SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to _________________
COMMISSION FILE NUMBER 1-7629
A. Full title of the plan and address of the plan, if different from that of
the issuer named below:
HOUSTON INDUSTRIES INCORPORATED
SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
HOUSTON INDUSTRIES INCORPORATED
5 POST OAK PARK
4400 POST OAK PARKWAY
HOUSTON, TEXAS 77027
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Independent Auditors' Report Page 1
Statement of Net Assets Available for Benefits,
December 31, 1993 Page 2
Statement of Net Assets Available for Benefits,
December 31, 1992 Page 3
Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 1993 Page 4
Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 1992 Page 5
Notes to Financial Statements for the Years Ended
December 31, 1993 and 1992 Page 6
Supplemental Schedule of Investments,
December 31, 1993 (Item 27a) Page 15
Supplemental Schedule of Assets Purchased and Sold
for the Year Ended December 31, 1993 (Item 27a) Page 19
Supplemental Schedule of 5% Reportable Transactions
for the Year Ended December 31, 1993 (Item 27d) Page 21
Pursuant to Item 4 of Form 11-K, the financial statements and schedules referred
to above have been prepared in accordance with regulations of the Employee
Retirement Income Security Act of 1974.
(b) Exhibit:
1 - Independent Auditors' Consent
INDEPENDENT AUDITORS' REPORT
============================
Houston Industries Incorporated Savings Plan:
We have audited, by fund and in total, the accompanying statements of net assets
available for benefits of the Houston Industries Incorporated Savings Plan (the
"Plan") as of December 31, 1993 and 1992, 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 as
of December 31, 1993 and 1992, 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 schedules
of (1) investments as of December 31, 1993, (2) assets purchased and sold for
the year ended December 31, 1993, and (3) 5% reportable transactions for the
year ended December 31, 1993 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. These schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing procedures
applied in our audit of the basic 1993 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.
/s/ Deloitte & Touche
DELOITTE & TOUCHE
Houston, Texas
June 15, 1994
1
HOUSTON INDUSTRIES INCORPORATED SAVINGS PLAN
============================================
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1993
PARTICIPANT INVESTMENT FUNDS
-----------------------------------------------------
ALLOCATED
A ESOP B C
------------ ------------ ------------ -----------
ASSETS
INVESTMENTS (Note 1)
Common Stock (Notes 4 and 8) $315,880,671 $ 53,039,534
Mutual Funds $ 55,123,859
Common/Collective Trusts 52,346,554
U.S. Government Obligations $ 3,240,827
U.S. Government Agencies 5,594,623
Corporate Bonds and Notes 5,004,642
Cash Equivalents (Note 4) 2,704,513 656,133 1,985,455 609,929
------------ ------------ ------------ -----------
Total 318,585,184 53,695,667 109,455,868 14,450,021
------------ ------------ ------------ -----------
PARTICIPANT LOANS 13,411,434 9,160,250 1,186,568
------------ ------------ ------------ -----------
RECEIVABLES
Dividends and Interest
(Note 1) 4,987,848 836,798 2,078,791 201,197
Contributions (Note 2)
Employers 1,335,002
Participants 570,924 538,003 70,575
------------ ------------ ------------ -----------
Total 5,558,772 2,171,800 2,616,794 271,772
------------ ------------ ------------ -----------
CASH 1 200,001
------------ ------------ ------------ -----------
TOTAL ASSETS 337,555,391 55,867,467 121,432,913 15,908,361
------------ ------------ ------------ -----------
LIABILITIES
PAYABLES (Note 2)
Forfeits to ESOP 5,267
Administrative Expenses 40,727 11,191
ESOP Loans from Company
------------ ------------ ------------ -----------
TOTAL LIABILITIES 5,267 40,727 11,191
------------ ------------ ------------ -----------
NET ASSETS AVAILABLE FOR
BENEFITS $337,550,124 $ 55,867,467 $121,392,186 $15,897,170
============ ============ ============ ===========
PARTICIPANT INVESTMENT FUNDS
----------------------------
UNALLOCATED
D TOTAL ESOP TOTAL
----------- ------------ ------------ ------------
ASSETS
INVESTMENTS (Note 1)
Common Stock (Notes 4 and 8 $368,920,205 $396,128,034 $765,048,239
Mutual Funds 55,123,859 55,123,859
Common/Collective Trusts 52,346,554 52,346,554
U.S. Government Obligations 3,240,827 3,240,827
U.S. Government Agencies 5,594,623 5,594,623
Corporate Bonds and Notes 5,004,642 5,004,642
Cash Equivalents (Note 4) $13,377,022 19,333,052 3,896,119 23,229,171
----------- ------------ ------------ ------------
Total 13,377,022 509,563,762 400,024,153 909,587,915
----------- ------------ ------------ ------------
PARTICIPANT LOANS 2,835,124 26,593,376 26,593,376
----------- ------------ ------------ ------------
RECEIVABLES
Dividends and Interest
(Note 1) 38,872 8,143,506 6,247,881 14,391,387
Contributions (Note 2)
Employers 1,335,002 1,335,002
Participants 74,221 1,253,723 1,253,723
----------- ------------ ------------ ------------
Total 113,093 10,732,231 6,247,881 16,980,112
----------- ------------ ------------ ------------
CASH 200,002 200,002
----------- ------------ ------------ ------------
TOTAL ASSETS 16,325,239 547,089,371 406,272,034 953,361,405
----------- ------------ ------------ ------------
LIABILITIES
PAYABLES (Note 2)
Forfeits to ESOP 5,267 5,267
Administrative Expenses 51,918 51,918
ESOP Loans from Company 332,488,713 332,488,713
------------ ----------- ----------- ------------
TOTAL LIABILITIES 57,185 332,488,713 332,545,898
------------ ------------ ----------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS $16,325,239 $547,032,186 $ 73,783,321 $620,815,507
=========== ============ ============ ============
See notes to financial statements
2
HOUSTON INDUSTRIES INCORPORATED SAVINGS PLAN
============================================
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1992
PARTICIPANT INVESTMENT FUNDS
-----------------------------------------------------
ALLOCATED
A ESOP B C
------------- ------------ ----------- -----------
ASSETS
INVESTMENTS (Note 1)
Common Stock (Notes 4 and 8)$283,612,416 $33,736,842
Mutual Funds $36,656,680
Common/Collective Trusts 49,847,881
U.S. Government Obligations $ 4,065,206
U.S. Government Agencies 2,902,223
Corporate Bonds and Notes 4,004,367
Cash Equivalents (Note 4) 3,692,380 367,820 1,631,745 1,540,375
------------ ------------ ----------- -----------
Total 287,304,796 34,104,662 88,136,306 12,512,171
------------ ------------ ----------- -----------
PARTICIPANT LOANS 11,707,581 7,723,947 1,177,461
------------ ------------ ----------- -----------
RECEIVABLES
Dividends and Interest
(Note 1) 20,507 890 621,937 91,723
Contributions (Note 2)
Employers 1,333,071
