<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM 11-K
-------------------------------
(Mark One)
[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 1-14634
-------------------------------
A. Full title of the plan and the address of the plan if different from that
of the issuer named below:
SANTA FE INVESTMENT SAVINGS & PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Santa Fe International Corporation
Two Lincoln Centre, Suite 1100
5420 LBJ Freeway
Dallas, Texas 75240-2648
<PAGE> 2
REQUIRED INFORMATION
The financial statements listed in the accompanying table of contents are filed
as part of this Form 11-K.
-2-
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee for the Employee Benefit Plans of Santa Fe
International Corporation has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
SANTA FE INVESTMENT SAVINGS &
PROFIT SHARING PLAN
By: /s/ C. STEDMAN GARBER, JR.
--------------------------------
C. Stedman Garber, Jr., Chairman of
the Administrative Committee for
the Employee Benefit Plans of Santa
Fe International Corporation
Date: July 9, 1999
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<PAGE> 4
SANTA FE INVESTMENT SAVINGS & PROFIT SHARING PLAN
CONTENTS
<TABLE>
<S> <C>
Report of independent auditors 5
Audited financial statements
Statements of net assets available for benefits
at December 31, 1998 and 1997 6
Statements of changes in net assets available for benefits
for the years ended December 31, 1998 and 1997 7
Notes to financial statements 8
Supplemental schedules Schedule
Line 27a - Schedule of assets held for investment
purposes at December 31, 1998 A
Line 27d - Schedule of reportable transactions for the
year ended December 31, 1998 B
</TABLE>
All other schedules for which provision is made in the applicable regulations of
the Employee Retirement Income Act of 1974 have been omitted as the schedules
are not required under the related instructions, are inapplicable, or the
information required thereby is set forth in the financial statements or notes
thereto.
-4-
<PAGE> 5
Report of Independent Auditors
Administrative Committee
Santa Fe Investment Savings & Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of the Santa Fe Investment Savings & Profit Sharing Plan as of December 31, 1998
and 1997, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. 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 at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended, are presented for purpose of additional
analysis and are not a required part of the financial statements but are
supplemental 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 are the responsibility of the
Plan's management. The Fund Information in the statements of net assets
available for benefits and the statements of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
ERNST & YOUNG LLP
June 1,1999
-5-
<PAGE> 6
SANTA FE INVESTMENT SAVINGS & PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1998 and 1997
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
1998
------------------------------------------------------------------------------------
MONEY ASSET MARKET
MARKET SANTA FE S&P 500 BOND ALLOCATION COMPLETION
FUND STOCK FUND FUND FUND FUND
----------- ----------- ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
INVESTMENTS AT FAIR VALUE $ -- $ 4,340,783 $ -- $ -- $ -- $ --
CONTRIBUTIONS RECEIVABLE FROM:
Santa Fe International Corporation -- -- -- -- -- --
Participants -- -- -- -- -- --
INTERFUND RECEIVABLE (PAYABLE) -- -- -- -- --
LIABILITIES
ADMINISTRATIVE AND OTHER PAYABLES -- -- -- -- -- --
----------- ----------- ----------- ----------- ------------ -------------
NET ASSETS AVAILABLE FOR BENEFITS $ -- $ 4,340,783 $ -- $ -- $ -- $ --
