<PAGE> 1
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- --------------------------------------------------------------------------------
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, 1998
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
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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 For Hourly Employees as of December 31, 1998
and 1997, and the related statement of changes in net assets available for plan
benefits for the year ended December 31, 1998. These financial statements and
the supplemental schedules referred to below are the responsibility of the
Tenneco Benefits Committee. Our responsibility is to express an opinion on these
financial statements and supplemental 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 For Hourly Employees as of December 31, 1998 and 1997, and the
changes in net assets available for plan benefits for the year ended December
31, 1998, 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, 1998, included as Schedule I,
reportable transactions -- series of transactions for the year ended December
31, 1998, included as Schedule II, reportable transactions -- single
transactions for the year ended December 31, 1998, included as Schedule III, and
nonexempt transactions for the year ended December 31, 1998, included as
Schedule IV, 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 15, 1999
2
<PAGE> 3
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock............................ $ 21,142,667 $17,570,588
El Paso Energy (formerly, El Paso Natural Gas
Company) common stock............................... 1,431,440 1,551,113
Newport News Shipbuilding Inc. common stock.......... 1,445,023 1,259,181
Other................................................ -- 126,581
------------ -----------
24,019,130 20,507,463
Collective trust funds --
BZW Barclays Equity Index Fund....................... 17,366,091 7,929,132
BZW Barclays U.S. Debt Market Index Fund............. 4,813,406 3,098,425
Other................................................ 2,109,680 2,168,134
------------ -----------
24,289,177 13,195,691
Registered investment companies --
Fidelity Growth Company Fund......................... 28,848,110 20,635,599
INVESCO Value Trust Total Return Fund................ 13,718,983 9,010,952
Putnam New Opportunities Fund........................ 9,139,269 4,925,755
Templeton Foreign Fund............................... 996,608 827,805
Other................................................ 5,621,801 4,865,576
------------ -----------
58,324,771 40,265,687
Pooled separate accounts............................... 2,589,321 --
Guaranteed investment contract......................... 480,379 193,658
Bankers Trust Pyramid Directed Account Cash Fund....... 1,097,290 --
Nations Cash Reserves.................................. 21,633,410 18,350,081
Participant loans receivable........................... 5,170,173 2,721,460
------------ -----------
Total investments.................................... 137,603,651 95,234,040
RECEIVABLES:
Employees' contributions.................................. 352,471 38,161
Employers' contributions.................................. 163,442 19,540
Accrued interest and dividends............................ 116,602 96,028
------------ -----------
Total receivables.................................... 632,515 153,729
CASH...................................................... -- 24
------------ -----------
Total assets......................................... 138,236,166 95,387,793
LIABILITIES:
Due to broker and other................................... 294,995 56,904
------------ -----------
Total liabilities.................................... 294,995 56,904
------------ -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS...................... $137,941,171 $95,330,889
============ ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
financial statements.
3
<PAGE> 4
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year... $ 95,330,889
------------
ADD:
Dividends --
Tenneco Inc. common stock.............................. 631,059
Other corporate securities............................. 40,851
Registered investment companies........................ 2,947,585
Interest.................................................. 1,090,235
------------
4,709,730
Net appreciation in fair value of investments............. 7,372,200
------------
Net investment income................................ 12,081,930
Contributions --
Employees.............................................. 16,208,702
Employers.............................................. 6,968,084
Rollovers.............................................. 150,832
------------
23,327,618
Repayment of loan interest................................ 247,759
Transfers from other plans (Note 5)....................... 13,407,835
------------
Total additions...................................... 49,065,142
------------
DEDUCT:
Withdrawals............................................... 6,359,481
Administrative expenses................................... 95,379
------------
Total deductions..................................... 6,454,860
------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year......... $137,941,171
============
</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, 1998 AND 1997
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 document for a more complete description of the Hourly
Thrift Plan's provisions.
GENERAL
The Hourly Thrift Plan was established effective 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 hourly employees of Tenneco Inc., its
subsidiaries and covered groups (collectively, the Employers) that have adopted
the Hourly Thrift Plan.
CONTRIBUTIONS
Eligible employees electing to participate in the Hourly Thrift Plan may make
salary deferral contributions (Salary Deferral Contribution Account) by payroll
deduction of not less than 1 percent nor greater than 8 percent of compensation
(or such percentage of compensation greater than 8 percent as may be specified
in a covered group's special appendix to the Hourly Thrift Plan), as defined,
with such contributions limited to $10,000 for 1998. The Employers contribute on
behalf of the participants a matching contribution equal to an amount detailed
in each group's special appendix.
The Employers' matching contributions are generally invested in Tenneco Inc.
common stock. Certain covered groups may direct the Employers' matching
contributions to the investment options listed in Note 3. 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 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
schedule detailed in each covered group's special appendix.
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.
Certain participants, as specified in the covered group's special appendix, who
have attained age 55 may elect an in-service withdrawal. Certain participants,
as specified in the covered group's special appendix, who have not attained age
59 1/2 may elect to withdraw all or part of their account balances, reduced by
the portion of their account balances attributable to salary deferral
contributions.
Certain participants, as specified in the covered group's special appendix, may,
subject to the approval of the plan administrator, make a hardship withdrawal
from their Salary Deferral Contribution Accounts, excluding gains and earnings
in such accounts. A hardship withdrawal shall only be made in the event of a
financial need constituting a hardship.
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<PAGE> 6
Certain participants may borrow from their accounts 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 their account balances. 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 Wall Street
Journal Prime Rate. Principal and interest are paid through payroll deductions.
