<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JANUARY 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-6959
MITCHELL ENERGY & DEVELOPMENT CORP.
(Exact name of registrant as specified in its charter)
TEXAS 74-1032912
(State of Incorporation) (I.R.S. Employer Identification No.)
2001 TIMBERLOCH PLACE
THE WOODLANDS, TEXAS 77380
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (713) 377-5500
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<S> <C>
Name of each exchange
Title of each class on which registered
------------------- -------------------------
Class A Common Stock, $.10 Par Value New York and Pacific
Class B Common Stock, $.10 Par Value New York and Pacific
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months, and (2)
has been subject to such filing
requirements for the past 90 days. Yes x No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of voting stock held by nonaffiliates of the
registrant at March 31, 1996 was approximately $146,646,000.
Shares of common stock outstanding at March 31, 1996:
Class A - 23,227,815
Class B - 28,832,037
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference into the
indicated parts of this report:
Annual Report to Stockholders for the fiscal year ended January 31, 1996 -
Parts I and II.
Definitive Proxy Statement to be filed within 120 days after January 31, 1996 -
Part III.
================================================================================
<PAGE> 2
FORM 10-K/A
AMENDMENT NO. 1
The undersigned registrant hereby amends Exhibits Nos. 99(a) and 99(b)
to its annual report on Form 10-K for the year ended January 31, 1996 as set
forth in the pages attached hereto:
Exhibit 99(a) - Form 11-K for the year ended January 31, 1996 for the
Mitchell Energy & Development Corp. Thrift and Savings Plan is
hereby amended to include the financial statements and schedules
required by that form and the related Report of Independent Public
Accountants on such statements and schedules together with their
consent to incorporate such report into previously filed Form S-8
registration statements.
Exhibit 99(b) - Form 11-K for the year ended January 31, 1996 for the
MND Hospitality, Inc. Thrift and Savings Plan is hereby amended to
include the financial statements and schedules required by that form
and the related Report of Independent Public Accountants on such
statements and schedules together with their consent to incorporate
such report into a previously filed Form S-8 registration statement.
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this amendment to be signed on its behalf
by the undersigned, thereunto duly authorized.
Mitchell Energy & Development Corp.
-----------------------------------
(Registrant)
By: /s/ Philip S. Smith
--------------------------------------
Philip S. Smith
Senior Vice President - Administration
Chief Financial Officer and
Principal Accounting Officer
Date: July 26, 1996
<PAGE> 1
Exhibit 99(a)
UNITED STATES
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 JANUARY 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-6959
----------------------
MITCHELL ENERGY & DEVELOPMENT CORP.
THRIFT AND SAVINGS PLAN
----------------------
MITCHELL ENERGY & DEVELOPMENT CORP.
(Name of issuer of securities held pursuant to the Plan)
P. O. Box 4000, The Woodlands, Texas 77387-4000
(Address of Plan and principal executive office of issuer)
<PAGE> 2
Mitchell Energy & Development Corp. Thrift and Savings Plan
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Statement of Net Assets Available for Plan Benefits with Fund Information
January 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
January 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statement of Changes in Net Assets Available for
Plan Benefits with Fund Information for the Year Ended
January 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
January 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Financial Statements--January 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . 7
Schedule I--Schedule of Assets Held for
Investment Purposes at January 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Schedule II--Schedule of Reportable Transactions
for the Year Ended January 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the Mitchell
Energy & Development Corp. Thrift and Savings Plan:
We have audited the accompanying statements of net assets available for
plan benefits of the Mitchell Energy & Development Corp. Thrift and Savings
Plan as of January 31, 1996 and 1995, and the related statements of changes in
net assets available for plan benefits for the years then ended. These
financial statements and the schedules referred to below are the responsibility
of Mitchell Energy & Development Corp.'s management. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan benefits of
the Mitchell Energy & Development Corp. Thrift and Savings Plan at January 31,
1996 and 1995, and the changes in net assets available for plan benefits for
the years then ended, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes as of January 31, 1996 and reportable transactions
for the year then ended 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 fund information in the statement of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Houston, Texas
July 12, 1996
<PAGE> 4
Mitchell Energy & Development Corp. Thrift and Savings Plan
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AT JANUARY 31, 1996
<TABLE>
<CAPTION>
Mutual Funds
------------------------------------------
MEDC Davis
Common Fixed New
Stock Income AIM York Franklin
Fund Fund Value Venture Income
-------------- -------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investments (at current values)
MEDC Common Stock
Class A _______________________________ $ 10,877,506 $ - $ - $ - $ -
Class B _______________________________ 11,417,656 - - - -
Merrill Lynch Retirement
Preservation Trust ____________________ - 47,076,818 - - -
Mutual Funds ___________________________ - - 4,542,418 2,964,141 843,910
Participants loans _____________________ - - - - -
Merrill Lynch CMA Fund _________________ 37,174 77,328 765 411 -
-------------- -------------- ------------- ----------- ------------
22,332,336 47,154,146 4,543,183 2,964,552 843,910
Due from trustee ________________________ - 38,390 - - -
Cash ____________________________________ - 40,448 - - -
-------------- -------------- ------------- ----------- ------------
Net assets available for plan benefits___ $ 22,332,336 $ 47,232,984 $ 4,543,183 $ 2,964,552 $ 843,910
============== ============== ============= =========== ============
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
--------------------------------------------------------
John Merrill Merrill
Hancock Lynch Merrill Lynch
Emerging Basic Lynch Global
Growth Value Capital Allocation
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Investments (at current values)
MEDC Common Stock
Class A _______________________________ $ - $ - $ - $ -
Class B _______________________________ - - - -
Merrill Lynch Retirement
Preservation Trust ____________________ - - - -
Mutual Funds ___________________________ 1,114,208 8,627,609 9,924,639 2,320,195
Participants loans _____________________ - - - -
Merrill Lynch CMA Fund _________________ 738 5,831 6,111 4,280
---------- ---------- ----------- -----------
1,114,946 8,633,440 9,930,750 2,324,475
Due from trustee ________________________ - - - -
Cash ____________________________________ - - - -
---------- ---------- ----------- -----------
Net assets available for plan benefits___ $1,114,946 $8,633,440 $ 9,930,750 $ 2,324,475
========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
--------------------------
Oppenheimer
Main Street Tem-
Income and pleton Loan
Growth Foreign Fund Total
---------- ---------- ----------- ------------
<C> <C> <C> <C>
Investments (at current values)
MEDC Common Stock
Class A _______________________________ $ - $ - $ - $ 10,877,506
Class B _______________________________ - - - 11,417,656
Merrill Lynch Retirement
Preservation Trust ____________________ - - - 47,076,818
Mutual Funds ___________________________ 3,705,045 1,612,221 35,654,386
Participants loans _____________________ - - 5,397,061 5,397,061
Merrill Lynch CMA Fund _________________ 765 - - 133,403
---------- ---------- ----------- ------------
3,705,810 1,612,221 5,397,061 110,556,830
Due from trustee ________________________ - - - 38,390
Cash ____________________________________ - - - 40,448
---------- ---------- ----------- ------------
Net assets available for plan benefits___ $3,705,810 $1,612,221 $ 5,397,061 $110,635,668
========== ========== =========== ============
</TABLE>
- -----------------------------
The accompanying notes are an integral part of this statement.
