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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, 1996
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)
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TEXAS UTILITIES COMPANY
Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201
(214) 812-4600
(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>
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, 1996 and 1995 . . . . . . . . . . . . . 3
Statements of Income and Changes in Plan Equity for the
years ended June 30, 1996, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . 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>
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DEFERRED AND INCENTIVE COMPENSATION PLAN OF
THE TEXAS UTILITIES COMPANY SYSTEM
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
June 30,
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ASSETS AND PLAN EQUITY 1996 1995
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<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: 1996 -- $11,435,143; 1995 -- $10,502,256) (Note 2) . . . . $14,493,246 $10,776,992
Dividends receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,512 241,405
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,924 6,586
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Total Assets and Plan Equity . . . . . . . . . . . . . . . . . . . . $14,665,682 $11,024,983
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</TABLE>
See accompanying Notes to Financial Statements.
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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,
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1996 1995 1994
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<S> <C> <C> <C>
Additions (deductions):
Net Investment Income:
Dividends on common stock of Texas Utilities Company . . . . . . . . $ 751,796 $ 932,142 $ 652,141
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,830 4,942 473
----------- ----------- ----------
Net investment income . . . . . . . . . . . . . . . . . . . . 754,626 937,084 652,614
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Realized gain on investments . . . . . . . . . . . . . . . . . . . . . . 31 157 9,168
Unrealized appreciation (depreciation) of investments . . . . . . . . . 2,783,336 908,351 (3,088,982)
Contributions and deposits (Note 3):
Participating employees' salary deferrals . . . . . . . . . . . . . . 903,000 833,350 762,560
Employer matching and incentive awards . . . . . . . . . . . . . . . 2,546,370 2,070,025 1,660,840
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Total contributions and deposits . . . . . . . . . . . . . . . 3,449,370 2,903,375 2,423,400
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Total additions (deductions) . . . . . . . . . . . . . . . 6,987,363 4,748,967 (3,800)
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Withdrawals, lapses and forfeitures:
Distributions to participants (Note 4) . . . . . . . . . . . . . . . 3,340,178 702,963 4,070,833
Distributions to plan sponsor . . . . . . . . . . . . . . . . . . . . 6,486 -- --
Forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- 36,459
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Total withdrawals, lapses and forfeitures . . . . . . . . . . 3,346,664 702,963 4,107,292
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Net additions (deductions) . . . . . . . . . . . . . . . . 3,640,699 4,046,004 (4,111,092)
Plan Equity, Beginning of Year . . . . . . . . . . . . . . . . . . . . . . 11,024,983 6,978,979 11,090,071
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Plan Equity, End of Year . . . . . . . . . . . . . . . . . . . . . . . . . $14,665,682 $11,024,983 $6,978,979
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</TABLE>
See accompanying Notes to Financial Statements.
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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 also provides awards under the
Annual Incentive Plan with 50% of any such awards treated as incentive
awards under this Plan. Amounts credited to a participant's account are
invested in shares of common stock of the Company. On the expiration of
the applicable maturity period (3 years for incentive awards and 5 years
for deferrals and matching awards) the value of the participant's
account is paid in cash. To the extent that the amounts maturing under
the Plan combined with the eligible 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.
The number of participants (current and former employees) at June 30,
1996, 1995 and 1994 were 54, 55, and 52, respectively.
2. Plan Investments -- The cost, market value and unrealized appreciation
(depreciation) of investments at June 30, 1996, 1995 and 1994 are as
follows:
<TABLE>
<CAPTION>
Unrealized
Number of Historical Market Appreciation
Shares Cost Value (Depreciation)
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<S> <C> <C> <C> <C>
June 30, 1996:
Common stock of Texas Utilities Company . . . . . 339,023(1) $11,435,143 $14,493,246 $3,058,103
June 30, 1995:
Common stock of Texas Utilities Company . . . . . 313,513(2) $10,502,256 $10,776,992 $274,736
June 30, 1994:
Common stock of Texas Utilities Company . . . . . 217,905(3) $7,443,618 $6,809,540 $(634,078)
</TABLE>
______________________________
(1)Represents 0.15% of the outstanding shares of common stock of Texas
Utilities Company (224,602,557 at June 30, 1996).
(2)Represents 0.14% of the outstanding shares of common stock of Texas
Utilities Company (225,841,037 at June 30, 1995).
