<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 11-K
------------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-12387
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
TENNECO THRIFT PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
TENNECO INC.
1275 KING STREET
GREENWICH, CONNECTICUT 06831
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<PAGE> 2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Tenneco Benefits Committee:
We have audited the accompanying statements of net assets available for plan
benefits of the Tenneco Thrift Plan as of December 31, 1996 and 1995, and the
related statements of changes in net assets available for plan benefits for the
years then ended. These financial statements and the schedules referred to below
are the responsibility of the Tenneco Benefits Committee. Our responsibility is
to express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Tenneco
Thrift Plan as of December 31, 1996 and 1995, and the changes in net assets
available for plan benefits for the years then ended in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1996, included as Schedule I,
reportable transactions -- series of transactions for the year ended December
31, 1996, included as Schedule II, and reportable transactions -- single
transactions for the year ended December 31, 1996, included as Schedule III, are
presented for purposes of additional analysis and are not a required part of the
basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audits 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.
ARTHUR ANDERSEN LLP
Houston, Texas
June 20, 1997
2
<PAGE> 3
TENNECO THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------------------------------------------- -----------------------------------------
MARKET MARKET
SHARES COST VALUE SHARES COST VALUE
------ ---- ------ ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments --
Corporate securities --
Tenneco Inc. common stock......... 7,024,248 $ 281,083,329 $ 316,969,191 7,332,492 $331,392,250 $ 363,874,916
El Paso Natural Gas Company common
stock........................... 637,280 25,746,686 32,182,638 -- -- --
Newport News Shipbuilding Inc.
common stock.................... 1,370,491 19,596,752 20,557,371 -- -- --
-------------- -------------- ------------ --------------
326,426,767 369,709,200 331,392,250 363,874,916
Collective trust funds --
BZW Barclays Equity Index Fund.... 3,865,996 64,993,385 75,787,788 -- -- --
BZW Barclays U.S. Debt Market
Index Fund...................... 1,187,604 13,489,594 14,091,620 -- -- --
-------------- -------------- ------------ --------------
78,482,979 89,879,408 -- --
Registered investment companies --
Fidelity Growth Company Fund...... 2,926,447 95,602,471 118,404,041 2,388,589 71,105,240 86,689,043
INVESCO Value Trust Total Return
Fund............................ 384,149 8,902,451 9,334,811 -- -- --
Putnam New Opportunities Fund..... 1,362,677 56,571,745 55,365,566 -- -- --
Templeton Foreign Fund............ 1,149,258 11,343,518 11,906,314 -- -- --
Fidelity U.S. Equity Index
Portfolio....................... -- -- -- 1,437,115 24,935,106 32,420,246
Capstone Growth Fund, Inc......... -- -- -- 2,283,231 29,993,103 31,531,420
Fidelity U.S. Bond Index
Portfolio....................... -- -- -- 1,571,333 16,899,764 17,211,429
-------------- -------------- ------------ --------------
172,420,185 195,010,732 142,933,213 167,852,138
U.S. Treasury notes................. 101,900,948 102,593,340 236,829,852 238,545,135
BASIC Agreements on U.S. Treasury
notes............................. 73,125 (619,267) 305,139 (1,410,145)
Money market fund/time deposits..... 319,522,676 319,522,676 227,090,114 227,090,114
Cash surrender value of life
insurance policies................ -- -- -- 86,486
Participant loans receivable........ 36,479,042 36,479,042 27,349,098 27,349,098
-------------- -------------- ------------ --------------
Total investments............... $1,035,305,722 $1,112,575,131 $965,899,666 $1,023,387,742
============== -------------- ============ --------------
Receivables --
Employees' contributions............ 1,377,863 1,040,322
Employers' contributions............ 1,302,516 948,894
Accrued interest.................... 2,822,003 3,867,269
-------------- --------------
5,502,382 5,856,485
Cash.................................. 7,805 355,550
-------------- --------------
Total assets.................... 1,118,085,318 1,029,599,777
LIABILITIES:
Due to Trustee for purchased
securities.......................... -- 154,758
-------------- --------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS.............................. $1,118,085,318 $1,029,445,019
============== ==============
</TABLE>
The accompanying notes to financial statements are an integral part of these
financial statements.
3
<PAGE> 4
TENNECO THRIFT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year... $1,029,445,019 $ 883,222,542
-------------- --------------
ADD:
Dividends --
Tenneco Inc............................................ 12,239,040 11,399,437
Registered investment companies........................ 6,505,201 10,146,008
Interest.................................................. 24,020,447 24,437,665
-------------- --------------
42,764,688 45,983,110
Net appreciation in fair value of investments............. 42,530,819 85,731,035
-------------- --------------
Net investment income................................ 85,295,507 131,714,145
Contributions --
Employees.............................................. 50,006,711 46,974,066
Employers.............................................. 48,127,132 44,180,868
Rollovers.............................................. 14,483,652 --
-------------- --------------
112,617,495 91,154,934
Repayment of loan interest................................ 2,186,426 1,917,000
-------------- --------------
Total additions...................................... 200,099,428 224,786,079
DEDUCT:
Withdrawals............................................... 105,343,239 65,058,828
Administrative expenses................................... 992,964 647,744
Transfer to other plans................................... 5,122,926 12,857,030
-------------- --------------
Total deductions..................................... 111,459,129 78,563,602
-------------- --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year......... $1,118,085,318 $1,029,445,019
============== ==============
</TABLE>
The accompanying notes to financial statements are an integral part of these
financial statements.
4
<PAGE> 5
TENNECO THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. DESCRIPTION OF THE THRIFT PLAN:
The following description of the Tenneco Thrift Plan (the Thrift Plan) provides
only general information. Participants should refer to the Thrift Plan for a
more complete description of the Thrift Plan's provisions.
REORGANIZATION OF SPONSOR
During 1996, Tenneco Inc. (Old Tenneco) undertook a series of transactions to
reorganize its historical businesses (the Transaction). Prior to the
Transaction, Old Tenneco restructured its businesses such that the assets,
liabilities and operations of its automotive (Tenneco Automotive), packaging
(Tenneco Packaging) and administrative services businesses (collectively, the
Industrial Business) were owned and operated by New Tenneco Inc. (New Tenneco),
a new wholly owned subsidiary of Old Tenneco, and the assets, liabilities and
operations of its shipbuilding business (the Shipbuilding Business) were owned
and operated by Newport News Shipbuilding Inc. (Newport News), another wholly
owned subsidiary of Old Tenneco. On December 11, 1996, Old Tenneco spun off New
Tenneco and Newport News by distributing all of the common stock of each company
to Old Tenneco's shareowners (the Distributions). Following the Distributions,
on December 12, 1996, a subsidiary of El Paso Natural Gas Company (El Paso) was
merged (the Merger) into Old Tenneco, which then consisted solely of Old
Tenneco's remaining active businesses, principally in the energy industry, and
certain discontinued operations (the Energy Business), with Old Tenneco
surviving the Merger as a subsidiary of El Paso. Immediately subsequent to the
Merger, Old Tenneco was renamed "El Paso Tennessee Pipeline Co.," and New
Tenneco was renamed "Tenneco Inc."
