<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 PACKAGING 401(K) SAVINGS PLAN
1603 ORRINGTON AVENUE
EVANSTON, ILLINOIS 60204
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
benefits of the Tenneco Packaging 401(k) Savings Plan (formerly known as the
Packaging Corporation of America 401(k)Savings Plan) as of December 31, 1996 and
1995, and the related statements of changes in net assets available for 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 benefits of the Tenneco
Packaging 401(k) Savings Plan as of December 31, 1996 and 1995, and the changes
in net assets available for 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 and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for benefits and the statements of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund. The supplemental
schedules and fund information 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
Chicago, Illinois,
June 6, 1997
2
<PAGE> 3
TENNECO PACKAGING 401(K) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
DREYFUS
MONEY MARKET
TENNECO DREYFUS DREYFUS INSTRUMENTS,
INC. CAPITAL STRATEGIC DREYFUS GOVERNMENT DREYFUS
COMMON PRESERVATION INVESTING BALANCED SECURITIES APPRECIATION LOAN
STOCK FUND FUND FUND FUND SERIES FUND FUND
---------- ------------ --------- -------- ------------ ------------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at quoted
market value --
Tenneco Inc. common
stock.............. $8,062,303 $ -- $ -- $ -- $ -- $ -- $ --
Common stock......... 1,350,967 -- -- -- -- -- --
Investment funds..... 7,894 8,907,632 4,290,213 6,676,959 7,818,209 10,037,264 --
Cash equivalents..... 20,989 13,352 -- -- -- -- --
Participant notes
receivable (Note
5)................. -- -- -- -- -- -- 207,553
---------- ---------- ---------- ---------- ---------- ----------- --------
Total
investments...... 9,442,153 8,920,984 4,290,213 6,676,959 7,818,209 10,037,264 207,553
---------- ---------- ---------- ---------- ---------- ----------- --------
Contributions receivable
--
Employee............... 60,353 31,452 26,002 34,189 57,814 42,264 --
Employer............... 21,007 11,472 11,416 13,824 19,797 15,497 --
Profit sharing (Note
3)................... 5,193 15,579 15,579 18,695 21,811 27,003 --
---------- ---------- ---------- ---------- ---------- ----------- --------
Total contributions
receivable....... 86,553 58,503 52,997 66,708 99,422 84,764 --
---------- ---------- ---------- ---------- ---------- ----------- --------
NET ASSETS AVAILABLE FOR
BENEFITS............... $9,528,706 $8,979,487 $4,343,210 $6,743,667 $7,917,631 $10,122,028 $207,553
========== ========== ========== ========== ========== =========== ========
<CAPTION>
TOTAL
-----
<S> <C>
ASSETS:
Investments, at quoted
market value --
Tenneco Inc. common
stock.............. $ 8,062,303
Common stock......... 1,350,967
Investment funds..... 37,738,171
Cash equivalents..... 34,341
Participant notes
receivable (Note
5)................. 207,553
-----------
Total
investments...... 47,393,335
-----------
Contributions receivable
--
Employee............... 252,074
Employer............... 93,013
Profit sharing (Note
3)................... 103,860
-----------
Total contributions
receivable....... 448,947
-----------
NET ASSETS AVAILABLE FOR
BENEFITS............... $47,842,282
===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
3
<PAGE> 4
TENNECO PACKAGING 401(K) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
DREYFUS
MONEY MARKET
TENNECO DREYFUS DREYFUS INSTRUMENTS,
INC. CAPITAL STRATEGIC DREYFUS GOVERNMENT DREYFUS
COMMON PRESERVATION INVESTING BALANCED SECURITIES APPRECIATION LOAN
STOCK FUND FUND FUND FUND SERIES FUND FUND
---------- ------------ --------- -------- ------------ ------------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at quoted