=========== =========== =========== =========== ============ =============
<CAPTION>
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
VANGUARD VANGUARD
INTERNATIONAL PROFIT VANGUARD VANGUARD TOTAL BOND ASSET
EQUITY SHARING MONEY MARKET 500 INDEX MARKET INDEX ALLOCATION
FUND FUND FUND FUND FUND FUND
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
INVESTMENTS AT FAIR VALUE $ 3,062,095 $ 11,186,514 $ 16,841,322 $ 22,509,177 $ 3,961,340 $ 6,354,784
CONTRIBUTIONS RECEIVABLE FROM:
Santa Fe International Corporation -- -- -- -- -- --
Participants -- -- -- -- -- --
INTERFUND RECEIVABLE (PAYABLE) -- -- (63,278) (76,144) -- 139,422
LIABILITIES
ADMINISTRATIVE AND OTHER PAYABLES -- -- -- -- -- --
------------- ------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 3,062,095 $ 11,186,514 $ 16,778,044 $ 22,433,033 $ 3,961,340 $ 6,494,206
============= ============ ============ ============ ============ ============
<CAPTION>
-----------------------------
-----------------------------
VANGUARD
EXTENDED
MARKET INDEX
FUND TOTAL
------------ ------------
<S> <C> <C>
ASSETS
INVESTMENTS AT FAIR VALUE $ 1,710,396 $ 69,966,411
CONTRIBUTIONS RECEIVABLE FROM:
Santa Fe International Corporation -- --
Participants -- --
INTERFUND RECEIVABLE (PAYABLE) -- --
LIABILITIES
ADMINISTRATIVE AND OTHER PAYABLES -- --
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 1,710,396 $ 69,966,411
============ ============
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
1997
--------------------------------------------------------------------------------------
MONEY ASSET MARKET
MARKET SANTA FE S&P 500 BOND ALLOCATION COMPLETION
FUND STOCK FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
INVESTMENTS AT FAIR VALUE $ 15,846,065 $ 7,133,117 $ 22,336,249 $ 2,631,599 $ 3,144,009 $ 2,390,083
CONTRIBUTIONS RECEIVABLE FROM:
Santa Fe International Corporation 31,208 30,088 45,062 6,888 9,200 7,063
Participants 57,306 60,584 86,943 12,737 17,661 14,977
INTERFUND RECEIVABLE (PAYABLE) (417,110) 199,352 192,801 (64,241) 238,676 48,371
LIABILITIES
ADMINISTRATIVE AND OTHER PAYABLES (1,319) (269,989) (1,485) (897) (596) (568
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 15,516,150 $ 7,153,152 $ 22,659,570 $ 2,586,086 $ 3,408,950 $ 2,459,926
============ ============ ============ ============ ============ ============
<CAPTION>
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
VANGUARD VANGUARD
INTERNATIONAL PROFIT VANGUARD VANGUARD TOTAL BOND ASSET
EQUITY SHARING MONEY MARKET 500 INDEX MARKET INDEX ALLOCATION
FUND FUND FUND FUND FUND FUND
------------- ------------ ------------ ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
INVESTMENTS AT FAIR VALUE $ 3,414,241 $ 11,253,560 $ -- $ -- $ -- $ --
CONTRIBUTIONS RECEIVABLE FROM:
Santa Fe International Corporation 12,370 -- -- -- -- --
Participants 19,966 -- -- -- -- --
INTERFUND RECEIVABLE (PAYABLE) (197,849) -- -- -- -- --
LIABILITIES
ADMINISTRATIVE AND OTHER PAYABLES (572) (12,051) -- -- -- --
------------- ------------ ------------ ----------- ------------ ----------
NET ASSETS AVAILABLE FOR BENEFITS $ 3,248,156 $ 11,241,509 $ -- $ -- $ -- $ --
============= ============ ============ =========== ============ ==========
<CAPTION>
----------------------------
----------------------------
VANGUARD
EXTENDED
MARKET INDEX
FUND TOTAL
------------ ------------
<S> <C> <C>
ASSETS
INVESTMENTS AT FAIR VALUE $ -- $ 68,148,923
CONTRIBUTIONS RECEIVABLE FROM:
Santa Fe International Corporation -- 141,879
Participants -- 270,174
INTERFUND RECEIVABLE (PAYABLE) -- --
LIABILITIES
ADMINISTRATIVE AND OTHER PAYABLES -- (287,477)
------------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $ -- $ 68,273,499
============= ============
</TABLE>
See accompanying notes.
