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
Commission file number 1-12385
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
NEWPORT NEWS SHIPBUILDING INC.
401(k) Investment Plan for Salaried Employees
4101 Washington Avenue
Newport News, Virginia 23607
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Newport News Shipbuilding Inc.
4101 Washington Avenue
Newport News, Virginia 23607
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Financial Statements
As of December 31, 1998 and 1997
Together With Report of Independent Public Accountants
<PAGE>
Report of Independent Public Accountants
To Newport News Shipbuilding Inc.:
We have audited the accompanying statements of net assets available for benefits
of the Newport News Shipbuilding Inc. 401(k) Investment Plan for Salaried
Employees (the "Plan") as of December 31, 1998 and 1997, and the related
statement of changes in net assets available for benefits for the year ended
December 31, 1998. These financial statements and the supplemental schedules
referred to below are the responsibility of the plan administrator. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and loans or fixed income obligations as of December 31,
1998, and schedule of reportable transactions for the year ended December 31,
1998, 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
our 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
Washington, D.C.
June 4, 1999
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Table of Contents
Page
Statements of Net Assets Available for Benefits
As of December 31, 1998 and 1997 1
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1998 2
Notes to Financial Statements
As of December 31, 1998 and 1997 3
Item 27(a) -Schedule of Assets Held for Investment Purposes
As of December 31, 1998 9
Item 27(b) -Schedule of Loans or Fixed Income Obligations
As of December 31, 1998 10
Item 27(d) -Schedule of Reportable Transactions
As of December 31, 1998 and for the Year Ended December 31, 1998 14
Schedules Omitted Because There Were No Such Items As of and for the Year
Ended December 31, 1998:
Item 27(c) - Schedule of Leases in Default or Classified as Uncollectible
Item 27(e) - Schedule of Nonexempt Transactions
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Statements of Net Assets Available for Benefits
As of December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
---- -----
<S> <C> <C>
Assets:
Cash $ 104,150 $ -
Investments, at fair market value-
Collective investment funds:
U.S. Bond Index Fund 11,354,024 8,896,883
Equity Index Fund 69,136,422 50,578,223
LifePath 2000 1,866,295 1,249,011
LifePath 2010 3,669,987 2,361,491
LifePath 2020 3,927,887 2,042,608
LifePath 2030 2,361,824 1,144,463
LifePath 2040 4,176,220 1,540,054
Money Market Fund 199,821,215 199,031,467
Uniqmoedc Money Market Fund 2,493,437 3,083,687
Mutual funds:
Putnam New Opportunities Fund 60,498,095 43,303,843
Templeton Foreign Fund 12,769,790 11,965,918
Fidelity Growth Company Fund 85,861,118 70,202,135
INVESCO Value Trust Total Return Fund 12,983,355 9,947,778
Common Stock:
Newport News Shipbuilding Inc. Common Stock 92,539,126 50,628,614
El Paso Natural Gas Company Common Stock 12,633,747 13,256,907
Tenneco Inc. Common Stock 71,473,688 89,962,278
Participant Loans 34,694,909 33,018,436
------------- -------------
Total investments 682,261,139 592,213,796
------------- -------------
Receivables:
Employer's contributions 1,165,010 894,669
Participants' contributions 963,246 1,065,178
------------- -------------
Total assets 684,493,545 594,173,643
------------- -------------
Liabilities:
Other liabilities - 183,461
------------- -------------
Net assets available for benefits $684,493,545 $593,990,182
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1998
Additions:
Investment income-
Net appreciation in fair value of investments $ 48,810,474
Interest 8,687,359
Dividends 20,487,714
Contributions-
Employer's 23,143,136
Participants' 28,601,886
Other additions 126,735
-------------
Total additions 129,857,304
-------------
Deductions:
Benefits paid to participants (39,325,189)
Administrative expenses (28,752)
-------------
Total deductions (39,353,941)
-------------
Net additions 90,503,363
-------------
Net assets available for benefits, December 31, 1997 593,990,182
-------------
Net assets available for benefits, December 31, 1998 $684,493,545
============
The accompanying notes are an integral part of this financial statement.
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Notes to Financial Statements
As of December 31, 1998 and 1997
1. Description of the Plan:
General
The Newport News Shipbuilding Inc. 401(k) Investment Plan for Salaried
Employees (the "Plan") was adopted by Newport News Shipbuilding Inc. (the
"Company" or "NNS"), effective December 16, 1996. This Plan was established
as a result of the Company being spun-off from its former parent, Tenneco Inc.
("Tenneco") on December 11, 1996 (the "Spin-Off"). Prior to the Spin-Off, the
Company's salaried employees were participants in the Tenneco Thrift Plan (the
"Former Plan").
The Plan is intended to constitute a defined contribution 401(k) plan that
provides for tax-deferred savings and employer contributions to participants.
The Company and Merrill Lynch (the "Trustee") have executed the Newport News
Shipbuilding Inc. 401(k) Investment Plan for Salaried Employees Trust Agreement,
which provides for the investment and reinvestment of the assets of the Plan.
The Plan is administered by the Company's Benefits Committee (the "Committee").
The members of the Committee are appointed by the Company's Board of Directors
(the "Board").