-3-
<PAGE> 5
Mitchell Energy & Development Corp. Thrift and Savings Plan
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AT JANUARY 31, 1995
<TABLE>
<CAPTION>
Mutual Funds
------------------------------------------------------
MEDC Davis John
Common Fixed New Hancock
Stock Income AIM York Franklin Emerging
Fund Fund Value Venture Income Growth
-------- -------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investments (at current values)
MEDC Common Stock
Class A_______________________________ $ 11,174,726 $ - $ - $ - $ - $ -
Class B_______________________________ 11,699,229 - - - - -
Merrill Lynch Retirement
Preservation Trust____________________ - 46,902,807 - - - -
Mutual funds___________________________ - - 2,347,047 1,434,953 745,421 317,283
Participants loans_____________________ - - - - - -
Merrill Lynch CMA Fund_________________ 52,146 343,482 9,566 6,656 1,685 2,604
---------------- --------------- -------------- ------------- ------------- --------------
22,926,101 47,246,289 2,356,613 1,441,609 747,106 319,887
Due from trustee________________________ - 50,445 - - - -
Cash____________________________________ 7,043 46,389 1,292 899 228 352
---------------- --------------- -------------- ------------- ------------- --------------
Net assets available for plan benefits__ $ 22,933,144 $ 47,343,123 $ 2,357,905 $ 1,442,508 $ 747,334 $ 320,239
================ =============== ============== ============= ============= ==============
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
------------------------------------------------------------------------
Merrill Merrill Oppenheimer
Lynch Merrill Lynch Main Street Tem-
Basic Lynch Global Income and pleton
Value Capital Allocation Growth Foreign
-------- -------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Investments (at current values)
MEDC Common Stock
Class A_______________________________ $ - $ - $ - $ - $ -
Class B_______________________________ - - - - -
Merrill Lynch Retirement
Preservation Trust____________________ - - - - -
Mutual funds___________________________ 6,847,583 7,656,415 2,004,776 2,290,632 1,280,958
Participants loans_____________________ - - - - -
Merrill Lynch CMA Fund_________________ 33,140 27,931 5,264 4,257 -
------------- -------------- -------------- ------------- --------------
6,880,723 7,684,346 2,010,040 2,294,889 1,280,958
Due from trustee________________________ - - - - -
Cash____________________________________ 4,476 3,772 711 574 -
------------- -------------- -------------- ------------- --------------
Net assets available for plan benefits__ $ 6,885,199 $ 7,688,118 $ 2,010,751 $ 2,295,463 $ 1,280,958
============= ============== ============== ============= ==============
</TABLE>
<TABLE>
<CAPTION>
Loan
Fund Total
-------- ---------
<S> <C> <C>
Investments (at current values)
MEDC Common Stock
Class A_______________________________ $ - $ 11,174,726
Class B_______________________________ - 11,699,229
Merrill Lynch Retirement
Preservation Trust____________________ - 46,902,807
Mutual funds___________________________ 24,925,068
Participants loans_____________________ 5,487,497 5,487,497
Merrill Lynch CMA Fund_________________ - 486,731
--------------- -----------------
5,487,497 100,676,058
Due from trustee________________________ - 50,445
Cash____________________________________ - 65,736
--------------- -----------------
Net assets available for plan benefits__ $ 5,487,497 $ 100,792,239
=============== =================
</TABLE>
- --------------------------------------
The accompanying notes are an integral part of this statement.
-4-
<PAGE> 6
Mitchell Energy & Development Thrift and Savings Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION
FOR THE YEAR ENDED JANUARY 31, 1996
<TABLE>
<CAPTION>
Mutual Funds
------------------------------------------
MEDC Davis
Common Fixed New
Stock Income AIM York Franklin
Fund Fund Value Venture Income
----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Earnings on investments
Interest income ____________________ $ 2,316 $ 2,952,205 $ - $ - $ -
Mutual fund distributions __________ - - 247,660 185,449 71,335
Cash dividends _____________________ 666,079 - - - -
Realized and unrealized
appreciation of investments _______ 1,968,016 - 591,891 471,739 92,664
Contributions
Members ____________________________ 766,565 2,133,481 257,764 152,380 51,727
Company ____________________________ 636,831 1,470,936 153,679 86,693 32,425
Participants loans
New loans made _____________________ (471,960) (1,370,313) (46,842) (34,447) (3,828)
Principal payments received ________ 385,944 1,114,048 55,701 46,636 23,057
Loan administrative fees ___________ (1,145) (3,721) (127) (82) (19)
Distributions to withdrawing
members____________________________ (1,780,506) (7,189,140) (199,729) (167,989) (32,465)
Transfers to MND Hospitality, Inc.
Thrift and Savings Plan ____________ (42,553) (68,887) (13,677) (7,360) (5,619)
Interfund transfers__________________ (2,730,395) 851,252 1,138,958 789,025 (132,701)
----------- ------------ ------------ ----------- -----------
Increase (decrease) in net assets____ (600,808) (110,139) 2,185,278 1,522,044 96,576
Net assets available for plan
benefits, beginning of year ________ 22,933,144 47,343,123 2,357,905 1,442,508 747,334
----------- ------------ ------------ ----------- -----------
Net assets available for plan
benefits, end of year ______________ $22,332,336 $ 47,232,984 $ 4,543,183 $ 2,964,552 $ 843,910
=========== ============ ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
---------------------------------------------------------------------------
John Merrill Merrill Oppenheimer
Hancock Lynch Merrill Lynch Main Street
Emerging Basic Lynch Global Income and
Growth Value Capital Allocation Growth
----------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Earnings on investments
Interest income ____________________ $ - $ - $ - $ - $ -
Mutual fund distributions __________ 110 382,489 992,805 196,016 48,760
Cash dividends _____________________ - - - - -
Realized and unrealized
appreciation of investments _______ 157,971 1,968,161 1,475,928 300,064 700,739
Contributions
Members ____________________________ 45,799 388,142 444,315 162,393 224,053
Company ____________________________ 28,118 269,365 301,226 115,497 128,116
Participants loans
New loans made _____________________ (5,687) (187,821) (260,417) (54,013) (46,077)
Principal payments received ________ 10,626 169,219 205,028 65,621 49,860
Loan administrative fees ___________ (17) (383) (458) (74) (115)
Distributions to withdrawing
members____________________________ (25,099) (1,192,290) (871,535) (100,521) (80,625)
Transfers to MND Hospitality, Inc.
Thrift and Savings Plan ____________ - (15,069) (15,371) (14,398) (5,266)
Interfund transfers__________________ 582,886 (33,572) (28,889) (356,861) 390,902
----------- ------------ ---------- ---------- ----------
Increase (decrease) in net assets____ 794,707 1,748,241 2,242,632 313,724 1,410,347
Net assets available for plan
benefits, beginning of year ________ 320,239 6,885,199 7,688,118 2,010,751 2,295,463
----------- ------------ ---------- ---------- ----------
Net assets available for plan
benefits, end of year ______________ $ 1,114,946 $ 8,633,440 $9,930,750 $2,324,475 $3,705,810
=========== ============ ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
------------
Tem-
pleton Loan
Foreign Fund Total
----------- ------------ --------------
<S> <C> <C> <C>
Earnings on investments
Interest income ____________________ $ - $ 473,777 $ 3,428,298
Mutual fund distributions __________ 95,143 - 2,219,767
Cash dividends _____________________ - - 666,079
Realized and unrealized
appreciation of investments _______ 122,164 - 7,849,337
Contributions
Members ____________________________ 130,817 - 4,757,436
Company ____________________________ 62,781 - 3,285,667
Participants loans
New loans made _____________________ (30,198) 2,511,603 -
Principal payments received ________ 25,570 (2,151,310) -
Loan administrative fees ___________ (59) - (6,200)
Distributions to withdrawing
members____________________________ (71,552) (444,675) (12,156,126)
Transfers to MND Hospitality, Inc.