ADMINISTRATION
The Hourly Thrift Plan is administered by the Tenneco Benefits Committee (the
Committee). NationsBank of Texas, N.A. (the Trustee), was the trustee of the
Hourly Thrift Plan Trust (the Trust) prior to February 1, 1998. During 1997, the
Defined Contribution Division of NationsBank of Texas, N.A., was purchased by
Bankers Trust Company. Effective February 1, 1998, the Plan transferred all
assets to Bankers Trust Company as the new trustee.
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. Collective trust funds and pooled separate accounts are
valued by reference to published market data, if available, of the underlying
assets. Guaranteed investment contracts are carried at contract value which
approximates fair value. Participant loans receivable are reported at cost which
approximates fair 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
Certain administrative expenses are currently paid by the Employers. In the
event expenses are not paid by the Employers, such expenses are paid by the
Hourly Thrift Plan.
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 1997 amounts have been reclassified to conform with the 1998
presentation.
3. INVESTMENT OPTIONS:
Participants may invest salary deferral contributions credited to their accounts
in one or more of the following:
Tenneco Inc. Common Stock -- Invests in Tenneco Inc. common stock and
short-term investments for liquidity purposes.
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.
6
<PAGE> 7
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.
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 Shipbuilding Inc. common stock, received through a 1996
distribution to Tenneco Inc. shareholders, and El Paso Energy (formerly, El Paso
Natural Gas Company) common stock, received through a 1996 merger transaction
through an affiliate of Tenneco Inc., are held in separate funds; however,
participants cannot direct contributions or investment transfers to these funds.
Interest and dividends earned on these funds are transferred to the Money Market
Fund.
See Exhibits 1 and 2 for individual fund information.
4. RISKS AND UNCERTAINTIES:
The Hourly Thrift Plan provides for investment in corporate securities,
collective trust funds, registered investment companies, pooled separate
accounts, a guaranteed investment contract and money market funds. Investment
securities, in general, are exposed to various risks, such as interest rate,
credit and overall market volatility risk. Due to the level of risk associated
with certain investment securities, it is reasonably possible that changes in
the values of investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the statements of net
assets available for plan benefits and participant accounts.
5. TRANSFERS FROM OTHER PLANS:
Effective April 22, 1998, the hourly rated employees of Tenneco Packaging at the
Pomona, California; Visalia, California; Kent, Washington; and Portland, Oregon,
facilities became eligible to participate in the Hourly Thrift Plan. On December
31, 1998, the Richter Manufacturing Corporation Profit Sharing and 401(k) Plan
(the Richter Plan) was merged into the Hourly Thrift Plan. In conjunction with
the merger, the Hourly Thrift Plan received approximately $3,400,000 from the
Richter Plan trustee. Subsequent to December 31, 1998, the Richter Plan's assets
were liquidated and reinvested into similar investment options available under
the Hourly Thrift Plan. These assets are recorded in Exhibits 1 and 2 as Merger
Assets.
On December 31, 1998, the hourly rated employees of Tenneco Packaging at the
Hayward, California; Pomona, California; Orlando, Florida; Alsip, Illinois;
Plymouth, Indiana; Wurtland, Kentucky; Glen Falls, New York; Granite Falls,
North Carolina; Corsicana, Texas; and Wenatchee, Washington, facilities became
eligible to participate in the Hourly Thrift Plan. In addition, on December 31,
1998, account balances in the Astro-Valcour, Inc. 401(k) Savings and Retirement
Accumulation Plan and the Astro-Valcour, Inc. Microfoam Hourly 401(k) Saving
Plan (the AVI Plans) were merged into the Hourly Thrift Plan. In conjunction
with the merger, the Hourly Thrift Plan received approximately $10,000,000 from
the AVI Plans' trustee. Subsequent to December 31, 1998, the AVI Plans' assets
were liquidated and reinvested into similar investment options available under
the Hourly Thrift Plan. These assets are recorded in Exhibits 1 and 2 as Merger
Assets.
Effective December 31, 1997, the hourly participants of the Tenneco 401(k)
Savings Plan for Chippewa Falls (the Chippewa Falls Plan) became eligible to
participate in the Hourly Thrift Plan, and their account
7
<PAGE> 8
balances maintained under the Chippewa Falls Plan were merged into the Hourly
Thrift Plan. In conjunction with the merger, the Hourly Thrift Plan received
approximately $2,500,000 from the trustee of the Chippewa Falls Plan. Subsequent
to December 31, 1997, the Chippewa Falls Plan's assets were liquidated and
reinvested into similar investment options available under the Hourly Thrift
Plan. These assets are recorded in Exhibit 1 as Merger Assets.
In addition, effective December 31, 1997, the hourly participants of the Clevite
Bargaining Investment Plan (the Clevite Plan) became eligible to participate in
the Hourly Thrift Plan, and their account balances maintained under the Clevite
Plan were merged into the Hourly Thrift Plan. In conjunction with the merger,
the Hourly Thrift Plan received approximately $5,000,000 from the trustee of the
Clevite Plan. Subsequent to December 31, 1997, the Clevite Plan's assets were
liquidated and reinvested into similar investment options available under the
Hourly Thrift Plan. These assets are recorded in Exhibit 1 as Merger Assets.
6. FEDERAL INCOME TAXES:
The Hourly Thrift Plan obtained its latest determination letter on March 20,
1998, in which the Internal Revenue Service stated that the Hourly Thrift Plan,
as then designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Hourly Thrift Plan has been amended since receiving
the determination letter. However, the plan administrator believes that the
Hourly Thrift Plan is currently designed and being operated in compliance with
the applicable requirements of the Internal Revenue Code. Therefore, the plan
administrator believes that the Hourly 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.