Participants 517,916 672,033 84,125
Inter Fund
----------- ------------ ----------- -----------
Total 538,423 1,333,961 1,293,970 175,848
------------ ------------ ----------- -----------
CASH 70
------------ ------------ ----------- -----------
TOTAL ASSETS 299,550,870 35,438,623 97,154,223 13,865,480
------------ ------------ ----------- -----------
LIABILITIES
PAYABLES (Note 2)
Forfeits to ESOP (13,323)
Affiliate Plan 46,589 5,830 29,548 6,890
Administrative Expenses 40,297 9,672
ESOP Loans from Company
Inter Fund 465,632
------------ ------------ ----------- -----------
TOTAL LIABILITIES 33,266 471,462 69,845 16,562
------------ ------------ ----------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS $299,517,604 $ 34,967,161 $97,084,378 $13,848,918
============ ============ =========== ===========
PARTICIPANT INVESTMENT FUNDS
---------------------------
UNALLOCATED
D TOTAL ESOP TOTAL
----------- ------------- ------------ -----------
ASSETS
INVESTMENTS (Note 1)
Common Stock (Notes 4 and 8) $317,349,258 $397,302,823 $714,652,081
Mutual Funds 36,656,680 36,656,680
Common/Collective Trusts 49,847,881 49,847,881
U.S. Government Obligations 4,065,206 4,065,206
U.S. Government Agencies 2,902,223 2,902,223
Corporate Bonds and Notes 4,004,367 4,004,367
Cash Equivalents (Note 4) $13,333,633 20,565,953 2,175,000 22,740,953
----------- ------------ ------------ ------------
Total 13,333,633 435,391,568 399,477,823 834,869,391
----------- ------------ ------------ ------------
PARTICIPANT LOANS 2,674,785 23,283,774 23,283,774
----------- ------------ ------------ ------------
RECEIVABLES
Dividends and Interest
(Note 1) 56,252 791,309 13,630 804,939
Contributions (Note 2)
Employers 1,333,071 1,333,071
Participants 104,210 1,378,284 1,378,284
Inter Fund 465,632 465,632
----------- ------------ ------------- ------------
Total 160,462 3,502,664 479,262 3,981,926
----------- ------------ ------------- ------------
CASH 70 70
----------- ------------ ------------- ------------
TOTAL ASSETS 16,168,880 462,178,076 399,957,085 862,135,161
----------- ------------ ------------- ------------
LIABILITIES
PAYABLES (Note 2)
Forfeits to ESOP (13,323) (13,323)
Affiliate Plan 2,270 91,127 91,127
Administrative Expenses 13,969 63,938 63,938
ESOP Loans from Company 332,488,713 332,488,713
Inter Fund 465,632 465,632
----------- ------------ ------------- ------------
TOTAL LIABILITIES 16,239 607,374 332,488,713 333,096,087
----------- ------------ ------------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS $16,152,641 $461,570,702 $ 67,468,372 $529,039,074
=========== ============ ============ ============
See notes to financial statements
3
HOUSTON INDUSTRIES INCORPORATED SAVINGS PLAN
============================================
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
PARTICIPANT INVESTMENT FUNDS
--------------------------------------------------------
ALLOCATED
A ESOP B C
------------ ------------- ------------- ------------
INVESTMENT INCOME (Note 1)
Dividends
Common Stock (Note 4) $ 24,090,174 $ 3,527,272
Mutual Funds $ 3,047,644
Interest (Note 4) 168,074 17,005 143,475 $ 994,153
NET APPRECIATION IN FAIR
VALUE OF INVESTMENTS
(Notes 4 and 8) 11,153,454 1,846,143 12,307,693 28,643
------------ ------------ ------------ -----------
Total 35,411,702 5,390,420 15,498,812 1,022,796
------------ ------------ ------------ -----------
CONTRIBUTIONS (Note 2)
Participants 14,294,697 13,559,271 1,757,726
Employers
Allocations of ESOP Stock 13,298,087
Cash 3,159,045
ESOP Contributions
------------ ------------ ------------ -----------
Total 14,294,697 16,457,132 13,559,271 1,757,726
------------ ------------ ------------ -----------
INTEREST ON PARTICIPANT LOANS 849,938 775,491 85,996
------------ ------------ ------------ -----------
FUND TRANSFERS
(To) From Affiliate Plan (53,937) (42,200) 22,579 (2,173)
(To) From Other Funds 881,756 (10,860) 523,320 76,173
------------ ------------ ------------ -----------
Total 827,819 (53,060) 545,899 74,000
------------ ------------ ------------ -----------
ADMINISTRATIVE EXPENSES
(Note 2) (211,859) (63,875)
------------ ------------ ------------ -----------
BENEFIT PAYMENTS
(Notes 2 and 5) (13,351,636) (894,186) (5,859,806) (828,391)
------------ ------------ ------------ -----------
INTEREST ON ESOP LOANS
------------ ------------ ------------ -----------
INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS 38,032,520 20,900,306 24,307,808 2,048,252
------------ ------------ ------------ -----------
NET ASSETS AVAILABLE FOR
BENEFITS:
BEGINNING OF YEAR 299,517,604 34,967,161 97,084,378 13,848,918
------------ ------------ ------------ -----------
END OF YEAR $337,550,124 $ 55,867,467 $121,392,186 $15,897,170
============ ============ ============ ===========
PARTICIPANT INVESTMENT FUNDS
----------------------------
UNALLOCATED
D TOTAL ESOP TOTAL
------------ ------------- ------------- -------------
INVESTMENT INCOME (Note 1)
Dividends
Common Stock (Note 4) $ 27,617,446 $ 31,767,683 $ 59,385,129
Mutual Funds 3,047,644 3,047,644
Interest (Note 4) $ 435,955 1,758,662 82,156 1,840,818
NET APPRECIATION IN FAIR
VALUE OF INVESTMENTS
(Notes 4 and 8) 25,335,933 14,644,259 39,980,192
----------- ------------ ------------ ------------
Total 435,955 57,759,685 46,494,098 104,253,783
----------- ------------ ------------ ------------
CONTRIBUTIONS (Note 2)
Participants 2,069,571 31,681,265 31,681,265
Employers
Allocations of ESOP Stock 13,298,087 (13,298,087)
Cash 3,159,045 3,159,045
ESOP Contributions 5,508,457 5,508,457
----------- ------------ ------------ ------------
Total 2,069,571 48,138,397 (7,789,630) 40,348,767
----------- ------------ ------------ ------------
INTEREST ON PARTICIPANT LOANS 134,680 1,846,105 1,846,105
----------- ------------ ------------ ------------
FUND TRANSFERS
(To) From Affiliate Plan (29,943) (105,674) (105,674)
(To) From Other Funds (1,470,389)
----------- ------------ ------------ ------------
Total (1,500,332) (105,674) (105,674)
----------- ------------ ------------ ------------
ADMINISTRATIVE EXPENSES
(Note 2) (30,818) (306,552) (306,552)
----------- ------------ ------------ ------------
BENEFIT PAYMENTS
(Notes 2 and 5) (936,458) (21,870,477) (21,870,477)
----------- ------------ ------------ ------------
INTEREST ON ESOP LOANS (32,389,519) (32,389,519)
----------- ------------ ------------ ------------
INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS 172,598 85,461,484 6,314,949 91,776,433
----------- ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS:
BEGINNING OF YEAR 16,152,641 461,570,702 67,468,372 529,039,074
----------- ------------ ------------ ------------
END OF YEAR $16,325,239 $547,032,186 $ 73,783,321 $620,815,507
=========== ============ ============ ============
See notes to financial statements.