Thrift and Savings Plan ____________ (6,575) (6,054) (200,829)
Interfund transfers__________________ 3,172 (473,777) -
----------- ------------ --------------
Increase (decrease) in net assets____ 331,263 (90,436) 9,843,429
Net assets available for plan
benefits, beginning of year ________ 1,280,958 5,487,497 100,792,239
----------- ------------ --------------
Net assets available for plan
benefits, end of year ______________ $ 1,612,221 $ 5,397,061 $ 110,635,668
=========== ============ ==============
</TABLE>
- ---------------------------------
The accompanying notes are an integral part of this statement.
-5-
<PAGE> 7
Mitchell Energy & Development Corp. Thrift and Savings Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION
FOR THE YEAR ENDED JANUARY 31, 1995
<TABLE>
<CAPTION>
Mutual Funds
---------------------------------------
MEDC Davis
Common Fixed New
Stock Income AIM York Franklin
Fund Fund Value Venture Income
----------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Earnings on investments
Interest income _____________________ $ 16,062 $ 3,185,912 $ - $ - $ -
Mutual fund distributions ____________ - - 37,172 64,907 52,018
Cash dividends _______________________ 582,208 - - - -
Realized and unrealized
depreciation of investments _________ (5,293,261) - (83,317) (124,482) (81,719)
Contributions
Members ______________________________ 969,688 2,397,698 157,066 121,367 53,616
Company ______________________________ 764,472 1,809,804 115,709 93,150 40,267
Participants loans
New loans made _______________________ (728,867) (2,451,935) (49,160) (35,851) (24,111)
Principal payments received __________ 293,064 880,812 26,732 29,751 15,488
Loan administrative fees _____________ (1,515) (4,968) (51) (58) (60)
Distributions to withdrawing
members _____________________________ (956,564) (4,250,518) (8,738) (3,204) (1,148)
Transfers to MND Hospitality, Inc.
Thrift and Savings Plan ______________ (32,935) (5,540) - - -
Interfund transfers____________________ 5,155,817 (6,089,310) 629,721 23,981 404,283
----------- ----------- ---------- ---------- ---------
Increase (decrease) in net assets _____ 768,169 (4,528,045) 825,134 169,561 458,634
Net assets available for plan
benefits, beginning of year __________ 22,164,975 51,871,168 1,532,771 1,272,947 288,700
----------- ----------- ---------- ---------- ---------
Net assets available for plan
benefits, end of year ________________ $22,933,144 $47,343,123 $2,357,905 $1,442,508 $ 747,334
=========== =========== ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
------------------------------------------------------------------------
John Merrill Merrill Oppenheimer
Hancock Lynch Merrill Lynch Main Street
Emerging Basic Lynch Global Income and
Growth Value Capital Allocation Growth
--------- ---------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
Earnings on investments
Interest income _____________________ $ - $ - $ - $ - $ -
Mutual fund distributions ____________ 54 439,217 717,536 114,713 41,142
Cash dividends _______________________ - - - - -
Realized and unrealized
depreciation of investments _________ (10,202) (484,943) (803,212) (207,036) (117,150)
Contributions
Members ______________________________ 29,385 448,600 515,537 192,302 156,012
Company ______________________________ 16,116 355,530 378,498 137,913 117,088
Participants loans
New loans made _______________________ (8,405) (242,256) (313,070) (118,700) (60,662)
Principal payments received __________ 2,922 138,111 154,466 58,597 27,238
Loan administrative fees _____________ (19) (690) (817) (74) (98)
Distributions to withdrawing
members _____________________________ (890) (332,738) (695,911) (18,140) (16,021)
Transfers to MND Hospitality, Inc.
Thrift and Savings Plan ______________ - (43,564) (51,476) (4,998) -
Interfund transfers____________________ 193,871 (1,226,943) (1,057,652) (37,005) 1,128,029
--------- ---------- ------------ ------------- -----------
Increase (decrease) in net assets _____ 222,832 (949,676) (1,156,101) 117,572 1,275,578
Net assets available for plan
benefits, beginning of year __________ 97,407 7,834,875 8,844,219 1,893,179 1,019,885
--------- ---------- ------------ ------------- -----------
Net assets available for plan
benefits, end of year ________________ $ 320,239 $6,885,199 $ 7,688,118 $ 2,010,751 $ 2,295,463
========= ========== ============ ============= ===========
</TABLE>
zx
<TABLE>
<CAPTION>
Mutual Funds
------------
Tem-
pleton Loan
Foreign Fund Total
------------ ------------ -------------
<S> <C> <C> <C>
Earnings on investments
Interest income _____________________ $ - $ 373,695 $ 3,575,669
Mutual fund distributions ____________ 84,785 - 1,551,544
Cash dividends _______________________ - - 582,208
Realized and unrealized
depreciation of investments _________ (144,955) - (7,350,277)
Contributions
Members ______________________________ 72,008 - 5,113,279
Company ______________________________ 50,675 - 3,879,222
Participants loans
New loans made _______________________ (33,424) 4,066,441 -
Principal payments received __________ 14,023 (1,641,204) -
Loan administrative fees _____________ (50) - (8,400)
Distributions to withdrawing
members _____________________________ (5,893) (261,815) (6,551,580)
Transfers to MND Hospitality, Inc.
Thrift and Savings Plan ______________ (5,114) (12,897) (156,524)
Interfund transfers____________________ 1,248,903 (373,695) -
------------ ------------ -------------
Increase (decrease) in net assets _____ 1,280,958 2,150,525 635,141
Net assets available for plan
benefits, beginning of year __________ - 3,336,972 100,157,098
------------ ------------ -------------
Net assets available for plan
benefits, end of year ________________ $ 1,280,958 $ 5,487,497 $ 100,792,239
============ ============ =============
</TABLE>
- ---------------------------------
The accompanying notes are an integral part of this statement.
-6-
<PAGE> 8
Mitchell Energy & Development Corp. Thrift and Savings Plan
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996 AND 1995
(1) SUMMARY OF THE PLAN
GENERAL
The Mitchell Energy & Development Corp. Thrift and Savings Plan (the
Plan) was adopted by Mitchell Energy & Development Corp. (MEDC) and certain of
its subsidiaries (collectively the Company) to encourage their employees to
provide additional security for their retirement. Full-time employees of the
Company are eligible to become members of the Plan on the first of the month
following their completion of a one-month eligibility period. Other employees
are eligible to become members after completing one year of participation
service as defined in the Plan's provisions. Members should refer to the Plan
document for a complete description of the Plan's provisions.
ADMINISTRATION
The Plan is administered by an administrative committee appointed by
MEDC's Board of Directors. The committee has broad responsibilities regarding
the supervision and administration of the Plan. Members of the administrative
committee receive no compensation from the Plan for their services. Except for
loan processing fees charged to members who have more than one loan
outstanding, administrative expenses have been paid by the Company. Should the
Company choose not to pay such expenses in the future, however, they would be
paid by the Plan and charged to the members' accounts.
TRUSTEE
Plan investments are held by Merrill Lynch Trust Company of Somerset, New
Jersey (Trustee), as trustee of the Plan. The Trustee receives contributions,
makes payments to members in accordance with the terms of the Plan and has
investment management authority where investment discretion is placed with the
Trustee.