<PAGE> 7
SANTA FE INVESTMENT SAVINGS & PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
December 31, 1998 and 1997
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
1998
---------------------------------------------------------------------------------------
MONEY ASSET
MARKET SANTA FE S&P 500 BOND ALLOCATION
FUND STOCK FUND FUND FUND
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS FROM:
Santa Fe International Corporation $ 383,177 $ 317,624 $ 589,381 $ 86,382 $ 143,922
Participants 710,463 660,194 1,137,030 163,774 317,264
NET INVESTMENT INCOME 828,046 (5,056,465) 5,868,226 212,612 1,072,389
DISTRIBUTIONS IN CONNECTION WITH
TERMINATIONS AND WITHDRAWALS (1,413,496) (280,416) (2,831,192) (719,811) (289,577)
ADMINISTRATIVE EXPENSES (57,443) (15,763) (87,200) (12,215) (40,485)
INTERFUND TRANSFERS (15,966,897) 1,562,457 (27,335,815) (2,316,828) (4,612,463)
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (15,516,150) (2,812,369) (22,659,570) (2,586,086) (3,408,950)
NET ASSETS AVAILABLE FOR BENEFITS
AT BEGINNING OF YEAR 15,516,150 7,153,152 22,659,570 2,586,086 3,408,950
-------------- -------------- -------------- -------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS
AT END OF YEAR $ -- $ 4,340,783 $ -- $ -- $ --
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
1998
-------------------------------------------------------------------------------------
MARKET INTERNATIONAL PROFIT VANGUARD VANGUARD
COMPLETION EQUITY SHARING MONEY MARKET 500 INDEX
FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS FROM:
Santa Fe International Corporation $ 117,746 $ 147,253 $ -- $ -- $ --
Participants 222,530 275,186 -- -- --
NET INVESTMENT INCOME 131,020 465,281 2,539,544 -- --
DISTRIBUTIONS IN CONNECTION WITH
TERMINATIONS AND WITHDRAWALS (543,242) (766,344) (2,499,864) -- --
ADMINISTRATIVE EXPENSES (10,451) (9,610) (94,675) -- --
INTERFUND TRANSFERS (2,377,529) (297,827) -- 16,778,044 22,433,033
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (2,459,926) (186,061) (54,995) 16,778,044 22,433,033
NET ASSETS AVAILABLE FOR BENEFITS
AT BEGINNING OF YEAR 2,459,926 3,248,156 11,241,509 -- --
-------------- -------------- -------------- -------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS
AT END OF YEAR $ -- $ 3,062,095 $ 11,186,514 $ 16,778,044 $ 22,433,033
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------
1998
-----------------------------------------------------------------
VANGUARD VANGUARD VANGUARD
TOTAL BOND ASSET EXTENDED
MARKET INDEX ALLOCATION MARKET INDEX
FUND FUND FUND TOTAL
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
CONTRIBUTIONS FROM:
Santa Fe International Corporation $ -- $ -- $ -- $ 1,785,485
Participants -- -- -- 3,486,441
NET INVESTMENT INCOME 32,117 -- -- 6,092,770
DISTRIBUTIONS IN CONNECTION WITH
TERMINATIONS AND WITHDRAWALS -- -- -- (9,343,942)
ADMINISTRATIVE EXPENSES -- -- -- (327,842)
INTERFUND TRANSFERS 3,929,223 6,494,206 1,710,396 --
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 3,961,340 6,494,206 1,710,396 1,692,912
NET ASSETS AVAILABLE FOR BENEFITS
AT BEGINNING OF YEAR -- -- -- 68,273,499
-------------- -------------- -------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS
AT END OF YEAR $ 3,961,340 $ 6,494,206 $ 1,710,396 $ 69,966,411
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
1997
---------------------------------------------------------------------------------------
MONEY ASSET
MARKET SANTA FE S&P 500 BOND ALLOCATION
FUND STOCK FUND FUND FUND
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS FROM:
Santa Fe International Corporation $ 453,974 $ 138,921 $ 579,274 $ 118,068 $ 112,693
Participants 812,493 299,628 1,106,218 231,777 225,769
NET INVESTMENT INCOME 957,345 (479,170) 6,357,536 341,593 683,659
DISTRIBUTIONS IN CONNECTION WITH
TERMINATIONS AND WITHDRAWALS (2,219,012) (70,279) (2,899,188) (543,981) (216,917)
ADMINISTRATIVE EXPENSES (63,016) (6,439) (76,221) (15,986) (22,262)
INTERFUND TRANSFERS (1,902,916) 7,270,491 (3,272,142) (2,433,872) 430,143
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (1,961,132) 7,153,152 1,795,477 (2,302,401) 1,213,085
NET ASSETS AVAILABLE FOR BENEFITS
AT BEGINNING OF YEAR 17,477,282 -- 20,864,093 4,888,487 2,195,865
-------------- -------------- -------------- -------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS
AT END OF YEAR $ 15,516,150 $ 7,153,152 $ 22,659,570 $ 2,586,086 $ 3,408,950
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
1997
-------------------------------------------------------------------------------------
MARKET INTERNATIONAL PROFIT VANGUARD VANGUARD
COMPLETION EQUITY SHARING MONEY MARKET 500 INDEX
FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS FROM:
Santa Fe International Corporation $ 103,787 $ 152,594 $ -- $ -- $ --
Participants 194,727 285,811 -- -- --
NET INVESTMENT INCOME 541,228 217,711 2,176,422 -- --
DISTRIBUTIONS IN CONNECTION WITH
TERMINATIONS AND WITHDRAWALS (199,852) (438,088) (910,627) -- --
ADMINISTRATIVE EXPENSES (9,918) (9,619) (60,359) -- --