(3)Represents 0.10% of the outstanding shares of common stock of Texas
Utilities Company (225,841,037 at June 30, 1994).
The investment in the Company's common stock (stated in terms of
performance units for each participant) is stated at market value based
upon the last reported sale prices on recognized exchanges on the last
business day of the Plan Year. The cost basis of plan investments is
determined on an average cost basis. 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.
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DEFERRED AND INCENTIVE COMPENSATION PLAN OF
THE TEXAS UTILITIES COMPANY SYSTEM
NOTES TO FINANCIAL STATEMENTS
Net plan investmens value at June 30, 1996, 1995 and 1994 is $42.75,
$34.38 and $31.25 per unit, respectively.
3. Plan Contributions -- Contributions by employer-corporations and
participating employees' salary deferrals for the years ended June 30,
1996, 1995 and 1994 are as follows:
1996
<TABLE>
<CAPTION>
Participating Contributions
Employees' by Employer- Total
Employer-Corporations Salary Deferral Corporations Contributions
------------------------------- --------------- ------------ -------------
<S> <C> <C> <C>
Texas Utilities Company . . . . . . . . . . $183,000 $ 579,500 $ 762,500
Texas Utilities Services Inc.
and Others . . . . . . . . . . . . . . . 365,160 1,015,550 1,380,710
Texas Utilities Electric Company . . . . . 354,840 951,320 1,306,160
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Total $903,000 $2,546,370 $3,449,370
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</TABLE>
1995
<TABLE>
<CAPTION>
Participating Contributions
Employees' by Employer- Total
Employer-Corporations Salary Deferral Corporation Contributions
------------------------- --------------- ------------- -------------
<S> <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
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</TABLE>
1994
<TABLE>
<CAPTION>
Participating Contributions
Employees' by Employer- Total
Employer-Corporations Salary Deferral Corporations Contributions
------------------------- --------------- ------------- -------------
<S> <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
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Total . . . . . . . . . . . . . . . . $762,560 $1,660,840 $2,423,400
======== ========== ==========
</TABLE>
The contribution for incentive awards amounted to $1,191,870,
$820,000, and $517,000 for the Plan Years ended June 30, 1996, 1995
and 1994, respectively.
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DEFERRED AND INCENTIVE COMPENSATION PLAN OF
THE TEXAS UTILITIES COMPANY SYSTEM
NOTES TO FINANCIAL STATEMENTS
4. Plan Distributions -- Maturing in June 1996 were the incentive awards
made for the Plan Year ended June 30, 1994. The distribution of
matured deferrals and/or awards of $601,240 represent the net proceeds
obtained by the Trustee upon sale of the associated assets (common
stock of the Company) in July 1996.
Maturing in June 1995 were 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. The distribution of
matured deferrals and/or awards of $3,340,178 represent the net
proceeds obtained by the Trustee upon sale of the associated assets
(common stock of the Company) in July 1995.
Maturing in June 1994 were the incentive awards made for the Plan Year
ended June 30, 1992. The distribution of matured deferrals and/or
awards of $702,963 represent the net proceeds obtained by the Trustee
upon sale of the associated assets (common stock of the Company) in
July 1994.
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
until paid or otherwise made available to the participant.
(c) Amounts distributed under the Plan will be taxable as ordinary
income to the participant in the year of such distribution.
6. Plan Administration Fees -- All administrative fees are paid by Texas
Utilities Company, the Plan sponsor.
7. Plan Termination -- The Company's Board of Directors may amend,
terminate, or suspend the Plan at any time. An amendment or
modification of the Plan may affect active participants as well as
future participants, but no amendment or modification of the Plan for
any reason may diminish any participant's account as of the
amendment's effective date. Upon Plan termination, all amounts
credited to a participant's account shall be deemed to have matured,
as described in the Plan document.
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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, 1996 and 1995, and the related statements of income and changes in plan
equity for each of the three years in the period ended June 30, 1996. 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, 1996 and
1995, and the related plan income and changes in plan equity for each of the
three years in the period ended June 30, 1996, in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Dallas, Texas
September 4, 1996
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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 13, 1996
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
23.1 Consent of Deloitte & Touche LLP
</TABLE>
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EXHIBIT 23.1
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 September 4, 1996, 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, 1996.
DELOITTE & TOUCHE LLP
Dallas, Texas
September 4, 1996
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