<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, 1997
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:
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
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. [X]
The aggregate market value of voting stock held by nonaffiliates of the
registrant at February 28, 1997 was
approximately $173,869,000.
Shares of common stock outstanding at February 28, 1997:
Class A - 23,055,659
Class B - 28,787,047
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, 1997 -
Parts I and II.
Definitive Proxy Statement to be filed within 120 days after January 31, 1997 -
Part III.
================================================================================
<PAGE> 2
FORM 10-K/A
AMENDMENT NO. 1
The undersigned registrant hereby amends Exhibits No.s 99(a) and 99(b)
to its annual report on Form 10-K for the year ended January 31, 1997 as set
forth in the pages attached hereto:
Exhibit 99(a) - Form 11-K for the year ended January 31, 1997 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, 1997 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 previously filed Form S-8 registration statements.
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: June 2, 1997
<PAGE> 3
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
99(a) - Form 11-K for the year ended January 31, 1997 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.
99(b) - Form 11-K for the year ended January 31, 1997 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 previously filed Form S-8 registration statements.
</TABLE>
<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, 1997
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, 1997..... .................................................... 3
January 31, 1996..... .................................................... 4
Statement of Changes in Net Assets Available for
Plan Benefits with Fund Information for the Year Ended
January 31, 1997... .................................................... 5
January 31, 1996... .................................................... 6
Notes to Financial Statements--January 31, 1997 and 1996 ................... 7
Schedule I--Schedule of Assets Held for
Investment Purposes at January 31, 1997......... .......................10
Schedule II--Schedule of Reportable Transactions
for the Year Ended January 31, 1997............. .......................11
</TABLE>
-1-
<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, 1997 and 1996, 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,
1997 and 1996, 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, 1997 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.
Houston, Texas
April 25, 1997
-2-
<PAGE> 4
Mitchell Energy & Development Corp. Thrift and Savings Plan
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AT JANUARY 31, 1997
<TABLE>
<CAPTION>
Mutual Funds
Merrill -----------------------------------------------------------
MEDC Lynch Davis John
Common Retirement New Hancock
Stock Preservation AIM York Franklin Emerging
Fund Trust Value Venture Income Growth
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments (at current values)
MEDC Common Stock
Class A ............................ $ 10,590,796 $ -- $ -- $ -- $ -- $ --
Class B ............................ 10,431,616 -- -- -- -- --
Merrill Lynch Retirement
Preservation Trust ................. -- 51,963,637 -- -- -- --
Mutual funds ......................... -- -- 5,230,020 5,171,304 1,229,982 2,755,250
Participants' loans................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
21,022,412 51,963,637 5,230,020 5,171,304 1,229,982 2,755,250
Other ................................... 2,460 178,208 1,108 675 203 369
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for plan benefits... $ 21,024,872 $ 52,141,845 $ 5,231,128 $ 5,171,979 $ 1,230,185 $ 2,755,619
============ ============ ============ ============ ============ ============
<CAPTION>
Mutual Funds
----------------------------------------------------------------------------------
Merrill Merrill Merrill Oppenheimer
Lynch Merrill Lynch Lynch Main Street Tem-
Basic Lynch Equity Index Global Income and pleton
Value Capital Trust I Allocation Growth Foreign
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments (at current values)
MEDC Common Stock
Class A ............................ $ -- $ -- -- $ -- $ -- $ --
Class B ............................ -- -- -- -- -- --
Merrill Lynch Retirement
Preservation Trust ................. -- -- -- -- -- --
Mutual funds ......................... 10,979,510 10,569,529 640,492 3,192,550 6,097,082 2,268,405