INTERFUND TRANSFERS (660,988) 569,284 -- -- --
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (31,016) 777,693 1,205,436 -- --
NET ASSETS AVAILABLE FOR BENEFITS
AT BEGINNING OF YEAR 2,490,942 2,470,463 10,036,073 -- --
-------------- -------------- -------------- -------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS
AT END OF YEAR $ 2,459,926 $ 3,248,156 $ 11,241,509 $ -- $ --
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------
1997
-----------------------------------------------------------------
VANGUARD VANGUARD VANGUARD
TOTAL BOND ASSET EXTENDED
MARKET INDEX ALLOCATION MARKET INDEX
FUND FUND FUND TOTAL
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
CONTRIBUTIONS FROM:
Santa Fe International Corporation $ -- $ -- $ -- $ 1,659,311
Participants -- -- -- 3,156,423
NET INVESTMENT INCOME -- -- -- 10,796,324
DISTRIBUTIONS IN CONNECTION WITH
TERMINATIONS AND WITHDRAWALS -- -- -- (7,497,944)
ADMINISTRATIVE EXPENSES -- -- -- (263,820)
INTERFUND TRANSFERS -- -- -- --
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS -- -- -- 7,850,294
NET ASSETS AVAILABLE FOR BENEFITS
AT BEGINNING OF YEAR -- -- -- 60,423,205
-------------- -------------- -------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS
AT END OF YEAR $ -- $ -- $ -- $ 68,273,499
============== ============== ============== ==============
</TABLE>
See accompanying notes.
-7-
<PAGE> 8
SANTA FE INVESTMENT SAVINGS & PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE 1 - DESCRIPTION OF THE PLAN
General
The Santa Fe Investment Savings & Profit Sharing Plan (the Plan), was
established on April 1, 1986 as successor plan to the Profit Sharing and
Retirement Plan For The Employees of the Santa Fe International Corporations
(the Profit Sharing Plan), the Santa Fe Investment Savings Plan, and the Stock
Bonus Plan for the Employees of the Santa Fe International Corporations. The
Plan is offered primarily to U.S. citizen employees of Santa Fe International
Corporation (Santa Fe or the Company) and certain affiliated companies.
Effective January 1, 1998, employees may not actively participate in the Plan
while actively participating in the U.K. Pension Scheme after December 31, 1998.
Although it has not expressed any intention to do so, the Company may, by
election of its Board of Directors, terminate the Plan. In the event of such
termination, the assets of the Plan shall be distributed to the participants in
proportion to their respective interests therein.
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
Contributions
An eligible employee may contribute either before-tax and/or after-tax an
amount equal to but not less than 1% nor more than 15% of his monthly
compensation and the Company must contribute an amount equal to 100% of the
aggregate employee contributions, up to a maximum of 5% of the employee's
monthly compensation, up to specified maximum amounts allowed by law.
Plan accounts
A separate account (the Participant Account) is maintained for each
participant in the Plan. The Participant Account includes each participant's
individual contributions to the Plan and his proportionate share of Company
-8-
<PAGE> 9
contributions and the related investment earnings thereon. In addition, the
Participant Account also includes, if applicable, each participant's interest in
the other employee benefit plans of the Company previously merged into the Plan,
except as noted below with respect to the Company's contributions to the Profit
Sharing Plan.
An additional separate account (the Company Account) is maintained for
each participant in the Plan who was also a participant in the Profit Sharing
Plan. The Company Account includes each participant's proportionate share of the
Company's prior contributions to the Profit Sharing Plan and the related
investment earnings thereon. In connection with the merger of the Profit Sharing
Plan into the Plan, no further Company contributions will be made to a
participant's Company Account. In the event a participant becomes eligible for
retirement benefits under the Pension Plan for the Employees of the Santa Fe
International Corporations (the Pension Plan), such benefits are initially
funded through amounts in his or her Company Account and excess amounts, if any,
are funded through the Pension Plan's net assets.
Vesting and distributions
A participant's interest in his or her Participant and Company Account is
fully vested. The participant has the right to withdraw all or a part of his or
her interest in the Participant account, except that voluntary withdrawals of
Company contributions are not permitted until two years have elapsed from the
time such contributions are credited to the participant's account. In addition,
contributions made on a pre-tax basis in connection with the 401(k) option
generally cannot be withdrawn, except in the case of serious financial
hardships. Withdrawal of earnings on investments made under the 401(k) option
after December 31, 1988 is not permitted in any case.
