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, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE
AND SAVINGS PLAN
Commission File No. 1-3183
ENSERCH CORPORATION
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)
TABLE OF CONTENTS
Page
----
FINANCIAL STATEMENTS
The following statements are furnished for the Plan:
Statement of Net Assets Available for Benefits,
December 31, 1997 and 1996 1
Statement of Changes in Net Assets Available for Benefits,
for the Year Ended December 31, 1997 2
Statement of Changes in Net Assets Available for Benefits,
for the Year Ended December 31, 1996 3
Notes to Financial Statements 4
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes,
December 31, 1997 9
Schedule of Reportable Transactions for the Year
Ended December 31, 1997 10
INDEPENDENT AUDITORS' REPORT 11
EXHIBITS
The following exhibit is filed herewith:
Independent Auditors' Consent 13
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
1997 1996
------------- --------------
ASSETS
Cash and Short-term Investments $ 246,862 $ 279,838
Investments - at fair value:
ENSERCH Corporation Common Stock -- 41,781,064
Enserch Exploration, Inc. (EEX)
Common stock 18,025,953 305,629
Texas Utilities Company (TUC) Common Stock 14,143,574 --
Fidelity Mutual Funds:
Equity Funds:
Magellan 10,716,846 10,699,452
Puritan 12,338,473 12,066,082
Equity Income 4,869,649 3,405,103
Spartan U.S. Equity Index 5,359,302 3,447,602
U.S. Bond Index 2,277,711 2,458,157
Retirement Government Money Market Portfolio 4,592,773 5,462,084
Participant loans receivable 777,489 969,332
----------- -----------
Total investments 73,101,770 80,594,505
----------- -----------
Receivables:
Employer contributions -- 61,113
Dividends and interest 7,638 4,079
----------- -----------
Total assets 73,356,270 80,939,535
----------- -----------
LIABILITIES
Administrative expense payable 61,002 61,113
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $73,295,268 $80,878,422
=========== ===========
<FN>
See accompanying Notes to Financial Statements.
</FN>
1
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
SUPPLEMENTAL INFORMATION
----------------------------------------------------------------
FIDELITY MUTUAL FUNDS
---------------------------
ENSERCH EEX TUC
Common Common Common
Stock Stock Stock
Total Fund Fund Fund Magellan Puritan
NET ASSETS AVAILABLE, FOR BENEFITS,
BEGINNING OF YEAR $80,878,422 $41,781,064 $305,629 $ -- $10,699,452 $12,066,082
----------- ------------ ----------- ----------- ----------- -----------
ADDITIONS:
Investment Income-
Interest and dividends 1,731,124 166,243 -- 173,328 154,117 473,850
----------- ------------ ----------- ----------- ----------- -----------
Contributions:
Participants' payroll deductions 5,741,763 590,220 39,169 239,929 1,448,359 1,622,757
Participants' rollover transfers 121,890 716 -- 902 27,353 23,191
Employer's matching contributions 2,026,724 249,865 29,278 519,919 319,625 372,060
----------- ------------ ----------- ----------- ----------- -----------
Total contributions 7,890,377 840,801 68,447 760,750 1,795,337 2,018,008
----------- ------------ ----------- ----------- ----------- -----------
Net unrealized and realized
appreciation (depreciation) in
fair value of investments 6,471,288 (5,595,297) 2,406,566 2,399,420 2,594,281 2,249,350
----------- ------------ ----------- ----------- ----------- -----------
Total additions 16,092,789 (4,588,253) 2,475,013 3,333,498 4,543,735 4,741,208
----------- ------------ ----------- ----------- ----------- -----------
DEDUCTIONS:
Distributions to withdrawing participants (11,652,191) (1,334,528) (1,771,263) (1,193,163) (1,494,685) (1,755,551)