4
HOUSTON INDUSTRIES INCORPORATED SAVINGS PLAN
============================================
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
PARTICIPANT INVESTMENT FUNDS
---------------------------------------------------------
ALLOCATED
A ESOP B C
------------- ------------- ------------ -------------
INVESTMENT INCOME (Note 1)
Dividends
Common Stock (Note 4) $ 19,199,106 $ 1,635,024
Mutual Funds $ 1,647,511
Interest (Note 4) 296,453 16,444 276,635 $ 978,957
NET APPRECIATION IN FAIR
VALUE OF INVESTMENTS
(Notes 4 and 8) 8,225,201 1,347,267 6,389,146 163,689
------------ ------------ ----------- ------------
Total 27,720,760 2,998,735 8,313,292 1,142,646
------------ ------------ ----------- ------------
CONTRIBUTIONS (Note 2)
Participants 12,961,093 13,519,190 1,706,260
Employers
Allocations of ESOP Stock 13,774,804
Cash 2,346,343
ESOP Contributions
------------ ------------ ----------- ------------
Total 12,961,093 16,121,147 13,519,190 1,706,260
------------ ------------ ----------- ------------
INTEREST ON PARTICIPANT LOANS 748,963 744,704 83,196
------------ ------------ ----------- ------------
FUND TRANSFERS
(To) Affiliate Plan (36,914) (7,003) (29,219) (6,282)
(To) From Other Funds 554,656 (14,708) 1,849,347 (470,260)
------------ ------------ ----------- ------------
Total 517,742 (21,711) 1,820,128 (476,542)
------------ ------------ ----------- ------------
ADMINISTRATIVE EXPENSES
(Note 2) (234,084) (61,311)
------------ ------------ ----------- ------------
BENEFIT PAYMENTS
(Notes 2 and 5) (57,949,830) (3,058,142) (19,911,182) (2,615,031)
------------ ------------ ----------- ------------
INTEREST ON ESOP LOANS
------------ ------------ ----------- ------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR
BENEFITS (16,001,272) 16,040,029 4,252,048 (220,782)
------------ ------------ ----------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS:
BEGINNING OF YEAR 315,518,876 18,927,132 92,832,330 14,069,700
------------ ------------ ----------- ------------
END OF YEAR $299,517,604 $ 34,967,161 $97,084,378 $ 13,848,918
============ ============ =========== ============
PARTICIPANT INVESTMENT FUNDS
----------------------------
UNALLOCATED
D TOTAL ESOP TOTAL
------------ ------------- ------------- -------------
INVESTMENT INCOME (Note 1)
Dividends
Common Stock (Note 4) $ 20,834,130 $ 26,384,161 $ 47,218,291
Mutual Funds 1,647,511 1,647,511
Interest (Note 4) $ 569,344 2,137,833 93,828 2,231,661
NET APPRECIATION IN FAIR
VALUE OF INVESTMENTS
(Notes 4 and 8) 16,125,303 13,935,682 30,060,985
------------ ------------ ------------ ------------
Total 569,344 40,744,777 40,413,671 81,158,448
------------ ------------ ------------ ------------
CONTRIBUTIONS (Note 2)
Participants 2,493,424 30,679,967 30,679,967
Employers
Allocations of ESOP Stock 13,774,804 (13,774,804)
Cash 2,346,343 2,346,343
ESOP Contributions 5,000,959 5,000,959
------------ ------------ ------------ ------------
Total 2,493,424 46,801,114 (8,773,845) 38,027,269
------------ ------------ ------------ ------------
INTEREST ON PARTICIPANT LOANS 149,487 1,726,350 1,726,350
------------ ------------ ------------ ------------
FUND TRANSFERS
(To) Affiliate Plan (2,270) (81,688) (81,688)
(To) From Other Funds (1,919,035)
------------ ------------ ------------ ------------
Total (1,921,305) (81,688) (81,688)
------------ ------------ ------------ ------------
ADMINISTRATIVE EXPENSES
(Note 2) (51,365) (346,760) (346,760)
------------ ------------ ------------ ------------
BENEFIT PAYMENTS
(Notes 2 and 5) (3,561,236) (87,095,421) (87,095,421)
------------ ------------ ------------ ------------
INTEREST ON ESOP LOANS (32,932,570) (32,932,570)
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE
FOR BENEFITS (2,321,651) 1,748,372 (1,292,744) 455,628
------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS:
BEGINNING OF YEAR 18,474,292 459,822,330 68,761,116 528,583,446
------------ ------------ ------------ ------------
END OF YEAR $ 16,152,641 $461,570,702 $ 67,468,372 $529,039,074
============ ============ ============ ============
See notes to financial statements.
5
HOUSTON INDUSTRIES INCORPORATED SAVINGS PLAN
============================================
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1992
----------------------------------------------
1. ACCOUNTING POLICIES
In accordance with the provisions of the Houston Industries Incorporated
Savings Plan (Plan), the financial records of the Plan are generally kept and
the valuations of accounts of participating employees (Participants) are
determined on the cash basis. The accompanying financial statements of the Plan
are presented on the accrual basis and, accordingly, memorandum entries have
been made to the accounting records of the Plan to reflect the accrual of
dividends and interest earned but not received and administrative expenses
incurred but not paid. Dividend income includes five quarterly dividends of
$0.75 per share due to a change in the timing of Houston Industries
Incorporated's Board of Directors' declaration of dividends. Dividend payout was
$3.00 per share in 1993.
The Plan recognizes net appreciation or depreciation in the fair value of
its investments. Investments are reflected at fair value in the financial
statements. Fair value for securities listed on a national exchange is
principally determined using the last recorded sales price. Fair value for
mutual funds is determined using net asset value. Fair value for
common/collective trusts is determined using unit values as reported by the
common/collective trusts' sponsors.
Certain amounts in the 1992 financial statements have been reclassified to
conform with the 1993 presentation.
2. SUMMARY OF THE PLAN
The Plan was amended and restated effective January 1, 1994. See Note 7 for
a description of the changes to the Plan.
Investment Program
- - ------------------
The Plan has four investment funds, Funds A, B, C and D (Funds), as
follows:
FUND A: Invested and reinvested in shares of common stock of Houston Industries
Incorporated (Company).
FUND B: Invested and reinvested in, directly or indirectly through collective
investment media such as mutual funds and any common, collective, group or
commingled trust fund that invests primarily in, (i) common stock and preferred
stock and limited partnership interests, (ii) leaseholds, fees and other
interests in real estate, (iii) income-producing debt securities or (iv) other
evidences of ownership of, or interest in, any property, such as trust and
participation certificates and conditional sale agreements, all exclusive of
direct investment in securities of the Company. It is intended that the assets
of Fund B be predominantly invested in equity securities and/or real estate.
Investment practices and techniques that may be utilized in Fund B include but
are not limited to (i) securities lending, (ii) investments in futures
contracts, forwards contracts, and options, (iii) swap agreements and (iv)
indexed securities in which value is linked to currencies, interest rates,
commodities indices, or other financial indicators.
6
FUND C: Invested and reinvested in, directly or indirectly through collective
investment media such as mutual funds and any common, collective, group or
commingled trust fund that invests primarily in income-producing debt securities
including but not limited to (i) obligations issued or fully guaranteed by the
United States of America or any agency thereof, (ii) debt securities issued by
corporations, partnerships, trans-national organizations or other entities,
(iii) interests in notes secured by mortgages on real estate and equity
interests in real estate, (iv) asset-backed securities, (v) debt securities
issued by foreign governments or any agency thereof or (vi) demand or time
deposits, repurchase agreements or commercial paper. Investment practices and
techniques that may be utilized in Fund C include but are not limited to (i)
securities lending, (ii) investments in futures contracts, forwards contracts,
and options, (iii) swap agreements, and (iv) indexed securities in which value
is linked to currencies, interest rates, commodities indices, or other financial
indicators.