market value --
Tenneco Inc. common
stock............. $7,161,086 $ -- $ -- $ -- $ -- $ -- $ --
Investment funds.... -- 7,444,622 2,235,578 4,167,516 5,975,765 5,427,322 --
Cash equivalents.... 580,650 -- -- -- -- -- --
Participant notes
receivable
(Note 5).......... -- -- -- -- -- -- 132,984
---------- ---------- ---------- ---------- ---------- ---------- --------
Total
investments..... 7,741,736 7,444,622 2,235,578 4,167,516 5,975,765 5,427,322 132,984
---------- ---------- ---------- ---------- ---------- ---------- --------
Contributions receivable
--
Employee.............. 46,484 34,752 17,054 27,995 42,401 29,267 --
Employer.............. 12,846 11,302 5,549 8,548 12,855 8,751 --
Profit sharing (Note
3).................. 4,810 23,776 17,764 30,307 36,970 38,699 --
---------- ---------- ---------- ---------- ---------- ---------- --------
Total
contributions
receivable...... 64,140 69,830 40,367 66,850 92,226 76,717 --
---------- ---------- ---------- ---------- ---------- ---------- --------
NET ASSETS AVAILABLE FOR
BENEFITS.............. $7,805,876 $7,514,452 $2,275,945 $4,234,366 $6,067,991 $5,504,039 $132,984
========== ========== ========== ========== ========== ========== ========
<CAPTION>
TOTAL
-----
<S> <C>
ASSETS:
Investments, at quoted
market value --
Tenneco Inc. common
stock............. $ 7,161,086
Investment funds.... 25,250,803
Cash equivalents.... 580,650
Participant notes
receivable
(Note 5).......... 132,984
-----------
Total
investments..... 33,125,523
-----------
Contributions receivable
--
Employee.............. 197,953
Employer.............. 59,851
Profit sharing (Note
3).................. 152,326
-----------
Total
contributions
receivable...... 410,130
-----------
NET ASSETS AVAILABLE FOR
BENEFITS.............. $33,535,653
===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
4
<PAGE> 5
TENNECO PACKAGING 401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
DREYFUS
MONEY MARKET
TENNECO DREYFUS DREYFUS INSTRUMENTS,
INC. CAPITAL STRATEGIC DREYFUS GOVERNMENT DREYFUS
COMMON PRESERVATION INVESTING BALANCED SECURITIES APPRECIATION LOAN
STOCK FUND FUND FUND FUND SERIES FUND FUND
---------- ------------ --------- -------- ------------ ------------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions --
Employee............... $ 747,735 $1,022,624 $ 663,868 $ 864,778 $1,243,886 $ 1,088,461 $ --
Employer............... 357,275 318,965 182,180 251,975 296,028 284,719 --
Profit sharing (Note
3)................... 5,193 15,579 15,579 18,695 21,811 27,003 --
----------- ---------- ---------- ---------- ---------- ----------- --------
Total
contributions...... 1,110,203 1,357,168 861,627 1,135,448 1,561,725 1,400,183 --
----------- ---------- ---------- ---------- ---------- ----------- --------
Investment income --
Interest income........ -- 469,770 -- -- -- -- --
Dividend income........ 306,313 -- 630,640 410,020 313,240 97,316 --
Other income........... 1,349,345 -- -- -- -- -- --
Realized gain.......... -- -- 3,662 26,955 -- 59,892 --
Unrealized gain
(loss)............... (870,956) -- (75,530) 224,861 -- 1,674,406 --
Loan interest income... -- -- -- -- -- -- 9,673
----------- ---------- ---------- ---------- ---------- ----------- --------
Total investment
income............. 784,702 469,770 558,772 661,836 313,240 1,831,614 9,673
----------- ---------- ---------- ---------- ---------- ----------- --------
Transfer in of assets from
various plans (Note 1)... 3,589,956 -- -- -- -- -- 115,633
----------- ---------- ---------- ---------- ---------- ----------- --------
TOTAL ADDITIONS............ 5,484,861 1,826,938 1,420,399 1,797,284 1,874,965 3,231,797 125,306
INTERFUND TRANSFERS........ (3,530,716) (119,605) 763,170 881,083 452,797 1,553,271 --
LOANS TO
PARTICIPANTS............. (558) (3,881) (3,723) (9,650) (14,173) (13,015) 45,000