Administrative expenses (263,759) (15,885) (3,053) (1,874) (4,246) (4,494)
----------- ------------ ----------- ----------- ----------- -----------
Total deductions (11,915,950) (1,350,413) (1,774,316) (1,195,037) (1,498,931) (1,760,045)
----------- ------------ ----------- ----------- ----------- -----------
TRANSFERS BETWEEN FUNDS - Net -- (35,810,774) 19,062,219 13,059,341 (424,126) 368,116
----------- ------------ ----------- ----------- ----------- -----------
PLAN CHANGES:
New plan members 637,019 -- -- -- 94,053 11,349
Distribution to EEX (12,394,936) -- (2,020,429) (1,048,867) (2,672,786) (3,071,102)
----------- ------------ ----------- ----------- ----------- -----------
Total (11,757,917) -- (2,020,429) (1,048,867) (2,578,733) (3,059,753)
----------- ------------ ----------- ----------- ----------- -----------
OTHER ACTIVITY (2,076) (31,624) (22,163) (5,361) (24,551) (17,135)
----------- ------------ ----------- ----------- ----------- -----------
Net additions (deductions) (7,583,154) (41,781,064) 17,720,324 14,143,574 17,394 272,391
----------- ------------ ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $73,295,268 $ -- $18,025,953 $14,143,574 $10,716,846 $12,338,473
=========== ============ =========== =========== =========== ===========
SUPPLEMENTAL INFORMATION
-------------------------------------------------------------
FIDELITY MUTUAL FUNDS
-------------------------------------------------
Retirement
Spartan Government
U.S. U.S. Money
Equity Equity Bond Market
Income Index Index Portfolio Other
NET ASSETS AVAILABLE, FOR BENEFITS,
BEGINNING OF YEAR $3,405,103 $3,447,602 $2,458,157 $5,462,084 $1,253,249
---------- ---------- ---------- ---------- ----------
ADDITIONS:
Investment Income-
Interest and dividends 89,189 85,826 177,384 307,330 103,857
---------- ---------- ---------- ---------- ----------
Contributions:
Participants' payroll deductions 495,738 445,419 342,360 517,812 --
Participants' rollover transfers 32,149 29,360 5,286 2,933 --
Employer's matching contributions 86,017 74,216 82,495 125,689 167,560
---------- ---------- ---------- ---------- ----------
Total contributions 613,904 548,995 430,141 646,434 167,560
---------- ---------- ---------- ---------- ----------
Net unrealized and realized
appreciation (depreciation) in
fair value of investments 1,095,841 1,267,487 53,100 540 --
---------- ---------- ---------- ---------- ----------
Total additions 1,798,934 1,902,308 660,625 954,304 271,417
---------- ---------- ---------- ---------- ----------
DEDUCTIONS:
Distributions to withdrawing participants (672,312) (385,086) (403,264) (2,517,079) (125,260)
Administrative expenses (1,018) (1,018) (1,099) (1,916) (229,156)
---------- ---------- ---------- ---------- ----------
Total deductions (673,330) (386,104) (404,363) (2,518,995) (354,416)
---------- ---------- ---------- ---------- ----------
TRANSFERS BETWEEN FUNDS - Net 1,033,891 1,215,005 38,353 1,498,078 (40,103)
---------- ---------- ---------- ---------- ----------
PLAN CHANGES:
New plan members 131,428 47,069 34,944 285,222 32,954
Distribution to EEX (834,757) (862,498) (517,632) (1,103,894) (262,971)
---------- ---------- ---------- ---------- ----------
Total (703,329) (815,429) (482,688) (818,672) (230,017)
---------- ---------- ---------- ---------- ----------
OTHER ACTIVITY 8,380 (4,080) 7,627 15,974 70,857
---------- ---------- ---------- ---------- ----------
Net additions (deductions) 1,464,546 1,911,700 (180,446) (869,311) (282,262)
---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $4,869,649 $5,359,302 $2,277,711 $4,592,773 $ 970,987
========== ========== ========== ========== ==========
<FN>
See accompanying Notes to Financial Statements.