FUND D: Invested and reinvested in, directly or indirectly through collective
investment media such as mutual funds and any common, collective, group or
commingled trust fund that invests primarily in, (i) money market or other
short-term investments (including but not limited to repurchase agreements,
bankers acceptances, certificates of deposit, commercial paper, demand or time
deposits, obligations issued or fully guaranteed by the United States of America
or any agency thereof, securities with an interest rate or dividend rate that
resets to a market-based rate within one year from the date of issuance or the
most recent date on which interest rates or dividend rates were set, medium-to
long-term securities which at the time of purchase have less than one year to
maturity and other securities which at the time of purchase have less than one
year to maturity) or (ii) annuity or investment contracts with life insurance
companies or other financial institutions under which certain guaranteed
interest is provided and a repayment of the principal amount is guaranteed.
Pending the acquisition of an investment in an orderly manner for the
Funds, the Trustee (as hereinafter defined) and the ESOP Trustee (as hereinafter
defined) may temporarily hold funds uninvested or in repurchase agreements,
bankers acceptances, certificates of deposit, commercial paper, demand or time
deposits, obligations issued or fully guaranteed by the United States of America
or any agency thereof, master notes or like holdings either separately or
through the medium of a common, collective, group or commingled trust fund that
invests primarily in such investments.
The assets of the Plan are held in trust by Texas Commerce Bank National
Association (Trustee) and State Street Bank and Trust Company (ESOP Trustee).
The Benefits Committee (Committee) (formerly the Compensation and Benefits
Committee) appointed by the Board of Directors of the Company, as the
administrator of the Plan, has appointed independent investment managers to
manage all or a portion of the assets of Funds B, C and D. The Committee has
also retained an investment consultant to provide investment advice with respect
to Funds B, C and D. The fees charged by the investment managers and the
consultant are paid by the Trustee out of Funds B, C and D.
In 1993 and 1992, a Participant had the right to direct the Trustee to
invest his contributions, but not matching contributions made by his employer
(Employer Contributions), in accordance with one of ten options.
7
At December 31, 1993 and 1992, the respective number of Participants in the Plan
selecting the options set forth below are as follows:
Number of Participants
----------------------
Investment Option 1993 1992
- - ----------------------------------- ---------- ----------
100% in Fund A................... 2,645 2,962
100% in Fund B................... 1,768 2,081
100% in Fund C................... 77 102
100% in Fund D................... 193 289
50% in Fund A and 50% in Fund B.. 2,994 3,307
50% in Fund A and 50% in Fund C.. 272 282
50% in Fund A and 50% in Fund D.. 353 495
50% in Fund B and 50% in Fund C.. 497 546
50% in Fund B and 50% in Fund D.. 587 806
50% in Fund C and 50% in Fund D.. 115 164
In 1993 and 1992, all Employer Contributions were invested in the ESOP (as
hereinafter defined).
Employee Stock Ownership Plan
-----------------------------
In October 1990, the Plan was amended and restated to add an employee stock
ownership component (ESOP) to the Plan. In connection with the ESOP, the
Company also executed an ESOP Trust Agreement (ESOP Trust) between the Company
and the ESOP Trustee.
The ESOP is a funding mechanism for a portion of the Employer Contributions
to the Plan. The ESOP Trustee purchased shares of the Company's common stock in
open market transactions with funds provided by loans (Loans) from the Company.
The ESOP Trustee completed the purchases of shares of the Company's common stock
in December 1991 after purchasing 9,381,092 shares at a cost of approximately
$350 million. At December 31, 1993 and 1992, the balance of the Loans was
approximately $332 million. The Loans bear interest at a fixed rate of 9.783%.
The Loans are expected to be repaid over a period of up to twenty years.
Although prepayments of principal are permitted, no principal repayments are
required until 1997.
The Company will make periodic cash contributions to the unallocated ESOP
(ESOP Contributions). The ESOP Contributions, together with the earnings
received by the ESOP Trustee, will be used to pay principal and interest on the
Loans. As debt service payments on the Loans are made, the Company will release
shares of common stock from the pledge securing the Loans and such shares will
be allocated to Participants' accounts as Employer Contributions. No allocated
shares will serve as collateral for the Loans. In addition to the ESOP
Contributions, the Company may elect to make Employer Contributions to the
Allocated ESOP (as hereinafter defined) in the form of cash which may be used to
purchase shares of the Company's common stock in the open market.
That portion of the ESOP which has been allocated to Participants (Allocated
ESOP) as Employer Contributions and that portion of the ESOP which has not been
allocated to Participants (Unallocated ESOP) are presented separately in the
financial statements.
8
Funding
- - -------
Contributions to the Plan are made by Participants and by the Company and
each subsidiary of the Company that has adopted the Plan (Employers). Each
Participant may contribute to the Plan annually an amount equal to any whole
percent up to and including 6% of his total compensation. In 1993 and 1992, this
amount, referred to as the Participant's "Basic Contributions", could be made up
of Pre-tax and After-tax Contributions (as hereinafter defined), provided that
the total amount contributed was less than or equal to 6% of the Participant's
compensation. Employer Contributions are in an amount equal to 70% of
Participants' Basic Contributions.
In 1993 and 1992, each Participant could make excess contributions annually
to the Plan in an amount equal to any whole percent up to and including 10% of
his total compensation. This amount, referred to as the Participant's "Excess
Contributions", could be made up of Pre-tax and After-tax Contributions,
provided that the total amount contributed was less than or equal to 10% of the
Participant's compensation. Employers do not match excess contributions.
In 1993 and 1992, Participants could make their contributions to the Plan
through (i) payroll deductions (After-tax Contributions), (ii) salary deferral
(Pre-tax Contributions) or (iii) a combination of After-Tax and Pre-tax
Contributions.
Pre-tax Contributions made to the Plan by salary deferral decrease a
Participant's income for federal income tax purposes by the amount of the
Participant's Pre-tax Contributions. Pre-tax Contributions are, however, subject
to Federal Insurance Contributions Act withholding tax.
The maximum amount that a taxpayer may elect to defer as a Pre-tax
Contribution for any taxable year under all cash or deferred arrangements (such
as the Plan) in which the taxpayer participates was limited to $8,994 in 1993
and $8,728 in 1992. The maximum limit for 1994 is $9,240, to be adjusted
annually thereafter for inflation. If the total amount of Pre-tax Contributions
exceeds the maximum limit during any calendar year, such excess will be included
in the taxpayer's gross income for the year to which the deferrals relate, and
will be returned to the Participant, plus any income or minus any loss allocable
thereto, by April 15 of the following year.
Participation
- - -------------
Any eligible employee of an Employer may participate in the Plan beginning on
any January 1 if he was employed by an Employer on or before the immediately
preceding October 1. Ineligible employees include persons not regularly and
principally employed by an Employer and leased employees. If an individual is
transferred to eligible employment covered by the Plan from employment not
covered by the Plan, he shall be eligible to participate in the Plan on the date
of his transfer if he was employed on or before the October 1 in the year
preceding his transfer. Former Participants who are reemployed by an Employer
may recommence participation in the Plan immediately, and their vesting service
and any portion of their interest in the Employer Contributions that was
forfeited will be reinstated.
