity Date, Shares,
Similar Party Units, Par or Maturity Value Cost Fair Value
- -------------------- ---------------------------- ------------- ------------
<S> <C> <C> <C>
Money Market Funds
- ------------------
Mellon Bank, N.A.* Cash management fund - $ 5,704,179 $ 5,704,179
5,704,179 units
United States Government Obligations
- ------------------------------------
FNMA 4,254,598 units $ 3,890,589 $ 3,890,589
Other
- -----
Participant Loans
Receivable 496,456 units $ 496,456 $ 496,456
------------ ------------
TOTAL INTEREST INCOME FUND $ 53,345,383 $ 53,345,383
------------ ------------
EQUITY INCOME FUND
Fidelity Equity -
Income Fund 825,054 units $ 23,701,735 $ 25,329,111
Participant Loans
Receivable 326,338 units 326,338 326,338
------------ ------------
TOTAL EQUITY INCOME FUND $ 24,028,073 $ 25,655,449
------------ ------------
EQUITY INDEX FUND
Fidelity Equity
Index Fund 420,649 units $ 7,085,832 $ 7,113,169
Participant Loans
Receivable 219,629 units 219,629 219,629
------------ ------------
TOTAL EQUITY INDEX FUND $ 7,305,461 $ 7,332,798
------------ ------------
BALANCED FUND
Phoenix Balanced Fund 771,707 units $ 12,249,406 $ 11,444,419
Participant Loans
Receivable 369,074 units 369,074 369,074
------------ ------------
TOTAL BALANCED FUND $ 12,618,480 $ 11,813,493
------------ ------------
</TABLE>
14
<PAGE>
EMPLOYEES' THRIFT PLAN OF THE TEXAS UTILITIES COMPANY SYSTEM - SUPPLEMENTAL
- ---------------------------------------------------------------------------
SCHEDULES
- ---------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES, DECEMBER 31, 1994 -
- -------------------------------------------------------------------------------
(concluded)
- -----------
<TABLE>
<CAPTION>
Description of Investment,
Identity of Issuer, Including Collateral, Rate of
Borrower, Lessor, or Interest, Maturity Date, Shares,
Similar Party Units, Par or Maturity Value Cost Fair Value
- -------------------- ---------------------------- ------------- -------------
<S> <C> <C> <C>
EQUITY GROWTH FUND
IDS New Dimensions
Fund 1,511,632 units $ 20,942,352 $ 20,089,580
Participant Loans
Receivable 627,008 units 627,008 627,008
------------ ------------
TOTAL EQUITY GROWTH FUND $ 21,569,360 $ 20,716,588
------------ ------------
TOTAL ALL FUNDS $536,328,600 $504,416,736
============ ============
*Party-in-Interest
</TABLE>
15
<PAGE>
INDEPENDENT AUDITORS' REPORT
Employees' Thrift Plan Committee
Employees' Thrift Plan of the
Texas Utilities Company System:
We have audited, by fund and in total, the accompanying statements of net assets
available for benefits of the Employees' Thrift Plan of the Texas Utilities
Company System (the "Plan") as of December 31, 1994 and 1993, 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 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, such financial statements present fairly, by fund and in total,
in all material respects, the net assets available for benefits of the Plan at
December 31, 1994 and 1993, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule
of assets held for investment purposes at December 31, 1994, is presented for
the purpose of additional analysis and is not a required part of the basic
financial statements, but is 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. This schedule is the
responsibility of the Plan's management. Such schedule has been subjected to
the auditing procedures applied in our audit of the basic 1994 financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
Dallas, Texas
June 26, 1995
16
<PAGE>
-----------------------------------
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employees' Thrift Plan Committee has duly caused this annual report to be signed
on its behalf by the undersigned thereunto duly authorized.
EMPLOYEES' THRIFT PLAN OF THE
TEXAS UTILITIES COMPANY SYSTEM
By /s/ Peter B. Tinkham
-------------------------------
Peter B. Tinkham, Secretary
Employees' Thrift Plan Committee
June 28, 1995
17
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No. 33-
59961 of Texas Utilities Company on Form S-8 of our report dated June 26, 1995,
appearing in this 1994 Annual Report on Form 11-K of the Employees' Thrift Plan
of the Texas Utilities Company System for the year ended December 31, 1994.
DELOITTE & TOUCHE LLP
Dallas, Texas
June 26, 1995
18