Participants' loans................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
10,979,510 10,569,529 640,492 3,192,550 6,097,082 2,268,405
Other ................................... 1,419 1,610 111 542 886 350
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for plan benefits... $ 10,980,929 $ 10,571,139 640,603 $ 3,193,092 $ 6,097,968 $ 2,268,755
============ ============ ============ ============ ============ ============
<CAPTION>
Loan
Fund Total
------------ ------------
<S> <C> <C>
Assets
Investments (at current values)
MEDC Common Stock
Class A ............................ $ -- $ 10,590,796
Class B ............................ -- 10,431,616
Merrill Lynch Retirement
Preservation Trust ................. -- 51,963,637
Mutual funds ......................... -- 48,134,124
Participants' loans................... 5,796,126 5,796,126
------------ -------------
5,796,126 126,916,299
Other ................................... -- 187,941
------------ -------------
Net assets available for plan benefits... $ 5,796,126 $ 127,104,240
============ =============
</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, 1996
<TABLE>
<CAPTION>
Mutual Funds
Merrill ---------------------------------------------------------
MEDC Lynch Davis John
Common Retirement New Hancock
Stock Preservation AIM York Franklin Emerging
Fund Trust Value Venture Income Growth
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <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 1,114,208
Participants' loans................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
22,295,162 47,076,818 4,542,418 2,964,141 843,910 1,114,208
Other ................................... 37,174 156,166 765 411 -- 738
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for plan benefits... $ 22,332,336 $ 47,232,984 $ 4,543,183 $ 2,964,552 $ 843,910 $ 1,114,946
============ ============ ============ ============ ============ ============
<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 ......................... 8,627,609 9,924,639 2,320,195 3,705,045 1,612,221
Participants' loans................... -- -- -- -- --
------------ ------------ ------------ ------------ ------------
8,627,609 9,924,639 2,320,195 3,705,045 1,612,221
Other ................................... 5,831 6,111 4,280 765 --
------------ ------------ ------------ ------------ ------------
Net assets available for plan benefits... $ 8,633,440 $ 9,930,750 $ 2,324,475 $ 3,705,810 $ 1,612,221
============ ============ ============ ============ ============
<CAPTION>
Loan
Fund Total
------------ ------------
<S> <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 ......................... -- 35,654,386
Participants' loans................... 5,397,061 5,397,061
------------ ------------
5,397,061 110,423,427
Other ................................... -- 212,241
------------ ------------
Net assets available for plan benefits... $ 5,397,061 $110,635,668
============ ============
</TABLE>
- --------------------------------------
The accompanying notes are an integral part of this statement.
-4-
<PAGE> 6
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, 1997
<TABLE>
<CAPTION>
Mutual Funds
Merrill -------------------------------------------------
MEDC Lynch Davis
Common Retirement New
Stock Preservation AIM York Franklin
Fund Trust Value Venture Income
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Earnings on investments
Interest income ................... $ -- $ 3,049,188 $ -- $ -- $ --
Mutual fund distributions ......... -- -- 250,174 213,037 90,795
Cash dividends .................... 538,939 -- -- -- --
Realized and unrealized
appreciation of investments ..... 4,992,262 -- 575,071 821,114 22,461
Contributions
Members ........................... 585,269 1,765,286 289,431 173,229 56,545
Company ........................... 451,817 1,245,497 215,783 131,556 39,483
Participants' loans
New loans made .................... (434,542) (1,609,586) (132,756) (84,440) (27,014)
Principal payments received ....... 382,468 1,211,235 85,878 68,373 20,769
Loan administration fees........... (1,053) (4,603) (264) (241) (50)
Distributions to
withdrawing members ............... (1,355,002) (3,561,507) (118,633) (161,849) (42,116)
Transfers from (to) MND Hospitality,
Inc. Thrift and Savings Plan ...... 516 (9,276) -- -- --
Interfund transfers................... (6,468,138) 2,822,627 (476,739) 1,046,648 225,402
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets .... (1,307,464) 4,908,861 687,945 2,207,427 386,275
Net assets available for plan