Eligibility and Contributions
All salaried employees are eligible to participate in the Plan on the first day
of the month after applying for Plan participation. Participants may elect to
voluntarily contribute a percentage of their annual before-tax compensation, not
to exceed limitations imposed by the Internal Revenue Service, through equal pay
period deductions. Participant contributions can range from 1 percent to 12
percent of annual compensation. The Company will provide a matching contribution
equal to 50 percent of participant contributions, capped at 8 percent of
participant contributions. Company matching contributions are made in the form
of the Company's stock. All Plan participants, regardless of whether they make a
contribution, also receive a Company stock grant equal to 3 percent of the
employee's base pay, each pay period.
Participant Accounts
Each participant's account is credited with the participant's contribution, an
allocation of the Plan's earnings or losses and Company matching contributions
each pay period. Allocations are based on the participant's account balance, as
defined in the plan document.
<PAGE>
Vesting
Participants hired after December 11, 1996, must have completed two years of
Company service to be vested in Company matching contributions. Forfeited
contributions are applied to reduce future Company matching contributions.
Participants hired prior to December 11, 1996, are fully vested in Company
matching contributions. All participants are fully vested in the 3 percent stock
grant and all other funds in their accounts.
Payment of Benefits
Upon termination of employment, including layoff, distributions to participants
are generally made via single lump sum payments. Participants whose account
balances exceed $3,500 (or have ever exceeded this amount at the time of a
previous distribution) have the right to defer the distribution of their account
balances until they reach the age of 70.
Investment Options
Upon enrollment in the Plan, participants may direct employee contributions in 1
percent increments in any of the nine investment funds that are selected by the
Committee. The Committee has currently selected the following funds:
U.S. Bond Index Fund - This is an index fund that attempts to replicate the
returns of the Lehman Brothers Aggregate Bond Index.
Equity Index Fund - This is a growth-oriented common stock mutual fund that
focuses on long-term capital appreciation and current income.
LifePath Funds - Collective funds which seek to achieve an appropriate balance
of risk versus return to help reach investment goals at specific times in the
future. Participants are able to choose from 5 different LifePath funds.
Money Market Fund - Invests in high-quality securities maturing in 13 months or
less.
Putnam New Opportunities Fund - Seeks long-term capital appreciation.
Templeton Foreign Fund - Seeks long-term capital growth by investing in stock
and debt obligations of companies and governments outside the United States.
NNS Fidelity Growth Company Fund - This is a growth-oriented common stock mutual
fund.
NNS INVESCO Value Trust Total Return Fund - Seeks consistent total return during
a variety of market cycles.
Newport News Shipbuilding Inc. Common Stock Fund - Contributions are invested
in the common stock of the Company.
The Plan holds investments in the Tenneco Inc. Common Stock Fund and El Paso
Natural Gas Company Common Stock Fund due to a stock-split that occurred as a
result of the Spin-Off. Investments in these stocks may be held or sold and
reinvested by participants. However, participants cannot purchase additional
shares of El Paso Natural Gas Company and Tenneco Inc. Common Stock under the
Plan.
<PAGE>
Investments in the Newport News Shipbuilding Inc. Common Stock Fund, NNS
Fidelity Growth Company Fund, NNS INVESCO Value Trust Total Return Fund, Tenneco
Inc. Common Stock Fund, and the El Paso Natural Gas Company Common Stock Fund,
are assigned units of participation. All of these funds hold investments in the
Uniqmoedc Money Market Fund. The unit value is determined daily, based upon the
fair market value of underlying net assets. The total units assigned to
participants and the unit values at December 31,1998 were as follows:
Units Unit Value
1998 1998
---------- ---------
Newport News Shipbuilding Inc. Common
Stock Fund 4,785,078 $19.43
NNS Fidelity Growth Company Fund 5,981,730 $14.39
NNS INVESCO Value Trust Total Return Fund 948,968 $13.76
Tenneco Inc. Common Stock Fund 8,790,197 $ 8.13
El Paso Natural Gas Company Common Stock Fund 868,134 $14.65
Loans to Participants
A participant may borrow up to 50 percent of his or her account balance with a
minimum loan amount of $1,000. Loans are repayable through payroll deductions
for a period no longer than 5 years. Interest on loans to participants is
charged at a rate of prime (rate of interest charged by commercial banks on
loans to preferred customers) plus 1 percent. The interest rate at December 31,
1998 was 8.75 percent.
2. Significant Accounting Policies:
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis of
accounting.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions in
determining the reported amounts of the Company's assets, liabilities, revenue,
and expenses. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
All investments are recorded at fair market value based on quoted market prices.
Purchases and sales transactions are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
<PAGE>
Payment of Benefits
Benefit payments are recorded when paid.
3. Investments:
The fair market value of individual investments that represent five percent of
the Plan's net assets as of December 31, 1998 and 1997, are as follows:
1998 1997
---- ----
Equity Index Fund $ 69,136,422 $ 50,578,223
Money Market Fund 199,821,215 199,031,467
Putnam New Opportunities Fund 60,498,095 43,303,843
Fidelity Growth Company Fund 85,861,118 70,202,135
Newport News Shipbuilding Inc. Common Stock 92,539,126 50,628,614
Tenneco Inc. Common Stock 71,473,688 89,962,278
Participant Loans 34,694,909 33,018,436
4. Tax Status:
The Plan obtained its most recent determination letter on November 17, 1997, in
which the Internal Revenue Service stated that the Plan, as then designed, was
in compliance with the applicable requirements of the Internal Revenue Code. The
Plan's administrator and the legal counsel of the Company believe that the Plan
is currently designed and being operated in compliance with requirements of the
Internal Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
5. Plan Termination:
The Company does not plan to terminate the Plan, however it has the right to do
so at any time by action of the Board. Should the Company decide to terminate
the Plan, all participants would become fully vested in their account balances.
