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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
________________________
FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-3591
DEFERRED AND INCENTIVE COMPENSATION PLAN OF THE
TEXAS UTILITIES COMPANY SYSTEM
(Full Title of the Plan)
________________________
TEXAS UTILITIES COMPANY
1601 Bryan Street, Dallas, Texas 75201
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL STATEMENTS Page
----
The following financial statements are furnished for the Plan:
Statements of Financial Condition at June 30, 1995 and 1994........................... 3
Statements of Income and Changes in Plan Equity for the
years ended June 30, 1995, 1994 and 1993........................................... 4
Notes to Financial Statements......................................................... 5-7
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................................................................... 8
PLAN ADMINISTRATOR'S SIGNATURE................................................................. 9
EXHIBIT
The following exhibit is filed herewith:
Independent Auditors' Consent......................................................... 10
</TABLE>
2
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DEFERRED AND INCENTIVE COMPENSATION PLAN OF
THE TEXAS UTILITIES COMPANY SYSTEM
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
June 30,
--------------------------
ASSETS AND PLAN EQUITY 1995 1994
---- ----
<S> <C> <C>
Investment in Securities of Participating Employers --
Common stock of Texas Utilities Company,
At fair value as determined by quoted market prices
(Historical cost: 1995 -- $10,502,256; 1994 -- $7,443,618) (Note 2)........... $10,776,992 $6,809,540
Dividends receivable............................................................. 241,405 167,787
Cash and cash equivalents........................................................ 6,586 1,652
----------- ----------
Total Assets and Plan Equity............................................ $11,024,983 $6,978,979
=========== ==========
</TABLE>
See accompanying Notes to Financial Statements.
3
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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,
-------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Additions (deductions):
Net Investment Income:
Dividends on common stock of Texas Utilities Company.............. $ 932,142 $ 652,141 $ 898,934
Interest.......................................................... 4,942 473 5,283
----------- ------------ -----------
Net investment income..................................... 937,084 652,614 904,217
----------- ------------ -----------
Changes in fair value of investments (Note 2):
Realized gain on investments...................................... 157 9,168 273,686
Unrealized appreciation (depreciation) of investments............. 908,351 (3,088,982) 1,530,544
----------- ------------ -----------
Total changes in fair value of investments................ 908,508 (3,079,814) 1,804,230
----------- ------------ -----------
Contributions and deposits (Note 3):
Participating employees' salary deferrals......................... 833,350 762,560 774,450
Employer matching and incentive awards............................ 2,070,025 1,660,840 2,905,784
----------- ------------ -----------
Total contributions and deposits.......................... 2,903,375 2,423,400 3,680,234
----------- ------------ -----------
Total additions (deductions)............................ 4,748,967 (3,800) 6,388,681
----------- ------------ -----------
Withdrawals, lapses and forfeitures:
Distributions to participants (Note 4)............................ 702,963 4,070,833 7,073,155
Forfeitures....................................................... -- 36,459 --
----------- ------------ -----------
Total withdrawals, lapses and forfeitures................. 702,963 4,107,292 7,073,155
----------- ------------ -----------
Net additions (deductions).............................. 4,046,004 (4,111,092) (684,474)
Plan Equity, Beginning of Year.......................................... 6,978,979 11,090,071 11,774,545
----------- ------------ -----------
Plan Equity, End of Year................................................ $11,024,983 $ 6,978,979 $11,090,071
=========== ============ ===========
</TABLE>
See accompanying Notes to Financial Statements.
4
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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,
effective July 1, 1987, amended effective May 31, 1992 and restated as of
January 1, 1995. 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
Organization and Compensation Committee of the Board of Directors of the
Company can also provide incentive awards under the Annual Incentive Plan
with 50% of any such awards treated as incentive awards under this Plan. On
the expiration of the applicable maturity period (3 years for incentive
awards and 5 years for deferrals and matching awards) the value of the
participant's account is paid in cash. To the extent that the amounts
maturing under the Plan combined with the eligible employees' other
remunerations exceeds $1,000,000, the maturity period shall be extended. In
the event a participant's employment is terminated because of death or
permanent and total disability, all amounts in the participant's account
shall mature immediately. If the participant terminates employment prior to
the end of a Plan Year, the deferred amount and company match will be
recomputed as of the termination date. In the event a participant's
employment is terminated by retirement, the participant will receive a
distribution of his account at the end of the applicable maturity period.
If the participant terminates employment by retirement prior to the end of a
Plan Year, the participant may have previously elected to accelerate the
balance of salary reductions. In the event a participant's employment is
terminated because of reasons other than death, disability or retirement,
all rights to any performance units for maturity periods not yet completed
shall be forfeited to the 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, 1995,
1994 and 1993 were 55, 52, and 41, respectively.