BASIS OF ACCOUNTING
The records of the Plan are maintained on the accrual basis of accounting
for financial reporting purposes. For financial statement purposes, Plan
investments other than the Merrill Lynch Retirement Preservation Trust and
participant loans are carried at market values which are determined based upon
published market quotations supplied by the Trustee. The Merrill Lynch
Retirement Preservation Trust, which is a common collective trust, is valued at
a unit value of $1 per unit while participant loans are valued at their
principal amounts which approximate market.
USE OF ESTIMATES. The preparation of financial statements in conformity
with generally accepted accounting principles requires the use of estimates and
assumptions that affect the accompanying financial statements and disclosures.
Actual results could differ from those estimates.
CONTRIBUTIONS AND INVESTMENT OPTIONS
Members may elect, with certain limitations, to reduce their compensation
by instructing the Company to contribute from 1% to 14% of their base salary to
the Plan on a pretax basis. Amounts so deferred, as limited by applicable
Federal income tax regulations, are not included in a member's adjusted gross
income for Federal income tax purposes in the year the income is deferred and
contributed to the Plan. Members may also make after-tax contributions to the
Plan. The total of a member's pretax and after-tax contributions may not
exceed 14% of base salary. After-tax contributions are included in the member's
adjusted gross income for Federal income tax purposes in the year the income is
earned and contributed to the Plan.
-7-
<PAGE> 9
The Company makes contributions to the Plan of an amount equal to 100% of
a member's contributions, up to 6% of base salary.
Each participant's account is credited with his or her contributions and
the applicable matching contributions and an allocation of the Plan's earnings.
Allocations of earnings are based on the proportion that each participant's
account balance bears to the total of all participant account balances, except
that earnings for investments that are valued daily are allocated only to
accounts participating in those investments.
Members may direct the Trustee to invest their contributions in one or
more of the investment funds listed below. The number of participants (some of
whom participate in more than one fund) in each investment fund at January 31,
1996 and 1995 and the investment objectives of the various funds are as
follows:
<TABLE>
<CAPTION>
Fund Investment Objective(s)
- ---------------------------------- -----------------------------------
<S> <C>
MEDC Common Stock Fund Invest in Class A and Class B
Common Stock of MEDC.
Fixed Income Fund Income, invest in U.S. government
and money market securities.
Investments of this fund in
guaranteed investment contracts
are recorded at contract values,
which approximate fair market
values.
Mutual Funds Capital appreciation, invests
primarily in equity securities.
AIM Value Fund
Davis New York Capital appreciation, invests in
Venture Fund, Inc. equity and convertible
securities.
Franklin Income Fund Income, invests in equity and debt
securities and cash equivalents.
John Hancock Emerging Capital appreciation, invests in
Growth Fund equity securities of rapidly
growing small and medium sized
companies.
Merrill Lynch Basic Capital appreciation, invests
Value Fund, Inc. primarily in equity securities.
Merrill Lynch Income and capital appreciation,
Capital Fund, Inc. invests in equity, debt and
convertible securities.
Merrill Lynch Global Income and capital appreciation,
Allocation Fund, Inc. invests in United States and
foreign equity, debt and money
market securities.
Oppenheimer Main Street Income and capital appreciation,
Income and Growth invests in equity and debt
securities.
Templeton Foreign Fund Capital appreciation, invests in
stock and debt securities of
companies outside the United
States.
</TABLE>
VESTING
A member becomes vested in the Company's matching contributions upon
completing five years of vesting service. A year of vesting service is defined
as the performance of 1,000 hours of service in a Plan year.
-8-
<PAGE> 10
FORFEITURES
When a member who has not yet vested terminates employment, the value of
his/her share of Company contributions is forfeited and used to reduce future
Company contributions. During the Plan years ended January 31, 1996 and 1995,
forfeitures of $95,041 and $164,301 occurred. Forfeitures of $91,361 and
$151,545 were used during these periods to reduce the Company's contributions,
and an additional $63,455 was available at January 31, 1996 to reduce the
Company's future contributions. For members re-employed before completing a
break in service, as defined by the Plan, Company contributions are reinstated
upon the member's reinvestment of applicable amounts in the Plan.
DISTRIBUTIONS, WITHDRAWALS AND LOANS
A withdrawing member is entitled to receive the value of his/her
contributions and, upon retirement, death, permanent disability or termination
after having completed five years of vesting service, is also entitled to
receive 100% of the value of applicable Company contributions.
Distributions of member account balances invested in the MEDC Common
Stock Fund are made in kind with fractional shares paid in cash. Distributions
from all other investment funds are paid in cash. A member may request a cash
distribution from the MEDC Common Stock Fund in lieu of stock, subject to
procedures established by the administrative committee.
Section 1.401(k)-1 of the Internal Revenue Code restricts the withdrawals
that members may make from their pretax contributions. Such withdrawals are
limited to instances of a member's death, retirement, disability, separation
from service, attainment of age 59-1/2 or conditions of severe hardship.
Withdrawals may be made on the first day of each month, but only once
during a twelve-month period. Fund balances arising from a member's rollover
of balances from other plans may be withdrawn at any time.
Members are eligible to borrow up to the lesser of 50% of the vested
value of their total Plan investments or $50,000. All loans are evidenced by
promissory notes, which are secured by the member's account and bear interest
at a quoted prime rate plus two percent. Participant loans are reported as
assets of the Loan Fund and payments received, including interest, are
transferred to the investment funds based on members' current contribution
elections. Member account balances pledged to secure loans may not be
withdrawn from the Plan.
TERMINATION
The Plan may be terminated, amended or modified by the MEDC's Board of
Directors at its option. If the Plan is terminated, and after all expenses are
paid, any unallocated contributions, forfeitures, income and expenses will be
allocated among the members' accounts. All members would then be fully vested
and would be entitled to receive all amounts then credited to their accounts.
(2) FEDERAL INCOME TAX STATUS
The Plan obtained its latest determination letter on December 29, 1995,
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 administrative committee believes that the Plan is currently being
operated in compliance with the applicable requirements of the Code.
-9-
<PAGE> 11
SCHEDULE I
Mitchell Energy & Development Corp. Thrift and Savings Plan
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT JANUARY 31, 1996
<TABLE>
<CAPTION>
Current
Identity of Issue/Description Cost Value
- --------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
Mitchell Energy & Development Corp. (a)
Class A Common Stock (604,306 shares)___________________________ $ 10,483,187 $ 10,877,506
Class B Common Stock (638,750 shares)___________________________ 10,967,761 11,417,656
-------------- ---------------
21,450,948 22,295,162
-------------- ---------------
Merrill Lynch Retirement Preservation Trust (a)(b)(c)________________ 47,076,818 47,076,818
-------------- ---------------
Mutual Funds
AIM Value Fund (168,550 units)__________________________________ 4,101,184 4,542,418
Davis New York Venture Fund, Inc. (198,669 units)_______________ 2,643,663 2,964,141
Franklin Income Fund (356,080 units)____________________________ 810,733 843,910
John Hancock Emerging Growth Fund (30,543 units)________________ 979,730 1,114,208
Merrill Lynch Basic Value Fund, Inc. (293,057 units)____________ 6,523,644 8,627,609
Merrill Lynch Capital Fund, Inc. (317,588 units)________________ 8,562,213 9,924,639
Merrill Lynch Global Allocation Fund, Inc. (163,050 units)______ 2,189,623 2,320,195
Oppenheimer Main Street Income and Growth (135,171 units)_______ 3,152,221 3,705,045
Templeton Foreign Fund (170,065 units)__________________________ 1,612,032 1,612,221
-------------- ---------------
30,575,043 35,654,386
-------------- ---------------
Participant loans, at interest rates ranging from 10.5% to 11%_______ - 5,397,061
-------------- ---------------
Merrill Lynch CMA Money Fund_________________________________________ 133,403 133,403
-------------- ---------------
$ 99,236,212 $ 110,556,830
============== ===============
</TABLE>
- --------------------
(a) Party-in-interest to the Plan.
