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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the Fiscal Year Ended December 31, 1999
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 1-3187
A. Full title of the plan and address of the plan, if different from that of
the issuer named below:
RELIANT ENERGY, INCORPORATED
SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
RELIANT ENERGY, INCORPORATED
1111 LOUISIANA STREET
HOUSTON, TEXAS 77002
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TABLE OF CONTENTS
Independent Auditors' Report Page 1
Financial Statements:
Statement of Net Assets Available for Plan Benefits, December 31, 1999 Page 2
Statement of Net Assets Available for Plan Benefits, December 31, 1998 Page 3
Statement of Changes in Net Assets Available for Plan Benefits for the
Year Ended December 31, 1999 Page 4
Notes to Financial Statements for the Year Ended December 31, 1999 Page 5
Supplemental Schedules:
Supplemental Schedule of Investments, December 31, 1999 Page 12
Supplemental Schedule of 5% Reportable Transactions for the Year
Ended December 31, 1999 Page 13
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.
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INDEPENDENT AUDITORS' REPORT
Reliant Energy, Incorporated Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Reliant Energy, Incorporated Savings Plan (the Plan) as of
December 31, 1999 and 1998 and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 1999. 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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for plan benefits of the Plan as of December
31, 1999 and 1998, and the changes in net assets available for plan benefits for
the year ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules,
listed in the Table of Contents, 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 supplemental schedules are the responsibility of the
Plan's management. Such supplemental schedules have been subjected to the
auditing procedures applied in our audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
Houston, Texas
June 22, 2000
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RELIANT ENERGY, INCORPORATED SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999
PARTICIPANT- NONPARTICIPANT- NONPARTICIPANT-
DIRECTED DIRECTED DIRECTED
INVESTMENT ALLOCATED UNALLOCATED
FUNDS ESOP ESOP TOTAL
-------------- --------------- --------------- --------------
ASSETS
Investments $1,193,051,411 $141,873,191 $ 252,082,170 $1,587,006,772
Participant loans 45,484,069 -- -- 45,484,069
Receivables:
Dividends and interest 825,401 23,120 33,087 881,608
Discretionary contribution -- 12,695,167 (12,695,167) --
-------------- ------------ ------------- --------------
Total receivables 825,401 12,718,287 (12,662,080) 881,608
-------------- ------------ ------------- --------------
Total Assets 1,239,360,881 154,591,478 239,420,090 1,633,372,449
-------------- ------------ ------------- --------------
LIABILITIES
Accrued expenses 12,489 1,774 -- 14,263
Interest on ESOP loans from Company -- -- 11,520,248 11,520,248
ESOP loans from Company -- -- 218,321,975 218,321,975
-------------- ------------ ------------- --------------
Total Liabilities 12,489 1,774 229,842,223 229,856,486
-------------- ------------ ------------- --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $1,239,348,392 $154,589,704 $ 9,577,867 $1,403,515,963
============== ============ ============= ==============
See Notes to the Plan's Financial Statements.
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RELIANT ENERGY, INCORPORATED SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1998
PARTICIPANT- NONPARTICIPANT- NONPARTICIPANT-
DIRECTED DIRECTED DIRECTED
INVESTMENT ALLOCATED UNALLOCATED
FUNDS ESOP ESOP TOTAL
-------------- --------------- --------------- --------------
ASSETS
Investments $725,192,998 $169,216,789 $380,775,216 $1,275,185,003
Participant loans 31,229,646 -- -- 31,229,646
Receivables:
Dividends and interest 159,461 9,971 15,494 184,926
Investment sales 3,983,898 -- -- 3,983,898
Employer contributions -- 137,591 -- 137,591
Participant contributions 868,071 -- -- 868,071
------------ ------------ ------------ --------------
Total receivables 5,011,430 147,562 15,494 5,174,486
------------ ------------ ------------ --------------
Total Assets 761,434,074 169,364,351 380,790,710 1,311,589,135
------------ ------------ ------------ --------------
LIABILITIES
Accrued expenses 9,521 1,976 -- 11,497
Interest on ESOP loans from Company -- -- 8,162,079 8,162,079
ESOP loans from Company -- -- 240,431,715 240,431,715
------------ ------------ ------------ --------------
Total Liabilities 9,521 1,976 248,593,794 248,605,291
------------ ------------ ------------ --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $761,424,553 $169,362,375 $132,196,916 $1,062,983,844
============ ============ ============ ==============
See Notes to the Plan's Financial Statements.