6. Related Party Transactions:
Since the Company's common stock is an investment option, investments in this
common stock represent related party transactions. Certain plan investments are
shares of collective funds managed by the Trustee. Therefore, transactions with
these investments qualify as related-party transactions.
<PAGE>
7. Participant Directed Investment Programs:
Statement of Changes in Net Assets by Investment With Fund Information
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
U.S. Bond
Index Equity LifePath LifePath LifePath LifePath LifePath
Fund Index Fund 2000 2010 2020 2030 2040
----------- ---------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets, December 31, 1997 $ 8,896,883 $50,578,223 $1,249,011 $2,361,491 $2,042,608 $1,144,463 $1,540,054
Additions:
Investment income-
Net appreciation (depreciation) in
fair value of investments - 15,023,122 146,680 395,245 497,167 333,400 625,924
Interest 854,181 - - - - - -
Dividends - - - - - - -
Contributions-
Employer's - - - - - - -
Participants' 550,310 3,237,218 97,002 235,420 359,767 244,658 427,167
Other additions (589) (99,888) 8 (27,811) 19 (51) 130
----------- ---------- --------- --------- --------- --------- -----------
Total additions 1,403,902 18,160,452 243,690 602,854 856,953 578,007 1,053,221
----------- ---------- --------- --------- --------- --------- -----------
Deductions:
Benefits paid to participants (818,664) (2,443,594) (26,787) (19,353) (39,591) (53,869) (320,000)
Administrative expenses (192) (1,513) (39) (66) (142) (128) (178)
----------- ---------- --------- --------- --------- --------- -----------
Total deductions (818,856) (2,445,107) (26,826) (19,419) (39,733) (53,997) (320,178)
----------- ---------- --------- --------- --------- --------- -----------
Net increase (decrease) prior to
interfund transfers 585,046 15,715,345 216,864 583,435 817,220 524,010 733,043
Interfund transfers 1,872,095 2,842,854 400,420 725,061 1,068,059 693,351 1,903,123
----------- ----------- --------- --------- --------- --------- ----------
Net increase (decrease) 2,457,141 18,558,199 617,284 1,308,496 1,885,279 1,217,361 2,636,166
----------- ---------- --------- ----------- --------- ----------- ---------
Net assets, December 31, 1998 $11,354,024 $69,136,422 $1,866,295 $3,669,987 $3,927,887 $2,361,824 $4,176,220
=========== =========== ========== ========== ========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
Money Uniqmoedc Putnam New
Market Money Market Opportunities
Fund Fund Fund
----------- ----------- -----------
<S> <C> <C> <C>
Net assets, December 31, 1997 $199,031,467 $3,083,687 $43,303,843
Additions:
Investment income-
Net appreciation (depreciation) in
fair value of investments - - 9,911,913
Interest - 167,019 1,951,395
Dividends 10,560,243 - -
Contributions-
Employer's (206) - -
Participants' 10,503,513 - 4,086,578
Other additions 734,784 (757,269) (37,947)
----------- ----------- -----------
Total additions 21,798,334 (590,250) 15,911,939
----------- ----------- -----------
Deductions:
Benefits paid to participants (20,650,091) - (2,679,945)
Administrative expenses (8,137) - (1,752)
------------- ----------- -----------
Total deductions (20,658,228) - (2,681,697)
------------- ----------- -----------
Net increase (decrease) prior to
interfund transfers 1,140,106 (590,250) 13,230,242
Interfund transfers (350,358) - 3,964,010
------------ ---------- -----------
Net increase (decrease) 789,748 (590,250) 17,194,252
------------ ----------- -----------
Net assets, December 31, 1998 $199,821,215 $2,493,437 $60,498,095
============ ========== ===========
</TABLE>
<PAGE>
Statement of Changes in Net Assets by Investment With Fund Information
For the Year Ended December 31, 1998
(Continued)
<TABLE>
<CAPTION>
Newport El Paso
INVESCO News Natural Gas
Templeton Fidelity Value Trust Shipbuilding Company Tenneco
Foreign Growth Company Total Return Inc. Common Common Inc. Common
Fund Fund Fund Stock Stock Stock
-------------- ----------- ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net assets, December 31, 1997 $11,965,918 $70,202,135 $9,947,778 $50,628,614 $13,256,907 $89,962,278