(b) Unit value of $1.00.
(c) The average yield for this trust was approximately 6.5% for the year ended
January 31, 1996.
<PAGE> 12
SCHEDULE II
Mitchell Energy & Development Corp. Thrift and Savings Plan
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED JANUARY 31, 1996
<TABLE>
<CAPTION>
Purchases Sales
----------------------- -------------------------------------------------------
Number Total Number Total Total Cost
of Trans- Purchase of Trans- Selling of Assets Net
Identity of Party Involved/Description actions Price (a) actions Price Sold (a)(b) Gain
- ----------------------------------------- -------- ------------ --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Mitchell Energy & Development Corp.
Class A Common Stock_______________ 352 $ 1,844,294 470 $ 3,234,293 $ 3,157,002 $ 77,291
Class B Common Stock_______________ 378 2,263,781 314 3,420,591 3,371,561 49,030
Merrill Lynch Retirement
Preservation Trust_________________ 627 13,999,717 410 13,825,706 13,825,706 -
Merrill Lynch CMA Money Fund____________ 129 17,233,413 177 17,586,741 17,586,741 -
</TABLE>
- --------------------
(a) Purchase and selling prices were equal to current market values on the
dates of the transactions and included (were net of) applicable expenses
incurred in connection with the transactions.
(b) Weighted average historical cost was used to determine the cost of assets
sold.
<PAGE> 13
Exhibit
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report dated July 12, 1996, on the financial statements of the Mitchell
Energy & Development Corp. Thrift and Savings Plan included in this Form 10-
K/A, Amendment No. 1 (which relates to such Plan's Form 11-K for the year ended
January 31, 1996) into the previously filed Form S-8 Registration Statement
Numbers 33-26276 and 2-86550.
ARTHUR ANDERSEN LLP
Houston, Texas
July 26, 1996
<PAGE> 1
Exhibit 99(b)
UNITED STATES
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 JANUARY 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-6959
-----------------------
MND HOSPITALITY, INC.
THRIFT AND SAVINGS PLAN
-----------------------
MITCHELL ENERGY & DEVELOPMENT CORP.
(Name of issuer of securities held pursuant to the Plan)
P. O. Box 4000, The Woodlands, Texas 77387-4000
(Address of Plan and principal executive office of issuer)
<PAGE> 2
MND Hospitality, Inc. Thrift and Savings Plan
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Statement of Net Assets Available for Plan Benefits with Fund Information
January 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
January 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statement of Changes in Net Assets Available for
Plan Benefits with Fund Information for the Year Ended
January 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
January 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Financial Statements--January 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . 7
Schedule I--Schedule of Assets Held for
Investment Purposes at January 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Schedule II--Schedule of Reportable Transactions
for the Year Ended January 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
MND Hospitality, Inc. Thrift and Savings Plan:
We have audited the accompanying statements of net assets available for
plan benefits of the MND Hospitality, Inc. Thrift and Savings Plan as of
January 31, 1996 and 1995, and the related state ments of changes in net assets
available for plan benefits for the years then ended. These financial
statements and the schedules referred to below are the responsibility of
Mitchell Energy & Development Corp.'s management. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan benefits of
the MND Hospitality, Inc. Thrift and Savings Plan at Janu ary 31,1996 and 1995,
and the changes in net assets available for plan benefits for the years then
ended, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes as of January 31, 1996 and reportable transactions
for the year then ended 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 fund information in the statement of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Houston, Texas
July 12, 1996
-2-
<PAGE> 4
MND Hospitality, Inc. Thrift and Savings Plan
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AT JANUARY 31, 1996
<TABLE>
<CAPTION>
Mutual Funds
------------------------------------------------
MEDC Davis John
Common Fixed New Hancock
Stock Income AIM York Franklin Emerging
Fund Fund Value Venture Income Growth
--------- ----------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investments (at current values)
MEDC Common Stock
Class A ______________________________ $ 255,765 $ - $ - $ - $ - $ -
Class B ______________________________ 238,971 - - - - -
Merrill Lynch Retirement
Preservation Trust ___________________ - 2,091,335 - - - -
Mutual funds __________________________ - - 106,253 59,642 26,865 36,412
Participants loans_____________________ - - - - - -
Merrill Lynch CMA Money Fund __________ 9,837 16,066 - 299 - -
--------- ----------- --------- -------- -------- --------
504,573 2,107,401 106,253 59,941 26,865 36,412
Due to trustee _________________________ - 1,845 - - - -
--------- ----------- --------- -------- -------- --------
Net assets vailable for plan benefits___ $ 504,573 $ 2,105,556 $ 106,253 $ 59,941 $ 26,865 $ 36,412
========= =========== ========= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
----------------------------------------------------------------
Merrill Merrill Oppenheimer
Lynch Merrill Lynch Main Street Tem-
Basic Lynch Global Income and pleton
Value Capital Allocation Growth Foreign
--------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Investments (at current values)
MEDC Common Stock
Class A ______________________________ $ - $ - $ - $ - $ -
Class B ______________________________ - - - - -
Merrill Lynch Retirement
Preservation Trust ___________________ - - - - -
Mutual funds __________________________ 349,485 453,991 72,382 97,341 37,947
Participants loans_____________________ - - - - -
Merrill Lynch CMA Money Fund __________ 287 243 234 - 197
--------- --------- -------- -------- --------
349,772 454,234 72,616 97,341 38,144
Due to trustee _________________________ - - - - -
--------- --------- -------- -------- --------
Net assets vailable for plan benefits___ $ 349,772 $ 454,234 $ 72,616 $ 97,341 $ 38,144
========= ========= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Loan
Fund Total
--------- -----------
<S> <C> <C>
Investments (at current values)
MEDC Common Stock
Class A ______________________________ $ - $ 255,765
Class B ______________________________ - 238,971
Merrill Lynch Retirement
Preservation Trust ___________________ - 2,091,335
Mutual funds __________________________ - 1,240,318
Participants loans_____________________ 339,215 339,215
Merrill Lynch CMA Money Fund __________ - 27,163
--------- -----------
339,215 4,192,767
Due to trustee _________________________ - 1,845
--------- -----------
Net assets vailable for plan benefits___ $ 339,215 $ 4,190,922
========= ===========
</TABLE>
- ---------------------------
The accompanying notes are in integral part of this statement.