LOAN REPAYMENTS............ 11,866 9,177 12,768 18,666 17,900 23,301 (93,678)
DEDUCTIONS:
Distributions to
participants......... (242,623) (247,594) (125,349) (178,082) (481,849) (177,365) (2,059)
----------- ---------- ---------- ---------- ---------- ----------- --------
Net additions...... 1,722,830 1,465,035 2,067,265 2,509,301 1,849,640 4,617,989 74,569
NET ASSETS AVAILABLE FOR
BENEFITS, January 1,
1996..................... 7,805,876 7,514,452 2,275,945 4,234,366 6,067,991 5,504,039 132,984
----------- ---------- ---------- ---------- ---------- ----------- --------
NET ASSETS AVAILABLE FOR
BENEFITS, December 31,
1996..................... $ 9,528,706 $8,979,487 $4,343,210 $6,743,667 $7,917,631 $10,122,028 $207,553
=========== ========== ========== ========== ========== =========== ========
<CAPTION>
TOTAL
-----
<S> <C>
ADDITIONS:
Contributions --
Employee............... $ 5,631,352
Employer............... 1,691,142
Profit sharing (Note
3)................... 103,860
-----------
Total
contributions...... 7,426,354
-----------
Investment income --
Interest income........ 469,770
Dividend income........ 1,757,529
Other income........... 1,349,345
Realized gain.......... 90,509
Unrealized gain
(loss)............... 952,781
Loan interest income... 9,673
-----------
Total investment
income............. 4,629,607
-----------
Transfer in of assets from
various plans (Note 1)... 3,705,589
-----------
TOTAL ADDITIONS............ 15,761,550
INTERFUND TRANSFERS........ --
LOANS TO
PARTICIPANTS............. --
LOAN REPAYMENTS............ --
DEDUCTIONS:
Distributions to
participants......... (1,454,921)
-----------
Net additions...... 14,306,629
NET ASSETS AVAILABLE FOR
BENEFITS, January 1,
1996..................... 33,535,653
-----------
NET ASSETS AVAILABLE FOR
BENEFITS, December 31,
1996..................... $47,842,282
===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
5
<PAGE> 6
TENNECO PACKAGING 401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
DREYFUS
MONEY MARKET
TENNECO DREYFUS DREYFUS INSTRUMENTS,
INC. CAPITAL STRATEGIC DREYFUS GOVERNMENT DREYFUS
COMMON PRESERVATION INVESTING BALANCED SECURITIES APPRECIATION LOAN
STOCK FUND FUND FUND FUND SERIES FUND FUND
---------- ------------ --------- -------- ------------ ------------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions --
Employee............... $1,116,050 $ 871,540 $ 422,088 $ 613,764 $1,003,272 $ 637,968 $ --
Employer............... 312,832 279,066 130,793 181,825 284,839 184,056 --
Profit sharing (Note
3)................... 4,810 23,776 17,764 30,307 36,970 38,699 --
---------- ---------- ---------- ---------- ---------- ----------- --------
Total
contributions...... 1,433,692 1,174,382 570,645 825,896 1,325,081 860,723 --
---------- ---------- ---------- ---------- ---------- ----------- --------
Investment income --
Interest income........ -- 371,896 -- -- -- -- --
Dividend income........ 253,910 -- 230,181 320,583 267,389 92,567 --
Realized gain (loss)... -- -- (16,373) 37,836 -- 40,361 --
Unrealized gain........ 913,133 -- 149,265 305,012 -- 1,076,588 --
Loan interest income... -- -- -- -- -- -- 5,813
---------- ---------- ---------- ---------- ---------- ----------- --------
Total investment
income............. 1,167,043 371,896 363,073 663,431 267,389 1,209,516 5,813
---------- ---------- ---------- ---------- ---------- ----------- --------
Transfer in of assets
from various plans
(Note 1)............... 647,579 439,312 262,510 561,284 1,107,381 740,218 135,248
---------- ---------- ---------- ---------- ---------- ----------- --------
TOTAL ADDITIONS............ 3,248,314 1,985,590 1,196,228 2,050,611 2,699,851 2,810,457 141,061
INTERFUND TRANSFERS........ (95,482) 120,119 (189,368) 219,801 (357,504) 302,434 --