Upon termination of employment, distribution of a participant's vested
interest in the Plan is made as soon as practicable following submission of a
completed withdrawal application.
Plan administration
Vanguard Fiduciary Trust Company ("VFTC") became the Plan's trustee
effective December 31, 1998. Prior to VFTC becoming the trustee, Wachovia Bank
of North Carolina was the Plan's trustee.
During the 1997 and 1998 plan years, participants were able to invest
amounts in their Participant Account in the following: common/collective trusts,
mutual funds and Company ordinary shares. As with any investment, there is some
risk associated with the S&P 500, Bond, Asset Allocation, Market Completion, and
International Equity Funds, as well as with Santa Fe stock, as the value of the
investment will increase or decrease depending on the overall
-9-
<PAGE> 10
performance of the stock or bond market. The Profit Sharing Fund is not subject
to participant elections and is invested separately by the Plan's Administrative
Committee or its representatives.
Administrative expenses that are specifically identified with a particular
Fund are charged to that Fund. Other expenses, such as recordkeeping,
accounting, audit, insurance and legal fees, are proportionately allocated among
the Funds.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment valuation
Investments in Santa Fe stock are valued at the closing price per share as
listed on the New York Stock Exchange on the last business day of the year.
Investments in mutual funds are valued on the basis of the net asset value of
shares of the fund at the close of business on the last business day of the
year. The fair value of investments in common/collective trusts are determined
periodically by the respective trusts' custodian based upon the current market
values of the underlying assets of the funds.
Net investment income
Dividend income is accrued on the ex-dividend date and interest is
recorded on the accrual basis. Net appreciation/(depreciation) in fair value of
investments include both realized and unrealized gains and losses. Realized
gains (losses) from security transactions are based on the average cost of the
securities sold. Unrealized gains (losses) on investments are measured by the
change in the difference between the market value and cost of the securities
held at the beginning of the year and end of the year.
Income tax status
The Plan has received a determination letter from the Internal Revenue
Service dated May 19, 1997, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
Interfund transfers
Interfund transfers and the related receivable (payable) primarily
represent participant and/or Administrative Committee elections to change
investment funds.
-10-
<PAGE> 11
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates that affect
the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
-11-
<PAGE> 12
Note 3 - Investments
The total fair value of the investments held by the Plan at December 31, 1998
is as follows:
<TABLE>
<CAPTION>
Money Asset
Market Fund Santa Fe Stock S&P 500 Fund Bond Fund Allocation Fund
-------------- -------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Ordinary shares $ - $ 4,340,783 $ - $ - $ -
-------------- -------------- --------------- --------------- ---------------
Total assets held for investment $ - $ 4,340,783 $ - $ - $ -
============== ============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Market International Profit Sharing Vanguard Money Vanguard 500
Completion Fund Equity Fund Fund Market Fund Index Fund
-------------- -------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Mutual funds $ - $ 3,062,095 $ 11,186,514 $ 16,841,322 $ 22,509,177
-------------- -------------- --------------- --------------- --------------
Total assets held for investment $ - $ 3,062,095 $ 11,186,514 $ 16,841,322 $ 22,509,177
============== ============== =============== =============== ==============
</TABLE>
<TABLE>
<CAPTION>
Vanguard Total Vanguard
Bond Market Vanguard Asset Extended Market
Index Fund Allocation Fund Index Fund Total
-------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Ordinary shares $ - $ - $ - $ 4,340,783
Mutual funds 3,961,340 6,354,784 1,710,396 65,625,628
-------------- --------------- --------------- --------------
Total assets held for investment $ 3,961,340 $ 6,354,784 $ 1,710,396 $ 69,966,411
============== =============== =============== ==============
</TABLE>
The total fair value of the investments held by the Plan at December 31, 1997
is as follows:
<TABLE>
<CAPTION>
Money Asset
Market Fund Santa Fe Stock S&P 500 Fund Bond Fund Allocation Fund
-------------- -------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Common/collective trusts $ 15,768,512 $ 3,450 $ 22,336,249 $ 2,631,599 $ 3,144,009
Ordinary shares - 7,124,200 - - -
Mutual funds - - - - -
Income receivable 77,553 5,467 - - -