-3-
<PAGE> 5
MND Hospitality, Inc. Thrift and Savings Plan
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AT JANUARY 31, 1995
<TABLE>
<CAPTION>
Mutual Funds
-------------------------------
MEDC Davis
Common Fixed New
Stock Income AIM York Franklin
Fund Fund Value Venture Income
-------- ---------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Investments (at current value)
MEDC Common Stock
Class A __________________________ $200,152 $ - $ - $ - $ -
Class B __________________________ 219,051 - - - -
Merrill Lynch Retirement
Preservation Trust _______________ - 1,899,664 - - -
Mutual Funds _________________________ - - 14,415 4,166 1,610
Participants loans ___________________ - - - - -
Merrill Lynch CMA Money Fund _________ 9,642 19,511 36 150 -
-------- ---------- ------- ------- -------
428,845 1,919,175 14,451 4,316 1,610
Due from trustee ________________________ 282 89 7 7 -
Cash ____________________________________ 2,621 5,303 10 41 -
-------- ---------- ------- ------- -------
Net assets available for plan benefits___ $431,748 $1,924,567 $14,468 $ 4,364 $ 1,610
======== ========== ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
--------------------------------------------------------------------------
John Merrill Merrill Oppenheimer
Hancock Lynch Merrill Lynch Main Street Tem-
Emerging Basic Lynch Global Income and pleton
Growth Value Capital Allocation Growth Foreign
------ -------- -------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Investments (at current value)
MEDC Common Stock
Class A __________________________ $ - $ - $ - $ - $ - $ -
Class B __________________________ - - - - - -
Merrill Lynch Retirement
Preservation Trust _______________ - - - - - -
Mutual Funds _________________________ 7,765 235,882 334,571 25,213 12,780 13,632
Participants loans ___________________ - - - - - -
Merrill Lynch CMA Money Fund _________ 47 2,023 1,076 3,370 47 47
------ -------- -------- --------- ------- -------
7,812 237,905 335,647 28,583 12,827 13,679
Due from trustee ________________________ - 192 157 211 - -
Cash ____________________________________ 12 550 293 916 13 13
------ -------- -------- --------- ------- -------
Net assets available for plan benefits___ $7,824 $238,647 $336,097 $ 29,710 $12,840 $13,692
====== ======== ======== ========= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Loan
Fund Total
-------- ----------
<S> <C> <C>
Investments (at current value)
MEDC Common Stock
Class A __________________________ $ - $ 200,152
Class B __________________________ - 219,051
Merrill Lynch Retirement
Preservation Trust _______________ - 1,899,664
Mutual Funds _________________________ - 650,034
Participants loans ___________________ 207,636 207,636
Merrill Lynch CMA Money Fund _________ - 35,949
-------- ----------
207,636 3,212,486
Due from trustee ________________________ - 945
Cash ____________________________________ - 9,772
-------- ----------
Net assets available for plan benefits___ $207,636 $3,223,203
======== ==========
</TABLE>
- --------------------------------
The accompanying notes are an integral part of this statement.
-4-
<PAGE> 6
MND Hospitality, Inc. Thrift and Savings Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION
FOR THE YEAR ENDED JANUARY 31, 1996
<TABLE>
<CAPTION>
Mutual Funds
-------------------------
MEDC Davis
Common Fixed New
Stock Income AIM York
Fund Fund Value Venture
---------- ---------- -------- --------
<S> <C> <C> <C> <C>
Earnings on investments
Interest income _________________________ $ 147 $ 129,458 $ - $ -
Mutual fund distributions ________________ - - 4,317 2,688
Cash dividends ___________________________ 14,158 - - -
Realized and unrealized appreciation
of investments__________________________ 34,838 - 8,556 4,149
Contributions
Members __________________________________ 60,761 197,373 19,556 9,800
Company __________________________________ 26,858 141,952 9,077 2,957
Participants loans
New loans made ___________________________ (26,593) (165,973) (1,792) (1,603)
Principal payments received ______________ 17,332 75,041 1,479 902
Loan administrative fees _________________ (187) (755) (12) (5)
Distributions to withdrawing members _________ (41,993) (186,463) (1,334) (1,550)
Transfers from Mitchell Energy & Develop-
ment Corp. Thrift and Savings Plan _______ 42,553 68,887 13,677 7,360
Interfund transfers___________________________ (55,049) (78,531) 38,261 30,879
--------- ---------- -------- --------
Increase in net assets _______________________ 72,825 180,989 91,785 55,577
Net assets available for plan
benefits, beginning of year ______________ 431,748 1,924,567 14,468 4,364
--------- ---------- -------- --------
Net assets available for plan
benefits, end of year ____________________ $504,573 $2,105,556 $106,253 $ 59,941
========= ========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
-----------------------------------------------------------------------
John Merrill Merrill
Hancock Lynch Merrill Lynch
Franklin Emerging Basic Lynch Global
Income Growth Value Capital Allocation
--------- --------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
Earnings on investments
Interest income _________________________ $ - $ - $ - $ - $ -
Mutual fund distributions ________________ 1,919 10 15,320 47,086 5,612
Cash dividends ___________________________ - - - - -
Realized and unrealized appreciation
of investments _________________________ 1,516 4,849 76,795 68,802 6,550
Contributions
Members __________________________________ 3,979 5,024 35,958 36,270 18,120
Company __________________________________ 1,540 1,687 15,923 18,663 6,532
Participants loans
New loans made ___________________________ (11,175) (2,554) (22,677) (30,958) (4,391)
Principal payments received ______________ 159 939 10,081 13,765 3,607
Loan administrative fees _________________ - (15) (138) (75) (58)
Distributions to withdrawing members _________ (28) (25) (29,867) (34,806) (7,973)
Transfers from Mitchell Energy & Develop-
ment Corp. Thrift and Savings Plan _______ 5,619 - 15,069 15,371 14,398
Interfund transfers___________________________ 21,726 18,673 (5,339) (15,981) 509
-------- -------- --------- --------- ---------
Increase in net assets _______________________ 25,255 28,588 111,125 118,137 42,906
Net assets available for plan
benefits, beginning of year ______________ 1,610 7,824 238,647 336,097 29,710
-------- -------- --------- --------- ---------
Net assets available for plan
benefits, end of year ____________________ $ 26,865 $ 36,412 $349,772 $454,234 $ 72,616
======== ======== ======== ======== =========
</TABLE>
<TABLE>
<CAPTION> Mutual Funds
---------------------------
Oppenheimer
Main Street Tem-
Income and pleton Loan
Growth Foreign Fund Total
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Earnings on investments
Interest income _________________________ $ - $ - $ 23,648 $ 153,253
Mutual fund distributions ________________ 1,021 2,223 - 80,196
Cash dividends ___________________________ - - - 14,158
Realized and unrealized appreciation
of investments _________________________ 10,683 1,357 - 218,095
Contributions
Members __________________________________ 11,074 6,677 - 404,592
Company __________________________________ 5,220 2,389 - 232,798
Participants loans
New loans made ___________________________ (12,512) (714) 280,942 -
Principal payments received ______________ 2,163 1,310 (126,778) -
Loan administrative fees _________________ (5) - - (1,250)
Distributions to withdrawing members _________ (388) (1,886) (28,639) (334,952)
Transfers from Mitchell Energy & Develop-
ment Corp. Thrift and Savings Plan _______ 5,266 6,575 6,054 200,829
Interfund transfers___________________________ 61,979 6,521 (23,648) -
-------- -------- --------- ----------
Increase in net assets _______________________ 84,501 24,452 131,579 967,719
Net assets available for plan
benefits, beginning of year ______________ 12,840 13,692 207,636 3,223,203
-------- -------- --------- ----------
Net assets available for plan
benefits, end of year ____________________ $ 97,341 $ 38,144 $ 339,215 $4,190,922
======== ======== ========= ==========
</TABLE>
- -----------------------------
The accompanying notes are an integral part of this statement.