</FN>
2
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
SUPPLEMENTAL INFORMATION
--------------------------------------------------------------
FIDELITY MUTUAL FUNDS
--------------------------------------
ENSERCH EEX
Common Common
Stock Stock Equity
Total Fund Fund Magellan Puritan Income
NET ASSETS AVAILABLE, FOR BENEFITS,
BEGINNING OF YEAR $62,142,043 $44,410,600 $ 65,995 $ 7,039,928 $ 5,664,094 $ --
----------- ------------ ----------- ----------- ----------- ----------
ADDITIONS:
Investment Income-
Interest and dividends 1,288,367 495,037 -- 123,544 292,003 20,328
----------- ------------ ----------- ----------- ----------- ----------
Contributions:
Participants' payroll deductions 6,404,956 1,180,656 35,011 2,063,172 1,928,489 80,957
Participants' rollover transfers 372,737 25,735 2,778 117,262 55,765 12,330
Employer's matching contributions 2,213,065 1,513,653 103,712 117,835 128,950 15,998
----------- ------------ ----------- ----------- ----------- ----------
Total contributions 8,990,758 2,720,044 141,501 2,298,269 2,113,204 109,285
----------- ------------ ----------- ----------- ----------- ----------
Net unrealized and realized
appreciation (depreciation) in
fair value of investments 18,777,277 17,013,713 24,850 823,204 790,512 106,959
----------- ------------ ----------- ----------- ----------- ----------
Total additions 29,056,402 20,228,794 166,351 3,245,017 3,195,719 236,572
----------- ------------ ----------- ----------- ----------- ----------
DEDUCTIONS:
Distributions to withdrawing participants (10,035,265) (8,095,993) (9,125) (483,498) (449,554) (16,825)
Administrative expenses (288,295) (29,095) (205) (3,813) (3,264) (15)
----------- ------------ ----------- ----------- ----------- ----------
Total deductions (10,323,560) (8,125,088) (9,330) (487,311) (452,818) (16,840)
----------- ------------ ----------- ----------- ----------- ----------
TRANSFERS BETWEEN FUNDS - Net -- (14,746,401) 83,181 948,126 3,704,039 3,193,100
----------- ------------ ----------- ----------- ----------- ----------
OTHER ACTIVITY 3,537 13,159 (568) (46,308) (44,952) (7,729)
----------- ------------ ----------- ----------- ----------- ----------
Net additions (deductions) 18,736,379 (2,629,536) 239,634 3,659,524 6,401,988 3,405,103
----------- ------------ ----------- ----------- ----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $80,878,422 $ 41,781,064 $ 305,629 $10,699,452 $12,066,082 $3,405,103
=========== ============ =========== =========== =========== ==========
SUPPLEMENTAL INFORMATION
-----------------------------------------------
FIDELITY MUTUAL FUNDS
-----------------------------------
Retirement
Spartan Government
U.S. U.S. Money
Equity Bond Market
Index Index Portfolio Other
NET ASSETS AVAILABLE, FOR BENEFITS,
BEGINNING OF YEAR $ -- $1,690,232 $2,183,798 $1,087,396
---------- ---------- ---------- ----------
ADDITIONS:
Investment Income-
Interest and dividends 18,939 124,897 133,615 80,004
---------- ---------- ---------- ----------
Contributions:
Participants' payroll deductions 73,913 450,131 592,627 --
Participants' rollover transfers 18,120 12,962 127,785 --
Employer's matching contributions 14,217 29,162 40,538 249,000
---------- ---------- ---------- ----------
Total contributions 106,250 492,255 760,950 249,000
---------- ---------- ---------- ----------
Net unrealized and realized
appreciation (depreciation) in
fair value of investments 80,684 (62,645) -- --
---------- ---------- ---------- ----------
Total additions 205,873 554,507 894,565 329,004
---------- ---------- ---------- ----------
DEDUCTIONS:
Distributions to withdrawing participants (2,636) (168,503) (756,021) (53,110)
Administrative expenses (17) (1,209) (1,712) (248,965)
---------- ---------- ---------- ----------
Total deductions (2,653) (169,712) (757,733) (302,075)
---------- ---------- ---------- ----------
TRANSFERS BETWEEN FUNDS - Net 3,245,813 389,448 3,153,766 28,928
---------- ---------- ---------- ----------
OTHER ACTIVITY (1,431) (6,318) (12,312) 109,996
---------- ---------- ---------- ----------
Net additions (deductions) 3,447,602 767,925 3,278,286 165,853
---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $3,447,602 $2,458,157 $5,462,084 $1,253,249
========== ========== ========== ==========
<FN>
See accompanying Notes to Financial Statements.