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RELIANT ENERGY, INCORPORATED SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
PARTICIPANT- NONPARTICIPANT- NONPARTICIPANT-
DIRECTED DIRECTED DIRECTED
INVESTMENT ALLOCATED UNALLOCATED
FUNDS ESOP ESOP TOTAL
--------------- -------------- --------------- ---------------
INVESTMENT INCOME (LOSS):
Dividends $ 69,391,384 $ 8,383,607 $ 16,729,561 $ 94,504,552
Interest 7,742,620 85,035 88,324 7,915,979
Net depreciation of investments (46,766,550) (51,937,296) (102,933,952) (201,637,798)
--------------- ------------- ------------- ---------------
Total investment income (loss) 30,367,454 (43,468,654) (86,116,067) (99,217,267)
--------------- ------------- ------------- ---------------
CONTRIBUTIONS:
Participant contributions 52,445,449 -- -- 52,445,449
Accrued discretionary contributions -- 12,695,167 (12,695,167) --
Allocation of ESOP stock -- 27,802,012 (27,802,012) --
Employer contributions -- 33,812 20,229,274 20,263,086
--------------- ------------- ------------- ---------------
Total contributions 52,445,449 40,530,991 (20,267,905) 72,708,535
--------------- ------------- ------------- ---------------
Transfer of net assets from merged plans 462,095,173 -- -- 462,095,173
Fund transfers, net (61,174) (5,618,330) 5,679,504 --
Administrative expenses (145,952) -- -- (145,952)
Benefit payments (66,777,111) (6,216,678) -- (72,993,789)
Interest on ESOP loans from Company -- -- (21,914,581) (21,914,581)
--------------- ------------- ------------- ---------------
CHANGE IN NET ASSETS AVAILABLE FOR PLAN BENEFITS 477,923,839 (14,772,671) (122,619,049) 340,532,119
NET ASSETS AVAILABLE FOR PLAN BENEFITS
BEGINNING OF PERIOD 761,424,553 169,362,375 132,196,916 1,062,983,844
--------------- ------------- ------------- ---------------
END OF PERIOD $ 1,239,348,392 $ 154,589,704 $ 9,577,867 $ 1,403,515,963
=============== ============= ============= ===============
See Notes to the Plan's Financial Statements.
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RELIANT ENERGY, INCORPORATED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1999
1. ACCOUNTING POLICIES
In accordance with the provisions of the Reliant Energy, Incorporated
Savings Plan (the Plan), the financial records of the Plan are kept and
the valuations of accounts of participating employees (Participants)
are determined on the accrual basis.
The Plan recognizes net appreciation or depreciation in the fair value
of its investments. Investments are reflected at fair value in the
financial statements. The fair value of nonparticipant-directed
investments are based on quoted market prices in an active market. Fair
value for mutual funds is determined using net asset value of each such
individual fund as of the financial statement dates. Security
transactions are recorded as of the trade date. Participant loans are
valued at cost which approximates fair value.
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions that
affect the reported amounts as well as certain disclosures. The Plan's
financial statements include amounts that are based on management's
best estimates and judgments. Actual results could differ from those
estimates.
The Plan provides for investments in Reliant Energy, Incorporated's
(the Company) common stock, various mutual funds and other investments.
Investments, in general, are exposed to various risks, such as interest
rate, credit and overall market volatility risk. Due to the level of
risk associated with certain investments, it is reasonably possible
that changes in the values of investments will occur in the near term
and that such changes could materially affect the amounts reported in
the statements of net assets available for plan benefits and
participant account balances. As of December 31, 1999 and 1998, an
aggregate of 34,111,957 and 29,962,679 shares of the Company's common
stock was held by the Plan which represented 49.2% and 75.5% of the
Plan's investments, respectively. Given the concentration of the Plan's
investments in the Company's common stock, there is vulnerability to
volatility of the Company's common stock. Rates of return will vary,
and returns will depend on the market value of the Company's common
stock.
The Plan adopted American Institute of Certified Public Accountants
Statement of Position 99-3, "Accounting for and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters,"
which changes the required disclosures for plans with participant
directed investment programs. As a result, the disclosure of
participant directed investment programs by fund are not presented.