Additions:
Investment income-
Net appreciation (depreciation)
in fair value of investments (1,924,744) 12,610,500 (630,282) 21,231,995 712,084 (10,122,530)
Interest 1,268,824 - 1,393,885 - - -
Dividends - 6,052,146 636,861 380,671 284,545 2,573,248
Contributions-
Employer's - - - 23,074,765 - -
Participants' 1,154,904 4,355,199 865,110 2,385,225 (2) (15)
Other additions 988 202,298 (24,776) (286,346) (140,892) 94,705
------------ ----------- ------------ ------------ ---------- ------------
Total additions 499,972 23,220,143 2,240,798 46,786,310 855,735 (7,454,592)
------------ ----------- ------------ ------------ ---------- ------------
Deductions:
Benefits paid to participants (401,032) (3,624,685) (391,120) (2,714,003) (556,514) (3,550,183)
Administrative expenses (362) (2,146) (279) (1,133) (119) (805)
------------ ----------- ------------ ------------ ---------- ------------
Total deductions (401,394) (3,626,831) (391,399) (2,715,136) (556,633) (3,550,988)
------------ ----------- ------------ ------------ ---------- ------------
Net increase (decrease) prior to
interfund transfers 98,578 19,593,312 1,849,399 44,071,174 299,102 (11,005,580)
Interfund transfers 705,294 (3,934,329) 1,186,178 (2,160,662) (922,262) (7,483,010)
------------ ------------ ------------ ------------ ---------- ------------
Net increase (decrease) 803,872 15,658,983 3,035,577 41,910,512 (623,160) (18,488,590)
------------ ----------- ------------ ------------ ---------- ------------
Net assets, December 31, 1998 $12,769,790 $85,861,118 $12,983,355 $92,539,126 $12,633,747 $71,473,688
============ =========== ============= ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Participant
Loans Other Total
----------- ----------- -----------
<S> <C> <C> <C>
Net assets, December 31, 1997 $33,018,436 $1,776,386 $593,990,182
Additions:
Investment income-
Net appreciation (depreciation)
in fair value of investments - - 48,810,474
Interest 3,049,674 2,381 8,687,359
Dividends - - 20,487,714
Contributions-
Employer's - 68,577 23,143,136
Participants' - 99,832 28,601,886
Other additions 237,437 231,935 126,735
----------- ----------- -----------
Total additions 3,287,111 402,725 129,857,304
----------- ----------- -----------
Deductions:
Benefits paid to participants (1,027,669) (8,089) (39,325,189)
Administrative expenses - (11,761) (28,752)
----------- ----------- -----------
Total deductions (1,027,669) (19,850) (39,353,941)
----------- ----------- -----------
Net increase (decrease) prior to
interfund transfers 2,259,442 382,875 90,503,363
Interfund transfers (582,969) 73,145 -
----------- ----------- -----------
Net increase (decrease) 1,676,473 456,020 90,503,363
----------- ----------- -----------
Net assets, December 31, 1998 $34,694,909 $2,232,406 $684,493,545
============ =========== ============
</TABLE>
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Item 27(a) - Schedule of Assets Held for Investment Purposes
As of December 31, 1998
<TABLE>
<CAPTION>
Current
Identity of Issue Asset Description Cost Value
- --------------------------- ----------------- ------------- --------------
<S> <C> <C> <C>
U.S. Bond Index Fund* Collective Fund $ 11,354,024 $ 11,354,024
Equity Index Fund* Collective Fund 46,287,481 69,136,422
LifePath 2000* Collective Fund 1,757,537 1,866,295
LifePath 2010* Collective Fund 3,281,257 3,669,987
LifePath 2020* Collective Fund 3,396,121 3,927,887
LifePath 2030* Collective Fund 2,030,740 2,361,824
LifePath 2040* Collective Fund 3,589,441 4,176,220
Money Market Fund* Collective Fund 199,821,215 199,821,215
Uniqmoedc Money Market Fund Collective Fund 2,493,437 2,493,437
Putnam New Opportunities Fund Mutual Fund Shares 45,906,226 60,498,095
Templeton Foreign Fund Mutual Fund Shares 14,994,964 12,769,790
Fidelity Growth Company Fund Mutual Fund Shares 70,876,640 85,861,118
INVESCO Value Trust Total Return Mutual Fund Shares 11,476,623 12,983,355
Fund
Newport News Shipbuilding Inc.
Common Stock* Common Stock Shares 63,108,780 92,539,126
El Paso Natural Gas Company
Common Stock Common Stock Shares 7,390,535 12,633,747