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. SUBSEQUENT EVENT:
On April 29, 1999, Tenneco Inc. announced that its board of directors had
approved a separation of its automotive and specialty packaging business into
two independent companies. The separation will be completed by the distribution
of the common stock of Tenneco Packaging to the holders of Tenneco Inc. commons
stock (the Spin-off). Upon completion of the Spin-off, current owners of Tenneco
Inc. common stock will own common equity securities of Tenneco Packaging and
Tenneco Inc. which in turn will then own the assets, liabilities and operations
of Tenneco Inc.'s automotive business.
In connection with the Spin-off, Tenneco Packaging will become the sole sponsor
of the Hourly Thrift Plan from and after the Spin-off date. Tenneco Automotive
will establish a defined contribution plan to which the account balances of
retained and former employees of Tenneco Automotive in the Hourly Thrift Plan
will be transferred.
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<PAGE> 9
EXHIBIT 1
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
---------------------------------------------------------------------------------------
BZW BARCLAYS FIDELITY INVESCO PUTNAM
TENNECO INC. BZW BARCLAYS U.S. DEBT GROWTH VALUE TRUST NEW
COMMON EQUITY INDEX MARKET INDEX COMPANY TOTAL RETURN OPPORTUNITIES
STOCK FUND FUND FUND FUND FUND
------------ ------------ ------------ -------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock......... $11,355,894 $ -- $ -- $ -- $ -- $ --
El Paso Energy common stock....... -- -- -- -- -- --
Newport News Shipbuilding Inc.
common stock.................... -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
11,355,894 -- -- -- -- --
Collective trust funds --
BZW Barclays Equity Index Fund.... -- 17,366,091 -- -- -- --
BZW Barclays U.S. Debt Market
Index Fund...................... -- -- 4,813,406 -- -- --
Other............................. -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
-- 17,366,091 4,813,406 -- -- --
Registered investment companies --
Fidelity Growth Company Fund...... -- -- -- 27,280,997 -- --
INVESCO Value Trust Total Return
Fund............................ -- -- -- -- 13,718,983 --
Putnam New Opportunities Fund..... -- -- -- -- -- 9,139,269
Templeton Foreign Fund............ -- -- -- -- -- --
Other............................. -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
-- -- -- 27,280,997 13,718,983 9,139,269
Pooled separate accounts........... -- -- -- -- -- --
Guaranteed investment contract..... -- -- -- -- -- --
Bankers Trust Pyramid Directed
Account Cash Fund................. 366,333 46 7 36 13 72
Nations Cash Reserves.............. -- -- -- -- -- --
Participant loans receivable....... -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
Total investments............... 11,722,227 17,366,137 4,813,413 27,281,033 13,718,996 9,139,341
Receivables:
Employees' contributions........... 51,645 58,251 22,256 64,785 29,837 49,246
Employers' contributions........... -- 2,297 185 7,089 3,391 1,468
Accrued interest and dividends..... 1,918 489 212 631 8,973 254
----------- ----------- ---------- ----------- ----------- ----------
Total receivables............... 53,563 61,037 22,653 72,505 42,201 50,968
----------- ----------- ---------- ----------- ----------- ----------
Total assets.................... 11,775,790 17,427,174 4,836,066 27,353,538 13,761,197 9,190,309
LIABILITIES:
Due to broker and other.............. -- 53,456 16,974 97,563 17,667 95,956
----------- ----------- ---------- ----------- ----------- ----------
Total liabilities............... -- 53,456 16,974 97,563 17,667 95,956
OPTION TRANSFERS RECEIVABLE
(PAYABLE)............................ (25,154) (7,585) (5,681) 14,397 (25,364) 44,988
----------- ----------- ---------- ----------- ----------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS............................. $11,750,636 $17,366,133 $4,813,411 $27,270,372 $13,718,166 $9,139,341
=========== =========== ========== =========== =========== ==========
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
--------------------------------------
TEMPLETON MONEY
FOREIGN MARKET PARTICIPANT
FUND FUND LOANS
--------- ------ -----------
<S> <C> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock......... $ -- $ -- $ --
El Paso Energy common stock....... -- -- --
Newport News Shipbuilding Inc.
common stock.................... -- -- --
---------- ----------- ----------
-- -- --
Collective trust funds --
BZW Barclays Equity Index Fund.... -- -- --
BZW Barclays U.S. Debt Market
Index Fund...................... -- -- --
Other............................. -- -- --
---------- ----------- ----------
-- -- --
Registered investment companies --
Fidelity Growth Company Fund...... -- -- --
INVESCO Value Trust Total Return
Fund............................ -- -- --
Putnam New Opportunities Fund..... -- -- --
Templeton Foreign Fund............ 996,608 -- --
Other............................. -- -- --
---------- ----------- ----------
996,608 -- --
Pooled separate accounts........... -- -- --
Guaranteed investment contract..... -- -- --
Bankers Trust Pyramid Directed
Account Cash Fund................. -- 308,925 --
Nations Cash Reserves.............. -- 21,633,410 --
Participant loans receivable....... -- -- 4,130,632
---------- ----------- ----------
Total investments............... 996,608 21,942,335 4,130,632
Receivables:
Employees' contributions........... 9,699 66,752 --
Employers' contributions........... 318 9,911 --
Accrued interest and dividends..... 22 90,846 --
---------- ----------- ----------
Total receivables............... 10,039 167,509 --
---------- ----------- ----------
Total assets.................... 1,006,647 22,109,844 4,130,632
LIABILITIES:
Due to broker and other.............. 10,396 -- --
---------- ----------- ----------
Total liabilities............... 10,396 -- --
OPTION TRANSFERS RECEIVABLE
(PAYABLE)............................ 357 11,209 (38,820)
---------- ----------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS............................. $ 996,608 $22,121,053 $4,091,812
========== =========== ==========
<CAPTION>
NONPARTICIPANT- DIRECTED INVESTMENTS
-----------------------------------------------------------------
EL PASO NEWPORT NEWS
TENNECO INC. ENERGY SHIPBUILDING
COMMON COMMON INC. CLEARING MERGER
STOCK STOCK COMMON STOCK ACCOUNT ASSETS TOTAL
------------ ------- ------------ -------- ------ -----
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock......... $ 9,786,773 $ -- $ -- $ -- $ -- $ 21,142,667
El Paso Energy common stock....... -- 1,428,342 -- 3,098 -- 1,431,440
Newport News Shipbuilding Inc.