2. SUMMARY OF THE PLAN
Description of the Plan
The following description of the Plan provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering all employees of the
Company and those subsidiaries and affiliates of the Company that
have adopted the Plan except (a) building trades workers under a
construction industry collective bargaining agreement, (b) leased
employees, (c) independent contractors or (d) non-resident aliens who
receive no U.S. sourced income. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
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Change of Plan Name
Effective April 1, 1999, the Plan changed its name from the Houston
Industries Incorporated Savings Plan to the Reliant Energy,
Incorporated Savings Plan.
Participant Accounts
Each Participant's account is credited with the Participant's
contributions and with allocations of the Company contributions and
Plan earnings. Each Participant's account is also charged with an
allocation of administrative expenses. Allocations are based on
Participant account balances, as defined. The benefit to which a
Participant is entitled is the amount that can be provided from the
Participant's vested accounts.
Investment Program
The Plan has eight investment funds (Funds), as follows:
Company Common Stock Fund: Invested primarily in shares of common stock
of the Company with the goal of long-term growth with little emphasis
on current income.
Capital Appreciation Equity Fund: Invested in a pool of stock mutual
funds that have a goal of long-term growth with little emphasis on
current income. The mutual funds seek to buy stocks of rapidly growing
companies or companies with potential for above average growth,
including small company and international stocks.
Growth and Income Equity Fund: Invested in a pool of stock mutual funds
that have a goal of long-term growth and current income. The mutual
funds buy stocks of growing companies and companies that have a history
of paying dividends.
International Equity Fund: Invested in a pool of international stock
mutual funds that have a goal of long-term growth with little emphasis
on current income. The mutual funds buy stocks of growing and
established companies that have their principal business activities and
interests outside of the United States which show the potential for
long-term growth.
Balanced Fund: Invested in both stock and bond mutual funds. The
Balanced Fund uses a bond mutual fund investing in high-quality bonds
and stock mutual funds to participate in stock market gains with less
volatility than investment in stocks alone.
Fixed Income Fund: Invested in a fixed income mutual fund. The mutual
fund invests in high-quality government and corporate bonds and other
fixed income securities to earn current income with minimum fluctuation
in principal.
Money Market Fund: Invested in a money market mutual fund. The mutual
fund invests in high-quality government and corporate fixed income
securities with maturities of less than one year to earn current income
without risk to principal.
S&P 500 Index Fund: Invested in a stock mutual fund that seeks to track
the investment performance of the Standard & Poor's 500 Composite Stock
Index, which emphasizes stocks of large U.S. companies. The S&P 500
Index Fund was added as a new investment option effective April 1,
1999.
Pending the acquisition of an investment for the Funds, the trustee may
temporarily hold funds uninvested or in short-term investments.
The assets of the Plan are held in trust by The Northern Trust Company
(Trustee). The Benefits Committee of Reliant Energy, Incorporated
(Committee), appointed by the Board of Directors of the Company, is the
plan administrator. The Committee retains an independent investment
consultant to provide investment advice with
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respect to the Funds. The fees charged by the Trustee and the
investment consultant are paid by the Trustee out of the Funds.
A Participant has the right to direct the Trustee to invest his
contributions, but not matching contributions made by the Company
(Employer Contributions), in 1% increments in any or all of the Funds.
All Employer Contributions to the Plan were invested in the employee
stock ownership component of the plan (ESOP).
Employee Stock Ownership Plan
The ESOP is a funding mechanism for a portion of the Employer
Contributions to the Plan. In connection with the ESOP, the Company was
party to an ESOP Trust Agreement between the Company and State Street
Bank (Prior ESOP Trustee). The Prior ESOP Trustee purchased shares of
the Company's common stock in open market transactions with funds
provided by loans (Loans) from the Company. The Prior ESOP Trustee
completed the purchases of shares of the Company's common stock in
December 1991 after purchasing 18,762,184 shares at a cost of $350
million. At December 31, 1999 and 1998, the balance of the Loans was
$218 million and $240 million, respectively. The Loans bear interest at
a fixed rate of 9.783% and must be repaid by January 2, 2011. Accrued
interest on the Loans was $12 million and $8 million at December 31,
1999 and 1998, respectively. At December 31, 1999 and 1998, the fair
value of the ESOP Loans including accrued interest was $230 million and
$287 million, respectively. Fair value is estimated based on the
present value of required principal and interest payments revalued at
current interest rates using the formula specified in the Loans
agreement to establish the fixed rate.