LOANS TO
PARTICIPANTS............. (191) (2,907) (2,799) (6,471) (3,790) (5,742) 21,900
LOAN REPAYMENTS............ 1,170 3,869 3,245 5,631 6,969 7,135 (28,019)
DEDUCTIONS:
Distributions to
participants........... (286,889) (184,329) (72,551) (222,671) (745,340) (105,999) (1,958)
Transfer out of assets
from Sylva plan........ (8,531) -- (1,174) (4,640) (93,694) (7,316) --
---------- ---------- ---------- ---------- ---------- ----------- --------
Net additions........ 2,858,391 1,922,342 933,581 2,042,261 1,506,492 3,000,969 132,984
NET ASSETS AVAILABLE FOR
BENEFITS, January 1,
1995..................... $4,947,485 $5,592,110 $1,342,364 $2,192,105 $4,561,499 $ 2,503,070 --
---------- ---------- ---------- ---------- ---------- ----------- --------
NET ASSETS AVAILABLE FOR
BENEFITS, December 31,
1995..................... $7,805,876 $7,514,452 $2,275,945 $4,234,366 $6,067,991 $ 5,504,039 $132,984
========== ========== ========== ========== ========== =========== ========
<CAPTION>
TOTAL
-----
<S> <C>
ADDITIONS:
Contributions --
Employee............... $ 4,664,682
Employer............... 1,373,411
Profit sharing (Note
3)................... 152,326
-----------
Total
contributions...... 6,190,419
-----------
Investment income --
Interest income........ 371,896
Dividend income........ 1,164,630
Realized gain (loss)... 61,824
Unrealized gain........ 2,443,998
Loan interest income... 5,813
-----------
Total investment
income............. 4,048,161
-----------
Transfer in of assets
from various plans
(Note 1)............... 3,893,532
-----------
TOTAL ADDITIONS............ 14,132,112
INTERFUND TRANSFERS........ --
LOANS TO
PARTICIPANTS............. --
LOAN REPAYMENTS............ --
DEDUCTIONS:
Distributions to
participants........... (1,619,737)
Transfer out of assets
from Sylva plan........ (115,355)
-----------
Net additions........ 12,397,020
NET ASSETS AVAILABLE FOR
BENEFITS, January 1,
1995..................... $21,138,633
-----------
NET ASSETS AVAILABLE FOR
BENEFITS, December 31,
1995..................... $33,535,653
===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
6
<PAGE> 7
TENNECO PACKAGING 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. DESCRIPTION OF THE PLAN:
The following description of the Tenneco Packaging 401(k) Savings Plan (the
"Plan") provides only general information. Participants should refer to the Plan
for a more complete description of the Plan's provisions.
The Plan was established on November 1, 1989, to provide for tax-deferred
savings contributions for Plan participants. The effective date for initial
contributions to the Plan was January 1, 1990.
The Plan is a defined contribution plan which complies with Sections 401(a)
and 401(k) of the Internal Revenue Code.
During the first year of the Plan, all active, full-time hourly rated
employees of the Tenneco Packaging Inc., Counce, Tennessee Mill, who had
completed one year of service, defined as 1,000 or more hours of qualified
service, were eligible for enrollment. On February 1, 1991, the Plan was
extended to include all active, full-time hourly rated employees at the
following six additional Tenneco Packaging Inc., formerly Packaging Corporation
of America (the "Company") operations:
- Los Angeles, California Container Plant
- Rutherfordton, North Carolina Container Plant
- Salisbury, North Carolina Container Plant
- Southern Region -- Woodlands, Counce, Tennessee
- Tomahawk, Wisconsin Mill
- Valdosta, Georgia Mill
Effective December 31, 1991, the Filer Mill 401(k) Savings Plan was merged
with the Plan. Assets of the Filer Mill 401(k) Savings Plan were transferred
into the Plan on January 1, 1992. All rights and obligations under the Filer
Mill 401(k) Savings Plan are in accordance with the amended plan agreement for
the Plan.