9
Distributions and Forfeitures
- - -----------------------------
A terminated Participant or the beneficiary of a deceased Participant is
entitled to a distribution of the value of the Participant's entire account in
case of disability, voluntary early retirement as described in the Plan,
retirement at or after age 65 or death. A Participant's surviving spouse is
deemed to be the Participant's beneficiary unless the Participant has provided
the Committee with a written designation of another beneficiary or
beneficiaries. Such written designation must contain the spouse's written
consent. In case of termination of service for other reasons, a Participant is
entitled to a distribution of the value of his contribution account plus the
vested portion of his Employer Contribution account. Vesting is determined by
vesting service years in accordance with the following schedule:
Vesting Service Vested
Years* Percentage
- - ----------------------------------- ----------
Less than two............. 0
Two but less than three... 20
Three but less than four.. 40
Four but less than five... 60
Five but less than six.... 80
Six or more............... 100
---
*Generally, a vesting service year will be a Plan year during
which a Participant completes at least 1,000 hours of service.
Any portion of the value of Employer Contributions not vested will be
forfeited. The amount forfeited by a Participant is applied so as to reduce the
respective Employer's subsequent contribution to the Plan. Forfeitures in 1993
and 1992 were approximately $161,000 and $643,500, respectively.
A terminated Participant must make a written request to receive a final
distribution from the Plan. The written request may be made at any time, but
must be made no later than the end of the year in which the terminated
Participant attains the age of 65. If no request is received by the end of the
year in which the terminated Participant attains age 65, an automatic
distribution will be made to the terminated Participant and mailed to his last
known address. If the vested value of the Participant's account does not exceed
$3,500, as valued as of the last day of the month preceding termination, an
automatic distribution will be made to the terminated Participant. Payments to a
beneficiary will be made as soon as practicable after the Participant's death
and if the distribution is more than $3,500, the beneficiary must consent to the
distribution.
An alternate payee may also receive a distribution from the Plan pursuant to a
"Qualified Domestic Relations Order".
10
Withdrawals and Loans
- - ---------------------
A Participant may make in-service withdrawals from amounts attributable to his
After-tax Contributions and may borrow against amounts attributable to his Pre-
tax Contributions. The loans bear interest at a rate determined by the Committee
on a uniform and consistent basis and set forth in written procedures
promulgated by the Committee as required by applicable governmental regulations.
The maximum amount that a Participant may borrow from his Pre-tax Contribution
account is the lesser of (i) $50,000, reduced by the excess, if any, of the
highest outstanding balance of loans to the Participant from all plans
maintained by the Company or an affiliated entity during the one-year period
ending on the day before the date on which such loan is made over the
outstanding balance of such loans from the plans on the date on which such loan
is made, (ii) 50% of the value of the Participant's vested account balance under
the Plan, or (iii) 100% of the value of the Participant's Pre-tax Contribution
account. The loans are to be secured by the pledge of a portion of the
Participant's right, title and value of the Participant's vested account balance
under the Plan as determined immediately after the loan is made. Loans may be
repaid over a period of up to four years. No loan will be made in a sum less
than $500.
Diversification of Investments
- - ------------------------------
A Participant who is 55 years or older and who has participated in the Plan
for at least ten years has the option to diversify the investments in his ESOP
account and his Employer Contribution account by transferring up to 25% of the
balances of those accounts (less any amount already transferred) to any of the
other three Funds. After five years of eligibility to make such transfers, the
maximum percentage increases to 50% (less any amount already transferred).
Elections must be made in the first 90 days of a year. A Participant may make
this election annually, and second or subsequent elections will cause transfers
only to the extent the election exceeds amounts previously transferred.
Termination of the Plan
- - -----------------------
The Company may terminate the Plan at any time and must give written notice to
the Trustee. In the event of termination of the Plan, the assets held by the
Trustee under the Plan will be valued and fully vested, and each Participant
will be entitled to distributions respecting his account.
3. FEDERAL INCOME TAXES
No provision for federal income taxes has been made in the financial
statements of the Plan. Prior to the amendment and restatement of the Plan to
include the ESOP, the Internal Revenue Service determined and informed the
Company by a letter dated March 26, 1990 that the Plan is qualified and the
trust fund (Trust) established under the Plan is tax-exempt, under the
appropriate sections of the Internal Revenue Code of 1986, as amended (Code).
The Plan has been amended since receiving the determination letter. However, the
Committee, the Company and the Company's counsel believe that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Code. Therefore, they believe that the Plan was qualified
and the related Trust was tax-exempt as of the financial statement dates.
11
As a result, the Participant's Pre-tax Contributions, up to a specified
maximum amount each calendar year, and the Employer Contributions to the Trust
on behalf of a Participant are not currently taxable to a Participant when made,
and income from any source accruing to a Participant's account is not taxable
when realized by the Trust. The After-tax Contributions made by a Participant
will not be deductible by the Participant. The continued status of the Trust as
a tax-exempt trust and the Plan as a qualified plan are contingent upon the
continuing operation of the Trust and the Plan in accordance with applicable
provisions of the Code.
4. RELATED PARTY TRANSACTIONS
During 1993, the Trustee and the ESOP Trustee purchased shares of the
Company's common stock directly from the Company for Fund A and the Allocated
ESOP at prices equal to the closing price on the New York Stock Exchange on the
dates the Trustee and the ESOP Trustee delivered to the Company written
acceptance of the Company's offers to sell. The Company withdrew such offers
effective January 1, 1994. The ESOP Trustee used cash from earnings and Employer
Contributions held in the Allocated ESOP to purchase shares of the Company's
common stock in the open market for the Allocated ESOP; see Note 2. The number
of shares of the Company's common stock purchased and the related cost are shown
below:
Fund A Allocated ESOP
----------------------- ------------------
Shares Cost Shares Cost
------- -------------- ------ ----------
Direct Sales By Company
to Trust 484,200 $22,673,275 22,600 $1,055,550
Open Market Purchases -0- -0- 16,759 764,884
During 1993, the ESOP Trustee sold in the open market 2,134 shares of the
Company's common stock valued at $98,588 (cost $79,757).
During 1992, the Trustee and the ESOP Trustee purchased in the open market
shares of the Company's common stock for Fund A and the Allocated ESOP; the
Trustee also purchased shares of the Company's common stock for Fund A from the
Allocated ESOP. The number of shares of the Company's common stock purchased and
the related cost are shown below:
Fund A Allocated ESOP
----------------------- -------------------
Shares Cost Shares Cost
------- -------------- ------- ----------
Open Market Purchases 432,351 $19,292,039 14,394 $ 609,270
Purchases from Allocated
ESOP 5,763 245,220 (5,763) (245,220)
During 1992, the Trustee sold in the open market 582,271 shares of the
Company's common stock valued at $25,003,881 (cost $16,359,478). During 1993
and 1992, the Trustee and the ESOP Trustee distributed 35,667 shares of the
Company's common stock (valued at $1,642,820) and 585,878 shares of the
Company's common stock (valued at $24,990,931), respectively.