5
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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, 1995, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
Unrealized
Number of Historical Market Appreciation
Shares Cost Value (Depreciation)
-------- ---------- ------ --------------
<S> <C> <C> <C> <C>
June 30, 1995:
Common stock of Texas Utilities Company................ 313,513 /1/ $10,502,256 $10,776,992 $ 274,736
June 30, 1994:
Common stock of Texas Utilities Company................ 217,905 /2/ $ 7,443,618 $ 6,809,540 $ (634,078)
June 30, 1993:
Common stock of Texas Utilities Company................ 238,341 /3/ $ 8,097,392 $10,904,123 $2,806,731
</TABLE>
_______________
/1/Represents 0.14% of the outstanding shares of common stock of Texas
Utilities Company (225,841,037 at June 30, 1995).
/2/Represents 0.10% of the outstanding shares of common stock of Texas
Utilities Company (225,841,037 at June 30, 1994).
/3/Represents 0.11% of the outstanding shares of common stock of Texas
Utilities Company (220,211,618 at June 30, 1993).
The investment in the Company's 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, 1995, 1994 and 1993 is $34.38, $31.25
and $45.75 per unit, respectively.
3. Plan Contributions -- Contributions by employer-corporations and
------------------
participating employees' salary deferrals for the years ended June 30, 1995,
1994 and 1993 are as follows:
<TABLE>
<CAPTION>
1995
----
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...................... $177,000 $ 490,500 $ -- $ 667,500
Texas Utilities Services Inc.
and Others................................. 334,180 823,270 -- 1,157,450
Texas Utilities Electric Company............. 322,170 756,255 -- 1,078,425
-------- ---------- --------- ----------
Total $833,350 $2,070,025 $ -- $2,903,375
======== ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
1994
----
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>
6
<PAGE>
DEFERRED AND INCENTIVE COMPENSATION PLAN OF
THE TEXAS UTILITIES COMPANY SYSTEM
NOTES TO FINANCIAL STATEMENTS
(CONCLUDED)
3. Plan Contributions -- (concluded)
------------------
1993
----
<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>
The contribution for incentive awards amounted to $820,000, $517,000, and
$555,000 for the Plan Years ended June 30, 1995, 1994 and 1993,
respectively.
4. Plan Distributions -- In June 1995, employees' salary deferrals and
------------------
matching awards made for the Plan Year ended June 30, 1991 and the
incentive awards made for the Plan Year ended June 30, 1993 matured. The
distribution of the matured salary deferrals and awards of $3,345,587 is
computed from the net plan investment value at June 30, 1995 of $34.38.
Cash distributions to participants for these matured accounts were made in
July 1995.
In June 1994, the incentive awards made for the Plan Year ended June 30,
1992 matured. The distribution of the matured awards 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.
In June 1993, employees' salary deferrals and matching awards made for the
Plan Year ended June 30, 1989 and the incentive awards made for the Plan
Year ended June 30, 1991 matured. The distribution of the matured salary
deferrals and awards 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.
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.
Based on the Internal Revenue Code and regulations promulgated thereunder:
(a) A participant's elective deferrals under the Plan, matching awards,
incentive awards, and any dividends, interest or other income thereon
will not be subject to federal income tax until the year such amounts
are paid or otherwise made available to the participant.
(b) Elective deferrals under the Plan are not deductible by the
participant on his or her federal income tax return, since elective
deferrals are not includable in participant's income.
(c) Amounts distributed under the Plan will be taxable as ordinary income
to the participant in the year of such distribution.
6. Plan Administration Fees -- All administrative fees are paid by Texas
------------------------
Utilities Company, the Plan sponsor.
7
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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,
1995 and 1994, and the related statements of income and changes in plan equity
for each of the three years in the period ended June 30, 1995. 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, 1995 and
1994, and the changes in Income and Plan Equity for each of the three years in
the period ended June 30, 1995, in conformity with generally accepted accounting
principles.
/s/ Deloitte & Touche LLP
Dallas, Texas
August 11, 1995
8
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Organization and Compensation Committee has duly caused this annual report
to be signed on its behalf by the undersigned thereunto duly authorized.
DEFERRED AND INCENTIVE COMPENSATION PLAN
OF THE TEXAS UTILITIES COMPANY SYSTEM
By /s/ Peter B. Tinkham
-----------------------------------------
Plan Administrator
Organization and Compensation Committee
September 26, 1995
9
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INDEPENDENT AUDITORS' CONSENT
Texas Utilities Company:
We consent to the incorporation by reference in Registration Statement No. 33-
59759 on Form S-8 of our report dated August 11, 1995, 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, 1995.
/s/ Deloitte & Touche LLP
Dallas, Texas
September 26, 1995
10