</FN>
3
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
NOTES TO FINANCIAL
STATEMENTS
1. DESCRIPTION OF THE PLAN
General - The ENSERCH Corporation Employee Stock Purchase and Savings
Plan ("the Plan"), is a participant-directed defined contribution combination
employee stock ownership and profit sharing plan under Sections 401(a),
401(k), 401(m) and 4975(e)(7) of the Internal Revenue Code ("the Code"). The
Plan is subject to the applicable provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
In August 1997, ENSERCH Corporation ("ENSERCH" or "the Corporation")
became a wholly-owned subsidiary of Texas Utilities Company ("TUC"). The
merger was immediately preceded by a distribution of Enserch Exploration, Inc.
("EEX") (a majority-owned publicly traded subsidiary) shares to holders of
ENSERCH common stock. Under terms of the merger agreement, shares of the
common stock of TUC were exchanged for all of the outstanding shares of the
Corporation and company matching contributions were modified to be in the form
of TUC stock. Pursuant to the distribution of EEX shares, approximately
$12,395,000 of Plan assets were transferred to the EEX Corporation Employee
Stock Purchase and Savings Plan.
In 1995, the Corporation acquired DGS Holdings Corp. During the 1997
Plan year, the Plan Committee approved the merger of the Thrift and Profit
Sharing Plan for Employees of DGS Holdings, Inc. (DGS Plan) into the Plan.
The DGS Plan assets, totaling approximately $637,000, were transferred into
the Plan in December 1997.
The following description is provided for general information only.
Reference should be made to the Plan document for more complete information.
The Plan was established by ENSERCH and its divisions and participating
subsidiary companies to encourage and assist employees in establishing an
individual savings and investment program. A committee appointed by the TUC
Board of Directors is responsible for the general administration, management
and operation of the Plan. Chase Bank ("the Trustee"), a federally chartered
bank, serves as trustee and is custodian of the assets of the Plan.
Participation by eligible employees is voluntary. All full time
employees of ENSERCH and its participating subsidiaries who were on the
ENSERCH payroll for the last payroll period of 1997 were eligible to
participate in the Plan, and those participating remain eligible while
employed by an affiliate of TUC. Individuals employed by ENSERCH and its
subsidiaries subsequent to the last payroll period of 1997 are eligible to
participate in the Employees' Thrift Plan of TUC.
Participants' Contributions - Under the Plan, a participant may invest
pre-tax and/or after-tax dollars through payroll deductions each pay period in
increments of one percent up to a maximum of 16 percent of base pay. The
Omnibus Budget Reconciliation Act of 1993 placed an annual limitation of
$160,000 in 1997 on the pay which can be used in computing benefits for
participants under the Plan. The maximum contribution for certain highly
compensated participants is subject to further reduction pursuant to
limitations under the Internal Revenue Code.
Eligible employees can rollover to the Plan distributions received from
other qualified retirement plans. Individual Retirement Account ("IRA")
distributions are not eligible for rollover into the Plan.
Each participant is entitled to direct the allocation of his or her
account among the common stock of TUC or six mutual fund investment options:
the Fidelity Puritan Fund, the Fidelity Magellan Fund, the Fidelity Equity
Income Fund and the Fidelity Spartan U.S. Equity Index Fund, all of which
invest in equity securities; the Fidelity U.S. Bond Index Fund, which invests
in fixed income bond securities; and the Fidelity Retirement Government Money
Market Portfolio, which invests in short-term U.S. government securities. A
participant can change investment elections for future contributions and can
transfer (or exchange) any existing mutual
4
fund balances among the offered investment elections at any time, in
accordance with the Plan guidelines. As of December 31, 1997 and 1996,
all net assets available for benefits were considered to be in
participant directed investments.