In connection with the Distributions, one share of New Tenneco common stock was
issued for each share of Old Tenneco common stock, and one share of Newport News
common stock was issued for each five shares of Old Tenneco common stock. Also,
in connection with the Merger, Old Tenneco shareowners received .093 shares of
El Paso common stock for each share of Old Tenneco common stock. Accordingly,
the shares of Old Tenneco common stock held in the accounts of the Thrift Plan
participants were exchanged for shares of New Tenneco, Newport News and El Paso,
and New Tenneco succeeded Old Tenneco as sponsor of the Thrift Plan.
Effective with the Distributions and Merger, Newport News and the Energy
Business ceased participation in the Thrift Plan and affected participants'
account balances totaling approximately $756,000,000 were subsequently
transferred in January 1997 to their respective successor plans (see Note 8).
For purposes of these financial statements, "Tenneco Inc." or "Employers" refers
to Old Tenneco and its subsidiaries that have adopted the Thrift Plan prior to
the Transaction and to Tenneco Inc., formerly known as New Tenneco Inc., and its
subsidiaries that have continued sponsorship of the Thrift Plan subsequent to
the Transaction.
GENERAL
The Thrift Plan is a defined contribution plan subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended. Effective April 1,
1996, the Thrift Plan was restated and the name was changed from the Tenneco
Inc. Thrift Plan to the Tenneco Thrift Plan.
The Thrift Plan covers eligible employees of the Employers.
CONTRIBUTIONS
Eligible employees electing to participate in the Thrift Plan may make salary
deferral contributions by payroll deduction of not less than 4 percent nor
greater than 8 percent of their base salary, with such contributions limited to
$9,500 for 1996 and $9,240 for 1995. Prior to April 1, 1996, if a participant
suspended contributions,
5
<PAGE> 6
then, with certain limited exceptions, such suspension continued for a one-year
period. The Employers contribute on behalf of the participant an amount up to
the participant's contribution according to the following percentages of the
participant's base salary, based on the number of years of participation in the
Thrift Plan: 4 percent -- through three years; 5 percent -- over three through
five years; 6 percent -- over five through seven years; and 8 percent -- over
seven years. The participant immediately vests in Employer contributions.
Employer contributions are made in the form of Tenneco Inc. common stock. The
Employers' matching contributions and the related earnings made after January 1,
1993, must remain in the form of Tenneco Inc. common stock until the participant
reaches age 55 or terminates employment and requests a total plan distribution.
VESTING
All participants are 100 percent vested in their entire account balance in the
Thrift Plan.
WITHDRAWALS AND PLAN LOANS
Upon retirement or other termination of employment, the participant may receive
the value of his account as a lump-sum distribution. A participant who has
attained age 55 may request an in-service withdrawal. If a participant has not
attained age 59- 1/2, he may elect to withdraw all or part of his account
balance, reduced by the portion of his account balance attributable to salary
deferral contributions. A participant who has not attained age 55 may request an
in-service withdrawal of his employee contributions made prior to April 1, 1984,
and any Employer matching contributions credited to his account prior to January
1, 1993. Plan equity as of December 31, 1996 and 1995, includes amounts pending
distribution to participants of $1,176,181 and $2,142,638, respectively. Amounts
pending distribution to participants as of December 31, 1996, do not include
transfers to the Newport News and El Paso plans (see Note 8).
Active participants and certain other individuals who have not had a plan loan
during the previous three months (12 months prior to April 1, 1996) may obtain a
plan loan with a term not to exceed 54 months from his account. The borrower may
have only one plan loan outstanding at any time, and the amount of the loan may
not be less than $1,000 and shall not exceed the lesser of (a) $50,000 or (b)
one-half the borrower's account balance. Prior to April 1, 1996, a restriction
existed on the loan repayment amount which limited loans to an amount the
repayment of which (together with interest) in equal monthly installments could
not exceed 10 percent of the borrower's monthly base compensation (or 10 percent
of the borrower's monthly income in the case of a nonemployee borrower). The
loan interest rate is equal to the highest share-secured loan interest rate
charged by the Tenneco Inc. Federal Credit Union. The average interest rate for
new loans was 7.75 percent and 7.38 percent during 1996 and 1995, respectively.
Loan principal and interest repayments are made through irrevocable payments.
Termination of employment may accelerate the maturity of the loan, and failure
to make a loan repayment on time may generally constitute default. In the event
of default, the Committee will treat the outstanding loan balance as a
distribution to the participant under the Thrift Plan and thereby reduce the
participant's interest in the Thrift Plan.
ADMINISTRATION
The Thrift Plan is administered by the Tenneco Benefits Committee (the
Committee). NationsBank (the Trustee) is the Trustee of the Thrift Plan Trust
(the Trust).
2. SUMMARY OF ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
The financial statements of the Thrift Plan are presented on the accrual basis
of accounting. The investments of the Thrift Plan are reported at quoted market
value except for the BASIC Agreement on U.S. Treasury notes whose market value
is based upon the difference between the quoted market value of the U.S.
Treasury notes and the amortized cost of the related securities.
6
<PAGE> 7
EARNINGS
Individual participants' accounts are credited daily with investment earnings
and losses. Investment earnings and losses are credited based upon the number of
shares held in an individual participant's account and the fair value per share
at the close of business each day.
EXPENSES
All administrative expenses, including the Trustee's fees, are paid from
earnings from the Trust attributable to unallocated amounts or by the Employers.
Such expenses may also be paid from the Trust in the event the Employers'
payments and such earnings are insufficient to meet such expenses. Brokerage
fees, transfer taxes, individual income taxes and all other charges and expenses
resulting from purchases or sales of securities are charged to the accounts of
the participants. In all other cases, including any situation where the
allocation of the charge to a participant within a particular investment option
is undeterminable, expenses are charged proportionately against all the accounts
within that investment option. Any other expenses chargeable against the entire
Trust are charged to each individual account in the proportion that such account
bears to the total amount of the Trust. Prior to April 1, 1996, an additional
transaction fee was charged to an individual participant's account for
processing new loans and investment purchases or sales over $100.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to use estimates and
assumptions that affect the accompanying financial statements and disclosures.
Actual results could differ from those estimates.
OTHER
Certain 1995 amounts have been reclassified to conform with the 1996
presentation.
3. INVESTMENT OPTIONS:
Effective March 1996, participants must invest contributions and other cash
amounts credited to their accounts in one or more of the following:
Tenneco Inc. Common Stock
BZW Barclays Equity Index Fund -- Fund seeks to earn high returns by
investing in a broad array of established U.S. companies.
BZW Barclays U.S. Debt Market Index Fund -- Fund seeks to earn moderate
returns with a moderate level of risk by investing in a diversified
portfolio of high-quality U.S. Government, corporate, mortgage-backed and
asset-backed bonds.
Fidelity Growth Company Fund -- Fund seeks capital appreciation by
investing primarily in common stock and securities convertible into common
stock of those companies believed to have above-average growth.
INVESCO Value Trust Total Return Fund -- Fund seeks reasonably consistent
total returns over a variety of market cycles by investing in a combination
of equity securities and fixed income securities.
Putnam New Opportunities Fund -- Fund seeks to achieve long-term capital
appreciation primarily through common stock investments in companies in
economic sectors with above-average prospects for growth.
Templeton Foreign Fund -- Fund invests in stocks and debt obligations of
companies and governments outside the U.S.