12
As of December 31, 1993, an aggregate of 16,064,005 shares of the Company's
common stock was held by the Plan, consisting of 6,632,665 shares held by the
Trustee and 9,431,340 shares held by the ESOP Trustee. As of December 31, 1992,
an aggregate of 15,578,247 shares of the Company's common stock was held by the
Plan, consisting of 6,182,287 shares held by the Trustee and 9,395,960 shares
held by the ESOP Trustee. These shares represented 5.08% and 7.22%,
respectively, of the Company's common stock outstanding at December 31, 1993 and
4.77% and 7.25%, respectively, of the Company's common stock outstanding at
December 31, 1992.
During 1993 and 1992, the Plan and the ESOP purchased and sold units of short-
term investment funds managed by the Trustee and the ESOP Trustee as temporary
investments, as shown below:
1993 1992
------------------------- -------------------------
Plan ESOP Plan ESOP
------------ ----------- ------------ -----------
Purchases $167,686,249 $30,324,545 $173,983,300 $28,670,000
Sales 156,371,604 28,315,358 176,735,142 29,998,000
5. BENEFITS PAYABLE
As of December 31, 1993 and 1992, net assets available for benefits included
benefits of $3,219,798 and $2,253,362, respectively, due to Participants.
6. EARLY RETIREMENT AND SEVERANCE PLANS
In January 1992, the Company, and its subsidiaries Houston Lighting & Power
Company and Utility Fuels, Inc. offered certain employees a voluntary early
retirement program and announced a severance plan for employees affected by
reductions in the workforce. Approximately 500 employees elected to take early
retirement effective April 1, 1992. The Plan was amended effective March 30,
1992 to provide for full vesting of the employer matching accounts of those
Participants who elected to retire under the voluntary early retirement program.
In March and April 1992, approximately 1,000 additional employees were notified
of their involuntary termination. Such employees continued their participation
in the Plan for a period of sixty (60) days following notification.
7. AMENDMENT AND RESTATEMENT OF PLAN
Pursuant to an amendment and restatement of the Plan, effective January 1,
1994, the KBLCOM Incorporated Savings Plan (KBLCOM Plan) was merged with and
consolidated into the Plan, the merged plan being the Houston Industries
Incorporated Savings Plan. The assets of the KBLCOM Plan became assets of the
Plan.
Changes affecting Participants include:
(1) vesting service years will be determined based on years of covered
employment,
(2) a Participant with less than five years of service who withdraws Basic
After-tax Contributions is suspended from Plan participation for six
months,
13
(3) loans may be repaid over a period of up to five years, and
(4) the Plan will accept "direct rollovers" from other qualified plans.
The Plan has been amended by the First Amendment effective April 6, 1994
which provided for the following:
(1) Participants may allocate future Participant contributions to any or
all of the Funds in 10% increments and may change such allocations
monthly,
(2) Participants may transfer amounts attributable to past Participant
contributions among the Funds monthly, and
(3) the Board of Directors of the Company delegated to the Committee the
authority to amend the Plan to change the number and composition of the
Funds.
8. SUBSEQUENT EVENTS
Subsequent to December 31, 1993 the market value of the Company's common
stock has declined. As of June 15, 1994, unrealized depreciation in Fund A,
Allocated ESOP, and Unallocated ESOP was $90,370,061, $15,174,040, and
$113,327,968, respectively.
14
Item 27a - Schedule of Assets Held for Investment Purposes;
EIN: 74-1885573; PN: 015
HOUSTON INDUSTRIES INCORPORATED SAVINGS PLAN
============================================
SUPPLEMENTAL SCHEDULE OF INVESTMENTS
DECEMBER 31, 1993
FUND A CURRENT
- - ------
COST VALUE
------------ ------------
Common Stock
- - ------------
*Houston Industries (6,632,665 shares) $200,715,851 $315,880,671
------------ ------------
Cash Equivalents
- - ----------------
*Texas Commerce Bank Short Term Investor Money Market
Group Fund($2,704,513 par value) 2,704,513 2,704,513
------------ ------------
TOTAL FUND A INVESTMENTS 203,420,364 318,585,184
------------ ------------
ALLOCATED ESOP
- - --------------
Common Stock
- - ------------
*Houston Industries (1,113,691 shares) 41,961,565 53,039,534
------------ ------------
Cash Equivalents
- - ----------------
*State Street Short Term Investment Fund
($655,068 par value) 655,068 655,068
*Texas Commerce Bank Short Term Investor Money Market
Group Fund ($1,065 par value) 1,065 1,065
------------ ------------
Total Cash Equivalents 656,133 656,133
------------ ------------
TOTAL ALLOCATED ESOP INVESTMENTS 42,617,698 53,695,667
------------ ------------
FUND B
- - ------
Mutual Funds
- - ------------
Acorn Fund (560,447 shares) 4,824,077 7,818,229
Fidelity Equity-Income Fund (266,489 shares) 7,281,497 9,017,981
Harbor International Fund (233,609 shares) 5,249,201 5,681,363
New York Venture Fund (1,059,773 shares) 13,400,000 12,685,478
Templeton Foreign Equity Series (452,511 shares) 5,058,222 6,027,448
Twentieth Century Growth Investors Fund
(186,236 shares) 3,567,847 4,171,682
Vanguard Windsor Fund (698,898 shares) 8,893,460 9,721,678
------------ ------------
Total Mutual Funds 48,274,304 55,123,859
------------ ------------
Common/Collective Trusts
- - ------------------------
Accel Fund (476,271 units) 5,001,333 6,853,698
Beutel Trust (789,201 units) 8,339,069 11,788,776
Dietche & Field Investment Trust A (741,444 units) 7,971,457 14,266,128
15
Item 27a - Schedule of Assets Held for Investment Purposes;
EIN: 74-1885573; PN: 015
CURRENT
COST VALUE
---------- -----------
Oechsle International Group Trust Fund-Core-Plus
Account (173,534 units) 4,158,824 5,123,360
Sarofim Equity Fund (9,015 units) 9,513,043 14,314,592
---------- -----------
Total Common/Collective Trusts 34,983,726 52,346,554
---------- -----------
Cash Equivalents
- - ----------------
Northern Trust Collective Short Term Investment Fund
($200,000 par value) 200,000 200,000
*Texas Commerce Bank Short Term Investor Money Market
Group Fund ($1,785,455 par value) 1,785,455 1,785,455
---------- -----------
Total Cash Equivalents 1,985,455 1,985,455
---------- -----------
TOTAL FUND B INVESTMENTS 85,243,485 109,455,868
---------- -----------
FUND C
- - ------
U.S. Government Obligations
- - ---------------------------
U.S. Treasury 6.875% note due 3/31/97
($725,000 par value) 779,668 772,574
U.S. Treasury 8.25% note due 7/15/98
($425,000 par value) 484,414 478,388
U.S. Treasury 7.00% note due 4/15/99
($920,000 par value) 999,062 992,303
U.S. Treasury 7.875% bond due 2/15/21