benefits, beginning of year ....... 22,332,336 47,232,984 4,543,183 2,964,552 843,910
------------- ------------- ------------- ------------- -------------
Net assets available for plan
benefits, end of year ............. $ 21,024,872 $ 52,141,845 $ 5,231,128 $ 5,171,979 $ 1,230,185
============= ============= ============= ============= =============
<CAPTION>
Mutual Funds
----------------------------------------------------------------------------------------
John Merrill Merrill Merrill
Hancock Lynch Merrill Lynch Lynch
Emerging Basic Lynch Equity Index Global
Growth Value Capital Trust I Allocation
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Earnings on investments
Interest income ................... $ -- $ -- $ -- $ -- $ --
Mutual fund distributions ......... 51,460 684,767 1,031,159 66 298,234
Cash dividends .................... -- -- -- -- --
Realized and unrealized
appreciation of investments ..... 236,149 1,015,693 215,842 53,944 107,487
Contributions
Members ........................... 96,410 349,289 378,127 9,771 144,149
Company ........................... 71,899 276,478 313,715 8,857 105,578
Participants' loans
New loans made .................... (33,987) (259,699) (287,683) -- (69,994)
Principal payments received ....... 37,478 157,464 216,789 8,253 62,480
Loan administration fees........... (159) (501) (640) -- (170)
Distributions to
withdrawing members ............... (20,576) (377,897) (545,375) (11) (53,294)
Transfers from (to) MND Hospitality,
Inc. Thrift and Savings Plan ...... -- -- 630 -- --
Interfund transfers................... 1,201,999 501,895 (682,175) 559,723 274,147
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets .... 1,640,673 2,347,489 640,389 640,603 868,617
Net assets available for plan
benefits, beginning of year ....... 1,114,946 8,633,440 9,930,750 -- 2,324,475
------------- ------------- ------------- ------------- -------------
Net assets available for plan
benefits, end of year ............. $ 2,755,619 $ 10,980,929 $ 10,571,139 640,603 $ 3,193,092
============= ============= ============= ============= =============
<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 ................... $ -- $ -- $ 536,445 $ 3,585,633
Mutual fund distributions ......... 406,051 94,467 -- 3,120,210
Cash dividends .................... -- -- -- 538,939
Realized and unrealized
appreciation of investments ..... 484,665 205,628 -- 8,730,316
Contributions
Members ........................... 238,004 93,872 -- 4,179,382
Company ........................... 172,721 68,259 -- 3,101,643
Participants' loans
New loans made .................... (111,084) (52,855) 3,103,640 --
Principal payments received ....... 84,935 43,751 (2,379,873) --
Loan administration fees........... (311) (204) -- (8,196)
Distributions to
withdrawing members ............... (176,408) (33,855) (324,702) (6,771,225)
Transfers from (to) MND Hospitality,
Inc. Thrift and Savings Plan ...... -- -- -- (8,130)
Interfund transfers................... 1,293,585 237,471 (536,445) --
------------- ------------- ------------- -------------
Increase (decrease) in net assets .... 2,392,158 656,534 399,065 16,468,572
Net assets available for plan
benefits, beginning of year ....... 3,705,810 1,612,221 5,397,061 110,635,668
------------- ------------- ------------- -------------
Net assets available for plan
benefits, end of year ............. $ 6,097,968 $ 2,268,755 $ 5,796,126 $ 127,104,240
============= ============= ============= =============
</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, 1996
<TABLE>
<CAPTION>
Mutual Funds
Merrill -------------------------------
MEDC Lynch Davis
Common Retirement New
Stock Preservation AIM York
Fund Trust Value Venture
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Earnings on investments
Interest income .................. $ 2,316 $ 2,952,205 $ -- $ --
Mutual fund distributions ........ -- -- 247,660 185,449
Cash dividends ................... 666,079 -- -- --
Realized and unrealized
appreciation of investments .... 1,968,016 -- 591,891 471,739
Contributions
Members .......................... 766,565 2,133,481 257,764 152,380
Company .......................... 636,831 1,470,936 153,679 86,693
Participants' loans
New loans made ................... (471,960) (1,370,313) (46,842) (34,447)
Principal payments received ...... 385,944 1,114,048 55,701 46,636
Loan administration fees ......... (1,145) (3,721) (127) (82)
Distributions to
withdrawing members .............. (1,780,506) (7,189,140) (199,729) (167,989)
Transfers to MND Hospitality, Inc. ..