7
<PAGE> 8
Money Market Fund (previously Time Deposits) -- Invests in Nations Cash
Reserves, which seeks to preserve principal value and maintain a high
degree of liquidity while providing current income. The fund also invests
in U.S. Treasury securities (see Note 4).
Shares of Newport News common stock and El Paso common stock received in
connection with the Distributions and Merger are held in separate funds;
however, participants cannot direct contributions or fund transfers to these
funds.
Prior to March 1996, participants could invest contributions and other cash
amounts credited to their accounts in one or more of the following:
Tenneco Inc. Common Stock
Fidelity Growth Company Fund -- Fund continued as an investment option
after March 1, 1996.
Fidelity U.S. Equity Index Portfolio -- Fund attempted to follow the S&P
500 index.
Capstone Growth Fund, Inc. -- Fund was a growth-oriented common stock
mutual fund that focused on long-term capital appreciation and current
income.
Fidelity U.S. Bond Index Portfolio -- Fund was an index fund that attempted
to follow the Lehman Brothers Aggregate Bond Index.
Time Deposits -- Invested in U.S. Treasury securities (see Note 4) and
interest-bearing deposits in banks and similar institutions supervised by
the United States or state regulatory agencies and selected by the
Committee. The Committee could have selected a bank which was a Thrift Plan
fiduciary, provided a reasonable rate of interest had been paid.
See Exhibits 1 and 2 for individual fund information.
4. BASIC AGREEMENT:
Effective November 24, 1993, the Thrift Plan entered into the Benefit Accessible
Securities Investment Contract (BASIC) Master Agreement (BASIC Agreement) with
Bankers Trust (Delaware) in order to increase the rate of return of the Money
Market Fund (formerly Time Deposits). Under the BASIC Agreement, monies are
invested in U.S. Treasury securities (the Securities) with original maturities
ranging from approximately 11 months to 37 months. The BASIC Agreement provides
that, in the event of liquidation required to pay withdrawals, the Securities
will be sold to Bankers Trust at face value adjusted for any unamortized
premium/discount and BASIC Agreement fee. As a result, the Thrift Plan is
generally protected from declines in the market value of the Securities and
relinquishes the benefits of appreciation in their market value. As
consideration for the BASIC Agreement, the Thrift Plan is required to pay an
initial fee to Bankers Trust; such fee is being amortized over the term of the
Securities. As of December 31, 1996 and 1995, the BASIC Agreement had an
amortized cost of $73,125 and $305,139 and a market value of $(619,267) and
$(1,410,145), respectively.
5. PAYABLE TO/RECEIVABLE FROM
TRUSTEE FOR SECURITIES:
Prior to March 1, 1996, securities were purchased or sold by the Trustee in
anticipation of the transaction requirements of the Thrift Plan participants.
The amount payable to the Trustee of $154,758 at December 31, 1995, represented
the cost of securities which were purchased by the Trustee as of such date in
accordance with the terms of the Thrift Plan over the amount of securities
required by the Thrift Plan.
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<PAGE> 9
6. RECONCILIATION OF FINANCIAL
STATEMENTS TO FORM 5500:
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500 as of December 31, 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Net assets available for plan benefits per the financial
statements................................................ $1,118,085,318 $1,029,445,019
Less -- Amounts allocated to withdrawing participants..... (1,176,181) (2,142,638)
-------------- --------------
Net assets available for plan benefits per the Form 5500.... $1,116,909,137 $1,027,302,381
============== ==============
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 as of December 31, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Benefits paid to participants per the financial
statements................................................ $105,343,239 $65,058,828
Add -- Amounts allocated to withdrawing participants at
December 31, 1996 and 1995............................. 1,176,181 2,142,638
Less -- Amounts allocated to withdrawing participants at
December 31, 1995 and 1994............................. (2,142,638) --
------------ -----------
Benefits paid to participants per the Form 5500............. $104,376,782 $67,201,466
============ ===========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, but not paid as of that date.
7. FEDERAL INCOME TAXES:
The Thrift Plan obtained its latest determination letter on August 19, 1996, in
which the Internal Revenue Service stated that the Thrift Plan, as then
designed, was in compliance with the applicable requirements of the Internal
Revenue Code. The Thrift Plan has been amended since receiving the determination
letter. However, the Plan administrator and the Thrift Plan's legal counsel
believe that the Thrift Plan is currently designed and being operated in
compliance with the applicable requirements of the Internal Revenue Code.
Therefore, they believe that the Thrift Plan was qualified and the related trust
was tax-exempt as of the financial statement date.
A participant is not subject to federal income tax on matching Employer
contributions, salary deferral contributions or earnings on such participant's
account balance until distributed.
8. TRANSFER TO OTHER PLANS:
In conjunction with the Distributions, the participation of Newport News
employees in the Thrift Plan ceased and their Thrift Plan account balances,
totaling approximately $523,000,000, were transferred in January 1997 to a new
plan established by Newport News.
In conjunction with the Merger, the participation of employees transferring to
El Paso in the Thrift Plan ceased and their Thrift Plan account balances,
totaling approximately $233,000,000, were transferred in January 1997 to an
existing plan of El Paso.
In June 1996, Tenneco Packaging and Caraustar Industries (Caraustar) entered
into a joint venture pursuant to which Tenneco Packaging contributed its two
recycled paperboard mills and a recovered paper stock and brokerage operation
for cash and a 20% equity position in the business. All salaried employees that
were affected by the transaction were transferred to Caraustar's payroll and
benefits programs. In conjunction with the transaction, the affected employees
ceased to participate in the Thrift Plan and their Thrift Plan account balances,
totaling $5,122,926, were transferred in November 1996 to the Caraustar savings
plan.
9
<PAGE> 10
In December 1994, Tenneco Inc. announced its intent to offer 100 percent of its
Albright & Wilson (A&W) chemical segment in an underwritten public offering. The
offering, in the form of a floatation in the United Kingdom, was completed in
the first quarter of 1995. In conjunction with the public offering, the
participation of A&W employees in the Thrift Plan ceased and their Thrift Plan
account balances, totaling $12,857,030, were transferred to a new plan
established by the new public entity.
9. ACQUISITIONS:
During 1996, Tenneco Packaging acquired Amoco Foam Products Company (Amoco
Foam). As agreed to in the purchase agreement, the former Amoco Foam salaried
employees were allowed to participate in the Thrift Plan effective October 1,
1996. Employers' contributions in the statements of changes in net assets
available for plan benefits includes a one-time special contribution related to
these former Amoco Foam salaried employees in the amount of $87,463 to make up
for the period from date of acquisition to October 1, 1996.
Beginning October 1, 1996, and ending October 31, 1996, former Amoco Foam
employees could have made an elective transfer of their account balances in the
Amoco Employee Savings Plan (the Amoco Foam Plan) into the Thrift Plan, provided
that the former Amoco Foam employees did not have more than one loan outstanding
under the Amoco Foam Plan.
During 1995, Tenneco Packaging acquired the Mobile Plastics Division of Mobil
Oil Corporation (Mobil). As agreed to in the purchase agreement, the former
Mobil salaried employees were not allowed to participate in the Thrift Plan
until April 1, 1996. In order to compensate this group of employees for the
matching contribution that they were not eligible for during the period from
November 17, 1995, through April 1, 1996, Tenneco Packaging made a one-time
special contribution equal to 6 percent of the compensation recognized under
their old plan during that period. Employers' contributions in the statements of
changes in net assets available for plan benefits includes the one-time special
contribution of $1,193,110.
