<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 FOR HOURLY EMPLOYEES
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
================================================================================
<PAGE> 2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Tenneco Benefits Committee:
We have audited the accompanying statement of net assets available for plan
benefits of the Tenneco Thrift Plan For Hourly Employees as of December 31,
1996, and the related statement of changes in net assets available for plan
benefits for the period from inception (April 1, 1996) through December 31,
1996. 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
audit.
We conducted our audit 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 audit provides 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 For Hourly Employees as of December 31, 1996, and the changes in net
assets available for plan benefits for the period from inception (April 1, 1996)
through December 31, 1996, in conformity with generally accepted accounting
principles.
Our audit was 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 period from inception (April 1,
1996) through December 31, 1996, included as Schedule II, and reportable
transactions -- single transactions for the period from inception (April 1,
1996) through 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 audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Houston, Texas
June 20, 1997
2
<PAGE> 3
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- ------
<S> <C> <C> <C>
INVESTMENTS:
Corporate securities --
Tenneco Inc. common stock.......................... 137,232 $ 5,674,959 $ 6,192,594
El Paso Natural Gas Company common stock........... 12,076 503,073 609,841
Newport News Shipbuilding Inc. common stock........ 25,970 382,908 389,550
----------- -----------
6,560,940 7,191,985
Collective trust funds --
BZW Barclays Equity Index Fund..................... 162,310 3,175,816 3,181,878
BZW Barclays U.S. Debt Market Index Fund........... 150,322 1,793,249 1,783,655
----------- -----------
4,969,065 4,965,533
Registered investment companies --
Fidelity Growth Company Fund....................... 63,968 2,706,927 2,588,137
INVESCO Value Trust Total Return Fund.............. 11,668 275,895 283,529
Putnam New Opportunities Fund...................... 55,325 2,329,047 2,247,853
Templeton Foreign Fund............................. 25,499 255,163 264,170
----------- -----------
5,567,032 5,383,689
Money market fund..................................... 2,335,726 2,335,726 2,335,726
Participant loans receivable.......................... 566,866 566,866 566,866
----------- -----------
Total investments................................ $19,999,629 20,443,799
=========== -----------
RECEIVABLES:
Employees' contributions.............................. 241,875
Employers' contributions.............................. 117,445
Accrued interest...................................... 13,189
OTHER................................................... (7,777)
-----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS.................. $20,808,531
===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
financial statement.
3
<PAGE> 4
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE PERIOD FROM INCEPTION (APRIL 1, 1996)
THROUGH DECEMBER 31, 1996
<TABLE>
<S> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of
period.................................................... $ --
-----------
ADD:
Dividends --
Tenneco Inc............................................ 64,025
Registered investment companies........................ 118,864
Interest.................................................. 22,976
-----------
205,865
Net depreciation in fair value of investments............. (75,710)
-----------
Net investment income................................ 130,155
Contributions --
Employees.............................................. 2,852,360
Employers.............................................. 3,319,046
Rollovers.............................................. 5,001,463
-----------
11,172,869
Repayment of loan interest................................ 4,874
Transfer from other plans (Note 4)........................ 9,657,825
Other..................................................... 12,333
-----------
Total additions...................................... 20,978,056
-----------
DEDUCT:
Withdrawals............................................... 169,525
-----------
Total deductions..................................... 169,525
-----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of period....... $20,808,531
===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
financial statement.
4
<PAGE> 5
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. DESCRIPTION OF THE HOURLY THRIFT PLAN:
The following description of the Tenneco Thrift Plan For Hourly Employees (the
Hourly Thrift Plan) provides only general information. Participants should refer
to the Hourly Thrift Plan for a more complete description of the Hourly 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 spunoff 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 Hourly 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 Hourly Thrift
Plan.