common stock.................... -- -- 1,445,023 -- -- 1,445,023
----------- ---------- ---------- -------- ----------- ------------
9,786,773 1,428,342 1,445,023 3,098 -- 24,019,130
Collective trust funds --
BZW Barclays Equity Index Fund.... -- -- -- -- -- 17,366,091
BZW Barclays U.S. Debt Market
Index Fund...................... -- -- -- -- -- 4,813,406
Other............................. -- -- -- -- 2,109,680 2,109,680
----------- ---------- ---------- -------- ----------- ------------
-- -- -- -- 2,109,680 24,289,177
Registered investment companies --
Fidelity Growth Company Fund...... -- -- -- -- 1,567,113 28,848,110
INVESCO Value Trust Total Return
Fund............................ -- -- -- -- -- 13,718,983
Putnam New Opportunities Fund..... -- -- -- -- -- 9,139,269
Templeton Foreign Fund............ -- -- -- -- -- 996,608
Other............................. -- -- -- -- 5,621,801 5,621,801
----------- ---------- ---------- -------- ----------- ------------
-- -- -- -- 7,188,914 58,324,771
Pooled separate accounts........... -- -- -- -- 2,589,321 2,589,321
Guaranteed investment contract..... -- -- -- -- 480,379 480,379
Bankers Trust Pyramid Directed
Account Cash Fund................. 182,983 27,189 25,022 186,664 -- 1,097,290
Nations Cash Reserves.............. -- -- -- -- -- 21,633,410
Participant loans receivable....... -- -- -- -- 1,039,541 5,170,173
----------- ---------- ---------- -------- ----------- ------------
Total investments............... 9,969,756 1,455,531 1,470,045 189,762 13,407,835 137,603,651
Receivables:
Employees' contributions........... -- -- -- -- -- 352,471
Employers' contributions........... 138,783 -- -- -- -- 163,442
Accrued interest and dividends..... 3,999 7,966 217 1,075 -- 116,602
----------- ---------- ---------- -------- ----------- ------------
Total receivables............... 142,782 7,966 217 1,075 -- 632,515
----------- ---------- ---------- -------- ----------- ------------
Total assets.................... 10,112,538 1,463,497 1,470,262 190,837 13,407,835 138,236,166
LIABILITIES:
Due to broker and other.............. -- 2,983 -- -- -- 294,995
----------- ---------- ---------- -------- ----------- ------------
Total liabilities............... -- 2,983 -- -- -- 294,995
OPTION TRANSFERS RECEIVABLE
(PAYABLE)............................ 14,432 (8,658) (757) 26,636 -- --
----------- ---------- ---------- -------- ----------- ------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS............................. $10,126,970 $1,451,856 $1,469,505 $217,473 $13,407,835 $137,941,171
=========== ========== ========== ======== =========== ============
</TABLE>
This exhibit is an integral part of the accompanying financial statements.
9
<PAGE> 10
EXHIBIT 1
CONTINUED
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
---------------------------------------------------------------------------------------
BZW BARCLAYS FIDELITY INVESCO PUTNAM
TENNECO INC. BZW BARCLAYS U.S. DEBT GROWTH VALUE TRUST NEW
COMMON EQUITY INDEX MARKET INDEX COMPANY TOTAL RETURN OPPORTUNITIES
STOCK FUND FUND FUND FUND FUND
------------ ------------ ------------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock.......... $10,361,095 $ -- $ -- $ -- $ -- $ --
El Paso Natural Gas Company common
stock............................ -- -- -- -- -- --
Newport News Shipbuilding Inc.