Effective April 1, 1993, all assets of the Dixie Container Corporation
Pretax Savings Plan (the "Dixie Plan") were merged into the Plan. Former
salaried participants of the Dixie Plan were eligible to participate in the
Tenneco Thrift Plan (the "Thrift Plan") effective January 1, 1992. As the Thrift
Plan does not allow any "roll-over" contribution of assets, the assets remained
in the Dixie Plan until April 1, 1993, at which time those assets were
transferred to the Plan. Former hourly participants of the Dixie Plan continue
to earn interest on their account balances now held by the Plan but are no
longer eligible to contribute to any of the Tenneco Inc. defined contribution
plans.
Effective February 1, 1994, the Plan was extended to include all active,
full-time hourly rated employees at the Company's Clayton, New Jersey, location.
Effective April 1, 1995, all assets of the Pressware International, Inc.
Employees' Profit Sharing and Salary Deferral Plan (the "Pressware Plan") were
merged into the Plan. Former salaried participants of the Pressware Plan were
eligible to participate in the Thrift Plan effective April 1, 1995. As the
Thrift Plan does not allow any "rollover" contribution of assets, those assets
were transferred to the Plan. Former hourly participants of the Pressware Plan
were eligible to participate in the Plan effective April 1, 1995. All six
investment options were made available to these participants. The hourly and
salaried participants were allowed to transfer existing loan balances into the
Plan and are also eligible to request loans against their account balances as of
April 1, 1995. Additionally, participants are eligible to receive discretionary
profit-sharing contributions.
7
<PAGE> 8
TENNECO PACKAGING 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996 AND 1995
Effective March 31, 1995, the Company sold the assets of its Sylva, North
Carolina, mill and all existing balances were transferred out of the Plan.
Effective May 3, 1995, the Lux Packaging Ltd. Employee Retirement Plan (the
"Lux Plan") was merged into the Plan. Former salaried participants of the Lux
Plan were eligible to participate in the Thrift Plan effective June 1, 1995. As
the Thrift Plan does not allow any "rollover" contribution of assets, the assets
remained in the Lux Plan until December 8, 1995, at which time those assets were
transferred to the Plan. Former hourly participants of the Lux Plan were
eligible to participate in the Plan effective June 1, 1995. All six investment
options were made available to these participants.
Effective November 20, 1995, the Deline Box Windsor, Inc. 401(k) Employee
Savings Plan (the "Windsor Plan") was merged into the Plan. Former salaried
participants of the Windsor Plan were eligible to participate in the Thrift Plan
effective December 1, 1995. As the Thrift Plan does not allow any "rollover"
contribution of assets, the assets remained in the Windsor Plan until December
5, 1995, at which time those assets were transferred to the Plan. Former hourly
participants of the Windsor Plan were eligible to participate in the Plan
effective December 1, 1995. All six investment options were made available to
these participants.
Effective January 1, 1996, the Hexacomb Corporation 401(k) and Profit
Sharing Plan (the "Hexacomb Plan") was merged into the Plan. Former salaried
participants of the Hexacomb Plan were eligible to participate in the Thrift
Plan effective January 1, 1996. As the Thrift Plan does not allow any "rollover"
contribution of assets, the assets remained in the Hexacomb Plan until May 2,
1996, at which time those assets were transferred to the Plan. Former hourly
participants of the Hexacomb Plan were eligible to participate in the Plan
effective January 1, 1996. Funds were transferred into the Tenneco Inc. Common
Stock Fund initially and interfund transferred to the other funds after January
1, 1996. All six investment options were made available to these participants.