-------------- -------------- --------------- --------------- ---------------
Total assets held for investment $ 15,846,065 $ 7,133,117 $ 22,336,249 $ 2,631,599 $ 3,144,009
============== ============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Market International Profit Sharing
Completion Fund Equity Fund Fund Total
--------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Common/collective trusts $ 2,390,083 $ 8,311 $ 10,163,724 $ 56,445,937
Ordinary shares - - - 7,124,200
Mutual funds - 3,405,930 1,089,836 4,495,766
Income receivable - - - 83,020
-------------- --------------- --------------- --------------
Total assets held for investment $ 2,390,083 $ 3,414,241 $ 11,253,560 $ 68,148,923
============== =============== =============== ==============
</TABLE>
-12-
<PAGE> 13
At December 31, 1998, the fair value of the following investments
individually exceeded 5% of the Plan's net assets available for benefits:
<TABLE>
<S> <C>
Vanguard 500 Stock Index Fund $ 22,509,177
Vanguard Prime Money Market Fund 16,841,322
Vanguard Asset Allocation Fund 16,387,664
Santa Fe Stock 4,340,783
Europacific Growth Fund 4,215,729
Vanguard Total Bond Market Index Fund 3,961,340
</TABLE>
At December 31, 1997, the fair value of the following investments
individually exceeded 5% of the Plan's net assets available for benefits:
<TABLE>
<S> <C>
Mellon EB Stock Index Fund $ 22,328,225
Mellon Bank Temporary Investment Fund 15,762,960
Mellon EB Asset Allocation Fund 13,293,265
Santa Fe Stock 7,124,200
Europacific Growth Fund 4,495,766
</TABLE>
Concentrations of risk with respect to investments in common/collective
trusts, mutual funds and Santa Fe stock is limited due to the high quality of
the investments underlying the funds and to the dispersion of the underlying
investments across many different industries and companies.
-13-
<PAGE> 14
Note 4 - Net investment income
Net investment income (loss) for the year ended December 31, 1998 is as follows:
<TABLE>
<CAPTION>
Money S&P 500 Asset
Market Fund Santa Fe Stock Fund Bond Fund Allocation Fund
------------ -------------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
Interest/dividend income
Net appreciation/(depreciation) $ 828,046 $ 30,723 $ 524,444 $ 178,375 $ 545,426
in fair value of investments -- (5,087,188) 5,343,782 34,237 526,963
------------ ------------ ------------ ------------ ------------
Net investment income $ 828,046 $ (5,056,465) $ 5,868,226 $ 212,612 $ 1,072,389
============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Market International Profit Sharing Vanguard Money Vanguard 500
Completion Fund Equity Fund Fund Market Fund Index Fund
--------------- ------------ -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Interest/dividend income
Net appreciation/(depreciation) $ 145,099 $ 173,924 $ 1,049,880 $ -- $ --
in fair value of investments (14,079) 291,357 1,489,664 -- --
------------ ------------ ------------ ------------ ------------
Net investment income $ 131,020 $ 465,281 $ 2,539,544 $ -- $ --
============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Vanguard Total Vanguard Asset Vanguard
Bond Market Allocation Extended Market
Index Fund Fund Index Fund Total
-------------- -------------- --------------- ------------
<S> <C> <C> <C> <C>
Interest/dividend income
Net appreciation/(depreciation) $ 32,117 $ -- $ -- $ 3,508,034
in fair value of investments -- -- -- 2,584,736
------------ ------------ ------------ ------------
Net investment income $ 32,117 $ -- $ -- $ 6,092,770
============ ============ ============ ============
</TABLE>
Net investment income (loss) for the year ended December 31, 1997 is as follows:
<TABLE>
<CAPTION>
Money S&P 500 Asset
Market Fund Santa Fe Stock Fund Bond Fund Allocation Fund
------------ -------------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
Interest/dividend income
Net appreciation/(depreciation) $ 957,345 $ 10,781 $ 398,653 $ 278,630 $ 110,330
in fair value of investments -- (489,951) 5,958,883 62,963 573,329
------------ -------------- ------------ ------------ ---------------
Net investment income $ 957,345 $ (479,170) $ 6,357,536 $ 341,593 $ 683,659
============ ============== ============ ============ ===============
</TABLE>
<TABLE>
<CAPTION>
Market International Profit Sharing
Completion Fund Equity Fund Fund Total
--------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
Interest/dividend income
Net appreciation/(depreciation) $ 33,418 $ 273,119 $ 525,135 $ 2,587,411
in fair value of investments 507,810 (55,408) 1,651,287 8,208,913
-------------- ------------ ------------ ---------------
Net investment income $ 541,228 $ 217,711 $ 2,176,422 $ 10,796,324
============== ============ ============ ===============
</TABLE>
Note 5 - Services provided by the Company
Certain administrative and record keeping services incurred by the Company
are paid by the Plan.