For purposes of these financial statements, "Tenneco Inc." or "Employers" refers
to Old Tenneco and its subsidiaries which have adopted the Hourly Thrift Plan
prior to the Transaction, and to Tenneco Inc., formerly known as New Tenneco
Inc., and its subsidiaries which have continued sponsorship of the Hourly Thrift
Plan subsequent to the Transaction.
GENERAL
The Hourly Thrift Plan was established effective as of April 1, 1996, and was
amended and restated effective December 1, 1996. The Hourly Thrift Plan is a
defined contribution plan subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended.
The Hourly Thrift Plan covers eligible employees of the Employers.
CONTRIBUTIONS
Eligible employees electing to participate in the Hourly Thrift Plan may make
salary deferral contributions by payroll deduction of not less than 1 percent
nor greater than 8 percent of compensation, as defined, with such contributions
limited to $9,500 for 1996. Effective with the merger of the Tenneco Automotive
Hourly Employees Savings Plan (the Automotive Plan) into the Hourly Thrift Plan
(see Note 4), the Employers contribute on behalf of Tenneco Automotive
participants a matching contribution equal to the following
5
<PAGE> 6
percentage of the affected participants' total salary deferral contribution,
based on the number of years of participation:
<TABLE>
<CAPTION>
YEARS OF MATCHING
PARTICIPATION PERCENTAGE
------------- ----------
<S> <C>
Less than 1.......................................... 30%
1 but less than 2.................................... 40
2 or more............................................ 50
</TABLE>
The Employers contribute on behalf of all other participants a matching
contribution equal to 100 percent of the participants' salary deferral
contributions not to exceed 3 percent of the participants' compensation.
The Employers matching contributions are made in the form of Tenneco Inc. common
stock. The Employers matching contributions and the related earnings 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
Participants are 100 percent vested in their salary deferral contributions made
to the Hourly Thrift Plan.
The Employers matching contributions become vested in accordance with the
following schedule:
<TABLE>
<CAPTION>
YEARS VESTED
OF SERVICE PERCENTAGE
- ---------- ----------
<S> <C> <C>
1..................................................... 20%
2..................................................... 40
3..................................................... 60
4..................................................... 80
5..................................................... 100
</TABLE>
Upon attainment of age 65, or termination of employment due to death or total
disability, a participant will become 100 percent vested in the Employers
matching contributions. Forfeited nonvested accounts will be applied to reduce
future Employers matching contributions.
WITHDRAWALS AND PARTICIPANT LOANS
Upon retirement or other termination of employment, the participant may receive
the value of the vested interest in his account as a lump-sum distribution.
A participant who has attained age 55 may elect 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 may borrow from his account a minimum of $1,000 up to a maximum
equal to the lesser of $50,000 minus the highest outstanding loan balance during
the last 12 months, or 50 percent of his account balance. Loan terms range from
1 to 4- 1/2 years. The loans are secured by the balance in the participant's
account and bear interest at a rate equal to the highest share-secured interest
rate charged by the Tenneco Federal Credit Union. The average interest rate for
new loans was 7.75 percent during 1996. Principal and interest are paid through
payroll deductions.
ADMINISTRATION
The Hourly Thrift Plan is administered by the Tenneco Benefits Committee (the
Committee). NationsBank (the Trustee) is the Trustee of the Hourly Thrift Plan
Trust (the Trust).
6
<PAGE> 7
2. SUMMARY OF ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
The financial statements of the Hourly Thrift Plan are presented on the accrual
basis of accounting. The investments of the Hourly Thrift Plan are reported at
quoted market value.
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 market value per
share at the close of business each day.
EXPENSES
Trustee and other administrative expenses are paid by the Employers or from
earnings attributable to unallocated amounts. 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.
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.
3. INVESTMENT OPTIONS:
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 -- Invests in Nations Cash Reserves, which seek to
preserve principal value and maintain a high degree of liquidity while
providing current income.
Shares of Newport News and El Paso common stock received in connection with the
Distributions and Merger are held in separate funds; however, participants
cannot direct contributions or investment transfers to these funds.