-5-
<PAGE> 7
MND Hospitality, Inc. Thrift and Savings Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION
FOR THE YEAR ENDED JANUARY 31, 1995
<TABLE>
<CAPTION>
Mutual Funds
-----------------------------------------------
MEDC Davis John Merrill
Common Fixed New Hancock Lynch
Stock Income AIM York Franklin Emerging Basic
Fund Fund Value Venture Income Growth Value
------ ------ ----- ------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings on investments
Interest income _________________________________ $ 772 $ 114,888 $ - $ - $ - $ - $ -
Mutual fund distributions _______________________ - - 214 154 66 2 10,766
Cash dividends __________________________________ 10,660 - - - - - -
Realized and unrealized
depreciation of investments __________________ (108,280) - (569) (366) (68) 358 (8,380)
Contributions
Members _________________________________________ 63,718 203,166 6,740 3,323 1,330 11,019 43,689
Company _________________________________________ 32,693 131,644 2,600 1,124 459 376 1,826
Participants loans
New loans made __________________________________ (19,707) (87,768) (5,006) (57) - (4,540) (12,181)
Principal payments received _____________________ 13,304 41,690 151 21 6 270 5,397
Loan administrative fees ________________________ (87) (507) - - - - (79)
Distributions to withdrawing members _______________ (52,258) (120,246) (1,002) (1,163) (122) - (6,072)
Transfers to Mitchell Energy & Develop-
ment Corp. Thrift and Savings Plan ______________ 32,935 5,540 - - - - 43,564
Interfund transfers ________________________________ 25,422 18,466 10,967 986 (61) 339 (14,254)
--------- --------- -------- -------- ------ ------- --------
Increase (decrease) in net assets __________________ (828) 306,873 14,095 4,022 1,610 7,824 64,276
Net assets available for plan
benefits, beginning of year _____________________ 432,576 1,617,694 373 342 - - 174,371
--------- --------- -------- -------- ------ ------- --------
Net assets available for plan
benefits, end of year ___________________________ $ 431,748 $1,924,567 $ 14,468 $ 4,364 $ 1,610 $ 7,824 $238,647
========= ========== ======== ======== ======= ======= ========
<CAPTION>
Mutual Funds
------------------------------------------
Merrill Oppenheimer
Merrill Lynch Main Street Tem-
Lynch Global Income and pleton Loan
Capital Allocation Growth Foreign Fund Total
------- ---------- ---------- ------- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Earnings on investments
Interest income _________________________________ $ - $ - $ - $ - $ 12,430 $ 128,090
Mutual fund distributions _______________________ 25,532 1,114 271 631 - 38,750
Cash dividends __________________________________ - - - - - 10,660
Realized and unrealized
depreciation of investments __________________ (26,357) (2,023) (817) (1,496) - (147,998)
Contributions
Members _________________________________________ 42,937 24,293 5,243 3,276 - 408,734
Company _________________________________________ 21,930 5,410 1,456 1,322 - 200,840
Participants loans
New loans made __________________________________ (13,096) (8,677) (4,914) (3,108) 159,054 -
Principal payments received _____________________ 9,065 1,513 137 78 (71,632) -
Loan administrative fees ________________________ (79) (48) - - - (800)
Distributions to withdrawing members _______________ (20,896) (4,413) (119) (120) (15,843) (222,254)
Transfers to Mitchell Energy & Develop-
ment Corp. Thrift and Savings Plan ______________ 51,476 4,998 - 5,114 12,897 156,524
Interfund transfers ________________________________ (51,795) 2,782 11,583 7,995 (12,430) -
-------- --------- -------- -------- -------- ----------
Increase (decrease) in net assets __________________ 38,717 24,949 12,840 13,692 84,476 572,546
Net assets available for plan
benefits, beginning of year _____________________ 297,380 4,761 - - 123,160 2,650,657
-------- --------- -------- -------- -------- ----------
Net assets available for plan
benefits, end of year ___________________________ $336,097 $ 29,710 $ 12,840 $ 13,692 $207,636 $3,223,203
======== ========= ======== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
-6-
<PAGE> 8
MND Hospitality, Inc. Thrift and Savings Plan
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996 AND 1995
(1) SUMMARY OF THE PLAN
GENERAL
Mitchell Energy & Development Corp. (the Company or MEDC), a large
independent oil and gas company in the United States and a leading real estate
developer in the Houston area, also engages in certain hospitality industry
activities. The Company's hospitality industry employees are employed by a
separate subsidiary, MND Hospitality, Inc. The MND Hospitality, Inc. Thrift
and Savings Plan (the Plan) was adopted to encourage hospitality industry
employees to provide additional security for their retirement. Full-time
employees of MND Hospitality, Inc. (the Employer) are eligible to become
members of the Plan on the first of the month following their completion of a
one-month eligibility period. Other employees are eligible to become members
after completing one year of participation service as defined in the Plan's
provisions. Members should refer to the Plan document for a complete
description of the Plan's provisions.
ADMINISTRATION
The Plan is administered by an administrative committee appointed by
MEDC's Board of Directors. The committee has broad responsibilities regarding
the supervision and administration of the Plan. Members of the administrative
committee receive no compensation from the Plan for their services. Except for
loan processing fees charged to members who have more than one loan
outstanding, administrative expenses have been paid by the Company. Should the
Company choose not to pay such expenses in the future, however, they would be
paid by the Plan and charged to the members' accounts.
TRUSTEE
Plan investments are held by Merrill Lynch Trust Company of Somerset, New
Jersey (Trustee), as trustee of the Plan. The Trustee receives contributions,
makes payments to members in accordance with the terms of the Plan and has
investment management authority where investment discretion is placed with the
Trustee.
BASIS OF ACCOUNTING
The records of the Plan are maintained on the accrual basis of accounting
for financial reporting purposes. For financial statement purposes, Plan
investments other than the Merrill Lynch Retirement Preservation Trust and
participant loans are carried at market values which are determined based upon
published market quotations supplied by the Trustee. The Merrill Lynch
Retirement Preservation Trust, which is a common collective trust, is valued at
a unit value of $1 per unit while participant loans are valued at their
principal amounts which approximate market.
USE OF ESTIMATES. The preparation of financial statements in conformity
with generally accepted accounting principles requires the use of estimates and
assumptions that affect the accompanying financial statements and disclosures.
Actual results could differ from those estimates.
CONTRIBUTIONS AND INVESTMENT OPTIONS
Members may elect, with certain limitations, to reduce their compensation
by instructing the Employer to contribute from 1% to 14% of their base salary
to the Plan on a pretax basis. Amounts so deferred, as limited by applicable
Federal income tax regulations, are not included in a member's adjusted gross
income for Federal income tax purposes in the year the income is deferred and
contributed to the Plan. Members may also make after-tax contributions to the
Plan. The total of a member's pretax and after-tax contributions may not
exceed 14% of base salary. After-tax contributions are included in the member's
adjusted gross income for Federal income tax purposes in the year the income is
earned and contributed to the Plan.
-7-
<PAGE> 9
For members who have completed less than five years of vesting service,
the Employer contributes an amount equal to 50% of a member's contributions, up
to 6% of base salary. For members with five or more years of vesting service,
Employer contributions are equal to 100% of a member's contributions, up to 6%
of base salary.
Each participant's account is credited with his or her contributions and
the applicable matching contributions and an allocation of the Plan's earnings.
Allocations of earnings are based on the proportion that each participant's
account balance bears to the total of all participant account balances, except
that earnings for investments that are valued daily are allocated only to
accounts participating in those investments.
Members may direct the Trustee to invest their contributions in one or
more of the investment funds listed below. The number of participants (some of
whom participate in more than one fund) in each investment fund at January 31,
1996 and 1995 and the investment objectives of the various funds are as
follows:
<TABLE>
<CAPTION>
Fund Investment Objective(s)
- ------------------------------- ---------------------------------------------------------
<S> <C>
MEDC Common Stock Fund Invest in Class A and Class B Common Stock of MEDC.