Tenneco Inc. Common Stock Common Stock Shares 83,793,205 71,473,688
Participant Loans (interest rates
varied from 6.17% to 9.89% during 1998)* Participant Loans 34,694,909 34,694,909
------------ ------------
Total assets held for investment purposes $606,253,135 $682,261,139
============ ============
</TABLE>
* Represents a party-in-interest
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Item 27(b) - Schedule of Loans or Fixed Income Obligations
As of December 31, 1998
<TABLE>
<CAPTION>
Loan Payments
in 1998 Unpaid
Loan -------------------- Balance at
Name Amount Principal Interest 12/31/98 Loan Terms
- -------------------- -------- -------- ----------- ---------- ---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Puckett, David L. $ 10,000 - - $9,718.30 4.5 yrs., 7.75%, made - 11/30/95 maturity - 5/31/00
Brown, Stafford T. 3,000 - - 3,351.35 2 yrs., 9.5%, made - 10/28/97 maturity - 10/28/99
Wiggins, Charles D. 10,000 - - 3,931.38 4 yrs., 7.5%, made - 12/31/92 maturity - 12/31/96
Howard, Stanley M. 3,000 - - 2,825.85 4.5 yrs., 7.5%, made - 4/30/95 maturity - 10/31/99
Smith, Daniel L. 5,000 - - 2,991.09 4.5 yrs., 7.25%, made - 9/30/94 maturity - 3/31/99
Ratcliffe, Nicholas 10,000 - - 4,005.18 4.5 yrs., 7.00%, made - 11/30/93 maturity - 5/31/98
Sarver, James M. 9,500 - - 367.46 4.5 yrs., 8.00%, made - 6/30/92 maturity - 12/31/96
Sarver, James M. 23,000 - - 27,053.92 5 yrs., 9.25%, made - 3/24/97 maturity - 3/20/02
Brown, Madison C. 14,500 - - 10,671.31 4.5 yrs., 7.00%, made - 2/25/94 maturity - 8/31/98
Clayton, Dean M. 2,000 - - 2,425.35 3 yrs., 7.5%, made - 9/30/95 maturity - 9/30/98
Hickman, Sidney C. 11,500 - - 141.21 4.5 yrs., 7.5%, made - 7/31/95 maturity - 1/31/00
Gilmartin, Sean R. 1,000 - - 1,518.27 2 yrs., 7.10%, made - 1/25/93 maturity - 2/15/95
James, Raymond H. 4,500 - - 7,283.38 3 yrs., 7.1%, made - 8/20/92 maturity - 9/15/95
Campbell, Willie G. 2,000 - - 2,373.42 2 yrs., 6.48%, made - 11/1/93 maturity - 11/30/95
Williams, Joseph R. 5,500 - - 6,449.80 4.5 yrs., 9.54%, made - 1/9/90 maturity - 8/15/94
Shelor, Richard E 4,000 - - 3,403.83 2 yrs., 6.46%, made - 6/15/94 maturity - 7/15/96
Eubank, Patsy R. 2,500 - - 3,454.57 4.5 yrs., 7.79%, made - 9/8/92 maturity - 3/31/97
Boothe, Robert L. 1,500 - - 2,146.04 1 yr., 8.42%, made - 7/16/91 maturity - 8/15/92
Anzio, Robert M. 1,500 - - 2,004.24 4.5 yrs., 7.27%, made - 12/20/94 maturity - 7/15/99
Daniels, William S. 8,000 - - 1,827.30 4.5 yrs., 8.00%, made - 3/7/88 maturity - 9/30/92
Tyler, Cathen E. 3,500 - - 5,853.71 4.5 yrs., 8.69%, made - 12/3/91 maturity - 6/30/96
Gauldin, Joseph G. 11,500 - - 13,078.98 4.5 yrs., 8.25%, made - 3/23/92 maturity - 10/15/96
Robinson, Albert C 10,000 - - 540.43 4.5 yrs., 6.87%, made - 6/11/95 maturity - 12/31/99
Brown, Pernell 5,000 - - 7,120.86 4.5 yrs., 6.75%, made - 9/16/93 maturity - 4/15/98
</TABLE>
<TABLE>
<CAPTION>
Amount Overdue
-------------------------
Name Principal Interest
- -------------------- --------- ---------
<S> <C> <C>
Puckett, David L. $ 8,234.95 $ 1,483.35
Brown, Stafford T. 3,000.00 351.35
Wiggins, Charles D. 3,120.85 810.53
Howard, Stanley M. 2,341.67 484.18
Smith, Daniel L. 2,610.58 380.51
Ratcliffe, Nicholas 3,492.87 512.31
Sarver, James M. 312.18 55.28
Sarver, James M. 23,000.00 4,053.92
Brown, Madison C. 8,876.02 1,795.29
Clayton, Dean M. 1,925.30 500.05
Hickman, Sidney C. 129.79 11.42
Gilmartin, Sean R. 1,000.00 518.27
James, Raymond H. 4,500.00 2,783.38
Campbell, Willie G. 1,740.55 632.87
Williams, Joseph R. 3,364.97 3,084.83
Shelor, Richard E 2,672.23 731.60
Eubank, Patsy R. 2,230.48 1,224.09
Boothe, Robert L. 1,179.01 967.03
Anzio, Robert M. 1,500.00 504.24
Daniels, William S. 1,065.60 761.70
Tyler, Cathen E. 3,294.93 2,558.78
Gauldin, Joseph G. 8,456.83 4,622.15
Robinson, Albert C 538.88 1.55
Brown, Pernell 5,000.00 2,120.86
</TABLE>
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Item 27(b) - Schedule of Loans or Fixed Income Obligations
As of December 31, 1998
(Continued)
<TABLE>
<CAPTION>
Loan Payments
in 1998 Unpaid
Loan ----------------------- Balance at
Name Amount Principal Interest 12/31/98 Loan Terms