See Exhibits 1 and 2 for individual fund information.
4. TRANSFER FROM OTHER PLANS:
Effective November 30, 1996, the Automotive Plan was merged into the Hourly
Thrift Plan.
5. ACQUISITIONS:
During 1996, Tenneco Packaging acquired Amoco Foam Products Company (Amoco
Foam). As agreed to in the purchase agreement, the former Amoco Foam hourly
employees were allowed to participate in the Hourly Thrift Plan effective
October 1, 1996. Employers' contributions in the statement of changes in net
assets available for plan benefits includes a one-time special contribution
related to these former Amoco Foam employees in the amount of $68,702 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 hourly
employees could have made an elective transfer of their account balances in the
Amoco Employee Savings Plan (the Amoco Foam Plan) into the Hourly Thrift Plan,
provided that the former Amoco Foam hourly employees did not have more than one
loan outstanding under the Amoco Foam Plan.
During 1995, Tenneco Packaging acquired the Mobil Plastics Division of Mobil Oil
Corporation (Mobil). As agreed to in the purchase agreement, the former Mobil
hourly employees were not allowed to participate in the Hourly Thrift Plan until
April 1, 1996. In order to compensate this group of employees for the matching
contribution for which they were not eligible 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 statement of changes in
net assets available for plan benefits includes the one-time special
contribution of $1,644,063.
Beginning April 1, 1996, and ending September 27, 1996, former Mobil hourly
employees could have made an elective transfer of their account balances in the
Mobil Employee Savings Plan (the Mobil Plan) into the Hourly Thrift Plan
provided, however, that no elective transfer was permitted if the former Mobil
hourly employees had a loan outstanding under the Mobil Plan.
6. FEDERAL INCOME TAXES:
The Hourly Thrift Plan has not been submitted to the Internal Revenue Service
for an initial determination letter. However, the plan administrator and the
Hourly Thrift Plan's legal counsel believe that the Hourly Thrift Plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, they believe that the
Hourly Thrift Plan was qualified and the related trust was tax-exempt as of the
financial statement date.
7. TERMINATION OF THE HOURLY THRIFT PLAN:
Although the participating Employers intend to continue the Hourly Thrift Plan
indefinitely, they reserve the right to terminate the Hourly Thrift Plan or
withdraw from participation in the Hourly Thrift Plan. Any assets which are not
allocated to the accounts of participants upon the complete termination of the
Hourly Thrift Plan or complete discontinuance of contributions will be allocated
among all of the participants' accounts pro rata on the basis of their account
balance at the date of termination.
8
<PAGE> 9
EXHIBIT 1
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENT
-------------------------------------------------------------------------------------
NEWPORT NEWS BZW
EL PASO SHIPBUILDING BARCLAYS FIDELITY
TENNECO INC. NATURAL GAS INC. BZW BARCLAYS U.S. DEBT GROWTH
COMMON COMPANY COMMON EQUITY INDEX MARKET INDEX COMPANY
STOCK COMMON STOCK STOCK FUND FUND FUND
------------ ------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS:
Corporate securities --
Tenneco Inc. common stock............... $3,588,184 $ -- $ -- $ -- $ -- $ --
El Paso Natural Gas Company common
stock.................................. -- 609,841 -- -- -- --
Newport News Shipbuilding Inc. common
stock.................................. -- -- 389,550 -- -- --
---------- -------- -------- ---------- ---------- ----------
3,588,184 609,841 389,550 -- -- --
Collective trust funds --
BZW Barclays Equity Index Fund.......... -- -- -- 3,181,878 -- --
BZW Barclays U.S. Debt Market Index
Fund................................... -- -- -- -- 1,783,655 --
---------- -------- -------- ---------- ---------- ----------
-- -- -- 3,181,878 1,783,655 --
Registered investment companies --
Fidelity Growth Company Fund............ -- -- -- -- -- 2,588,137
INVESCO Value Trust Total Return Fund... -- -- -- -- -- --
Putnam New Opportunities Fund........... -- -- -- -- -- --
Templeton Foreign Fund.................. -- -- -- -- -- --
---------- -------- -------- ---------- ---------- ----------