Effective January 1, 1996, hourly rated employees of Tenneco Packaging
Container Division, Edmore, Michigan and Traverse City, Michigan, became
eligible to participate in the Plan.
Tenneco Packaging Inc. is a wholly owned subsidiary of Tenneco Inc. 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.
Dreyfus Trust Company ("Trustee") is the Trustee of the Plan.
8
<PAGE> 9
TENNECO PACKAGING 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996 AND 1995
2. SUMMARY OF ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
The Plan's financial statements are maintained on the accrual basis of
accounting. Investments are reported at market value. Cost of investments sold
is determined using the average cost method.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions in determining the reported amounts on the Company's assets,
liabilities, revenues and expenses. Actual results may differ from these
estimates.
3. CONTRIBUTIONS:
Eligible participants in the Plan may make tax-deferred savings
contributions via payroll deductions that range from 1% to 16% of their salary
(in increments of 1%). The Company contributes, on behalf of the participant, a
matching amount to the Plan which varies by location, of the first 4% of the
participant's contributions. Additionally, active participants of the Pressware
Plan are eligible to receive discretionary profit-sharing contributions.
Tax-deferred savings contributions per employee are limited to $9,500 and $9,240
in 1996 and 1995, respectively, in accordance with Section 402 of the Internal
Revenue Code.
4. INVESTMENT OPTIONS:
Participating employees at all locations, unless otherwise noted, may
invest their tax-deferred savings contributions and the matching Company
contributions in multiples of 10% in the following funds:
a. Tenneco Inc. Common Stock Fund
This fund invests in common stock of Tenneco Inc., the Company's parent.
The value of this fund changes with the market value of Tenneco Inc. common
stock and related dividend income. Included within this fund as a cash
equivalent is the Dreyfus Liquid Asset Fund, which is used as a holding account
for cash invested in Tenneco Inc. Common Stock.
As a result of the Transaction that occurred in December 1996, this fund
also holds stock of El Paso and Newport News as of December 31, 1996.
b. Dreyfus Capital Preservation Fund
This fund invests in money markets and floating and fixed-rate contracts
placed with approved banks and insurance carriers, with no more than 10% of the
fund invested in a single carrier. Only the Counce, Tennessee, Filer City,
Michigan, and Clayton, New Jersey locations have this investment option.
c. Dreyfus Strategic Investing Fund
This fund invests mainly in publicly issued common stock. The fund may
invest in common stocks of foreign companies, convertible securities, preferred
stocks and debt securities. In an effort to increase its total return, the fund
may engage in techniques such as leveraging, short-selling, options and futures
transactions and currency transactions.
d. Dreyfus Balanced Fund
This fund invests in common stocks and fixed income instruments.
9
<PAGE> 10
TENNECO PACKAGING 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996 AND 1995
e. Dreyfus Money Market Instruments, Government Securities Series
This fund invests primarily in short-term securities issued or guaranteed
by the U.S. Government.
f. Dreyfus Appreciation Fund
This fund invests in stocks that are considered "undervalued" in terms of
current earnings, asset or growth potential.
Fully benefit-responsive investment contracts are valued at contract value,
which represents the principal balance of the investment contracts, plus accrued
interest at the stated contract rate, less payments received and contract
charges by the insurance company. Under the terms of the investment contracts,
the crediting interest rate is determined semiannually based on the insurance
company's applicable rate schedule. The contract value of the investment
contracts as of December 31, 1996, approximated fair value.
5. PARTICIPANT LOANS:
Effective April 1, 1995, active participants of the Pressware Plan were
allowed to transfer existing loan balances into the Plan and may take a loan
from their 401(k) account. Participants may borrow from their fund accounts a
minimum of $1,000 up to a maximum of the lesser of 50% of their vested balance
or $50,000 less the participant's highest Plan loan balance in the last 12
months. Loan transactions are treated as a transfer from (to) the investment
funds to (from) the Loan Fund. Loans for the purchase of a primary residence can
be repaid over a period of up to 10 years. Loans for any other reason can be
repaid over a period of up to 5 years. Loans are repaid to the participant's
401(k) account at a fixed interest rate through payroll deductions. The interest
rate is set at 1% above the current prime rate. Outstanding interest rates at
December 31, 1996, ranged from 7% to 14.45%.