- ---------------------- ----------- --------- -------- ---------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Phillips, Martin A. $ 1,500.00 - - $ 2,098.53 4 yrs., 7.0%, made - 2/24/94 maturity - 4/15/98
Crandol, Jerry A. 1,500.00 - - 1,550.40 4.5 yrs., 6.52%, made - 12/3/93 maturity - 5/31/98
Hill, Robert B. 2,500.00 - - 2,897.43 4.5 yrs., 7.0%, made - 4/1/93 maturity - 10/31/97
Hill, Altee M. 8,000.00 - - 8,477.11 4.5 yrs., 6.7%, made - 7/27/93 maturity - 2/28/98
Wills, Christophe L. 13,000.00 - - 12,768.12 4.5 yrs., 7.00%, made - 4/28/93 maturity - 10/31/97
Everett, Randy B. 1,500.00 - - 2,333.59 3 yrs., 7.66%, made - 3/7/88 maturity - 3/31/91
Rainey, Quinton 1,500.00 - - 2,883.90 2 yrs., 8.98%, made - 8/30/91 maturity - 9/30/93
Vann, Henry L. 2,500.00 - - 5,366.58 4.5 yrs., 9.82%, made - 6/27/90 maturity - 1/31/95
Dolby, Calvin V. 1,500.00 - - 2,436.11 2 yrs., 9.05%, made - 4/18/91 maturity - 5/15/93
Kilmon, Asa K. 7,000.00 - - 9,264.01 4.5 yrs., 7.25%, made - 2/1/95 maturity - 8/31/99
Evans, Bobby C. 1,500.00 - - 1,667.86 2 yrs., 6.4%, made - 7/28/93 maturity - 8/31/95
Slade, Linwood L. 5,000.00 - - 6,264.08 4.5 yrs., 7.75%, made - 1/22/96 maturity - 8/15/00
Jones, Herman 14,500.00 - - 15,584.55 4.5 yrs., 6.96%, made - 2/26/93 maturity - 9/30/97
Campbell, Ronnie F. 5,000.00 - - 4,142.63 3 yrs., 9.6%, made - 8/10/90 maturity - 9/15/93
Hood, James 10,000.00 - - 12,733.26 4 yrs., 6.94%, made - 12/6/94 maturity 1/31/99
Flyth, Calvin B. 3,500.00 - - 6,219.01 4.5 yrs., 9.32%, made - 6/26/91 maturity 1/31/96
Wilder, Bernard 1,000.00 - - 1,600.60 2 yrs., 7.45%, made - 8/19/92 maturity 9/15/94
Riddick, Wilbert J. 11,000.00 - - 6,763.48 4.5 yrs., 7.5%, made - 11/16/92 maturity 5/15/97
Jenkins, Fred T. 5,000.00 - - 7,417.20 2 yrs., 7.77%, made - 3/12/92 maturity 4/15/94
Wild, Bernard W. 1,000.00 - - 1,678.67 2 yrs., 9.12%, made - 4/19/91 maturity 5/15/93
Burger, Crystal L. 1,500.00 - - 1,771.18 2 yrs., 6.53%, made - 8/19/93 maturity 9/15/95
McTheny, Mark T. 2,500.00 - - 3,113.06 4 yrs., 7.22%, made - 5/18/95 maturity 6/15/99
Thompson, Lonnell 5,000.00 - - 128.54 2 yrs., 7.5%, made - 2/8/96 maturity 2/28/98
Williams, John D. 1,000.00 - - 1,600.47 3 yrs., 7.4%, made - 8/4/92 maturity 9/15/95
</TABLE>
<TABLE>
<CAPTION>
Amount Overdue
----------------------
Name Principal Interest
- ---------------------- --------- --------
<S> <C> <C>
Phillips, Martin A. $ 1,500.00 $ 598.53
Crandol, Jerry A. 1,198.11 352.29
Hill, Robert B. 2,078.85 818.58
Hill, Altee M. 6,378.95 2,098.16
Wills, Christophe L. 9,458.79 3,309.33
Everett, Randy B. 1,100.08 1,233.51
Rainey, Quinton 1,500.00 1,383.90
Vann, Henry L. 2,410.43 2,956.15
Dolby, Calvin V. 1,265.57 1,170.54
Kilmon, Asa K. 7,000.00 2,264.01
Evans, Bobby C. 1,218.08 449.78
Slade, Linwood L. 5,000.00 1,264.08
Jones, Herman 11,333.16 4,251.39
Campbell, Ronnie F. 2,222.13 1,920.50
Hood, James 9,816.89 2,916.37
Flyth, Calvin B. 3,255.45 2,963.56
Wilder, Bernard 1,000.00 600.60
Riddick, Wilbert J. 5,187.72 1,575.76
Jenkins, Fred T. 4,494.13 2,923.07
Wild, Bernard W. 864.32 814.35
Burger, Crystal L. 1,281.85 489.33
McTheny, Mark T. 2,439.88 673.18
Thompson, Lonnell 120.36 8.18
Williams, John D. 1,000.00 600.47
</TABLE>
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Item 27(b) - Schedule of Loans or Fixed Income Obligations
As of December 31, 1998
(Continued)
<TABLE>
<CAPTION>
Loan Payments
in 1998 Unpaid
Loan ---------------------- Balance at
Name Amount Principal Interest 12/31/98 Loan Terms
- ---------------------- ---------- --------- -------- ----------- --------------------------------------------------
<S> <C> <C> <C> <C> <C>
Joyner Jr. David R. $10,000.00 - - $ 5,387.52 4.5 yrs., 7.5%, made - 10/31/92 maturity 4/30/97
Hall, Arnold R. 7,500.00 - - 775.95 4 yrs., 7.9%, made - 6/14/88 maturity 7/15/92
Mabine, James E. 2,500.00 - - 4,779.87 2 yrs., 9.01%, made - 10/1/91 maturity 10/31/93
Parker, Kenneth L. 10,000.00 - - 18,551.07 4 yrs., 9.37%, made - 10/3/91 maturity 10/31/95
Hicks, Leogie 2,000.00 - - 2,136.82 4 yrs., 7.68%, made - 9/16/92 maturity 10/15/96
Butler, Harold M. 11,500.00 - - 3,992.78 4.5 yrs., 9.89%, made - 1/31/91 maturity 8/31/95