common stock..................... -- -- -- -- -- --
Other.............................. -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
10,361,095 -- -- -- -- --
Collective trust funds --
BZW Barclays Equity Index Fund..... -- 7,929,132 -- -- -- --
BZW Barclays U.S. Debt Market Index
Fund............................. -- -- 3,098,425 -- -- --
Other.............................. -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
-- 7,929,132 3,098,425 -- -- --
Registered investment companies --
Fidelity Growth Company Fund....... -- -- -- 20,635,599 -- --
INVESCO Value Trust Total Return
Fund............................. -- -- -- -- 9,010,952 --
Putnam New Opportunities Fund...... -- -- -- -- -- 4,925,755
Templeton Foreign Fund............. -- -- -- -- -- --
Other.............................. -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
-- -- -- 20,635,599 9,010,952 4,925,755
Nations Cash Reserves............... 240,872 -- -- -- -- --
Guaranteed investment contract...... -- -- -- -- -- --
Participant loans receivable........ -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
Total investments................ 10,601,967 7,929,132 3,098,425 20,635,599 9,010,952 4,925,755
Receivables:
Employees' contributions............ 13,012 4,757 581 3,799 1,196 7,755
Employers' contributions............ -- -- -- -- -- --
Accrued interest and dividends...... 1,498 113 7 60 2,323 234
----------- ----------- ---------- ----------- ----------- ----------
Total receivables................ 14,510 4,870 588 3,859 3,519 7,989
Cash................................ -- 15 9 -- -- --
----------- ----------- ---------- ----------- ----------- ----------
Total assets..................... 10,616,477 7,934,017 3,099,022 20,639,458 9,014,471 4,933,744
LIABILITIES:
Other................................. -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
Total liabilities................ -- -- -- -- -- --
OPTION TRANSFERS RECEIVABLE
(PAYABLE)............................. 92,908 2,613,287 (291) (6,566) 2,916,525 194,074
----------- ----------- ---------- ----------- ----------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS.............................. $10,709,385 $10,547,304 $3,098,731 $20,632,892 $11,930,996 $5,127,818
=========== =========== ========== =========== =========== ==========
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
-------------------------------------
TEMPLETON MONEY
FOREIGN MARKET PARTICIPANT
FUND FUND LOANS
--------- ----------- -----------
<S> <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..................... -- -- --
Other.............................. -- -- --
-------- ----------- ----------
-- -- --
Collective trust funds --
BZW Barclays Equity Index Fund..... -- -- --
BZW Barclays U.S. Debt Market Index
Fund............................. -- -- --
Other.............................. -- -- --
-------- ----------- ----------
-- -- --
Registered investment companies --
Fidelity Growth Company Fund....... -- -- --
INVESCO Value Trust Total Return
Fund............................. -- -- --
Putnam New Opportunities Fund...... -- -- --
Templeton Foreign Fund............. 827,805 -- --
Other.............................. -- -- --
-------- ----------- ----------
827,805 -- --
Nations Cash Reserves............... -- 17,750,920 --
Guaranteed investment contract...... -- -- --
Participant loans receivable........ -- -- 2,555,274
-------- ----------- ----------
Total investments................ 827,805 17,750,920 2,555,274
Receivables:
Employees' contributions............ 1,172 5,889 --
Employers' contributions............ -- -- --
Accrued interest and dividends...... 33 81,291 --
-------- ----------- ----------
Total receivables................ 1,205 87,180 --
Cash................................ -- -- --
-------- ----------- ----------
Total assets..................... 829,010 17,838,100 2,555,274
LIABILITIES:
Other................................. -- -- --
-------- ----------- ----------
Total liabilities................ -- -- --
OPTION TRANSFERS RECEIVABLE
(PAYABLE)............................. 66,262 1,510,462 157,467
-------- ----------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS.............................. $895,272 $19,348,562 $2,712,741
======== =========== ==========
<CAPTION>
NONPARTICIPANT-DIRECTED INVESTMENTS
-------------------------------------------------------------------
NEWPORT NEWS
EL PASO SHIPBUILDING
TENNECO INC. ENERGY INC.
COMMON COMMON COMMON CLEARING MERGER
STOCK STOCK STOCK ACCOUNT ASSETS TOTAL
------------ ------------ ------------ -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at market value --
Corporate securities --
Tenneco Inc. common stock.......... $7,113,310 $ -- $ -- $ -- $ 96,183 $17,570,588
El Paso Natural Gas Company common
stock............................ -- 1,551,113 -- -- -- 1,551,113
Newport News Shipbuilding Inc.
common stock..................... -- -- 1,259,181 -- -- 1,259,181
Other.............................. -- -- -- -- 126,581 126,581
---------- ---------- ---------- -------- ----------- -----------
7,113,310 1,551,113 1,259,181 -- 222,764 20,507,463
Collective trust funds --
BZW Barclays Equity Index Fund..... -- -- -- -- -- 7,929,132
BZW Barclays U.S. Debt Market Index
Fund............................. -- -- -- -- -- 3,098,425
Other.............................. -- -- -- -- 2,168,134 2,168,134
---------- ---------- ---------- -------- ----------- -----------
-- -- -- -- 2,168,134 13,195,691
Registered investment companies --
Fidelity Growth Company Fund....... -- -- -- -- -- 20,635,599
INVESCO Value Trust Total Return
Fund............................. -- -- -- -- -- 9,010,952
Putnam New Opportunities Fund...... -- -- -- -- -- 4,925,755
Templeton Foreign Fund............. -- -- -- -- -- 827,805
Other.............................. -- -- -- -- 4,865,576 4,865,576
---------- ---------- ---------- -------- ----------- -----------
-- -- -- -- 4,865,576 40,265,687
Nations Cash Reserves............... 165,369 30,644 27,363 134,913 -- 18,350,081
Guaranteed investment contract...... -- -- -- -- 193,658 193,658
Participant loans receivable........ -- -- -- -- 166,186 2,721,460
---------- ---------- ---------- -------- ----------- -----------
Total investments................ 7,278,679 1,581,757 1,286,544 134,913 7,616,318 95,234,040
Receivables:
Employees' contributions............ -- -- -- -- -- 38,161
Employers' contributions............ 19,540 -- -- -- -- 19,540
Accrued interest and dividends...... 1,008 8,724 78 659 -- 96,028
---------- ---------- ---------- -------- ----------- -----------
Total receivables................ 20,548 8,724 78 659 -- 153,729
Cash................................ -- -- -- -- -- 24
---------- ---------- ---------- -------- ----------- -----------
Total assets..................... 7,299,227 1,590,481 1,286,622 135,572 7,616,318 95,387,793
LIABILITIES:
Other................................. -- -- -- -- 56,904 56,904
---------- ---------- ---------- -------- ----------- -----------
Total liabilities................ -- -- -- -- 56,904 56,904
OPTION TRANSFERS RECEIVABLE
(PAYABLE)............................. (645) (9,056) (376) 25,363 (7,559,414) --
---------- ---------- ---------- -------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS.............................. $7,298,582 $1,581,425 $1,286,246 $160,935 $ -- $95,330,889
========== ========== ========== ======== =========== ===========
</TABLE>
This exhibit is an integral part of the accompanying financial statements.