6. VESTING:
Participants at the Counce, Tennessee Mill, the Filer City, Michigan Mill,
the Edmore, Michigan Plant, the Traverse City, Michigan Plant, the Clayton, New
Jersey Plant, the Waco, Texas Plant, the Windsor, Colorado Plant, the Columbus,
Ohio Plant and the Dixie locations are fully vested in the portion of their
accounts attributable to their tax-deferred savings contributions and the
related earnings thereon as well as in the Company's matching contributions.
Other participants are fully vested in their own tax-deferred savings
contributions and the related earnings thereon, but vest in Company matching
contributions evenly over a five-year period. The five-year period includes
service under Georgia-Pacific Corporation ("G.P.") and with any entity acquired
by G.P. and recognized by G.P. for vesting purposes. Forfeitures are used to
reduce future employer matching contributions.
7. PLAN DISTRIBUTIONS AND WITHDRAWALS:
Upon retirement or termination, participants may elect to have the portion
of their accounts invested in the Tenneco Inc. Common Stock Fund distributed in
either stock or cash. The portion of the participant's account balance invested
in other investment options will be paid in cash. The distribution will begin
upon the earlier of the participant's 65th birthday, death or termination of
employment with the Company. In no event may a participant delay distribution
after reaching age 70 1/2.
Participants may withdraw all or a portion of their accounts attributable
to tax-deferred savings contributions in the event of serious financial hardship
(subject to the approval of the Plan administrator and in accordance with the
Plan agreement and the applicable regulations of the Internal Revenue Code),
subject to a minimum withdrawal. Company matching contributions may not be
withdrawn at all facilities.
The Company has reserved the right to terminate the Plan at any time.
However, should the Company terminate the Plan, all participants will be fully
vested in their accounts.
10
<PAGE> 11
TENNECO PACKAGING 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996 AND 1995
8. RECONCILIATION TO FORM 5500:
As of December 31, 1996 and 1995, the Plan had $390,266 and $224,220,
respectively, of pending distributions to participants who elected to withdraw
from the operations and earnings of the Plan. These amounts are recorded as a
liability in the Plan's Form 5500; however, in accordance with generally
accepted accounting principles, these amounts are not recorded as a liability in
the financial statements.
The following table reconciles net assets available for Plan benefits per
the financial statements to the Form 5500 as filed by the Company for the year
ended December 31, 1996:
<TABLE>
<CAPTION>
NET ASSETS
BENEFITS AVAILABLE
PAYABLE TO BENEFITS FOR PLAN
PARTICIPANTS PAID BENEFITS
------------ -------- ----------
<S> <C> <C> <C>
Per financial statements................... $ -- $1,454,921 $47,842,282
Accrued benefit payments................... 390,266 390,266 (390,266)
Reversal of 1995 accrual for benefit
payments................................. -- (224,220) --
-------- ---------- -----------
Per Form 5500......................... $390,266 $1,620,967 $47,452,016
======== ========== ===========
</TABLE>
9. PLAN EXPENSES:
Administrative expenses may be paid from fund assets as permitted by and
subject to limitation set by law. All Trustee fees and other administrative
expenses were paid directly by the Company in 1996 and 1995.
10. FEDERAL INCOME TAXES:
The Plan received a determination letter on February 6, 1991, in which the
Internal Revenue Service ("IRS") stated that the Plan was in compliance with the
applicable requirements of the Internal Revenue Code. The Plan has been amended
subsequent to the most recent IRS determination. The Plan administrator
continues to believe that the Plan is designed and operated in compliance with
the applicable requirements of the Internal Revenue Code and, as such, that the
Plan is qualified and the related trust income is tax-exempt.