The Company makes periodic cash contributions (ESOP Contributions) to
the portion of the ESOP trust which has not been allocated to
Participants (Unallocated ESOP). The ESOP Contributions, the earnings
received on the investments included in the Unallocated ESOP and the
dividend income from the Unallocated ESOP and the portion of the ESOP
trust which has been allocated to Participants (Allocated ESOP) are
used to pay principal and interest on the Loans. The dividend income
from the Allocated ESOP that is used to pay debt service on the Loans
is replaced with released shares of the Company's common stock. As debt
service payments on the Loans are made, the Company releases shares of
common stock from the pledge securing the Loans and such shares are
available for allocation to Participants' accounts as Employer
Contributions. Unallocated ESOP stock serves as collateral for the
Loans. All released shares must be allocated to Participants' accounts
at year-end. No allocated shares serve as collateral for the Loans.
In addition to the ESOP Contributions, the Company may elect to make
Employer Contributions to the Allocated ESOP in the form of cash which
may be used to purchase shares of the Company's common stock in the
open market. Dividend income received on shares of the Company's common
stock that were purchased in the open market and placed in the
Allocated ESOP is not available for debt service payments.
Funding
Participants may make contributions to the Plan through (a) payroll
deductions on a pre-tax (Pre-tax Contributions) or an after-tax
(After-tax Contributions) basis, (b) a combination of After-tax and
Pre-tax Contributions or (c) a rollover of pre-tax contributions from
another qualified plan.
Contributions to the Plan are made by Participants and by the Company.
Each Participant may contribute to the Plan annually an amount equal to
any whole percentage up to and including 6% of his total eligible
compensation. This amount, referred to as the Participant's "Matched
Contributions", could be made up of Pre-tax and/or After-tax
Contributions provided that the total amount contributed does not
exceed 6% of the Participant's eligible compensation. Effective January
1, 1999, the Employer Contribution increased from 70% to 75% of the
Participant's Matched Contributions. In addition, the Company may make
a discretionary contribution up to an additional 50 cents for every $1
of eligible Participant's Matched Contributions. Eligible Participants
for the discretionary contribution are active employees as of the end
of the applicable year or terminated employees during such year who
meet certain requirements under the Plan. A discretionary contribution
based on the Company's
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performance for the previous year, if any, is determined by the
Chairman of the Committee and will be communicated to Participants
within 90 days following the end of the applicable year. The Company
will make any discretionary contribution as soon as practicable after
performance for the previous year is measured. During March 2000, a
discretionary contribution of $12.7 million was made through the
allocation of ESOP stock to Participant accounts. Such discretionary
contribution was accrued in the financial statements for the year ended
December 31, 1999 as a reclassification between the Unallocated and
Allocated ESOP.
Each Participant's may also make excess Pre-tax and/or After-tax
Contributions annually to the Plan in an amount equal to any whole
percentage greater than 6% but not more than 16% of his total eligible
compensation. This amount is referred to as the Participant's
"Unmatched Contributions". The Company does not match Unmatched
Contributions.
Pre-tax Contributions made to the Plan decrease a Participant's income
for federal income tax purposes by the amount of such Participant's
Pre-tax Contributions. Pre-tax Contributions are, however, subject to
Federal Insurance Contributions Act withholding tax.
The maximum amount that a Participant 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 Participant participates
was limited to $10,000 in 1999. Such amount may be adjusted 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 Participant'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 may participate in the Plan as soon as is
practicable after employment commences. Ineligible employees include
building trades workers under a construction industry collective
bargaining agreement, leased employees, independent contractors or
non-resident aliens who receive no U.S. sourced income. Former
Participants who are reemployed by the Company may recommence
participation in the Plan as soon as practicable after reemployment.
Their vesting service will be reinstated and any portion of their
interest in the Employer Contributions that was forfeited will be
reinstated in accordance with the terms of the Plan.