Employer Matching Contributions ("company matching") - The maximum
participant contribution eligible for matching ranges from 3% to 6% of the
participant's eligible compensation, depending on length of service. Company
matching contributions as a percentage of participant contributions are at a
rate of 50% or 60% depending on length of service. Employees are 100% vested
in the matching contributions. Prior to October 1996, ENSERCH made matching
contributions in common stock of either ENSERCH or EEX based on the
participant's election. From October 1996 and through the merger closing
date, matching contributions were invested based on participants' elections.
Subsequent to the merger date, all matching contributions are in TUC common
stock.
Investment of Funds - All assets of the Plan are held by the Trustee for
the exclusive benefit of participants and their beneficiaries. Separate
account records for each participant are maintained by the Trustee. The
Trustee provides a summary of financial performance by investment fund
directly to Plan participants.
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.
Withdrawal from the Plan - Withdrawals from the Plan are governed by
applicable IRS regulations and provisions of ERISA. Penalties may apply in
certain instances.
Withdrawals of after-tax accounts may be made at any time and for any
reason while employed. The full amount in the account must be withdrawn and
there is a one year restriction on making future after-tax contributions.
Withdrawals of company matching accounts may be made at any time and for
any reason while employed. The full amount in the account must be withdrawn
and there is a one year restriction from future participation in the plan.
Withdrawals from rollover accounts may also be made at any time and for
any reason while employed.
Withdrawals from pretax accounts may be made while employed after meeting
certain qualifications as defined by the IRS based on certain hardship rules.
A participant who terminates employment and has an account balance of
more than $3,500 can retain the funds in the Plan or withdraw them at any
time. Participants that terminate with balances equal to or less than $3,500
are required to receive a distribution after termination. To avoid taxation,
the taxable portion of any withdrawal made upon termination can be rolled into
an IRA or a qualified retirement plan sponsored by another employer.
The IRS has established rules governing distributions from the Plan
after the participant has attained 70 ½ years of age.
5
Unclaimed Terminated Participants' Accounts - The plan has a segregated
account of amounts payable to terminated participants of the former Tax
Reduction Act Stock Ownership Plan ("TRASOP") whom the Plan administrators
have been unable to locate for more than one year from the date of
termination. Included in net assets available for benefits as of December 31,
1997, and 1996, were $1,431,021 and $1,448,166, respectively, of TRASOP
unclaimed terminated participants' benefits. As of December 31, 1997 and
1996, there was $239,122 and $217,521 respectively, invested in the Chase Bank
Short Term Investment Fund, representing unclaimed dividends payable to
terminated participants of the TRASOP. The Plan remains contingently liable
to terminated participants for unclaimed cash and shares.
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 Corporation
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)Employee after-tax contributions are not deductible on the
participant's federal income tax return.
(c)Only pre-tax contributions 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)A total withdrawal generally results in taxable income to
the participant equal to the gross distribution less any after-tax
employee contribution. However, if the total withdrawal meets the
lump sum distribution requirement of the Code, (i) any net unrealized
appreciation in the value of distributable Common Stock from the time
of distribution 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.
Termination of the Plan - It is the intention of the Corporation to
continue the Plan indefinitely; however, the Corporation, 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.
In the event of termination of the Plan in whole or in part, each
participant in the Plan shall receive a distribution of the entire balance in
the participant's account. Participants are 100% vested in their accounts at
all times.
6
2.SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting - The financial statements of the Plan are prepared
under the accrual method of accounting.
Use of Estimates - The preparation of financial statements requires the
use of significant estimates and assumptions by management; actual results
could differ from those estimates.