-- -- -- -- -- 2,588,137
Money market fund......................... 99,596 15,864 11,992 -- -- --
Participant loans receivable.............. -- -- -- -- -- --
---------- -------- -------- ---------- ---------- ----------
Total investments.................... 3,687,780 625,705 401,542 3,181,878 1,783,655 2,588,137
RECEIVABLES:
Employees' contributions.................. 33,889 -- -- 45,800 27,987 45,506
Employers' contributions.................. -- -- -- -- -- --
Accrued interest.......................... 237 38 29 -- -- --
OPTION TRANSFERS RECEIVABLE (PAYABLE)...... 5,145 -- -- 1,251 306 955
OTHER...................................... -- -- -- -- -- --
---------- -------- -------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS..... $3,727,051 $625,743 $401,571 $3,228,929 $1,811,948 $2,634,598
========== ======== ======== ========== ========== ==========
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENT
-------------------------------------------------------------------
INVESCO PUTNAM
VALUE TRUST NEW TEMPLETON MONEY
TOTAL RETURN OPPORTUNITIES FOREIGN MARKET PARTICIPANT
FUND FUND FUND FUND LOANS
------------ ------------- --------- ------ -----------
<S> <C> <C> <C> <C> <C>
INVESTMENTS:
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................................... -- -- -- -- --
-------- ---------- -------- ---------- --------
-- -- -- -- --
Registered investment companies --
Fidelity Growth Company Fund............ -- -- -- -- --
INVESCO Value Trust Total Return Fund... 283,529 -- -- -- --
Putnam New Opportunities Fund........... -- 2,247,853 -- -- --
Templeton Foreign Fund.................. -- -- 264,170 -- --
-------- ---------- -------- ---------- --------
283,529 2,247,853 264,170 -- --
Money market fund......................... -- -- -- 2,092,529 --
Participant loans receivable.............. -- -- -- -- 566,866
-------- ---------- -------- ---------- --------
Total investments.................... 283,529 2,247,853 264,170 2,092,529 566,866
RECEIVABLES:
Employees' contributions.................. 7,900 44,673 6,165 29,955 --
Employers' contributions.................. -- -- -- -- --
Accrued interest.......................... 1,077 -- -- 8,346 1,820
OPTION TRANSFERS RECEIVABLE (PAYABLE)...... 193 1,868 203 1,785 (11,706)
OTHER...................................... -- -- -- -- --
-------- ---------- -------- ---------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS..... $292,699 $2,294,394 $270,538 $2,132,615 $556,980
======== ========== ======== ========== ========
<CAPTION>
NONPARTICIPANT-
DIRECTED
INVESTMENTS
-----------------------
TENNECO INC.
COMMON CLEARING
STOCK ACCOUNT TOTAL
------------ -------- -----
<S> <C> <C> <C>
INVESTMENTS:
Corporate securities --
Tenneco Inc. common stock............... $2,604,410 $ -- $ 6,192,594
El Paso Natural Gas Company common
stock.................................. -- -- 609,841
Newport News Shipbuilding Inc. common
stock.................................. -- -- 389,550
---------- ------- -----------
2,604,410 -- 7,191,985
Collective trust funds --
BZW Barclays Equity Index Fund.......... -- -- 3,181,878
BZW Barclays U.S. Debt Market Index
Fund................................... -- -- 1,783,655
---------- ------- -----------
-- -- 4,965,533
Registered investment companies --
Fidelity Growth Company Fund............ -- -- 2,588,137
INVESCO Value Trust Total Return Fund... -- -- 283,529
Putnam New Opportunities Fund........... -- -- 2,247,853
Templeton Foreign Fund.................. -- -- 264,170
---------- ------- -----------
-- -- 5,383,689
Money market fund......................... 72,289 43,456 2,335,726
Participant loans receivable.............. -- -- 566,866
---------- ------- -----------
Total investments.................... 2,676,699 43,456 20,443,799
RECEIVABLES:
Employees' contributions.................. -- -- 241,875
Employers' contributions.................. 117,445 -- 117,445
Accrued interest.......................... 178 1,464 13,189
OPTION TRANSFERS RECEIVABLE (PAYABLE)...... -- -- --
OTHER...................................... -- (7,777) (7,777)
---------- ------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS..... $2,794,322 $37,143 $20,808,531
========== ======= ===========
</TABLE>
This exhibit is an integral part of the accompanying financial statements.
