SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 22, 1993
ENSERCH Corporation
(Exact name of Registrant as specified in its charter)
Texas 1-3183 75-0399066
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
ENSERCH Center, 300 S. St. Paul, Dallas, Texas 75201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including Area Code: 214-651-8700
ITEM 2. Acquisition or Disposition of Assets
Set forth below in its entirety is a news release issued by ENSERCH
Corporation on December 22, 1993. This release relates to ENSERCH Corporation's
closing of the sale of the principal operating assets of Ebasco Services
Incorporated to Raytheon Engineers & Constructors and the sale of Dorsch
Consult.
ENSERCH CLOSES EBASCO SALE;
SELLS 49% INTEREST IN DORSCH CONSULT
DALLAS, TEXAS (December 22, 1993) -- ENSERCH Corporation has
closed the sale of the principal operating assets of the
Corporation's engineering and construction subsidiary, Ebasco
Services, to Raytheon Engineers & Constructors. In a separate
transaction, ENSERCH also has completed the sale of its 49% interest
in Dorsch Consult in Germany for $9.5 million, including debt
assumption.
ENSERCH is retaining the bulk of Ebasco's accounts receivable.
ENSERCH also is retaining and will operate Ebasco's environmental
division, which will be known as Enserch Environmental.
"We are pleased with the proceeds from the sale of Ebasco
under this agreement," said David W. Biegler, ENSERCH chairman,
president and chief executive officer. "A sale price of
$210 million, accounts receivable with a net book value of
$135 million, and a retained business with a value well above its
net book value of $29 million add to a value from this sale in the
upper range of most financial analysts' expectations."
"Completing these two transactions," Biegler added, "is a
major step forward permitting ENSERCH to focus on its integrated
natural-gas business. Proceeds from the closings and the collection
of receivables provide a significant cash infusion that is being
directed toward our goal of a strengthened balance sheet."
ITEM 7. Financial Statements and Exhibits
(b) Pro forma financial information
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Pro Forma Condensed Consolidated Balance Sheet has been prepared to
reflect the effects of the following transactions as if such transactions had
occurred as of September 30, 1993:
(1) The sale, effective December 22, 1993, by ENSERCH of the
principal operating assets of its engineering and
construction subsidiary, Ebasco Services Incorporated
("Ebasco"), for some $210 million. Accounts receivable
of Ebasco with a net book value of $135 million and
Ebasco's environmental business with a net book value of
$29 million were retained by ENSERCH.
(2) The sale, effective December 17, 1993, of the Corpora-
tion's 49% interest in German-based Dorsch Consult for
$9.3 million, including debt assumed.
The Condensed Consolidated Statements of Income for the nine months ended
September 30, 1993, and for the year ended December 31, 1992, have been restated
to reflect the sold engineering and construction operations, including the UK-
based H&G Engineering business sold in 1992, as discontinued operations.
ENSERCH CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Restated for Discontinued Operations
(Unaudited)
For the Nine Months Ended September 30, 1993
Reclassification
of
Previously Discontinued
Reported Operations(a) Restated
---------- ------------ ----------
(In thousands except per share amounts)
Revenues . . . . . . . . . . . . . . . . $2,307,797 $ (947,881) $1,359,916
---------- ---------- ----------
Costs and Expenses
Gas purchase . . . . . . . . . . . . . 712,620 712,620
Contract construction expense. . . . . 603,904 (575,043) 28,861
Operating expenses . . . . . . . . . . 685,964 (341,658) 344,306
Depreciation and amortization. . . . . 104,273 (4,150) 100,123
Gross receipts and production taxes. . 42,442 42,442
Payroll, ad valorem and other taxes. . 40,095 (15,901) 24,194
---------- ---------- ----------
Total. . . . . . . . . . . . . . . 2,189,298 (936,752) 1,252,546
---------- ---------- ----------
Operating Income . . . . . . . . . . . . 118,499 (11,129) 107,370
Gain on Disposition of
Significant Assets . . . . . . . . . . 2,436 (2,436)
Other Income (Expense) - Net . . . . . . (6,479) (646) (7,125)
Interest Expense . . . . . . . . . . . . (65,071) 7,281 (57,790)
---------- ---------- ----------
Income before Income Taxes . . . . . . . 49,385 (6,930) 42,455
Income Taxes . . . . . . . . . . . . . . 28,934 (2,326) 26,608
---------- ---------- ----------
Income from Continuing Operations. . . . 20,451 (4,604) 15,847
Discontinued Operations. . . . . . . . . 4,604 4,604
---------- ---------- ----------
Net Income . . . . . . . . . . . . . . . $ 20,451 $ $ 20,451
========== ========== ==========
Earnings per Share of Common Stock
Income from continuing operations
(after provision for dividends
on preferred stock). . . . . . . . . . $ .16 $ .09
Discontinued operations. . . . . . . . .07
---------- ----------
Earnings applicable to common stock. $ .16 $ .16
========== ==========
Average Common Shares Outstanding. . . . 66,519 66,519
========== ==========
ENSERCH CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Restated for Discontinued Operations
(Unaudited)
For the Year Ended December 31, 1992
Reclassification
of
Previously Discontinued