Beginning April 1, 1996, and ending September 27, 1996, former Mobil salaried
employees could have made an elective transfer of their account balances from
the Mobil Employee Savings Plan (the Mobil Plan) into the Thrift Plan provided,
however, that no elective transfer was permitted if the former Mobil salaried
employee had a loan outstanding under the Mobil Plan.
10. TERMINATION OF THE THRIFT PLAN:
Although the participating Employers intend to continue the Thrift Plan
indefinitely, they reserve the right to terminate the Thrift Plan or withdraw
from participation in the Thrift Plan. Any assets which are not allocated to the
accounts of participants upon the complete termination of the Thrift Plan, or
complete discontinuance of contributions, will be allocated among all of the
participants' accounts pro rata on the basis of their respective balances.
10
<PAGE> 11
EXHIBIT 1
TENNECO THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
--------------------------------------------------------
EL PASO NEWPORT NEWS
NATURAL GAS SHIPBUILDING BZW
TENNECO INC. COMPANY INC. BARCLAYS
COMMON COMMON COMMON EQUITY INDEX
STOCK STOCK STOCK FUND
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock................................ $177,195,021 $ -- $ -- $ --
El Paso Natural Gas Company common stock................. -- 32,182,638 -- --
Newport News Shipbuilding Inc. common stock.............. -- -- 20,557,371 --
------------ ----------- ----------- -----------
177,195,021 32,182,638 20,557,371 --
Collective trust funds --
BZW Barclays Equity Index Fund........................... -- -- -- 75,787,788
BZW Barclays U.S. Debt Market Index Fund................. -- -- -- --
------------ ----------- ----------- -----------
-- -- -- 75,787,788
Registered investment companies --
Fidelity Growth Company Fund............................. -- -- -- --
INVESCO Value Trust Total Return Fund.................... -- -- -- --
Putnam New Opportunities Fund............................ -- -- -- --
Templeton Foreign Fund................................... -- -- -- --
------------ ----------- ----------- -----------
-- -- -- --
U.S. Treasury notes....................................... -- -- -- --
BASIC Agreements on U.S. Treasury notes................... -- -- -- --
Money market fund......................................... 3,854,941 841,798 543,181 --
Participant loans receivable.............................. -- -- -- --
------------ ----------- ----------- -----------
Total investments...................................... 181,049,962 33,024,436 21,100,552 75,787,788
------------ ----------- ----------- -----------
Receivables --
Employees' contributions.................................. 193,496 -- -- 123,193
Employers' contributions.................................. -- -- -- --
Accrued interest.......................................... 14,489 2,336 1,639 --
------------ ----------- ----------- -----------
207,985 2,336 1,639 123,193
Cash....................................................... -- -- -- 14
OPTION TRANSFERS RECEIVABLE (PAYABLE)....................... (62,626) (51,314) (82,310) 76,514
------------ ----------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS...................... $181,195,321 $32,975,458 $21,019,881 $75,987,509
============ =========== =========== ===========
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
-----------------------------------------------------------
BZW
BARCLAYS FIDELITY INVESCO PUTNAM
U.S. DEBT GROWTH VALUE TRUST NEW
MARKET INDEX COMPANY TOTAL RETURN OPPORTUNITIES
FUND FUND FUND FUND
------------ -------- ------------ -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock................................ $ -- $ -- $ -- $ --
El Paso Natural Gas Company common stock................. -- -- -- --
Newport News Shipbuilding Inc. common stock.............. -- -- -- --
----------- ------------ ---------- -----------
-- -- -- --
Collective trust funds --
BZW Barclays Equity Index Fund........................... -- -- -- --
BZW Barclays U.S. Debt Market Index Fund................. 14,091,620 -- -- --
----------- ------------ ---------- -----------
14,091,620 -- -- --
Registered investment companies --
Fidelity Growth Company Fund............................. -- 118,404,041 -- --
INVESCO Value Trust Total Return Fund.................... -- -- 9,334,811 --
Putnam New Opportunities Fund............................ -- -- -- 55,365,566
Templeton Foreign Fund................................... -- -- -- --
----------- ------------ ---------- -----------
-- 118,404,041 9,334,811 55,365,566
U.S. Treasury notes....................................... -- -- -- --
BASIC Agreements on U.S. Treasury notes................... -- -- -- --
Money market fund......................................... -- -- -- --
Participant loans receivable.............................. -- -- -- --
----------- ------------ ---------- -----------
Total investments...................................... 14,091,620 118,404,041 9,334,811 55,365,566
----------- ------------ ---------- -----------
Receivables --
Employees' contributions.................................. 29,132 244,340 28,522 172,729
Employers' contributions.................................. -- -- -- --
Accrued interest.......................................... -- -- 14,862 --
----------- ------------ ---------- -----------
29,132 244,340 43,384 172,729
Cash....................................................... 14 -- -- --
OPTION TRANSFERS RECEIVABLE (PAYABLE)....................... (6,850) 94,039 26,685 296,181
----------- ------------ ---------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS...................... $14,113,916 $118,742,420 $9,404,880 $55,834,476
=========== ============ ========== ===========
<CAPTION>
NONPARTICIPANT-
PARTICIPANT-DIRECTED INVESTMENTS DIRECTED INVESTMENTS
---------------------------------------- -------------------------
TEMPLETON MONEY TENNECO INC.