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 death, disability or retirement. Retirement is
termination of service at the later of (a) Participant's attainment of
age 65 or (b) the fifth anniversary of the Participant's commencement
of participation in the Plan. In case of termination of service for any
other reason, a Participant is entitled to a distribution of the entire
value of his Participant contribution account plus the vested portion
of his Employer Contribution account. Vesting is determined by vesting
service years in accordance with the schedule detailed below:
VESTING SERVICE YEARS* VESTED PERCENTAGE
--------------------- -----------------
Less than two............................. 0%
Two but less than three................... 25%
Three but less than four.................. 50%
Four but less than five................... 75%
Five and more............................. 100%
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* Generally, vesting service years are based on all years, months
and days of active employment with the Company and its subsidiaries
and affiliates.
Any portion of the value of Employer Contributions not vested will be
forfeited. The amount forfeited by a Participant is applied to
reinstate previously forfeited balances of former Participants who are
reemployed by the Company and/or pay incidental Plan expenses with any
remaining forfeitures used to reduce the respective
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Company's subsequent contribution to the Plan. Employee forfeitures for
the year ended December 31, 1999 were not significant to the Plan.
A terminated Participant whose account exceeds $5,000 may elect upon
written request at any time to receive distribution of his Plan account
in a single lump sum payment or fixed monthly, quarterly, semi-annually
or annual installments over a period of 10 years or less. The
Participant may have the above selected distribution option paid in the
form of cash, Company common stock or a combination of both.
To the extent a Participant has not requested a distribution by the
time he reaches age 70 1/2, required minimum distributions will be sent
to the last known address beginning no later than April 1st of the
calendar year following the calendar year the Participant attains age
70 1/2. If a Participant terminates employment after age 70 1/2,
required minimum distributions will start no later than April 1st of
the calendar year following the calendar year in which the Participant
terminated employment.
Immediate lump sum distributions are made for accounts which do not
exceed $5,000.
Participant Withdrawals
A Participant who is under age 59 1/2 may make a withdrawal from
amounts attributable to his After-tax Contributions and, if applicable,
his rollover contributions in the Plan and associated earnings. A
Participant who is under age 59 1/2 and has less than five years of
service who withdraws Matched After-tax Contributions will be suspended
from Plan participation for six months.
A Participant who is age 59 1/2 or older may make unlimited withdrawals
from his Pre-tax Contributions and the associated earnings.
Certain Participants who were former participants in the NorAm Employee
Savings and Investment Plan or the Minnegasco Division Employees'
Retirement Savings Plan may make unlimited withdrawals from the vested
portion of their employer contributions under either of such plans.
Participant Loans
A Participant may borrow against his vested account balances. The
maximum amount that a Participant may borrow from his vested account is
the lesser of (a) $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 loans from the Plan on the date on
which such loan is made or (b) 50% of the value of the Participant's
vested account balance under the Plan.
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 five years. No loan
will be made for a sum of less than $500. Interest rates are fixed at
the prime rate prevailing at the Loan's inception plus one percent.
Loan transactions are treated as a transfer to (from) the investment
fund from (to) the Participant loan fund.
Diversification of Investments
Employer matching and discretionary contributions are invested in the
ESOP. Once a Participant attains age 55 and has participated in the
Plan for at least 10 years, he has the option to diversify his
investment of Employer Contributions (Diversification Election). A
Participant may transfer up to 25% of the balance of his Employer
Contribution account for the first 5 years he is eligible and 50% of
the balance of his Employer Contribution account beginning in the 6th
year of eligibility (in each case less any dollar amount already
diversified) from the ESOP to any or all of the other funds available
under the Plan as of such date.
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Diversification Elections must be made during the first quarter of each
plan year. The transfer is effective as of the day the Participant
makes the election using that day's valuation date.
Termination of the Plan
Although it has not expressed any intent to do so, the Company may
terminate the Plan at any time subject to the provisions of ERISA 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 each Participant will become fully vested in his account.
3. MERGER OF NORAM/MINNEGASCO PLANS
Effective April 1, 1999, the NorAm Employee Savings and Investment Plan
and the Minnegasco Division Employees' Retirement Savings Plan were
merged into the Plan. Net assets available for plan benefits of
approximately $462 million were transferred into the Plan on April 1,
1999. The Plan's management believes that the merger was a tax-exempt
transaction under the applicable provisions of the Internal Revenue
Code.
4. INVESTMENTS
The following presents investments that represent 5 percent or more of
the Plan's net assets available for plan benefits.