-14-
<PAGE> 15
Note 6 - Reconciliation to amounts reported in Form 5500
The following is a reconciliation of net assets available for benefits and
distributions in connection with terminations and withdrawals per the financial
statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
---------------------------
1998 1997
------------ ------------
<S> <C> <C>
Net assets available for benefits per the financial statements $ 69,966,411 $ 68,273,499
Amounts allocated to withdrawing participants -- (456,339)
------------ ------------
Net assets available for benefits per the Form 5500 $ 69,966,411 $ 67,817,160
============ ============
</TABLE>
<TABLE>
<CAPTION>
Year Ended
December 31, 1998
-----------------
<S> <C>
Distributions in connection with terminations and withdrawals
per the financial statements $ 9,343,942
Add: Amounts allocated to withdrawing participants
at December 31, 1998 --
Less: Amounts allocated to withdrawing participants
at December 31, 1997 (456,339)
-----------
Benefits paid to participants per the Form 5500 $ 8,887,603
===========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment prior
to December 31 but not yet paid as of that date.
Note 7 - Year 2000 (Unaudited)
The Company has developed a plan to modify its internal information
technology to ensure that the Plan's information systems will be prepared to
handle year 2000 dates. This internal system conversion is expected to be
substantially complete by the end of July 1999. Costs associated with internal
modifications are not estimated to be significant and will be paid by the
Company.
The Year 2000 conversion project also includes determining whether the
Plan's third party service providers have reasonable plans in place to become
year 2000 compliant as related to the Plan's operations. All third party service
providers have indicated that they are currently substantially compliant, having
completed their internal and external mission-critical conversions no later than
March 1999.
The company does not expect the year 2000 conversion project to have a
significant effect on plan operations. No contingency plan has been developed,
as Plan management is confident that all required systems will be year 2000
ready.
-15-
<PAGE> 16
Note 8 - Party in Interest Transactions
The Plan invests in shares of mutual funds managed by an affiliate of
VFTC. VFTC acts as trustee for only those investments as defined by the Plan.
Transactions in such investments qualify as party-in-interest transactions which
are exempt from the prohibited transaction rules.
Note 9 - Subsequent Event
Effective January 1, 1999, the Plan was amended to: (1) define the Plan's
new investment options, (2) provide daily valuation recordkeeping and (3) make
employees eligible for participation in the Plan upon the first day of
employment, except for U.S. domestic based oil well drilling rig employees hired
on or after March 1, 1996, who have to complete 30 days of continuous employment
before being eligible for participation in the Plan.
-16-
<PAGE> 17
SUPPLEMENTAL SCHEDULES
<PAGE> 18
SCHEDULE A
SANTA FE INVESTMENT SAVINGS & PROFIT SHARING PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
(c)
(b) DESCRIPTION INVESTMENT INCLUDING MATURITY (e)
IDENTITY OF ISSUE, BOROWER, DATE RATE OF INTEREST, COLLATERAL, (d) CURRENT
(a) LESSOR, OR SIMILAR PARTY APR, CR MATURITY VALUE COST VALUE
- ---- ---------------------------------- ----------------------------------------- ----------- -----------
<S> <C> <C> <C> <C>
* SANTA FE INTERNATIONAL CORPORATION ORDINARY SHARES $ 9,389,685 $ 4,340,783
* VANGUARD FIDUCIARY TRUST COMPANY PRIME MONEY MARKET FUND 16,841,322 16,841,322
* VANGUARD FIDUCIARY TRUST COMPANY 500 INDEX FUND 22,509,177 22,509,177
* VANGUARD FIDUCIARY TRUST COMPANY TOTAL BOND MARKET INDEX FUND 3,961,340 3,961,340
* VANGUARD FIDUCIARY TRUST COMPANY ASSET ALLOCATION FUND 16,387,609 16,387,664