9
<PAGE> 10
EXHIBIT 2
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND
INFORMATION
FOR THE PERIOD FROM INCEPTION (APRIL 1, 1996) THROUGH DECEMBER 31, 1996
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENT
-------------------------------------------------------------------------------------
NEWPORT NEWS
EL PASO SHIPBUILDING BZW BARCLAYS FIDELITY
TENNECO INC. NATURAL GAS INC. BZW BARCLAYS U.S. DEBT GROWTH
COMMON COMPANY COMMON EQUITY INDEX MARKET INDEX COMPANY
STOCK COMMON STOCK STOCK FUND FUND FUND
------------ ------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS,
beginning of period.................. $ -- $ -- $ -- $ -- $ -- $ --
ADD:
Dividends --
Tenneco Inc. common stock.......... 14,357 -- -- -- -- --
Registered investment companies.... -- -- -- -- -- 92,675
Interest............................. 3,141 38 29 -- -- --
---------- -------- -------- ---------- ---------- ----------
17,498 38 29 -- -- 92,675
Net appreciation (depreciation) in
fair value of investments.......... 45,157 54,342 (25,970) 7,748 (9,519) (117,851)
---------- -------- -------- ---------- ---------- ----------
Net investment income (loss)..... 62,655 54,380 (25,941) 7,748 (9,519) (25,176)
Contributions --
Employees.......................... 510,091 -- -- 419,774 261,656 512,821
Employers.......................... -- -- -- -- -- --
Rollovers.......................... 1,483,881 -- -- 463,180 147,994 418,222
---------- -------- -------- ---------- ---------- ----------
1,993,972 -- -- 882,954 409,650 931,043
Repayment of loan interest........... -- -- -- -- -- --
Distributions and Merger............. (573,688) 573,892 429,279 -- -- --
Transfer from other plans (Note 4)... 2,272,965 -- -- 2,341,617 1,418,386 1,735,781
Other................................ -- -- -- -- -- --
---------- -------- -------- ---------- ---------- ----------
Total additions.................. 3,755,904 628,272 403,338 3,232,319 1,818,517 2,641,648
---------- -------- -------- ---------- ---------- ----------
DEDUCT:
Withdrawals.......................... 18,123 1,415 962 13,901 3,488 11,244
---------- -------- -------- ---------- ---------- ----------
Total deductions................. 18,123 1,415 962 13,901 3,488 11,244
OPTION TRANSFERS...................... (10,730) (1,114) (805) 10,511 (3,081) 4,194
---------- -------- -------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of period.............. $3,727,051 $625,743 $401,571 $3,228,929 $1,811,948 $2,634,598
========== ======== ======== ========== ========== ==========
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENT
-------------------------------------------------------------------
INVESCO PUTNAM
VALUE TRUST NEW TEMPLETON MONEY
TOTAL RETURN OPPORTUNITIES FOREIGN MARKET PARTICIPANT
FUND FUND FUND FUND LOANS
------------ ------------- --------- ------ -----------
<S> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS,
beginning of period.................. $ -- $ -- $ -- $ -- $ --
ADD:
Dividends --
Tenneco Inc. common stock.......... -- -- -- -- --
Registered investment companies.... 4,751 15,453 5,985 -- --
Interest............................. -- -- -- 14,816 --
-------- ---------- -------- ---------- --------