FOREIGN MARKET PARTICIPANT COMMON CLEARING
FUND FUND LOANS STOCK ACCOUNT
--------- ------ ----------- ------------ --------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock................................ $ -- $ -- $ -- $139,774,170 $ --
El Paso Natural Gas Company common stock................. -- -- -- -- --
Newport News Shipbuilding Inc. common stock.............. -- -- -- -- --
----------- ------------ ----------- ------------ ----------
-- -- -- 139,774,170 --
Collective trust funds --
BZW Barclays Equity Index Fund........................... -- -- -- -- --
BZW Barclays U.S. Debt Market Index Fund................. -- -- -- -- --
----------- ------------ ----------- ------------ ----------
-- -- -- -- --
Registered investment companies --
Fidelity Growth Company Fund............................. -- -- -- -- --
INVESCO Value Trust Total Return Fund.................... -- -- -- -- --
Putnam New Opportunities Fund............................ -- -- -- -- --
Templeton Foreign Fund................................... 11,906,314 -- -- -- --
----------- ------------ ----------- ------------ ----------
11,906,314 -- -- -- --
U.S. Treasury notes....................................... -- 102,593,340 -- -- --
BASIC Agreements on U.S. Treasury notes................... -- (619,267) -- -- --
Money market fund......................................... -- 309,860,733 -- 3,040,837 1,381,186
Participant loans receivable.............................. -- -- 36,479,042 -- --
----------- ------------ ----------- ------------ ----------
Total investments...................................... 11,906,314 411,834,806 36,479,042 142,815,007 1,381,186
----------- ------------ ----------- ------------ ----------
Receivables --
Employees' contributions.................................. 30,414 556,037 -- -- --
Employers' contributions.................................. -- -- -- 1,302,516 --
Accrued interest.......................................... -- 2,691,203 76,040 11,430 10,004
----------- ------------ ----------- ------------ ----------
30,414 3,247,240 76,040 1,313,946 10,004
Cash....................................................... -- -- -- -- 7,777
OPTION TRANSFERS RECEIVABLE (PAYABLE)....................... 97,188 (224,232) (420,581) -- 257,306
----------- ------------ ----------- ------------ ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS...................... $12,033,916 $414,857,814 $36,134,501 $144,128,953 $1,656,273
=========== ============ =========== ============ ==========
<CAPTION>
TOTAL
-----
<S> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock................................ $ 316,969,191
El Paso Natural Gas Company common stock................. 32,182,638
Newport News Shipbuilding Inc. common stock.............. 20,557,371
--------------
369,709,200
Collective trust funds --
BZW Barclays Equity Index Fund........................... 75,787,788
BZW Barclays U.S. Debt Market Index Fund................. 14,091,620
--------------
89,879,408
Registered investment companies --
Fidelity Growth Company Fund............................. 118,404,041
INVESCO Value Trust Total Return Fund.................... 9,334,811
Putnam New Opportunities Fund............................ 55,365,566
Templeton Foreign Fund................................... 11,906,314
--------------
195,010,732
U.S. Treasury notes....................................... 102,593,340
BASIC Agreements on U.S. Treasury notes................... (619,267)
Money market fund......................................... 319,522,676
Participant loans receivable.............................. 36,479,042
--------------
Total investments...................................... 1,112,575,131
--------------
Receivables --
Employees' contributions.................................. 1,377,863
Employers' contributions.................................. 1,302,516
Accrued interest.......................................... 2,822,003
--------------
5,502,382
Cash....................................................... 7,805
OPTION TRANSFERS RECEIVABLE (PAYABLE)....................... --
--------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS...................... $1,118,085,318
==============
</TABLE>
This exhibit is an integral part of the accompanying financial statements.
11
<PAGE> 12
EXHIBIT 1
CONTINUED
TENNECO THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
------------------------------------------------------------------------
FIDELITY
TENNECO INC. GROWTH FIDELITY U.S. CAPSTONE FIDELITY U.S.
COMMON COMPANY EQUITY INDEX GROWTH BOND INDEX
STOCK FUND PORTFOLIO FUND, INC. PORTFOLIO
------------ -------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock................ $233,515,424 $ -- $ -- $ -- $ --
Registered investment companies --
Fidelity Growth Company Fund............. -- 86,689,043 -- -- --
Capstone Growth Fund, Inc................ -- -- -- 31,531,420 --
Fidelity U.S. Equity Index Portfolio..... -- -- 32,420,246 -- --
Fidelity U.S. Bond Index Portfolio....... -- -- -- -- 17,211,429
------------ ----------- ----------- ----------- -----------
-- 86,689,043 32,420,246 31,531,420 17,211,429
U.S. Treasury notes........................ -- -- -- -- --
BASIC Agreements on U.S. Treasury notes.... -- -- -- -- --
Time deposits.............................. -- -- -- -- --
Cash surrender value of life insurance
policies................................. -- -- -- -- --
Participant loans receivable............... -- -- -- -- --
------------ ----------- ----------- ----------- -----------
Total investments...................... 233,515,424 86,689,043 32,420,246 31,531,420 17,211,429
------------ ----------- ----------- ----------- -----------
Receivables --
Employees' contributions................... 244,145 189,205 79,042 37,911 33,163
Employers' contributions................... -- -- -- -- --
Accrued interest........................... -- -- -- -- --
------------ ----------- ----------- ----------- -----------
244,145 189,205 79,042 37,911 33,163
Cash......................................... 901 272 -- 141 113
------------ ----------- ----------- ----------- -----------
Total assets........................... 233,760,470 86,878,520 32,499,288 31,569,472 17,244,705
LIABILITIES:
Due to Trustee for purchased securities...... 63,061 49,719 15,944 13,054 12,980
------------ ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS......... $233,697,409 $86,828,801 $32,483,344 $31,556,418 $17,231,725
============ =========== =========== =========== ===========
<CAPTION>
NONPARTICIPANT-
PARTICIPANT-DIRECTED INVESTMENTS DIRECTED
----------------------------------------- INVESTMENT
---------------
DISCONTINUED TENNECO INC.
TIME INVESTMENT PARTICIPANT COMMON
DEPOSITS OPTIONS LOANS STOCK TOTAL
-------- ------------ ----------- ------------ -----
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock................ $ -- $ -- $ -- $130,359,492 $ 363,874,916
Registered investment companies --
Fidelity Growth Company Fund............. -- -- -- -- 86,689,043
Capstone Growth Fund, Inc................ -- -- -- -- 31,531,420
Fidelity U.S. Equity Index Portfolio..... -- -- -- -- 32,420,246
Fidelity U.S. Bond Index Portfolio....... -- -- -- -- 17,211,429
------------ ------- ----------- ------------ --------------
-- -- -- -- 167,852,138
U.S. Treasury notes........................ 238,545,135 -- -- -- 238,545,135
BASIC Agreements on U.S. Treasury notes.... (1,410,145) -- -- -- (1,410,145)
Time deposits.............................. 227,090,114 -- -- -- 227,090,114
Cash surrender value of life insurance
policies................................. -- 86,486 -- -- 86,486
Participant loans receivable............... -- -- 27,349,098 -- 27,349,098
------------ ------- ----------- ------------ --------------
Total investments...................... 464,225,104 86,486 27,349,098 130,359,492 1,023,387,742
------------ ------- ----------- ------------ --------------
Receivables --
Employees' contributions................... 456,575 281 -- -- 1,040,322
Employers' contributions................... -- -- -- 948,894 948,894
Accrued interest........................... 3,867,269 -- -- -- 3,867,269
------------ ------- ----------- ------------ --------------
4,323,844 281 -- 948,894 5,856,485
Cash......................................... 354,123 -- -- -- 355,550
------------ ------- ----------- ------------ --------------
Total assets........................... 468,903,071 86,767 27,349,098 131,308,386 1,029,599,777
LIABILITIES:
Due to Trustee for purchased securities...... -- -- -- -- 154,758
------------ ------- ----------- ------------ --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS......... $468,903,071 $86,767 $27,349,098 $131,308,386 $1,029,445,019
============ ======= =========== ============ ==============
</TABLE>
This exhibit is an integral part of the accompanying financial statements.