DECEMBER 31,
--------------------------------------
1999 1998
------------------- -----------------
Company Common Stock Fund - Reliant Energy, Incorporated
common stock, 17,465,309 and 13,117,003 shares, respectively $ 399,518,943 $ 421,383,721
Allocated ESOP - Reliant Energy, Incorporated common stock,
5,967,159 and 5,171,613 shares, respectively * 136,498,762 166,138,067
Unallocated ESOP - Reliant Energy, Incorporated common stock,
10,679,489 and 11,674,063 shares, respectively * 244,293,311 375,029,274
Acorn Fund - Income Capital Open End Fund, 5,867,739 and 2,069,951
shares, respectively 108,729,205 34,878,683
Harbor Capital Fund - Capital Appreciation U.S. Equities, 1,920,421
and 823,961 shares, respectively 97,269,346 31,289,147
Janus Fund - Income Capital Open End Fund, 2,322,969 and 995,216
shares, respectively 102,326,790 33,489,019
Vanguard Institutional Index Fund, 790,576 shares 105,945,123 --
Northern Trust Collective Short-term Investment Fund, 92,018,206
and 40,513,725 shares, respectively 92,018,206 40,513,725
Northern Trust Collective Short-term Investment Fund, 13,163,288
and 8,824,664 shares, respectively* 13,163,288 8,824,664
------------
* Non-participant directed investments
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year)
depreciated in value as follows:
Mutual funds $ 88,599,355
Company common stock (290,237,153)
----------------
$ (201,637,798)
================
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5. NONPARTICIPANT-DIRECTED INVESTMENTS
Information relating to the nonparticpant-directed investments is as
follows:
DECEMBER 31,
--------------------------------------
1999 1998
------------------- -----------------
Cash and cash equivalents $ 13,163,288 $ 8,824,664
Company common stock 380,792,073 541,167,341
6. FEDERAL INCOME TAXES
The Internal Revenue Service (IRS) determined and informed the Company
by letter dated December 3, 1994 that the Plan, as amended and restated
effective January 1, 1994 (Prior Plan), was qualified and the trust
fund (Trust) established under the Prior Plan was tax-exempt under the
appropriate sections of the Internal Revenue Code of 1986, as amended
(Code). Although the Plan was amended and restated subsequent to that
date, the Committee and the Company's counsel believe that the Plan was
designed and operated in compliance with the requirements of the Code.
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.
7. RELATED PARTY TRANSACTIONS
During 1999, the Plan purchased and sold shares of the Company's common
stock and units of short-term investment funds managed by the Trustee
as temporary investments (party-in-interest transactions) as shown
below:
1999
----------------
Purchases Company common stock $ 38,594,139
Short-term funds 704,514,188
Sales Company common stock $ 18,256,454
Short-term funds 646,756,321
11
14
RELIANT ENERGY, INCORPORATED SAVINGS PLAN
SUPPLEMENTAL SCHEDULE OF INVESTMENTS
ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
SHARES COST CURRENT VALUE
-------------- -------------- --------------
COMPANY COMMON STOCK FUND
Reliant Energy, Incorporated Common Stock* 17,465,309 $ 287,033,577 $ 399,518,943
Northern Trust Collective Short-term Investment Fund* 4,024,218 4,024,218 4,024,218
-------------- --------------
TOTAL COMPANY COMMON STOCK FUND INVESTMENT 291,057,795 403,543,161
-------------- --------------
ALLOCATED ESOP
Reliant Energy, Incorporated Common Stock* 5,967,159 112,375,576 136,498,762
Northern Trust Collective Short-term Investment Fund* 5,374,429 5,374,429 5,374,429
-------------- --------------
TOTAL ALLOCATED ESOP INVESTMENT 117,750,005 141,873,191
-------------- --------------
CAPITAL APPRECIATION EQUITY FUND
Mutual Funds:
Acorn Fund - Income Capital Open End Fund 4,890,462 76,894,967 90,620,254
Harbor Capital Fund - Capital Appreciation U.S.