4,751 15,453 5,985 14,816 --
Net appreciation (depreciation) in
fair value of investments.......... 7,910 (80,706) 9,373 -- --
-------- ---------- -------- ---------- --------
Net investment income (loss)..... 12,661 (65,253) 15,358 14,816 --
Contributions --
Employees.......................... 136,149 556,509 109,048 346,312 --
Employers.......................... -- -- -- -- --
Rollovers.......................... 133,088 757,713 160,453 1,123,652 313,280
-------- ---------- -------- ---------- --------
269,237 1,314,222 269,501 1,469,964 313,280
Repayment of loan interest........... -- -- -- -- 4,874
Distributions and Merger............. -- -- -- -- --
Transfer from other plans (Note 4)... -- 1,007,337 -- 751,529 110,582
Other................................ -- -- -- -- --
-------- ---------- -------- ---------- --------
Total additions.................. 281,898 2,256,306 284,859 2,236,309 428,736
-------- ---------- -------- ---------- --------
DEDUCT:
Withdrawals.......................... 5,364 19,952 6,249 10,634 --
-------- ---------- -------- ---------- --------
Total deductions................. 5,364 19,952 6,249 10,634 --
OPTION TRANSFERS...................... 16,165 58,040 (8,072) (93,060) 128,244
-------- ---------- -------- ---------- --------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of period.............. $292,699 $2,294,394 $270,538 $2,132,615 $556,980
======== ========== ======== ========== ========
<CAPTION>
NONPARTICIPANT-
DIRECTED
INVESTMENTS
------------------------
TENNECO INC.
COMMON CLEARING
STOCK ACCOUNT TOTAL
------------ -------- -----
<S> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS,
beginning of period.................. $ -- $ -- $ --
ADD:
Dividends --
Tenneco Inc. common stock.......... 49,668 -- 64,025
Registered investment companies.... -- -- 118,864
Interest............................. 2,353 2,599 22,976
---------- --------- -----------
52,021 2,599 205,865
Net appreciation (depreciation) in
fair value of investments.......... 33,806 -- (75,710)
---------- --------- -----------
Net investment income (loss)..... 85,827 2,599 130,155
Contributions --
Employees.......................... -- -- 2,852,360
Employers.......................... 3,319,046 -- 3,319,046
Rollovers.......................... -- -- 5,001,463
---------- --------- -----------
3,319,046 -- 11,172,869
Repayment of loan interest........... -- -- 4,874
Distributions and Merger............. (429,483) -- --
Transfer from other plans (Note 4)... -- 19,628 9,657,825
Other................................ -- 12,333 12,333
---------- --------- -----------
Total additions.................. 2,975,390 34,560 20,978,056
---------- --------- -----------
DEDUCT:
Withdrawals.......................... 78,193 -- 169,525
---------- --------- -----------
Total deductions................. 78,193 -- 169,525
OPTION TRANSFERS...................... (102,875) 2,583 --
---------- --------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of period.............. 2,794,322 $ 37,143 $20,808,531
========== ========= ===========
</TABLE>
This exhibit is an integral part of the accompanying financial statements.