10
<PAGE> 11
EXHIBIT 2
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND
INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
---------------------------------------------------------------------------------------
BZW BARCLAYS FIDELITY INVESCO PUTNAM
TENNECO INC. BZW BARCLAYS U.S. DEBT GROWTH VALUE TRUST NEW
COMMON EQUITY INDEX MARKET INDEX COMPANY TOTAL RETURN OPPORTUNITIES
STOCK FUND FUND FUND FUND FUND
------------ ------------ ------------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, BEGINNING OF YEAR..... $10,709,385 $10,547,304 $3,098,731 $20,632,892 $11,930,996 $5,127,818
----------- ----------- ---------- ----------- ----------- ----------
ADD:
Dividends --
Tenneco Inc. ................. 353,833 -- -- -- -- --
Other corporate securities.... -- -- -- -- -- --
Registered investment
companies................... -- -- -- 1,883,256 683,003 275,875
Interest........................ 12,883 -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
366,716 -- -- 1,883,256 683,003 275,875
Net appreciation (depreciation)
in fair value of
investments................... (1,386,704) 3,400,090 336,462 3,839,248 951,392 1,261,802
----------- ----------- ---------- ----------- ----------- ----------
Net investment income
(loss)................... (1,019,988) 3,400,090 336,462 5,722,504 1,634,395 1,537,677
Contributions --
Employees..................... 1,967,347 2,834,670 1,199,246 3,353,107 1,542,630 1,948,505
Employers..................... 280,155 107,589 7,412 492,023 260,053 67,360
Rollovers..................... 8,591 31,529 8,383 39,543 8,401 19,822
----------- ----------- ---------- ----------- ----------- ----------
2,256,093 2,973,788 1,215,041 3,884,673 1,811,084 2,035,687
Repayment of loan interest...... 13,727 23,511 7,924 31,138 14,114 16,504
Transfer from other plans (Note
5)............................ -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
Total additions........... 1,249,832 6,397,389 1,559,427 9,638,315 3,459,593 3,589,868
----------- ----------- ---------- ----------- ----------- ----------
DEDUCT:
Withdrawals..................... 538,695 531,918 286,338 1,286,075 806,288 281,752
Administrative expenses......... -- -- -- -- -- --
----------- ----------- ---------- ----------- ----------- ----------
Total deductions.......... 538,695 531,918 286,338 1,286,075 806,288 281,752
OPTION TRANSFERS, net............ 330,114 953,358 441,591 (1,714,760) (866,135) 703,407
----------- ----------- ---------- ----------- ----------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of year........... $11,750,636 $17,366,133 $4,813,411 $27,270,372 $13,718,166 $9,139,341
=========== =========== ========== =========== =========== ==========
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
-------------------------------------
TEMPLETON MONEY
FOREIGN MARKET PARTICIPANT
FUND FUND LOANS
--------- ----------- -----------
<S> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, BEGINNING OF YEAR..... $895,272 $19,348,562 $2,712,741
-------- ----------- ----------
ADD:
Dividends --
Tenneco Inc. ................. -- -- --
Other corporate securities.... -- -- --
Registered investment
companies................... 105,451 -- --
Interest........................ -- 1,046,596 --
-------- ----------- ----------
105,451 1,046,596 --
Net appreciation (depreciation)
in fair value of
investments................... (169,426) -- --
-------- ----------- ----------
Net investment income
(loss)................... (63,975) 1,046,596 --
Contributions --
Employees..................... 341,532 3,021,665 --
Employers..................... 16,727 530,948 --
Rollovers..................... 19,998 14,565 --
-------- ----------- ----------
378,257 3,567,178 --
Repayment of loan interest...... 1,910 20,863 --
Transfer from other plans (Note
5)............................ -- -- --
-------- ----------- ----------
Total additions........... 316,192 4,634,637 --
-------- ----------- ----------
DEDUCT:
Withdrawals..................... 73,131 1,736,732 268,126
Administrative expenses......... -- -- --
-------- ----------- ----------
Total deductions.......... 73,131 1,736,732 268,126
OPTION TRANSFERS, net............ (141,725) (125,414) 1,647,197
-------- ----------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of year........... $996,608 $22,121,053 $4,091,812
======== =========== ==========
<CAPTION>
NONPARTICIPANT-DIRECTED INVESTMENTS
--------------------------------------------------------------------------------
NEWPORT NEWS
EL PASO SHIPBUILDING
TENNECO INC. ENERGY INC.