($70,000 par value) 79,953 81,474
U.S. Treasury 8.125% bond due 8/15/21
($765,000 par value) 865,018 916,088
---------- -----------
Total U.S. Government Obligations 3,208,115 3,240,827
---------- -----------
U.S. Government Agencies
- - ------------------------
Federal Home Loan Mortgage Corp 9.70% multiclass
mortgage participation certificate guaranteed
series 17 class 17-H due 6/15/18
($300,000 par value) 321,469 318,279
Federal Home Loan Mortgage Corp 6.50% multiclass
series 1580-A class A due 9/15/98
($505,000 par value) 487,790 479,160
Federal National Mortgage Assn 6.50% pool #232698
due 9/1/08 ($495,000 par value) 474,162 476,664
Federal National Mortgage Assn 6.50% pass through
certificate pool #247313 due 11/1/08
($757,500 par value) 769,372 762,063
Federal National Mortgage Assn 8.50% guaranteed
remic pass through certificate remic trust 1990-112
class 112-E due 7/25/19 ($500,000 par value) 524,844 521,483
Federal National Mortgage Assn 10.00% guaranteed
mortgage pass through certificate pool #129851
due 6/1/20 ($360,000 par value) 170,341 170,197
Government National Mortgage Assn 7.50% pool #326440
due 6/15/23 ($320,687 par value) 315,357 314,268
Government National Mortgage Assn 7.00% pool #330301
due 9/15/23 ($396,001 par value) 398,944 401,228
16
Item 27a - Schedule of Assets Held for Investment
Purposes;
EIN: 74-1885573; PN: 015
CURRENT
COST VALUE
---------- ----------
Government National Mortgage Assn 7.50% pool #364629
due 9/15/23 ($350,830 par value) 361,122 363,037
Government National Mortgage Assn 6.50% pool #363130
due 12/15/23 ($396,001 par value) 390,865 392,892
Resolution Trust mortgage pass through securities
income commercial certificate series 1992-C7
class A-2 due 6/25/23 ($500,000 par value) 440,908 446,375
Resolution Trust mortgage pass through securities
income commercial certificate series 1992-C8
class A-2 variable rate due 12/25/23
($500,000 par value) 475,810 477,598
Resolution Trust mortgage pass through securities
income commercial certificate series 1993-C2
class A-2 floating rate due 3/25/25 ($500,000
par value) 471,942 471,379
---------- ----------
Total U.S. Government Agencies 5,602,926 5,594,623
---------- ----------
Corporate Bonds and Notes
- - -------------------------
Bellsouth Capital Funding 8.90% medium term note
due 3/1/98 ($100,000 par value) 114,573 113,340
British Telecom Finance 9.375% guaranteed note
due 2/15/99 ($500,000 par value) 542,790 579,510
Export Import Bank of Japan 8.00% insc #284734 euro
#17056 due 6/4/00 ($93,750 par value) 88,505 97,031
Exxon Capital 6.50% note due 8/15/97
($500,000 par value) 527,370 518,020
Ford Motor Credit 8.00% note due 10/1/96
($500,000 par value) 539,950 536,585
General Electric Capital 8.70% note due 2/15/03
($500,000 par value) 583,265 582,285
Premier Auto Trust 1993-4 4.65% asset backed note
class A-2 due 2/2/99 ($350,000 par value) 350,378 348,900
Republic New York 9.75% subordinated note due 12/1/00
($500,000 par value) 609,435 603,530
Salomon Brothers Mortgage Securities IV 9.50% income
conduit pass through certificate series 1979-86
due 8/1/16 ($1,100,000 par value) 61,907 63,566
Sears Mortgage Security 9.50% guaranteed mortgage
pass through certificate series 86-E due 8/25/16
($880,000 par value) 80,292 81,850
Shawmut National 9.15% remic tr 1990-A home equity
loan pass through certificate class A due 11/15/05
($715,000 par value) 99,532 98,810
Spain (Kingdom) 9.125% due 8/1/00 ($500,000 par value) 583,730 587,135
Texaco Capital 7.75% note due 2/15/33
($400,000 par value) 431,396 411,000
US West Communications 4.75% debenture due 9/30/33
($400,000 par value) 390,716 383,080
---------- ----------
Total Corporate Bonds and Notes 5,003,839 5,004,642
---------- ----------
Cash Equivalents
- - ----------------
*Texas Commerce Bank Short Term Investment Fund K
($609,929 par value) 609,929 609,929
---------- ----------
TOTAL FUND C INVESTMENTS 14,424,809 14,450,021
---------- ----------
17
Item 27a - Schedule of Assets Held for Investment
Purposes;
EIN: 74-1885573; PN: 015
CURRENT
COST VALUE
------------ ------------
FUND D
- - ------
Cash Equivalents
- - ----------------
*Texas Commerce Bank Short Term Investor Money Market
Group Fund ($13,377,022 par value) 13,377,022 13,377,022
------------ ------------
TOTAL FUND D INVESTMENTS 13,377,022 13,377,022
------------ ------------
TOTAL PARTICIPANT INVESTMENTS 359,083,378 509,563,762
------------ ------------
UNALLOCATED ESOP
- - ----------------
Common Stock
- - ------------
*Houston Industries (8,317,649 shares) 310,529,233 396,128,034
------------ ------------
Cash Equivalents
- - ----------------
*State Street Short Term Investment Fund
($3,896,119 par value) 3,896,119 3,896,119
------------ ------------
TOTAL UNALLOCATED ESOP INVESTMENTS 314,425,352 400,024,153
------------ ------------
TOTAL SAVINGS PLAN INVESTMENTS $673,508,730 $909,587,915
============ ============
*PARTICIPANT LOANS, 7% to 11-1/2%,
maturing 1994 through 1998 $ 26,593,376 $ 26,593,376
============ ============
*Party-in-Interest
18
Item 27a - Schedule of Assets Held for Investment Purposes; EIN: 74-1885573;
PN: 015
HOUSTON INDUSTRIES INCORPORATED SAVINGS PLAN
============================================
SUPPLEMENTAL SCHEDULE OF ASSETS PURCHASED AND SOLD
FOR THE YEAR ENDED DECEMBER 31, 1993
- - --------------------------------------------------------------------------------------------------------------
DESCRIPTION SHARES/ SALES
PAR VALUE COST PROCEEDS
- - --------------------------------------------------------------------------------------------------------------
SHORT-TERM SECURITIES
- - ---------------------
Daiwa Securities repurchase agreements:
3.3% collateralized by FNMA pass-through pool #124615 7% due 12/1/07 4,000,000 $ 4,000,000 $ 4,000,000
3.125% collateralized by FNMA guaranteed remic trust 1989-24
class 24-X due 4/25/16 4,000,000 4,000,000 4,000,000
Kidder Peabody open repurchase agreement collateralized by Sears
Credit Account Trust 1991-B 8.6% due 5/15/96 9,286,794 9,286,794 9,286,794
Prudential Securities open repurchase agreement collateralized by
GE Capital Mortgage Services income multiclass pass-through 91-7
class 7TG due 12/25/22 22,810,700 22,810,700 22,810,700
Yamaichi International open repurchase agreements:
collateralized by Nippon Oil (Del) Ltd (The Mitsui Kobe Bank)
discount note due 1/29/93 4,633,413 4,633,413 4,633,413
collateralized by Okura Fuji (letter of credit) restricted
commercial paper due 3/22/93 4,642,234 4,642,234 4,642,234
collateralized by Shimizu DKB (letter of credit) restricted
due 4/12/93 4,637,326 4,637,326 4,637,326
collateralized by West Deutsche Landesbank Yankee
certificate of deposit due 4/7/93 4,636,502 4,636,502 4,636,502