10
<PAGE> 11
SCHEDULE I
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
SHARES OR CURRENT
IDENTITY OF ISSUE DESCRIPTION OF ASSET FACE VALUE COST VALUE
----------------- -------------------- ---------- ---- -------
<S> <C> <C> <C> <C>
CORPORATE SECURITIES:
Tenneco Inc.*........................ Tenneco Inc. common stock 137,232 $ 5,674,959 $ 6,192,594
El Paso Natural Gas Company.......... El Paso Natural Gas Company
common stock 12,076 503,073 609,841
Newport News Shipbuilding Inc........ Newport News Shipbuilding
Inc. common stock 25,970 382,908 389,550
----------- -----------
Total corporate securities 6,560,940 7,191,985
----------- -----------
COLLECTIVE TRUST FUNDS:
BZW Barclays Global Investors........ BZW Barclays Equity Index
Fund 162,310 3,175,816 3,181,878
BZW Barclays Global Investors........ BZW Barclays U.S. Debt
Market Index Fund 150,322 1,793,249 1,783,655
----------- -----------
Total collective trust
funds 4,969,065 4,965,533
----------- -----------
REGISTERED INVESTMENT COMPANIES:
Fidelity Investments Institutional
Services Co........................ Fidelity Growth Company Fund 63,968 2,706,927 2,588,137
INVESCO Funds Group, Inc............. INVESCO Value Trust Total
Return Fund 11,668 275,895 283,529
Putnam Management Company............ Putnam New Opportunities
Fund 55,325 2,329,047 2,247,853
Franklin Templeton................... Templeton Foreign Fund 25,499 255,163 264,170
----------- -----------
Total registered
investment companies 5,567,032 5,383,689
----------- -----------
NationsBank.......................... Nations Cash Reserves 2,335,726 2,335,726 2,335,726
Tenneco Thrift Plan for Hourly
Employees*......................... Participant loans receivable
(interest rates ranging from
6% to 12%) 566,866 566,866 566,866
----------- -----------
Total assets held for
investment purposes $19,999,629 $20,443,799
=========== ===========
</TABLE>
- -------------------------
*Indicated party in interest.
11
<PAGE> 12
SCHEDULE II
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS -- SERIES OF TRANSACTIONS
FOR THE PERIOD FROM INCEPTION (APRIL 1, 1996) THROUGH DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF COST
TRANSACTIONS OF ASSETS NET
IDENTITY OF ----------------- PURCHASE SELLING SOLD OR GAIN
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 stock 5 1 $ 1,205,815 $ 54,863 $ 53,454 $1,409
BZW Barclays Global
Investors............... BZW Barclays Equity Index
Fund 47 28 3,234,417 60,287 58,601 1,686
BZW Barclays Global
Investors............... BZW Barclays U.S. Debt
Market Index Fund 32 27 1,804,018 10,844 10,769 75
Fidelity Investments
Institutional Services
Co...................... Fidelity Growth Company
Fund 46 43 2,751,133 45,145 44,206 939
INVESCO Funds Group,
Inc. ................... INVESCO Value Trust Total
Return Fund 45 30 289,252 13,633 13,357 276
Putnam Management
Company................. Putnam New Opportunities
Fund 55 38 2,427,944 99,385 98,897 488
Franklin Templeton........ Templeton Foreign Fund 42 32 279,381 24,584 24,218 366
NationsBank............... Nations Cash Reserves 145 186 18,438,603 16,102,877 16,102,877 --
</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 initial contribution
made to the Tenneco Thrift Plan for Hourly Employees. The Trustee
initiates and consummates all investment transactions at the direction of
the participants.