Gilliam, McAuthor 6,500.00 - - 3,242.75 4.5 yrs., 6.17%, made - 11/29/95 maturity 3/31/00
Combs, Alton L. 12,000.00 - - 6,253.42 4.5 yrs., 7.89%, made - 10/25/88 maturity 5/31/93
Bazemore, William H. 1,000.00 - - 1,041.90 2 yrs., 7.08%, made - 1/9/95 maturity 1/31/97
Hurt, Don O. 3,000.00 - - 3,874.67 4 yrs., 8.77%, made - 2/11/92 maturity 2/29/96
Watson, Donna M. 5,000.00 - - 4,955.48 4 yrs., 9.50%, made - 9/8/97 maturity 9/15/01
Watson, Donna M. 3,000.00 - - 3,264.36 5 yrs., 9.50%, made - 2/4/98 maturity 1/31/03
Smith, Michael P. 1,000.00 - - 979.77 5 yrs., 9.5%, made - 10/22/97 maturity 10/15/02
Smith, Michael P. 1,350.00 - - 1,366.67 3 yrs., 9.5%, made - 2/26/98 maturity 2/28/01
Pearson, Willie R. 15,000.00 - - 4,576.88 4 yrs., 7.25%, made - 10/31/94 maturity 10/31/98
Maxey, Judy A. 8,000.00 - - 7,744.53 5 yrs., 9.5%, made - 7/24/97 maturity 7/15/02
Johnson, Michael H. 5,000.00 - - 5,358.20 2 yrs., 7.74%, made - 11/30/95 maturity 11/30/97
Simon, Judy T. 3,595.00 - - 3,207.18 3 yrs., 7.75%, made - 4/30/96 maturity 4/30/99
Woodell, James W. 5,500.00 - - 2,404.07 4 yrs., 7.00%, made - 2/28/94 maturity 2/28/98
Mills, Jeffery A. 7,800.00 - - 6,751.80 5 yrs., 9.25%, made - 2/28/97 maturity 2/28/02
Mills, Jeffery A. 6,079.18 - - 6,524.23 5 yrs., 9.5%, made - 3/30/98 maturity 3/15/03
Sisco, Henderson L. 6,000.00 - - 2,752.61 4 yrs., 8.0%, made - 2/06/89 maturity 2/28/93
</TABLE>
<TABLE>
<CAPTION>
Amount Overdue
-----------------------
Name Principal Interest
- ---------------------- --------- ---------
<S> <C> <C>
Joyner Jr. David R. $ 4,197.43 $ 1,190.09
Hall, Arnold R. 458.38 317.57
Mabine, James E. 2,500.00 2,279.87
Parker, Kenneth L. 9,677.32 8,873.75
Hicks, Leogie 1,460.96 675.86
Butler, Harold M. 2,646.39 1,346.39
Gilliam, McAuthor 3,106.87 135.88
Combs, Alton L. 3,675.75 2,577.67
Bazemore, William H. 813.47 228.43
Hurt, Don O. 2,333.65 1,541.02
Watson, Donna M. 4,583.59 371.89
Watson, Donna M. 3,000.00 264.36
Smith, Michael P. 923.97 55.80
Smith, Michael P. 1,289.22 77.45
Pearson, Willie R. 4,283.16 293.72
Maxey, Judy A. 7,218.48 526.05
Johnson, Michael H. 4,318.15 1,040.05
Simon, Judy T. 2,772.74 434.44
Woodell, James W. 2,066.23 337.84
Mills, Jeffery A. 6,353.35 398.45
Mills, Jeffery A. 6,079.18 445.05
Sisco, Henderson L. 1,605.50 1,147.11
</TABLE>
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Item 27(b) - Schedule of Loans or Fixed Income Obligations
As of December 31, 1998
(Continued)
<TABLE>
<CAPTION>
Loan Payments
in 1998 Unpaid
Loan --------------------- Balance at
Name Amount Principal Interest 12/31/98 Loan Terms
- ----------------------- --------- --------- -------- ---------- -----------------------------------------------
<S> <C> <C> <C> <C> <C>
Smith, Arnold R. $ 3,500.00 - - $ 3,388.46 3 yrs., 9.62%, made - 6/26/90 maturity 7/31/93
Monds, Kathryn N. 2,500.00 - - 3,802.29 4 yrs., 7.70%, made - 8/4/92 maturity 8/31/96
Culotta, Monrickie R. 3,000.00 - - 510.19 2 yrs., 9.46%, made - 8/16/90 maturity 9/15/92
Joyner, Barbara M. 2,000.00 - - 2,724.92 2 yrs., 6.19%, made - 12/15/93 maturity 1/31/96
Williams, Bobby K. 2,500.00 - - 2,768.32 2 yrs., 6.40%, made - 8/12/93 maturity 9/15/95
Evilsizer, Joseph M. 8,000.00 - - 11,467.47 4.5 yrs., 6.69%, made - 7/26/93 maturity 2/28/98
Brown, Ricky M. 1,000.00 - - 1,625.59 2 yrs., 7.45%, made - 6/3/92 maturity 6/30/94
Johnson, James E. 2,500.00 - - 3,307.32 4.5 yrs., 7.23%, made - 1/30/95 maturity 8/31/99
Rawles, Michael 4,000.00 - - 5,826.65 2 yrs., 8.49%, made - 1/24/92 maturity 2/15/94
Williams, Jon F. 2,000.00 - - 1,202.46 3 yrs., 9.39%, made - 9/24/91 maturity 10/15/94
Dudney, Lester K. 5,000.00 - - 6,760.71 4 yrs., 6.72%, made - 6/16/94 maturity 7/15/98
Armstead, Carl M. 5,500.00 - - 7,605.51 4.5 yrs., 6.74%, made - 10/01/93 maturity 4/30/98
Carmean, Patrick S. 1,000.00 - - 1,227.36 1 yr., 8.74%, made - 5/24/91 maturity 6/15/92
Higgins, Anthony L. 3,000.00 - - 4,630.83 2 yrs., 7.02%, made - 10/06/92 maturity 10/31/94
Whitmore, Scott M. 1,500.00 - - 2,087.25 3 yrs., 7.10%, made - 12/02/92 maturity 3/31/95
Turner, Gary R. 1,500.00 - - 49.29 2 yrs., 7.94, made - 5/5/92 maturity 5/31/94