collaterized by Canon Leasing discount note due 1/1/93 4,633,889 4,633,889 4,633,889
collaterized by Kajima USA discount note due 4/20/93 4,643,085 4,643,085 4,643,085
U. S. GOVERNMENT OBLIGATIONS
- - ----------------------------
U. S. Treasury 4.625% note due 11/30/94 2,040,000 2,062,222 2,064,927
U. S. Treasury 4.125% note due 6/30/95 515,000 517,454 516,548
U. S. Treasury 4.25% note due 7/31/95 200,000 200,056 200,906
U. S. Treasury 5.125% note due 11/15/95 715,000 726,031 729,183
U. S. Treasury 4.625% note due 2/15/95 725,000 733,061 732,039
U. S. Treasury 8% note due 10/15/96 500,000 549,844 549,531
U. S. Treasury 6.875% note due 4/30/97 500,000 530,312 534,922
U. S. Treasury 6.375% note due 1/15/00 375,000 397,090 404,941
U. S. Treasury 8.5% note stripped principal payment due 2/15/00 800,000 517,880 529,168
U. S. Treasury securities stripped interest payment tint series 15
due 2/15/02 620,000 356,599 355,613
U. S. Treasury 7.50% note due 5/15/02 600,000 677,812 667,656
U. S. Treasury 8.125% bond due 8/15/19 1,000,000 1,235,375 1,223,191
19
Item 27a - Schedule of Assets Held for Investment Purposes; EIN: 74-1885573;
PN: 015
- - --------------------------------------------------------------------------------------------------------
DESCRIPTION SHARES/ SALES
PAR VALUE COST PROCEEDS
- - --------------------------------------------------------------------------------------------------------
U. S. GOVERNMENT AGENCIES
- - -------------------------
Federal Home Loan Mortgage Assn 7.00% multiclass mortgage
participation certificate gold remic series 1460
class 1460-U due 1/15/05 683,000 106,364 72,303
Federal National Mortgage Assn 6.50% TBA due 5/1/07 750,000 743,789 755,625
Federal National Mortgage Assn 6.50% TBA due 8/15/07 1,000,000 998,594 1,007,266
Federal National Mortgage Assn 7.00% guaranteed mortgage
pass through certificate #200744 due 1/1/08 1,188,000 1,179,090 1,192,968
Federal National Mortgage Assn 6.50% TBA due 7/1/08 750,000 746,250 757,500
Federal National Mortgage Assn 6.50% due 8/1/08 750,000 754,922 767,461
Federal National Mortgage Assn guaranteed remic pass through
certificate remic trust 1992-38 class 38-L due 11/25/16 500,000 467,031 489,062
Federal National Mortgage Assn 8.00% participation certificate
#070986 due 11/1/21 729,748 516,502 516,812
Federal National Mortgage Assn 6.50% participation certificate
#216147 due 9/1/23 396,000 387,368 393,958
Government National Mortgage Assn 7.00% TBA due 5/15/13 640,000 639,700 639,200
Government National Mortgage Assn 8.00% pool #223017 due 10/15/17 605,000 499,505 507,433
Government National Mortgage Assn 9.50% pool #291760 due 11/15/20 510,000 503,687 506,299
Government National Mortgage Assn 7.00% TBA due 5/15/22 530,000 527,019 532,981
Government National Mortgage Assn 8.00% pool #338201 due 2/15/23 495,000 509,850 518,512
Government National Mortgage Assn 7.50% TBA due 3/15/23 640,000 655,100 663,700
Government National Mortgage Assn 7.00% due 6/15/23 530,000 530,994 533,570
Government National Mortgage Assn 7.00% pool #350868 due 8/15/23 634,000 628,452 650,246
Government National Mortgage Assn 7.00% pool #364592 due 8/15/23 59,400 59,910 61,107
Government National Mortgage Assn 6.50% due 11/15/23 100,000 100,750 100,828
Corporate Bonds & Notes
- - -----------------------
Abbey National Treasury Services 6.50% isin #XS0043596666 due 5/12/03 400,000 398,400 406,520
Bear Stearns Mortgage Securities 8.00% inc mortgage pass through
certificate series 1992-1 class A-2 due 5/25/23 200,000 100,143 99,645
Boeing 7.25% debenture due 6/15/26 500,000 498,255 521,675
Italy, Republic 9.5% isin #GB0004694856 due 11/14/95 500,000 555,085 554,485
Pacific Bell 7.375% debenture due 6/15/25 400,000 396,936 418,214
Pacific Bell 7.50% debenture due 2/1/33 500,000 476,390 486,820
20
Item 27d - Schedule of Reportable Transactions; EIN: 74-1885573; PN: 015
HOUSTON INDUSTRIES INCORPORATED SAVINGS PLAN
============================================
SUPPLEMENTAL SCHEDULE OF 5% REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
- - ---------------------------------------------------------------------------------------------------------------------------
CURRENT VALUE
PURCHASE SELLING COST OF ON TRANSACTION EXPENSE
DESCRIPTION PRICE PRICE ASSET DATE INCURRED NET GAIN
- - ---------------------------------------------------------------------------------------------------------------------------
SINGLE TRANSACTIONS
- - -------------------
None
SERIES OF TRANSACTIONS
- - ----------------------
*Texas Commerce Bank: (Note 4)
Short Term Investor Money Market Group
Fund
(242 Purchases) $95,664,564 $95,664,564
(88 Sales) $83,120,634 $83,120,634 83,120,634
Short Term Investment Fund K
(190 Purchases) 29,604,350 29,604,350
(83 Sales) 30,779,348 30,779,348 30,779,348
Money Market Fund I
(90 Purchases) 42,417,335 42,417,335
(72 Sales) 42,471,622 42,471,622 42,471,622
*State Street Bank & Trust Short Term
Investment Fund: (Note 4)
(38 Purchases) 30,324,545 30,324,545
(34 Sales) 28,315,358 28,315,358 28,315,358
Prudential Securities open repurchase
agreement collaterized by GE Capital
Mortgage Services income multiclass
pass through certificate series 91-7
class 7TG due 12/25/22
(3 Purchases) 22,810,700 22,810,700
(3 Sales) 22,810,700 22,810,700 22,810,700
- - ----------------------------------------
*Party-in-interest
21
SIGNATURE
=========
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed on its behalf by the undersigned thereunto duly
authorized.
HOUSTON INDUSTRIES INCORPORATED SAVINGS PLAN
By /s/ D. D. Sykora
---------------------------------
(D. D. Sykora, Chairman of the
Benefits Committee of
Houston Industries Incorporated,
Plan Administrator)
June 28, 1994
22
Index to Exhibits
Exhibit
No. Description
- - ------- -----------------------------------------------
1 Independent Auditors' Consent
2 Houston Industries Incorporated Savings Plan,
as Amended and Restated Effective as of
January 1, 1994 (incorporated by reference to
Exhibit 4.5 to Post-Effective Amendment No. 1
to Form S-8 of the Company, File No. 33-38344)
3 Houston Industries Incorporated Master Savings
Trust, as Amended and Restated Effective as of
January 1, 1994, between the Company and Texas
Commerce Bank National Association
(incorporated by reference to Exhibit 10 to
the Quarterly Report on Form 10-Q of the Company
for the quarter ended March 31, 1994,
File No. 1-7629)
4 First Amendment to Houston Industries
Incorporated Savings Plan, as Amended and
Restated Effective January 1, 1994, effective as
of April 6, 1994 (incorporated by reference to
Exhibit 99(d) to the Quarterly Report on
Form 10-Q of the Company for the quarter ended
March 31, 1994, File No. 1-7629)
1