12
<PAGE> 13
EXHIBIT 2
TENNECO THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FROM PLAN BENEFITS, WITH FUND
INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
--------------------------------------------------------------------------------------
EL PASO NEWPORT NEWS
NATURAL GAS SHIPBUILDING BZW BZW BARCLAYS FIDELITY
TENNECO INC. COMPANY INC. BARCLAYS U.S. DEBT GROWTH
COMMON COMMON COMMON EQUITY INDEX MARKET COMPANY
STOCK STOCK STOCK FUND INDEX FUND FUND
------------ ----------- ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS,
beginning of year.................. $233,697,409 $ -- $ -- $ -- $ -- $ 86,828,801
------------ ----------- ----------- ----------- ----------- ------------
ADD:
Dividends --
Tenneco Inc. common stock......... 5,950,325 -- -- -- -- --
Registered investment companies... -- -- -- -- -- 5,218,502
Interest........................... 223,542 2,336 1,639 -- -- --
------------ ----------- ----------- ----------- ----------- ------------
6,173,867 2,336 1,639 -- -- 5,218,502
Net appreciation (depreciation) in
fair value of investments......... 8,709,868 2,859,285 (1,376,780) 11,405,739 646,394 11,227,240
------------ ----------- ----------- ----------- ----------- ------------
Net investment income (loss)..... 14,883,735 2,861,621 (1,375,141) 11,405,739 646,394 16,445,742
Contributions --
Employees......................... 8,198,796 -- -- 4,165,475 1,055,965 9,070,169
Employers......................... -- -- -- -- -- --
Rollovers......................... 1,777,636 -- -- 1,124,015 548,117 2,464,757
------------ ----------- ----------- ----------- ----------- ------------
9,976,432 -- -- 5,289,490 1,604,082 11,534,926
Repayment of loan interest......... -- -- -- -- -- --
Distributions and merger........... (29,426,664) 30,607,578 22,894,864 -- -- --
------------ ----------- ----------- ----------- ----------- ------------
Total additions.................. (4,566,497) 33,469,199 21,519,723 16,695,229 2,250,476 27,980,668
------------ ----------- ----------- ----------- ----------- ------------
DEDUCT:
Withdrawals........................ 3,085,975 54,862 38,660 5,923,762 1,499,250 6,690,510
Administrative expenses............ -- -- -- -- -- --
Transfers to other plans........... 798,150 -- -- 176,714 26,393 271,964
------------ ----------- ----------- ----------- ----------- ------------
Total deductions................. 3,884,125 54,862 38,660 6,100,476 1,525,643 6,962,474
OPTION TRANSFERS.................... (44,051,466) (438,879) (461,182) 65,392,756 13,389,083 10,895,425
------------ ----------- ----------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of year.............. $181,195,321 $32,975,458 $21,019,881 $75,987,509 $14,113,916 $118,742,420
============ =========== =========== =========== =========== ============
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
---------------------------------------------------------------------------------------
INVESCO PUTNAM FIDELITY
VALUE TRUST NEW TEMPLETON MONEY U.S. EQUITY CAPSTONE
TOTAL RETURN OPPORTUNITIES FOREIGN MARKET INDEX GROWTH
FUND FUND FUND FUND PORTFOLIO FUND, INC.
------------ ------------- --------- ------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS,
beginning of year.................. $ -- $ -- $ -- $468,903,071 $ 32,483,344 $ 31,556,418
---------- ----------- ----------- ------------ ------------ ------------
ADD:
Dividends --
Tenneco Inc. common stock......... -- -- -- -- -- --
Registered investment companies... 239,394 426,689 431,296 -- -- --
Interest........................... -- -- -- 23,426,184 -- --
---------- ----------- ----------- ------------ ------------ ------------
239,394 426,689 431,296 23,426,184 -- --
Net appreciation (depreciation) in
fair value of investments......... 460,370 (1,193,570) 587,863 -- 1,414,691 1,036,393
---------- ----------- ----------- ------------ ------------ ------------
Net investment income (loss)..... 699,764 (766,881) 1,019,159 23,426,184 1,414,691 1,036,393
Contributions --
Employees......................... 612,777 3,407,310 643,517 22,048,071 416,352 208,344
Employers......................... -- -- -- -- -- --
Rollovers......................... 1,221,988 3,296,595 647,255 2,580,191 -- --
---------- ----------- ----------- ------------ ------------ ------------
1,834,765 6,703,905 1,290,772 24,628,262 416,352 208,344
Repayment of loan interest......... -- -- -- -- -- --
Distributions and merger........... -- -- -- -- -- --
---------- ----------- ----------- ------------ ------------ ------------
Total additions.................. 2,534,529 5,937,024 2,309,931 48,054,446 1,831,043 1,244,737
---------- ----------- ----------- ------------ ------------ ------------
DEDUCT:
Withdrawals........................ 343,831 1,376,268 161,193 71,137,293 489 427
Administrative expenses............ -- -- -- 430,723 -- --
Transfers to other plans........... 300 1,067 298 2,429,120 -- --
---------- ----------- ----------- ------------ ------------ ------------
Total deductions................. 344,131 1,377,335 161,491 73,997,136 489 427
OPTION TRANSFERS.................... 7,214,482 51,274,787 9,885,476 (28,102,567) (34,313,898) (32,800,728)
---------- ----------- ----------- ------------ ------------ ------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of year.............. $9,404,880 $55,834,476 $12,033,916 $414,857,814 $ -- $ --
========== =========== =========== ============ ============ ============
<CAPTION>
NONPARTICIPANT-
PARTICIPANT-DIRECTED INVESTMENTS DIRECTED INVESTMENTS
----------------------------------------- -------------------------
FIDELITY
U.S. BOND DISCONTINUED TENNECO INC.
INDEX INVESTMENT PARTICIPANT COMMON CLEARING
PORTFOLIO OPTIONS LOANS STOCK ACCOUNT TOTAL
--------- ------------ ----------- ------------ -------- -----
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS,
beginning of year.................. $ 17,231,725 $86,767 $27,349,098 $131,308,386 $ -- $1,029,445,019
------------ ------- ----------- ------------ ---------- --------------
ADD:
Dividends --
Tenneco Inc. common stock......... -- -- -- 6,288,715 -- 12,239,040
Registered investment companies... 189,320 -- -- -- -- 6,505,201
Interest........................... -- -- -- 182,893 183,853 24,020,447
------------ ------- ----------- ------------ ---------- --------------
189,320 -- -- 6,471,608 183,853 42,764,688
Net appreciation (depreciation) in
fair value of investments......... (372,758) -- -- 7,126,084 -- 42,530,819
------------ ------- ----------- ------------ ---------- --------------
Net investment income (loss)..... (183,438) -- -- 13,597,692 183,853 85,295,507
Contributions --
Employees......................... 179,935 -- -- -- -- 50,006,711
Employers......................... -- -- -- 48,127,132 -- 48,127,132
Rollovers......................... -- -- 823,098 -- -- 14,483,652
------------ ------- ----------- ------------ ---------- --------------
179,935 -- 823,098 48,127,132 -- 112,617,495
Repayment of loan interest......... -- -- 2,186,426 -- -- 2,186,426
Distributions and merger........... -- -- -- (24,075,778) -- --
------------ ------- ----------- ------------ ---------- --------------
Total additions.................. (3,503) -- 3,009,524 37,649,046 183,853 200,099,428
------------ ------- ----------- ------------ ---------- --------------
DEDUCT:
Withdrawals........................ 1,846 86,767 1,091,483 13,850,623 -- 105,343,239
Administrative expenses............ -- -- -- -- 562,241 992,964
Transfers to other plans........... -- -- 37,583 1,381,337 -- 5,122,926
------------ ------- ----------- ------------ ---------- --------------
Total deductions................. 1,846 86,767 1,129,066 15,231,960 562,241 111,459,129
OPTION TRANSFERS.................... (17,226,376) -- 6,904,945 (9,596,519) 2,034,661 --
------------ ------- ----------- ------------ ---------- --------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of year.............. $ -- $ -- $36,134,501 $144,128,953 $1,656,273 $1,118,085,318
============ ======= =========== ============ ========== ==============
</TABLE>
This exhibit is an integral part of the accompanying financial statements.