Investment Valuation and Income Recognition - The Plan's investments are
stated at fair value. Investments in common stock of TUC, ENSERCH and EEX are
valued at their quoted market value. Investments in Fidelity mutual funds are
valued at quoted net asset value of the respective funds reflecting the
closing sales price of the underlying securities. Security transactions are
recorded on the trade date.
Expenses - All charges and expenses incurred in the administration of the
Plan and fees and expenses of the Trustee are paid by the Corporation.
Recordkeeping fees are deducted from participants' accounts.
Benefits Payable - Benefits are recorded when paid. As of December 31,
1997 and 1996, net assets available for benefits included benefits of $286,542
and $121,966 respectively, due to participants who had withdrawn from
participation in the Plan but who had not yet received their benefits.
7
3.MUTUAL FUND VALUATIONS AND COMMON STOCK HOLDINGS
Units in each mutual fund at December 31, 1997 and 1996 and net asset value
per unit are presented below.
1997 1996
------------------------ -------------------------
Net Asset Net Asset
Number Value per Number Value per
Of units Unit of Units Unit
Fidelity Mutual Funds:
Magellan 112,489.196 $95.27 132,665.247 $80.65
Puritan 636,660.101 19.38 699,888.797 17.24
Equity Income 92,914.495 52.41 79,502.744 42.83
Spartan U.S. Equity Index 153,210.458 34.98 127,925.845 26.95
U. S. Bond Index 211,094.618 10.79 232,780.053 10.56
Retirement Government
Money Market Portfolio 4,592,773.040 1.00 5,462,083.720 1.00
Shares of common stock of TUC, ENSERCH and EEX at December 31, 1997 and
1996 and market value per share are presented below:
1997 1996
------------------------- ------------------------
Market Market
Number of Value per Number of Value per
Shares Share Shares Share
TUC Common Stock 340,809 $41.500 -- -
ENSERCH Common Stock -- -- 1,816,568 $23.000
EEX Common Stock 1,989,075 9.0625 26,011 11.750
4.PARTICIPANT LOANS
Participants may borrow up to 50% of the market value of their pre-tax
employee contribution account and any rollover account; however, the loan
cannot exceed $50,000 less the maximum outstanding loan balance in the
previous one year period. The interest rate on the loan is equal to the prime
interest rate of the Trustee that is in effect on the date the loan is made.
The interest rate on loans outstanding at the end of the year ranged from 6%
to 10%. Loans are funded by withdrawals from the individual's investment
accounts as determined by the plan committee. The maximum term of a loan
cannot exceed 5 years or, if earlier, severance from service. A participant
may have a maximum of two concurrent loans.
5.SUBSEQUENT EVENTS
The Plan was amended effective January 1, 1998 to reflect the adoption of
a revised company contribution matching schedule and to incorporate certain
technical changes required by recent legislation.
8
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - SUPPLEMENTAL
SCHEDULES
ITEM 27 a -SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES, DECEMBER 31, 1997
(Dollar amounts rounded to nearest whole dollar)
DESCRIPTION OR FAIR
IDENTITY OF ISSUER INVESTMENT COST VALUE
- ------------------- ----------- ------ -------
TEXAS UTILITIES COMPANY
COMMON STOCK * 340,809 shares, $11,088,528 $14,143,574
no par value
ENSERCH EXPLORATION,
INC. COMMON STOCK * 1,989,075 shares, par 14,367,032 18,025,953
value of $1.00
per share
FIDELITY MUTUAL FUNDS:
MAGELLAN FUND 112,489.196 units 9,025,084 10,716,846
PURITAN FUND 636,660.101 units 10,927,748 12,338,473
EQUITY INCOME FUND 92,914.495 units 4,209,169 4,869,649
SPARTAN U.S. EQUITY INDEX
FUND 153,210.458 units 4,353,071 5,359,302
U.S. BOND INDEX FUND 211,094.618 units 2,204,185 2,277,711
RETIREMENT GOVERNMENT MONEY MARKET
PORTFOLIO FUND 4,592,773.040 units 4,592,773 4,592,773
LOANS TO PARTICIPANTS *
Interest Rate - Ranges from
6% - 10% (Based on Prime on
date of loan)
Maturity Dates -
Various, from January 1998
to May 2002
Term of Loans - Not less than
one year or more than
five years 777,489 units 777,489 777,489
----------- -----------
TOTAL $61,545,079 $73,101,770
=========== ===========
<FN>
* Party-in-Interest.