12
<PAGE> 13
SCHEDULE III
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS -- SINGLE TRANSACTIONS
FOR THE PERIOD FROM INCEPTION (APRIL 1, 1996) THROUGH DECEMBER 31, 1996
<TABLE>
<CAPTION>
COST
OF ASSETS NET
IDENTITY OF PURCHASE SELLING SOLD OR GAIN
PARTY INVOLVED DESCRIPTION PRICE(A)(C) PRICE(B)(C) DISTRIBUTED (LOSS)
-------------- ----------- ----------- ----------- ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Tenneco Inc. .................. Tenneco Inc. common stock Purchase $ 999,998 $ -- $ -- $--
Tenneco Inc. .................. Tenneco Inc. common stock Purchase 99,956 -- -- --
BZW Barclays Global
Investors.................... BZW Barclays Equity Index Fund Purchase 404,526 -- -- --
BZW Barclays Global
Investors.................... BZW Barclays Equity Index Fund Purchase 2,233,039 -- -- --
BZW Barclays Global
Investors.................... BZW Barclays Equity Index Fund Purchase 114,749 -- -- --
BZW Barclays Global
Investors.................... BZW Barclays Equity Index Fund Purchase 219,961 -- -- --
BZW Barclays Global
Investors.................... BZW Barclays U.S. Debt Market
Index Fund Purchase 1,418,246 -- -- --
BZW Barclays Global
Investors.................... BZW Barclays U.S. Debt Market
Index Fund Purchase 148,913 -- -- --
Fidelity Investments
Institutional Services
Co. ......................... Fidelity Growth Company Fund Purchase 172,271 -- -- --
Fidelity Investments
Institutional Services
Co. ......................... Fidelity Growth Company Fund Purchase 253,011 -- -- --
Fidelity Investments
Institutional Services
Co. ......................... Fidelity Growth Company Fund Purchase 1,673,386 -- -- --
Fidelity Investments
Institutional Services
Co. ......................... Fidelity Growth Company Fund Purchase 168,003 -- -- --
Putnam Management Company...... Putnam New Opportunities Fund Purchase 120,521 -- -- --
Putnam Management Company...... Putnam New Opportunities Fund Purchase 675,026 -- -- --
Putnam Management Company...... Putnam New Opportunities Fund Purchase 880,862 -- -- --
Putnam Management Company...... Putnam New Opportunities Fund Purchase 147,832 -- -- --
Putnam Management Company...... Putnam New Opportunities Fund Purchase 107,376 -- -- --
Franklin Templeton............. Templeton Foreign Fund Purchase 130,867 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 1,644,063 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 764,361 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 125,114 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 179,247 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 3,465,379 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 765,117 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 1,404,652 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 7,004,539 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 747,502 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 540,648 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 296,234 -- -- --
NationsBank Texas.............. Nations Cash Reserves Purchase 195,640 -- -- --
NationsBank Texas.............. Nations Cash Reserves Sale -- 1,644,063 1,644,063 --
NationsBank Texas.............. Nations Cash Reserves Sale -- 745,491 745,491 --
NationsBank Texas.............. Nations Cash Reserves Sale -- 3,483,565 3,483,565 --
NationsBank Texas.............. Nations Cash Reserves Sale -- 99,291 99,291 --
NationsBank Texas.............. Nations Cash Reserves Sale -- 1,005,733 1,005,733 --
NationsBank Texas.............. Nations Cash Reserves Sale -- 103,736 103,736 --
NationsBank Texas.............. Nations Cash Reserves Sale -- 6,948,863 6,948,863 --
NationsBank Texas.............. Nations Cash Reserves Sale -- 477,524 477,524 --
NationsBank Texas.............. Nations Cash Reserves Sale -- 251,795 251,795 --
NationsBank Texas.............. Nations Cash Reserves Sale -- 276,344 276,344 --
</TABLE>
- -------------------------
(a) Purchase price includes expenses incurred in connection with transaction
(i.e., commissions, transfer fees, etc.).
(b) Selling price is net of expenses incurred in connection with transaction.
(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 initial contribution made to the Tenneco Thrift
Plan for Hourly Employees. The Trustee initiates and consummates all
investment transactions at the direction of the participants.
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 THRIFT PLAN FOR HOURLY
EMPLOYEES
Date: June 27, 1997 By: /s/ DANA G. MEAD
----------------------------------
Dana G. Mead
Chairman of the Tenneco
Benefits Committee
<PAGE> 15
INDEX TO EXHIBIT
EXHIBIT
NUMBER
- -------
23 --Consent of Independent Public Accountants
<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 For Hourly Employees
(File Nos. 333-17487, 333-27281 and 333-27279).
ARTHUR ANDERSEN LLP
Houston, Texas
June 27, 1997