13
<PAGE> 14
EXHIBIT 2
CONTINUED
TENNECO THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND
INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
----------------------------------------------------------------------
FIDELITY FIDELITY
TENNECO INC. GROWTH FIDELITY U.S. CAPSTONE U.S.
COMMON COMPANY EQUITY INDEX GROWTH BOND INDEX
STOCK FUND PORTFOLIO FUND, INC. PORTFOLIO
------------ -------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year........................................ $220,354,216 $66,903,581 $22,961,424 $29,073,325 $13,469,769
ADD:
Dividends --
Tenneco Inc. common stock.............................. 7,882,241 -- -- -- --
Registered investment companies........................ -- 3,867,033 783,458 4,382,470 1,106,065
Interest.................................................. -- -- -- -- --
----------- ---------- ----------- ----------- ----------
7,882,241 3,867,033 783,458 4,382,470 1,106,065
Net appreciation in fair value of investments............. 36,658,103 21,115,284 7,699,600 3,311,421 1,424,680
----------- ---------- ----------- ----------- ----------
Net investment income.............................. 44,540,344 24,982,317 8,483,058 7,693,891 2,530,745
Contributions --
Employees................................................ 9,043,738 6,991,199 2,718,782 1,592,300 1,257,810
Employers................................................ -- -- -- -- --
----------- ---------- ----------- ----------- -----------
9,043,738 6,991,199 2,718,782 1,592,300 1,257,810
Repayment of loan interest................................ -- -- -- -- --
----------- ---------- ----------- ----------- -----------
Total additions.................................... 53,584,082 31,973,516 11,201,840 9,286,191 3,788,555
----------- ---------- ----------- ----------- -----------
DEDUCT:
Withdrawals.............................................. 7,502,726 8,018 1,593 1,393 2,267
Administrative expenses.................................. -- -- -- -- --
Transfer to other plans.................................. 2,909,337 2,119,563 1,107,463 998,541 417,258
----------- ---------- ----------- ----------- -----------
Total deductions................................... 10,412,063 2,127,581 1,109,056 999,934 419,525
----------- ---------- ----------- ----------- -----------
OPTION TRANSFERS.......................................... (29,828,826) (9,920,715) (570,864) (5,803,164) 392,926
----------- ---------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year.............................................. $233,697,409 $86,828,801 $32,483,344 $31,556,418 $17,231,725
============ =========== =========== =========== ===========
<CAPTION>
NONPARTICIPANT-
DIRECTED
PARTICIPANT-DIRECTED INVESTMENTS INVESTMENT
----------------------------------------- ---------------
DISCONTINUED TENNECO INC.
TIME INVESTMENT PARTICIPANT COMMON
DEPOSITS OPTIONS LOANS STOCK
-------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year........................................ $426,040,723 $ 172,017 $27,619,916 $ 76,627,571
ADD:
Dividends --
Tenneco Inc. common stock.............................. -- -- -- 3,517,196
Registered investment companies........................ -- 6,982 -- --
Interest.................................................. 24,424,327 13,338 -- --
------------ --------- ----------- ------------
24,424,327 20,320 -- 3,517,196
Net appreciation in fair value of investments............. -- 7,592 -- 15,514,355
------------ --------- ----------- ------------
Net investment income.............................. 24,424,327 27,912 -- 19,031,551
Contributions --
Employees................................................ 25,359,397 10,840 -- --
Employers................................................ -- -- -- 44,180,868
------------ --------- ----------- ------------
25,359,397 10,840 -- 44,180,868
Repayment of loan interest................................ -- -- 1,917,000 --
------------ --------- ----------- ------------
Total additions.................................... 49,783,724 38,752 1,917,000 63,212,419
------------ --------- ----------- ------------
DEDUCT:
Withdrawals.............................................. 55,238,262 -- 1,055,627 1,248,942
Administrative expenses.................................. 634,419 13,325 -- --
Transfer to other plans.................................. 3,051,930 -- 470,820 1,782,118
------------ --------- ----------- ------------
Total deductions................................... 58,924,611 13,325 1,526,447 3,031,060
------------ --------- ----------- ------------
OPTION TRANSFERS.......................................... 52,003,235 (110,677) (661,371) (5,500,544)
------------ --------- ----------- ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year.............................................. $468,903,071 $ 86,767 $27,349,098 $131,308,386
============ ========= =========== ============
<CAPTION>
TOTAL
-----
<S> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year........................................ $ 883,222,542
ADD:
Dividends --
Tenneco Inc. common stock.............................. 11,399,437
Registered investment companies........................ 10,146,008
Interest.................................................. 24,437,665
--------------
45,983,110
Net appreciation in fair value of investments............. 85,731,035
--------------
Net investment income.............................. 131,714,145
Contributions --
Employees................................................ 46,974,066
Employers................................................ 44,180,868
--------------
91,154,934
Repayment of loan interest................................ 1,917,000
--------------
Total additions.................................... 224,786,079
--------------
DEDUCT:
Withdrawals.............................................. 65,058,828
Administrative expenses.................................. 647,744
Transfer to other plans.................................. 12,857,030
--------------
Total deductions................................... 78,563,602
--------------
OPTION TRANSFERS.......................................... --
--------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year.............................................. $1,029,445,019
==============
</TABLE>
This exhibit is an integral part of the accompanying financial statements.