Ridout, Jay L. 1,500.00 - - 2,098.04 4.5 yrs., 6.79%, made - 1/4/94 maturity 7/31/98
Cooke, Dirik B. 7,000.00 - - 9,014.82 4.5 yrs., 9.55%, made - 4/9/90 maturity 11/15/94
Godwin Jr., Frederick 1,000.00 - - 1,440.48 4 yrs., 6.77%, made - 7/22/93 maturity 8/15/97
Ezzell, David E. 15,000.00 - - 17,528.88 4.5 yrs., 7.21%, made - 10/30/92 maturity 5/31/97
Bazemore Jr., James N. 13,500.00 - - 13,864.88 4.5 yrs, 7.25%, made - 3/16/93 maturity 10/31/97
McKinney, Gilmer L. 8,500.00 - - 472.13 4.5 yrs., 7.75%, made - 11/20/87 maturity 6/15/92
Bayse, John T. 2,000.00 - - 3,068.44 4.5 yrs., 7.26%, made - 1/20/93 maturity 8/15/97
Mason, Elliott L. 1,500.00 - - 1,383.79 3 yrs., 9.75%, made - 5/18/90 maturity 6/15/93
Hall, Randall W. 1,000.00 - - 1,618.44 2 yrs., 7.79%, made - 3/26/92 maturity 4/30/94
Hendrix Jr., Harvey H. 4,000.00 - - 6,847.84 4.5 yrs., 9.31%, made - 4/25/91 maturity 11/30/95
</TABLE>
<TABLE>
<CAPTION>
Amount Overdue
------------------------
Name Principal Interest
- ----------------------- ----------- ----------
<S> <C> <C>
Smith, Arnold R. $ 1,765.25 $ 1,623.21
Monds, Kathryn N. 2,381.92 1,420.37
Culotta, Monrickie R. 277.04 233.15
Joyner, Barbara M. 2,000.00 724.92
Williams, Bobby K. 2,027.07 741.25
Evilsizer, Joseph M. 8,000.00 3,467.47
Brown, Ricky M. 1,000.00 625.59
Johnson, James E. 2,500.00 807.32
Rawles, Michael 3,358.57 2,468.08
Williams, Jon F. 737.93 464.53
Dudney, Lester K. 5,000.00 1,760.71
Armstead, Carl M. 5,416.93 2,188.58
Carmean, Patrick S. 656.66 570.70
Higgins, Anthony L. 3,000.00 1,630.83
Whitmore, Scott M. 1,392.55 694.70
Turner, Gary R. 34.05 15.24
Ridout, Jay L. 1,500.00 598.04
Cooke, Dirik B. 4,679.66 4,335.16
Godwin Jr., Frederick 1,000.00 440.48
Ezzell, David E. 12,154.01 5,374.87
Bazemore Jr., James N. 10,101.01 3,763.87
McKinney, Gilmer L. 281.55 190.58
Bayse, John T. 2,000.00 1,068.44
Mason, Elliott L. 711.66 672.13
Hall, Randall W. 969.86 648.58
Hendrix Jr., Harvey H. 3,587.13 3,260.71
</TABLE>
<PAGE>
Newport News Shipbuilding Inc. 401(k) Investment
Plan for Salaried Employees
Item 27(d) - Schedule of Reportable Transactions
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Number Number Total Total Cost of
of Purchase of Sales Amount of Amount of Assets Gain
Transactions Transactions Description Purchases (a) Sales (b) Sold (Loss)
- ------------ ------------ -------------------------- ------------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
116 136 Money Market Fund* $ 86,425,912 $ 85,636,165 $ 85,636,165 $
-
Uniqmoedc Money
966 1,166 Market Fund 134,637,547 135,429,117 135,429,117 -
Putnam New Opportunities
136 116 Fund 18,859,983 11,577,645 9,460,175 2,117,470
92 156 Fidelity Growth Company 13,280,707 10,809,903 9,443,733 1,366,170
Fund
INVESCO Value Trust Total
133 91 Return Fund 4,831,774 2,636,430 2,346,482 289,948
Newport News Shipbuilding
Inc. Common Stock*
136 124 59,728,878 41,314,343 33,604,694 7,709,649
El Paso Natural Gas
Company Common Stock
- 171 - 1,022,874 601,201 421,673
- 155 Tenneco Inc. Common Stock - 8,316,031 8,257,480 58,551
</TABLE>
Note: This schedule presents all transactions or series of transactions of the
same issue during the period January 1, 1998 through December 31, 1998,
in excess of 5 percent of the fair value of the Plan's assets as of the
beginning of the year.
(a) Purchase price includes expenses incurred with transactions.
(b) Selling price is net of transaction expenses.
* Represents a party-in-interest
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Newport News Shipbuilding Inc. Benefits Committee has caused this annual
report to be signed on its behalf by the undersigned thereunto duly authorized.
NEWPORT NEWS SHIPBUILDING INC.
401(k) INVESTMENT PLAN FOR
SALARIED EMPLOYEES
Date: __________________________ By: /s/ Robert H. Walker
--------------------------
Manager, Employee Benefits
Newport News Shipbuilding Inc.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K, into Newport News
Shipbuilding Inc.'s previously filed Registration Statements on Form S-8, File
Nos. 333-72765 and 333-63231.
Washington, D.C. ARTHUR ANDERSEN LLP
June 29, 1999