Fixed Income Fund Income investments, consisting of guaranteed invest-
ment contracts; U.S. government securities and money
market securities. Investments of this fund in guaranteed
investment contracts are recorded at contract values, which
approximate fair market values.
Mutual Funds
AIM Value Fund Capital appreciation, invests primarily in equity securities.
Davis New York Capital appreciation, invests in equity and convertible
Venture Fund, Inc. securities.
Franklin Income Fund Income, invests in equity and debt securities and cash
equivalents.
John Hancock Emerging Capital appreciation, invests in equity securities of rapidly
Growth Fund growing small and medium sized companies.
Merrill Lynch Basic Capital appreciation, invests primarily in equity securities.
Value Fund, Inc.
Merrill Lynch Income and capital appreciation, invests in equity, debt
Capital Fund, Inc. and convertible securities.
Merrill Lynch Global Income and capital appreciation, invests in United States
Allocation Fund, Inc. and foreign equity, debt and money market securities.
Oppenheimer Main Street Income and capital appreciation, invests in equity and
Income and Growth debt securities.
Templeton Foreign Fund Capital appreciation, invests in stock and debt securities
of companies outside the United States.
</TABLE>
VESTING
A member becomes vested in the Employer's matching contributions upon
completing five years of vesting service. A year of vesting service is defined
as the performance of 1,000 hours of service in a Plan year.
-8-
<PAGE> 10
FORFEITURES
When a member who has not yet vested terminates employment, the value of
his/her share of Employer contributions is forfeited and used to reduce future
Employer contributions. During the plan years ended January 31, 1996 and 1995,
forfeitures of $36,550 and $21,850 occurred. Forfeitures of $20,882 and
$27,853 were used during these periods to reduce the Company contributions, and
an additional $23,791 was available at January 31, 1996 to reduce the Company's
future contributions. For members re-employed before completing a break in
service, as defined by the Plan, Employer contributions are reinstated upon the
member's reinvestment of applicable amounts in the Plan.
DISTRIBUTIONS, WITHDRAWALS AND LOANS
A withdrawing member is entitled to receive the value of his/her
contributions and, upon retirement, death, permanent disability or termination
after having completed five years of vesting service, is also entitled to
receive 100% of the value of applicable Employer contributions.
Distributions of member account balances invested in MEDC Common Stock
Fund are made in kind with fractional shares paid in cash. Distributions from
all other investment funds are paid in cash. A member may request a cash
distribution from the MEDC Common Stock Fund in lieu of stock, subject to
procedures established by the administrative committee.
Section 1.401(k)-1 of the Internal Revenue Code restricts the withdrawals
that members may make from their pretax contributions. Such withdrawals are
limited to instances of a member's death, retirement, disability, separation
from service, attainment of age 59-1/2 or conditions of severe hardship.
Withdrawals may be made on the first day of each month, but only once
during a twelve-month period. Fund balances arising from a member's rollover
of balances from other plans may be withdrawn at any time.
Members are eligible to borrow up to the lesser of 50% of the vested
value of their total Plan investments or $50,000. All loans are evidenced by
promissory notes, which are secured by the member's account and bear interest
at a quoted prime rate plus two percent. Participant loans are reported as
assets of the Loan Fund and payments received, including interest, are
transferred to the investment funds based on members' current contribution
elections. Member account balances pledged to secure loans may not be
withdrawn from the Plan.
TERMINATION
The Employer can terminate, amend or modify the Plan at its option. If
the Plan is terminated, and after all expenses are paid, any unallocated
contributions, forfeitures, income and expenses will be allocated among the
members' accounts. All members would then be fully vested and would be
entitled to receive all amounts then credited to their accounts.
(2) FEDERAL INCOME TAX STATUS
The Plan obtained its latest determination letter on December 14, 1995,
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 administrative committee believes that the Plan is currently being
operated in compliance with the applicable requirements of the Code.
-9-
<PAGE> 11
SCHEDULE I
MND Hospitality, Inc. Thrift and Savings Plan
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT JANUARY 31, 1996
<TABLE>
<CAPTION>
Current
Identity of Issue/Description Cost Value
- ---------------------------------------------------------------------- ---------- ----------
<S> <C> <C>
Mitchell Energy & Development Corp. (a)
Class A Common Stock (14,209 shares)______________________________ $ 256,608 $ 255,765
Class B Common Stock (13,369 shares)______________________________ 237,441 238,971
---------- ----------
494,049 494,736
---------- ----------
Merrill Lynch Retirement Preservation Trust (a)(b)(c)__________________ 2,091,335 2,091,335
---------- ----------
Mutual Funds
AIM Value Fund (3,943 units)______________________________________ 98,417 106,253
Davis New York Venture Fund, Inc. (3,997 units)___________________ 55,927 59,642
Franklin Income Fund (11,335 units)_______________________________ 25,657 26,865
John Hancock Emerging Growth Fund (998 units)_____________________ 31,969 36,412
Merrill Lynch Basic Value Fund, Inc. (11,871 units)_______________ 269,647 349,485
Merrill Lynch Capital Fund, Inc. (14,528 units)___________________ 396,113 453,991
Merrill Lynch Global Allocation Fund, Inc. (5,087 units)__________ 67,904 72,382
Oppenheimer Main Street Income and Growth (3,551 units)___________ 87,781 97,341
Templeton Foreign Fund (4,003 units)______________________________ 37,947 37,947
---------- ----------
1,071,362 1,240,318
---------- ----------
Participant loans, at interest rates ranging from 10.5% to 11%_________ - 339,215
---------- ----------
Merrill Lynch CMA Money Fund___________________________________________ 27,163 27,163
---------- ----------
$3,683,909 $4,192,767
========== ==========
</TABLE>
- --------------------
(a) Party-in-interest to the Plan.
(b) Unit value of $1.00.
(c) The average yield for this trust was approximately 6.5% for the year ended
January 31, 1996.
<PAGE> 12
SCHEDULE II
MND Hospitality, Inc. Thrift and Savings Plan
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED JANUARY 31, 1996
<TABLE>
<CAPTION>
Purchases Sales
-------------------------- -----------------------------------------------------
Number Total Number Total Total Cost Net
of Trans- Purchase of Trans- Selling of Assets Gain
Identity of Party Involved/Description actions Price (a) actions Price Sold (a)(b) (Loss)
- --------------------------------------------- --------- ------------ --------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mitchell Energy & Development Corp.
Class A Common Stock_____________________ 127 $ 116,089 67 $ 79,315 $ 83,409 $ (4,094)
Class B Common Stock_____________________ 125 94,439 68 90,518 94,313 (3,795)
Merrill Lynch Retirement
Preservation Trust_______________________ 184 709,699 118 518,028 518,028 -
Merrill Lynch Capital Fund, Inc.______________ 124 151,159 49 100,541 90,798 9,743
Merrill Lynch CMA Money Fund__________________ 109 1,222,097 139 1,230,883 1,230,883 -
</TABLE>
____________________
(a) Purchase and selling prices were equal to current market values on the
dates of the transaction and included (were net of) applicable expenses
incurred in connection with the transactions.
(b) Weighted average historical cost was used to determine the cost of assets
sold.
<PAGE> 13
Exhibit
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report dated July 12, 1996, on the financial statements of the MND
Hospitality, Inc. Thrift and Savings Plan included in this Form 10-K/A,
Amendment No. 1 (which relates to such Plan's Form 11-K for the year ended
January 31, 1996) into the previously filed Form S-8 Registration Statement
Number 33-2716.
ARTHUR ANDERSEN LLP
Houston, Texas
July 26, 1996