14
<PAGE> 15
SCHEDULE I
TENNECO THRIFT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
IDENTITY OF ISSUE SHARES OR CURRENT
VALUE DESCRIPTION OF ASSET FACE VALUE COST VALUE
----------------- -------------------- ---------- ---- -------
<S> <C> <C> <C> <C>
CORPORATE SECURITIES:
Tenneco Inc.*.................. Tenneco Inc. common stock 7,024,248 $ 281,083,329 $ 316,969,191
El Paso Natural Gas Company.... El Paso Natural Gas Company common stock 637,280 25,746,686 32,182,638
Newport News Shipbuilding
Inc.......................... Newport News Shipbuilding Inc. common stock 1,370,491 19,596,752 20,557,371
-------------- --------------
Total corporate securities 326,426,767 369,709,200
-------------- --------------
COLLECTIVE TRUST FUNDS:
BZW Barclays Global
Investors.................... BZW Barclays Equity Index Fund 3,865,996 64,993,385 75,787,788
BZW Barclays Global
Investors.................... BZW Barclays U.S. Debt Market Index Fund 1,187,604 13,489,594 14,091,620
-------------- --------------
Total collective trust funds 78,482,979 89,879,408
-------------- --------------
REGISTERED INVESTMENT COMPANIES:
Fidelity Investments
Institutional Services Co.... Fidelity Growth Company Fund 2,926,447 95,602,471 118,404,041
INVESCO Funds Group, Inc....... INVESCO Value Trust Total Return Fund 384,149 8,902,451 9,334,811
Putnam Management Company...... Putnam New Opportunities Fund 1,362,677 56,571,745 55,365,566
Franklin Templeton............. Templeton Foreign Fund 1,149,258 11,343,518 11,906,314
-------------- --------------
Total registered investment companies 172,420,185 195,010,732
-------------- --------------
U.S. TREASURY NOTES:
U.S. Treasury note, 6.750%, due February 28,
U.S. Government................ 1997 $ 12,000,000 12,031,746 12,028,080
U.S. Treasury note, 6.875%, due March 31,
U.S. Government................ 1997 12,000,000 12,034,124 12,043,080
U.S. Treasury note, 6.875%, due April 30,
U.S. Government................ 1997 12,000,000 12,028,272 12,060,000
U.S. Government................ U.S. Treasury note, 6.750%, due May 31, 1997 12,000,000 12,017,640 12,061,920
U.S. Government................ U.S. Treasury note, 6.375%, due June 30, 1997 6,000,000 5,993,941 6,030,960
U.S. Government................ U.S. Treasury note, 5.500%, due July 31, 1997 6,000,000 5,974,718 6,002,820
U.S. Treasury note, 5.625%, due August 31,
U.S. Government................ 1997 6,000,000 5,965,993 6,001,860
U.S. Treasury note, 5.500%, due September 30,
U.S. Government................ 1997 6,000,000 5,939,511 5,999,040
U.S. Treasury note, 5.750%, due October 31,
U.S. Government................ 1997 6,000,000 5,933,457 6,008,460
U.S. Treasury note, 7.375%, due November 15,
U.S. Government................ 1997 6,000,000 5,985,009 6,086,220
U.S. Treasury note, 7.375%, due November 15,
U.S. Government................ 1997 6,000,000 5,979,726 6,086,220
U.S. Treasury note, 7.375%, due November 15,
U.S. Government................ 1997 6,000,000 6,000,000 6,086,220
U.S. Treasury note, 7.250%, due February 15,
U.S. Government................ 1998 6,000,000 6,016,811 6,098,460
-------------- --------------
Total U.S. Treasury notes 101,900,948 102,593,340
-------------- --------------
BASIC AGREEMENTS:
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 6.750%, due February 28, 1997 -- $ 2,709 $ 6,376
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 6.875%, due March 31, 1997 -- 4,029 (4,927)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 6.875%, due April 30, 1997 -- 5,606 (26,122)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 6.750%, due May 31, 1997 -- 6,518 (37,762)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 6.375%, due June 30, 1997 -- 9,119 (27,900)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 5.500%, due July 31, 1997 -- 3,802 (24,300)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 5.625%, due August 31, 1997 -- 4,745 (31,122)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 5.500%, due September 30, 1997 -- 5,087 (54,442)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 5.750%, due October 31, 1997 -- 5,658 (69,345)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 7.375%, due November 15, 1997 -- 6,496 (94,715)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 7.375%, due November 15, 1997 -- 6,121 (100,373)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 7.375%, due November 15, 1997 -- 5,711 (80,509)
BASIC Agreement on U.S. Treasury note,
Bankers Trust Co. New York..... 7.250%, due February 15, 1998 -- 7,524 (74,126)
-------------- --------------
Total BASIC agreements 73,125 (619,267)
-------------- --------------
MONEY MARKET FUND:
NationsBank Texas*............. Nations Cash Reserves $319,522,676 319,522,676 319,522,676
-------------- --------------
Total money market fund 319,522,676 319,522,676
-------------- --------------
PARTICIPANT LOANS RECEIVABLE
TENNECO INC. THRIFT PLAN* (Interest rates ranging from 6% to 9.75%) $ 36,479,042 36,479,042 36,479,042
-------------- --------------
Total assets held for investment purposes $1,035,305,722 $1,112,575,131
============== ==============
</TABLE>
.
- -------------------------
* Indicated party in interest.
15
<PAGE> 16
SCHEDULE II
TENNECO THRIFT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS -- SERIES OF TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF COST
TRANSACTIONS OF ASSETS
----------------- PURCHASE SELLING SOLD OR NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION PURCHASES SALES PRICE(A)(C) PRICE(B)(C) DISTRIBUTED (LOSS)
- -------------------------- ----------- --------- ----- ----------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Tenneco Inc............... Tenneco Inc. common 48 119 $ 13,566,482 $ 86,840,933 $ 73,834,207 $13,006,726
stock
BZW Barclays Global
Investors............... BZW Barclays Equity 84 109 74,894,356 10,512,235 9,900,971 611,264
Index Fund
Fidelity Investments
Institutional Services
Co...................... Fidelity Growth 140 135 40,039,610 20,009,685 15,994,838 4,014,847
Company Fund
Putnam Management
Company................. Putnam New 149 39 59,789,544 3,230,409 3,217,800 12,609
Opportunities Fund
NationsBank Texas......... Nations Cash Reserves 286 318 627,662,985 308,140,321 308,140,321 --
Wachovia Bank of
Georgia................. Wachovia Bank of 2 3 51,000,000 75,000,000 75,000,000 --
Georgia Flex Fund
Wachovia Bank N.A......... Wachovia Bank N.A. 2 3 51,000,000 75,000,000 75,000,000 --
Flex Fund
</TABLE>
(a) Purchase price includes expenses incurred in connection with transactions
(i.e., commissions, transfer fees, etc.).
(b) Selling price is net of expenses incurred in connection with transactions.
(c) Current value of asset on transaction date is equal to the purchase/selling
price.
NOTE: This schedule is a listing of series of transactions in the same
security which exceed 5 percent of the market value of the Tenneco
Thrift Plan assets held on January 1, 1996. The Trustee initiates and
consummates all investment transactions at the direction of the
participants.
16
<PAGE> 17
SCHEDULE III
TENNECO THRIFT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS - SINGLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
COST
OF ASSETS
PURCHASE SELLING SOLD OR NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION PRICE(A)(C) PRICE(B)(C) DISTRIBUTED (LOSS)
- -------------------------- ------------------------------------- ----------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
BZW Barclays Global
Investors............... BZW Barclays Equity Index Fund Purchase $ 66,940,473 $-- $-- $--
NationsBank Texas......... Nations Cash Reserves Purchase 263,936,708 -- -- --
</TABLE>
(a) Purchase price includes expenses incurred in connection with transactions
(i.e., commissions, transfer fees, etc.).
(b) Selling price is net of expenses incurred in connection with transactions.
(c) Current value of asset on transaction date is equal to the purchase/selling
price.
NOTE: This schedule is a listing of single transactions which exceed 5
percent of the market value of the Tenneco Thrift Plan assets held on
January 1, 1996. The Trustee initiates and consummates all investment
transactions at the direction of the participants.
17
<PAGE> 18
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Tenneco Benefits Committee has duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
TENNECO THRIFT PLAN
<TABLE>
<S> <C>
Date: June 27, 1997 By: /s/ DANA G. MEAD
---------------------------------------------
Dana G. Mead
Chairman of the Tenneco
Benefits Committee
</TABLE>
<PAGE> 19
INDEX TO EXHIBIT
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<C> <S>
23 --Consent of Independent Public Accountants
</TABLE>
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 20, 1997, included in this Annual Report on
Form 11-K for the year ended December 31, 1996, into the previously filed Form
S-8 Registration Statements of the Tenneco Thrift Plan (File Nos. 333-17487 and
333-27281).
ARTHUR ANDERSEN LLP
Houston, Texas
June 27, 1997