Reported Operations(a) Restated
---------- ------------ ----------
(In thousands except per share amounts)
Revenues . . . . . . . . . . . . . . . . $2,825,455 $(1,110,894) $1,714,561
---------- ----------- ----------
Costs and Expenses
Gas purchase . . . . . . . . . . . . . 902,346 902,346
Contract construction expense. . . . . 593,998 (572,171) 21,827
Operating expenses . . . . . . . . . . 946,845 (489,751) 457,094
Depreciation and amortization. . . . . 150,168 (7,456) 142,712
Gross receipts and production taxes. . 52,517 52,517
Payroll, ad valorem and other taxes. . 49,672 (23,052) 26,620
---------- ---------- ----------
Total. . . . . . . . . . . . . . . 2,695,546 (1,092,430) 1,603,116
---------- ---------- ----------
Operating Income . . . . . . . . . . . . 129,909 (18,464) 111,445
Loss on Disposition of
Significant Assets . . . . . . . . . . (21,489) 21,489
Other Income (Expense) - Net . . . . . . (14,150) 1,698 (12,452)
Interest Expense . . . . . . . . . . . . (109,765) 12,715 (97,050)
---------- ---------- ----------
Income (Loss) before Income Taxes. . . . (15,495) 17,438 1,943
Income Taxes (Benefit) . . . . . . . . . (2,847) 1,780 (1,067)
---------- ---------- ----------
Income (Loss) from Continuing Operations (12,648) 15,658 3,010
Discontinued Operations. . . . . . . . . (15,658) (15,658)
Extraordinary Loss on Extinguishment
of Debt . . . . . . . . . . . . . . . (15,358) (15,358)
---------- ---------- ----------
Net Loss . . . . . . . . . . . . . . . . $ (28,006) $ $ (28,006)
========== ========== ==========
Earnings (Loss) per Share of Common Stock
Loss from continuing operations
(after provision for dividends
on preferred stock). . . . . . . . . . $ (.39) $ (.15)
Discontinued operations. . . . . . . . (.24)
Extraordinary loss . . . . . . . . . . (.23) (.23)
---------- ----------
Earnings applicable to common stock. $ (.62) $ (.62)
========== ==========
Average Common Shares Outstanding. . . . 65,695 65,695
========== ==========
ENSERCH CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
September 30, 1993
ASSETS
Adjustments
Historical (b) Pro Forma
---------- ----------- ---------
(In thousands)
Current Assets
Cash and equivalents . . . . . . . . . . $ 27,305 $ (23,615) $ 3,690
Accounts receivable. . . . . . . . . . . 244,702 (87,589) 157,113
Costs associated with unbilled
revenues . . . . . . . . . . . . . . . 285,574 (110,676) 174,898
Gas stored underground . . . . . . . . . 127,585 127,585
Gas purchase settlements
recoverable from customers . . . . . . 55,573 55,573
Other. . . . . . . . . . . . . . . . . . 102,346 (3,966) 98,380
---------- ---------- ----------
Total current assets . . . . . . . 843,085 (225,846) 617,239
Investments. . . . . . . . . . . . . . . . 102,317 (14,391) 87,926
Property, Plant and Equipment - Net. . . . 2,152,495 (17,797) 2,134,698
Other assets . . . . . . . . . . . . . . . 76,672 (29,479) 47,193
---------- ---------- ----------
Total . . . . . . . . . . . . . $3,174,569 $ (287,513) $2,887,056
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Commercial paper and other short-
term borrowings. . . . . . . . . . . . $ 202,477 $ (19,286) $ 183,191
Current maturities of senior
long-term debt . . . . . . . . . . . . 17,100 17,100
Accounts payable and other accrued
liabilities. . . . . . . . . . . . . . 467,802 (100,444) 367,358
Billings in excess of costs and
advances on uncompleted
contracts. . . . . . . . . . . . . . . 77,746 (49,216) 28,530
Accrued interest . . . . . . . . . . . . 30,210 30,210
Other. . . . . . . . . . . . . . . . . . 88,759 22,612 111,371
---------- ---------- ----------
Total current liabilities . . . . 884,094 (146,334) 737,760
Senior Long-Term Debt. . . . . . . . . . . 835,482 (200,000) 635,482
Convertible Subordinated Debentures. . . . 90,750 90,750
Deferred Income Taxes. . . . . . . . . . . 345,516 (22,427) 323,089
Other Liabilities. . . . . . . . . . . . . 229,656 (1,752) 227,904
Adjustable Rate Preferred Stock. . . . . . 175,000 175,000
Common Shareholders' Equity. . . . . . . . 614,071 83,000 697,071
---------- ---------- ----------
Total. . . . . . . . . . . . . $3,174,569 $ (287,513) $2,887,056
========== ========== ==========
ADJUSTMENTS FOR PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Periods Ended September 30, 1993 and December 31, 1992
(Unaudited)
Statements of Income Adjustments
(a) To reclassify discontinued engineering and construction opera-
tions. The after-tax gain of approximately $83 million, which is
net of provisions for impairment of retained assets and for
liabilities related to the sold businesses, has not been
reflected in the statements of income restated for discontinued
operations. Partially offsetting this gain, in the fourth
quarter, the Corporation expects to record provisions for
impairment of some of its oil and gas properties and for other
matters.
Balance Sheet Adjustments
(b) Adjustment to reflect the sale of the principal operating assets
of Ebasco and the sale of the Corporation's 49% interest in
Dorsch. Cash proceeds of $210 million and $9.3 million
from the respective sales have been used to retire $200 million
of long-term debt and $19.3 million of commercial paper
indebtedness.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENSERCH Corporation
Date: January 6, 1994 By: /s/ Jerry W. Pinkerton
Jerry W. Pinkerton,
Vice President and Controller,
Chief Accounting Officer