COMMON COMMON COMMON CLEARING MERGER
STOCK STOCK STOCK ACCOUNT ASSETS TOTAL
------------ ---------- ------------ -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, BEGINNING OF YEAR..... $ 7,298,582 $1,581,425 $1,286,246 $160,935 $ -- $ 95,330,889
----------- ---------- ---------- -------- ----------- ------------
ADD:
Dividends --
Tenneco Inc. ................. 277,226 -- -- -- -- 631,059
Other corporate securities.... -- 33,275 7,576 -- -- 40,851
Registered investment
companies................... -- -- -- -- -- 2,947,585
Interest........................ 10,094 1,079 865 18,718 -- 1,090,235
----------- ---------- ---------- -------- ----------- ------------
287,320 34,354 8,441 18,718 -- 4,709,730
Net appreciation (depreciation)
in fair value of
investments................... (1,280,761) 67,001 353,096 -- -- 7,372,200
----------- ---------- ---------- -------- ----------- ------------
Net investment income
(loss)................... (993,441) 101,355 361,537 18,718 -- 12,081,930
Contributions --
Employees..................... -- -- -- -- -- 16,208,702
Employers..................... 5,205,817 -- -- -- -- 6,968,084
Rollovers..................... -- -- -- -- -- 150,832
----------- ---------- ---------- -------- ----------- ------------
5,205,817 -- -- -- -- 23,327,618
Repayment of loan interest...... 118,068 -- -- -- -- 247,759
Transfer from other plans (Note
5)............................ -- -- -- -- 13,407,835 13,407,835
----------- ---------- ---------- -------- ----------- ------------
Total additions........... 4,330,444 101,355 361,537 18,718 13,407,835 49,065,142
----------- ---------- ---------- -------- ----------- ------------
DEDUCT:
Withdrawals..................... 406,711 78,931 64,784 -- -- 6,359,481
Administrative expenses......... -- -- -- 95,379 -- 95,379
----------- ---------- ---------- -------- ----------- ------------
Total deductions.......... 406,711 78,931 64,784 95,379 -- 6,454,860
OPTION TRANSFERS, net............ (1,095,345) (151,993) (113,494) 133,199 -- --
----------- ---------- ---------- -------- ----------- ------------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of year........... $10,126,970 $1,451,856 $1,469,505 $217,473 $13,407,835 $137,941,171
=========== ========== ========== ======== =========== ============
</TABLE>
This exhibit is an integral part of the accompanying financial statements.
11
<PAGE> 12
SCHEDULE I
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
<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 620,693 $ 26,017,531 $ 21,142,667
El Paso Energy Company.......... El Paso Energy common stock 41,029 1,084,191 1,431,440
Newport News Shipbuilding
Inc........................... Newport News Shipbuilding Inc. common
stock 43,215 831,549 1,445,023
------------ ------------
Total corporate securities 27,933,271 24,019,130
------------ ------------
COLLECTIVE TRUST FUNDS:
BZW Barclays Global Investors... BZW Barclays Equity Index Fund 516,804 13,035,369 17,366,091
BZW Barclays Global Investors... BZW Barclays U.S. Debt Market Index Fund 341,318 4,368,083 4,813,406
Fidelity Investments
Institutional Services Co..... Fidelity Managed Income Portfolio (1998
average yield 5.93%) 2,109,680 2,109,680 2,109,680
------------ ------------
Total collective trust funds 19,513,132 24,289,177
------------ ------------
REGISTERED INVESTMENT COMPANIES:
Fidelity Investments
Institutional Services Co..... Fidelity Balanced Fund 32 458 528
Fidelity Investments
Institutional Services Co..... Fidelity Growth & Income Fund 15,785 603,496 723,555
Fidelity Investments
Institutional Services Co..... Fidelity Growth Company Fund 550,497 26,536,098 28,848,110
Fidelity Investments
Institutional Services Co..... Fidelity Intermediate Bond Fund 3,986 40,445 40,932
Fidelity Investments
Institutional Services Co..... Fidelity International Growth & Income
Fund 25,899 493,463 541,557
Fidelity Investments
Institutional Services Co..... Fidelity Magellan Fund 22,635 2,025,286 2,734,812
Fidelity Investments
Institutional Services Co..... Fidelity Puritan Fund 78,745 1,397,486 1,580,417
INVESCO Funds Group, Inc........ INVESCO Value Trust Total Return Fund 437,467 12,719,733 13,718,983
Putnam Management Company....... Putnam New Opportunities Fund 156,414 7,509,709 9,139,269
Franklin Templeton.............. Templeton Foreign Fund 118,785 1,214,484 996,608
------------ ------------
Total registered investment companies 52,540,658 58,324,771
------------ ------------
POOLED SEPARATE ACCOUNTS:
Principal Life Insurance
Company....................... Bond & Mortgage Account 4 1,802 1,801
Principal Life Insurance
Company....................... Bond Emphasis Balanced Account 10,337 164,221 169,326
Principal Life Insurance
Company....................... International Stock Account 6,244 216,425 209,681
Principal Life Insurance
Company....................... Medium Company Blend Account 16,610 573,992 545,811
Principal Life Insurance
Company....................... Medium Company Value Account 16,900 621,997 625,926
Principal Life Insurance
Company....................... Money Market Account 14,485 522,945 535,538
Principal Life Insurance
Company....................... Real Estate Account 6 1,800 1,814
Principal Life Insurance
Company....................... Small Company Blend Account 8,588 313,631 284,559
Principal Life Insurance
Company....................... Stock Emphasis Balance Account 9,696 184,359 190,473
Principal Life Insurance
Company....................... Stock Index 500 Account 519 19,266 22,221
Principal Life Insurance
Company....................... U.S. Stock Account 5 1,969 2,171
------------ ------------
Total pooled separate accounts 2,622,407 2,589,321
------------ ------------
GUARANTEED INVESTMENT CONTRACT:
Principal Life Insurance
Company....................... Guaranteed Interest Account (maturity
December 31, 1999, interest 4.53%) 480,379 480,379 480,379
------------ ------------
Total guaranteed investment contract 480,379 480,379
------------ ------------
MONEY MARKET FUNDS:
Bankers Trust Company*.......... Bankers Trust Pyramid Directed Account
Cash Fund 1,097,290 1,097,290 1,097,290
NationsBank of Texas, N.A.*..... Nations Cash Reserves 21,633,410 21,633,410 21,633,410
------------ ------------
Total money market funds 22,730,700 22,730,700
------------ ------------
TENNECO THRIFT PLAN FOR HOURLY
EMPLOYEES*...................... Participant loans receivable (interest
rates ranging from 6% to 10%) 5,170,173 5,170,173
------------ ------------
Total assets held for investment
purposes $128,368,313 $137,603,651
============ ============
</TABLE>
- -------------------------
* Indicated party in interest.