Equities 1,920,421 76,790,082 97,269,346
Janus Fund - Income Capital Open End Fund 2,322,969 83,631,727 102,326,790
Northern Trust Collective Short-term Investment Fund* 1,435 1,435 1,435
-------------- --------------
TOTAL CAPITAL APPRECIATION EQUITY FUND INVESTMENTS 237,318,211 290,217,825
-------------- --------------
GROWTH AND INCOME EQUITY FUND
Mutual Funds:
Davis New York Venture Fund Class A 1,824,179 30,549,844 52,463,381
Dodge & Cox Stock Fund 335,981 31,840,110 33,772,776
ICAP Fund - Income Equity Portfolio 1,057,159 39,770,470 45,605,823
Northern Trust Collective Short-term Investment Fund* 319 319 319
-------------- --------------
TOTAL GROWTH AND INCOME EQUITY FUND INVESTMENTS 102,160,743 131,842,299
-------------- --------------
INTERNATIONAL EQUITY FUND
Mutual Funds:
American Funds EuroPacific Growth Fund 550,688 15,898,824 23,492,370
Lazard International Equity Portfolio 1,267,914 19,114,246 21,921,893
-------------- --------------
TOTAL INTERNATIONAL EQUITY FUND INVESTMENTS 35,013,070 45,414,263
-------------- --------------
BALANCED FUND
Mutual Funds:
Acorn Fund - Income Capital Open End Fund 977,277 15,713,127 18,108,951
American Funds EuroPacific Growth Fund 244,270 6,810,749 10,420,540
Davis New York Venture Fund Class A 446,090 11,046,413 12,829,537
ICAP Fund - Income Equity Portfolio 418,975 16,591,920 18,074,581
Vanguard Fixed Income Securities - Short-term 3,330,872 35,912,664 35,074,082
Northern Trust Collective Short-term Investment Fund* 144,183 144,183 144,183
-------------- --------------
TOTAL BALANCED FUND INVESTMENTS 86,219,056 94,651,874
-------------- --------------
FIXED INCOME FUND
Mutual Fund:
Vanguard Fixed Income Securities 3,189,821 34,295,089 33,588,815
Northern Trust Collective Short-term Investment Fund* 3,581 3,581 3,581
-------------- --------------
TOTAL FIXED INCOME FUND INVESTMENTS 34,298,670 33,592,396
-------------- --------------
MONEY MARKET FUND
Northern Trust Collective Short-term Investment Fund* 87,843,733 87,843,733 87,843,733
-------------- --------------
TOTAL MONEY MARKET FUND INVESTMENTS 87,843,733 87,843,733
-------------- --------------
S&P 500 INDEX FUND
Mutual Fund:
Vanguard Institutional Index Fund 790,576 94,247,403 105,945,123
Northern Trust Collective Short-term Investment Fund* 737 737 737
-------------- --------------
TOTAL S&P 500 INDEX FUND INVESTMENTS 94,248,140 105,945,860
-------------- --------------
TOTAL PARTICIPANT INVESTMENTS 1,085,909,423 1,334,924,602
-------------- --------------
UNALLOCATED ESOP
Reliant Energy, Incorporated Common Stock* 10,679,489 198,689,179 244,293,311
Northern Trust Collective Short-term Investment Fund* 7,788,859 7,788,859 7,788,859
-------------- --------------
TOTAL UNALLOCATED ESOP INVESTMENTS 206,478,038 252,082,170
-------------- --------------
TOTAL PLAN INVESTMENTS $1,292,387,461 $1,587,006,772
============== ==============
PARTICIPANT LOANS, INTEREST RATE AT PRIME PLUS 1% $ 45,484,069
==============
- -----------
*Party-in-interest
12
15
RELIANT ENERGY, INCORPORATED SAVINGS PLAN
SUPPLEMENTAL SCHEDULE OF 5% REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
SINGLE TRANSACTIONS
None.
SERIES OF TRANSACTIONS - SAME
SECURITY
None.
13
16
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.
RELIANT ENERGY, INCORPORATED SAVINGS PLAN
By /s/ LEE W. HOGAN
-----------------------------------------------------
(Lee W. Hogan, Chairman of the Benefits Committee
of Reliant Energy, Incorporated, Plan Administrator)
June 27, 2000
17
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
23 Independent Auditor's Consent
1
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-11329 of Reliant Energy, Incorporated on Form S-8 of our report dated June
22, 2000, appearing in this Annual Report on Form 11-K of the Reliant Energy,
Incorporated Savings Plan for the year ended December 31, 1999.
Houston, Texas
June 27, 2000