A participant is not subject to federal income tax on employer and employee
contributions or on earnings on these contributions until distributed.
11. SUBSEQUENT EVENT:
Effective August 1, 1997, NationsBank will be the Trustee to the Plan and
the Plan will be merged into the Tenneco Thrift Plan for Hourly Employees.
11
<PAGE> 12
SCHEDULE I
TENNECO PACKAGING 401(K) SAVINGS PLAN
ITEM 27(A)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
(EMPLOYER IDENTIFICATION NUMBER 36-2552989, PLAN NUMBER 019)
<TABLE>
<CAPTION>
SHARES/ CURRENT
UNITS COST VALUE
------- ---- -------
<S> <C> <C> <C>
Tenneco Inc. Common Stock Fund*....................... 178,666 $ 8,203,408 $ 8,083,292
Dreyfus Liquid Asset Fund*............................ 7,894 7,894 7,894
Dreyfus Capital Preservation Fund*.................... 8,907,632 8,920,984 8,920,984
Dreyfus Strategic Investing Fund*..................... 205,963 4,373,207 4,290,213
Dreyfus Balanced Fund*................................ 416,269 6,103,188 6,676,959
Dreyfus Money Market Instruments, Government
Securities Series*.................................. 7,818,209 7,818,209 7,818,209
Dreyfus Appreciation Fund*............................ 392,387 7,181,687 10,037,264
Dreyfus Loan Fund*.................................... 207,553 207,553 207,553
El Paso Natural Gas Common Stock...................... 16,324 787,633 824,362
Newport News Common Stock............................. 35,107 561,712 526,605
--------- ----------- -----------
8,186,004 $44,165,475 $47,393,335
========= =========== ===========
</TABLE>
- -------------------------
*Represents a party-in-interest transaction.
The accompanying notes to financial statements are an integral part of this
schedule.
12
<PAGE> 13
SCHEDULE II
TENNECO PACKAGING 401(K) SAVINGS PLAN
ITEM 27(D) -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(EMPLOYER IDENTIFICATION NUMBER 36-2552989, PLAN NUMBER 019)
<TABLE>
<CAPTION>
COST OF COST OF
PURCHASED ASSETS PROCEEDS NET
INVESTMENT ASSETS SOLD FROM SALES GAIN
---------- --------- ------- ---------- ----
<S> <C> <C> <C> <C>
Tenneco Inc. Common Stock Fund*................. $ 7,958,228 $6,757,189 $6,757,189 $ --
Dreyfus Capital Preservation Fund*.............. 2,169,498 706,488 706,488 --
Dreyfus Strategic Investing Fund*............... 2,288,228 158,064 161,726 3,662
Dreyfus Balanced Fund*.......................... 2,665,452 380,870 407,825 26,955
Dreyfus Money Market Instruments, Government
Securities Series*............................ 3,059,715 1,217,271 1,217,271 --
Dreyfus Appreciation Fund*...................... 3,117,551 182,014 241,906 59,892
Dreyfus Loan Fund*.............................. 45,000 95,737 95,737 --
----------- ---------- ---------- -------
$21,303,672 $9,497,633 $9,588,142 $90,509
=========== ========== ========== =======
</TABLE>
- -------------------------
*Represents a party-in-interest transaction.
The accompanying notes to financial statements are an integral part of this
schedule.
13
<PAGE> 14
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 PACKAGING 401(k) SAVINGS PLAN
<TABLE>
<S> <C>
Date: June 27, 1997 By: /s/ DANA G. MEAD
---------------------------------------------
Dana G. Mead
Chairman of the Tenneco
Benefits Committee
</TABLE>
<PAGE> 15
INDEX TO EXHIBIT
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<C> <S>
23 --Consent of Independent Public Accountants
</TABLE>
<PAGE> 1
EXHIBIT 23
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report dated June 6, 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 Statement of the Tenneco Packaging 401(K) Savings Plan (File
No. 333-17487).
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 27, 1997