</FN>
9
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - SUPPLEMENTAL
SCHEDULES
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS, DECEMBER 31, 1997
(Dollar amounts rounded to nearest whole dollar)
PURCHASES
---------------------------
IDENTITY OF NUMBER OF
OF PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS AMOUNT
CHASE BANK ENSERCH EXPLORATION, INC.
COMMON STOCK 1 $17,455,230
CHASE BANK ENSERCH EXPLORATION, INC.
COMMON STOCK 129 $17,787,496
CHASE BANK TEXAS UTILITIES COMPANY
COMMON STOCK 70 $13,042,345
CHASE BANK TEXAS UTILITIES COMPANY
COMMON STOCK 1 $11,549,805
FIDELITY MUTUAL FUNDS PURITAN FUND 154 $ 5,167,448
FIDELITY MUTUAL FUNDS RETIREMENT GOVERNMENT MONEY
MARKET PORTFOLIO FUND 149 $ 5,726,758
SALES
----------------------------------------------------------------------
CURRENT
VALUE OF
ASSET ON REALIZED
IDENTITY OF NUMBER OF SELLING COST TRANSACTION GAIN
PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS PRICE OF ASSET DATE (LOSS)
CHASE BANK ENSERCH CORPORATION
COMMON STOCK 153 $36,547,841 $41,996,329 $36,547,841 $(5,448,488)
CHASE BANK ENSERCH CORPORATION
COMMON STOCK 1 $31,361,875 $36,417,890 $31,361,875 $(5,056,015)
CHASE BANK ENSERCH EXPLORATION,
INC. COMMON STOCK 146 $ 4,702,567 $ 4,397,808 $ 4,702,567 $ 304,758
FIDELITY MUTUAL FUNDS MAGELLAN FUND 175 $ 5,911,477 $ 5,176,054 $ 5,911,477 $ 735,423
FIDELITY MUTUAL FUNDS PURITAN FUND 176 $ 6,530,792 $ 5,868,463 $ 6,530,792 $ 662,329
FIDELITY MUTUAL FUNDS RETIREMENT GOVERNMENT
MONEY MARKET
PORTFOLIO FUND 187 $ 6,596,068 $ 6,596,068 $ 6,596,068 $ --
10
INDEPENDENT AUDITORS' REPORT
Employees' Thrift Plan Committee
Employees' Thrift Plan of the Texas Utilities Company System:
We have audited the accompanying statements of net assets available for
benefits of the ENSERCH Corporation Employee Stock Purchase and Savings Plan
("the Plan") as of December 31, 1997 and 1996, 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, in all material
respects, the net assets available for benefits of the Plan at December 31,
1997 and 1996, 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 supplemental information by fund is
presented for the purpose of additional analysis of the basic financial
statements rather than to present information regarding the net assets
available for benefits and changes in net assets available for benefits of the
individual funds, and is not a required part of the basic financial
statements. The accompanying supplemental schedules of (1) assets held for
investment purposes at December 31, 1997 and (2) reportable transactions for
the year ended December 31, 1997 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements, but
are 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. The supplemental information by fund and supplemental
schedules are the responsibility of the Plan's management. Such supplemental
information by fund and supplemental schedules have been subjected to the
auditing procedures applied in our audit of the basic 1997 financial
statements and, in our opinion, are fairly stated in all material respects
when considered in relation to the basic financial statements taken as a
whole.
DELOITTE & TOUCHE LLP
Dallas, Texas
July 10, 1998
11
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/ Robert L. Turpin
---------------------------------
Robert L. Turpin, Assistant Secretary
Employees' Thrift Plan Committee
July 10, 1998
12