12
<PAGE> 13
SCHEDULE II
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS -- SERIES OF TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
COST COST
PURCHASE IN-KIND SELLING OF ASSETS IN-KIND OF ASSETS
IDENTITY OF PRICE EXCHANGES PRICE SOLD OR EXCHANGES EXCHANGED
PARTY INVOLVED Description (A)(C) In(c) (B)(C) DISTRIBUTED OUT(C) OUT
-------------- ----------- -------- --------- ------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Tenneco Inc. ........ Tenneco Inc. common
stock $ 2,131,414 $5,322,930 $1,154,458 $ 1,362,108 $60,342 $59,492
BZW Barclays Global
Investors.......... BZW Barclays Equity
Index Fund 8,655,549 -- 2,618,680 2,267,387 -- --
Fidelity Investments
Institutional
Services Co. ...... Fidelity Growth
Company Fund 6,191,626 -- 3,385,476 3,431,178 -- --
INVESCO Funds Group,
Inc. .............. INVESCO Value Trust
Total Return Fund 5,873,827 -- 2,117,188 2,003,754 -- --
Putnam Management
Company............ Putnam New
Opportunities Fund 4,115,160 -- 1,163,448 1,082,287 -- --
Bankers Trust
Company............ Bankers Trust Pyramid
Directed Account Cash
Fund 42,614,702 -- 41,517,412 41,517,412 -- --
NationsBank of Texas,
N.A. .............. Nations Cash Reserves 33,314,617 -- 30,031,288 30,031,288 -- --
<CAPTION>
NET
IDENTITY OF GAIN
PARTY INVOLVED (LOSS)
-------------- ------
<S> <C>
Tenneco Inc. ........
$(206,800)
BZW Barclays Global
Investors..........
351,293
Fidelity Investments
Institutional
Services Co. ......
(45,702)
INVESCO Funds Group,
Inc. ..............
113,434
Putnam Management
Company............
81,161
Bankers Trust
Company............
--
NationsBank of Texas,
N.A. .............. --
</TABLE>
- -------------------------
(a) Purchase price equals cost of asset and 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 and in-kind exchanges in/out.
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 for
Hourly Employees assets held on January 1, 1998.
13
<PAGE> 14
SCHEDULE III
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS -- SINGLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
IDENTITY OF PURCHASE SELLING COST OF NET GAIN
PARTY INVOLVED DESCRIPTION PRICE(A)(C) PRICE(B)(C) ASSETS (LOSS)
-------------- ----------- ----------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Bankers Trust Company Bankers Trust Pyramid
Directed Account Cash Fund Purchase $19,503,316 $ -- $19,503,316 $ --
Bankers Trust Company Bankers Trust Pyramid
Directed Account Cash Fund Sale -- 18,806,299 18,806,299 --
NationsBank of Texas, N.A. Nations Cash Reserves Purchase 19,000,000 -- 19,000,000 --
NationsBank of Texas, N.A. Nations Cash Reserves Sale -- 19,421,690 19,421,690 --
</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 Tenneco Thrift Plan for Hourly Employees assets
held on January 1, 1998.
14
<PAGE> 15
SCHEDULE IV
TENNECO THRIFT PLAN FOR HOURLY EMPLOYEES
SCHEDULE OF NONEXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
RELATIONSHIP TO PLAN INTEREST
IDENTITY OF EMPLOYER OR OTHER DESCRIPTION OF TRANSACTIONS, INCLUDING MATURITY DATE AMOUNT INCURRED
PARTY INVOLVED PARTY IN INTEREST RATE OF INTEREST, COLLATERAL AND PAR OR MATURITY VALUE LOANED ON LOAN
- -------------- -------------------- ------------------------------------------------------ ------ --------
<S> <C> <C> <C> <C>
Tenneco Inc. Employer Lending of monies from the Tenneco Thrift Plan for
Hourly Employees to the Employer -- August 22, 1997
(payroll date), employee contributions of Filer City
not remitted until April 30, 1998. Interest of 22% per
annum........................................... $ 13,032(a) $1,807(a)
Tenneco Inc. Employer Lending of monies from the Tenneco Thrift Plan for
Hourly Employees to the Employer -- December 22, 1997
(payroll date), employee contributions of Filer City
and Tomahawk locations not remitted until April 30,
1998. Interest of 19% per annum................. $ 53,297(a) $2,719(a)
Tenneco Inc. Employer Lending of monies from the Tenneco Thrift Plan for
Hourly Employees to the Employer -- June 26, 1998
(payroll date), employee contributions for eight
locations of Tenneco Packaging not remitted until
August 1, 1998. Interest of 26% per annum....... $119,310(b) $1,020(b)
</TABLE>
- -------------------------
(a) The employee contributions and related earnings were paid to the Tenneco
Thrift Plan for Hourly Employees on April 30, 1998.
(b) The employee contributions and related earnings were paid to the Tenneco
Thrift Plan for Hourly Employees on August 1, 1998.
15
<PAGE> 16
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 28, 1999 By: /s/ DANA G. MEAD
------------------------
Dana G. Mead
Chairman of the Tenneco
Benefits Committee
<PAGE> 17
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 15, 1999, included in this Annual Report on
Form 11-K for the year ended December 31, 1998, into the previously filed Form
S-8 Registration Statements of the Tenneco Thrift Plan For Hourly Employees
(File Nos. 333-17487, 333-27281, 333-27279, 333-30933, 333-41537, 333-48777 and
333-76261).
ARTHUR ANDERSEN LLP
Houston, Texas
June 28, 1999