* VANGUARD FIDUCIARY TRUST COMPANY EXTENDED MARKET INDEX FUND 1,710,396 1,710,396
* VANGUARD FIDUCIARY TRUST COMPANY EUROPACIFIC GROWTH FUND 4,215,729 4,215,729
----------- -----------
$75,015,258 $69,966,411
=========== ===========
</TABLE>
* PARTY-IN-INTEREST
<PAGE> 19
SCHEDULE B
SANTA FE INVESTMENT SAVINGS & PROFIT SHARING PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
(h)
CURRENT VALUE
(a) (b) (c) (d) (g) OF ASSET ON (i)
IDENTITY OF PARTY INVOLVED AND PURCHASE OR COST OF TRANSACTION NET GAIN
DESCRIPTION OF ASSET (SALE) PRICE ASSET DATE OR (LOSS)
- ------------------------------------------------------ --------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
CATEGORY (i) - INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
Wachovia Bank Short Term Investment Fund 15,750,884 15,750,884 15,750,884 --
5,288,189 5,288,189 5,288,189 --
9,953,478 9,953,478 9,953,478 --
(15,751,073) 15,751,073 15,751,073 --
(5,825,472) 5,825,472 5,825,472 --
(9,652,789) 9,652,789 9,652,789 --
(3,865,363) 3,865,363 3,865,363 --
Mellon Bank Temporary Investment Fund (15,661,286) 15,661,286 15,661,286 --
Mellon Bank EB Stock Index Fund (21,760,045) 12,556,128 21,760,045 9,203,917
Mellon Bank EB Asset Allocation Fund (5,299,114) 3,654,169 5,299,114 1,644,945
(9,974,041) 7,219,022 9,974,041 2,755,019
Vanguard Prime Money Market Fund 15,571,073 15,571,073 15,571,073 --
Vanguard 500 Index Fund 22,022,000 22,022,000 22,022,000 --
Vanguard Total Bond Market Index Fund 3,865,363 3,865,363 3,865,363 --
Vanguard Asset Allocation Fund 5,825,472 5,825,472 5,825,472 --
9,652,789 9,652,789 9,652,789 --
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
Wachovia Bank Short Term Investment Fund 60,089,861 60,089,861 60,089,861 --
(60,022,422) 60,022,422 60,022,422 --
Mellon Bank Temporary Investment Fund 2,200,860 2,200,860 2,200,860 --
(17,963,819) 17,963,819 17,963,819 --
Mellon Bank EB Stock Index Fund 753,824 753,824 753,824 --
(27,353,238) 15,997,866 27,353,238 11,355,372
</TABLE>
<PAGE> 20
SCHEDULE B
SANTA FE INVESTMENT SAVINGS & PROFIT SHARING PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
(h)
CURRENT VALUE
(a) (b) (c) (d) (g) OF ASSET ON (i)
IDENTITY OF PARTY INVOLVED AND PURCHASE OR COST OF TRANSACTION NET GAIN
DESCRIPTION OF ASSET (SALE) PRICE ASSET Date or (Loss)
- ------------------------------------------------------ --------------- ----------------- ---------------- ----------------
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)
<S> <C> <C> <C> <C>
Mellon Bank Bond Index Fund 1,151,933 1,151,933 1,151,933 -
(3,842,438) 3,707,107 3,842,438 135,331
Mellon Bank EB Asset Allocation Fund 1,914,074 1,914,074 1,914,074 -
(17,660,569) 12,872,464 17,660,569 4,788,105
Vanguard Prime Money Market Fund 16,972,411 16,972,411 16,972,411 -
(144,325) 144,325 144,325 -
Vanguard 500 Index Fund 22,023,000 22,023,000 22,023,000 -
(511,357) 491,749 511,357 19,608
Vanguard Total Bond Market Index Fund 3,962,464 3,962,464 3,962,464 -
Vanguard Asset Allocation Fund 17,046,807 17,046,807 17,046,807 -
(258,823) 263,764 258,823 (4,941)
Vanguard Extended Market Index Fund 3,147,517 3,147,517 3,147,517 -
(1,462,560) 1,458,203 1,462,560 4,357
</TABLE>
Columns (e) and (f) are not applicable.
There were no category (ii) or (iv) reportable transactions during the year
ended December 31, 1998.
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
23.1 Consent of Ernst & Young LLP, Independent Auditors
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-7070) pertaining to the Santa Fe International Corporation
Investment Savings & Profit Sharing Plan of our report dated June 1, 1999, with
respect to the financial statements and schedules of the Santa Fe International
Corporation Investment Savings & Profit Sharing Plan included in this Annual
Report (Form 11-K) for the year ended December 31, 1998.
ERNST & YOUNG LLP
July 9, 1999
Dallas, Texas