Thrift and Savings Plan .......... (42,553) (68,887) (13,677) (7,360)
Interfund transfers.................. (2,730,395) 851,252 1,138,958 789,025
------------- ------------- ------------- -------------
Increase (decrease) in net assets.... (600,808) (110,139) 2,185,278 1,522,044
Net assets available for plan
benefits, beginning of year ...... 22,933,144 47,343,123 2,357,905 1,442,508
------------- ------------- ------------- -------------
Net assets available for plan
benefits, end of year ............ $ 22,332,336 $ 47,232,984 $ 4,543,183 $ 2,964,552
============= ============= ============= =============
<CAPTION>
Mutual Funds
----------------------------------------------------------------
John Merrill
Hancock Lynch Merrill
Franklin Emerging Basic Lynch
Income Growth Value Capital
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Earnings on investments
Interest income .................. $ -- $ -- $ -- $ --
Mutual fund distributions ........ 71,335 110 382,489 992,805
Cash dividends ................... -- -- -- --
Realized and unrealized
appreciation of investments .... 92,664 157,971 1,968,161 1,475,928
Contributions
Members .......................... 51,727 45,799 388,142 444,315
Company .......................... 32,425 28,118 269,365 301,226
Participants' loans
New loans made ................... (3,828) (5,687) (187,821) (260,417)
Principal payments received ...... 23,057 10,626 169,219 205,028
Loan administration fees ......... (19) (17) (383) (458)
Distributions to
withdrawing members .............. (32,465) (25,099) (1,192,290) (871,535)
Transfers to MND Hospitality, Inc. ..
Thrift and Savings Plan .......... (5,619) -- (15,069) (15,371)
Interfund transfers.................. (132,701) 582,886 (33,572) (28,889)
------------- ------------- ------------- -------------
Increase (decrease) in net assets.... 96,576 794,707 1,748,241 2,242,632
Net assets available for plan
benefits, beginning of year ...... 747,334 320,239 6,885,199 7,688,118
------------- ------------- ------------- -------------
Net assets available for plan
benefits, end of year ............ $ 843,910 $ 1,114,946 $ 8,633,440 $ 9,930,750
============= ============= ============= =============
<CAPTION>
Mutual Funds
------------------------------------------------
Merrill Oppenheimer
Lynch Main Street Tem-
Global Income and pleton Loan
Allocation Growth Foreign Fund Total
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Earnings on investments
Interest income .................. $ -- $ -- $ -- $ 473,777 $ 3,428,298
Mutual fund distributions ........ 196,016 48,760 95,143 -- 2,219,767
Cash dividends ................... -- -- -- -- 666,079
Realized and unrealized
appreciation of investments .... 300,064 700,739 122,164 -- 7,849,337
Contributions
Members .......................... 162,393 224,053 130,817 -- 4,757,436
Company .......................... 115,497 128,116 62,781 -- 3,285,667
Participants' loans
New loans made ................... (54,013) (46,077) (30,198) 2,511,603 --
Principal payments received ...... 65,621 49,860 25,570 (2,151,310) --
Loan administration fees ......... (74) (115) (59) -- (6,200)
Distributions to
withdrawing members .............. (100,521) (80,625) (71,552) (444,675) (12,156,126)
Transfers to MND Hospitality, Inc.
Thrift and Savings Plan .......... (14,398) (5,266) (6,575) (6,054) (200,829)
Interfund transfers.................. (356,861) 390,902 3,172 (473,777) --
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets.... 313,724 1,410,347 331,263 (90,436) 9,843,429
Net assets available for plan
benefits, beginning of year ...... 2,010,751 2,295,463 1,280,958 5,487,497 100,792,239
------------- ------------- ------------- ------------- -------------
Net assets available for plan
benefits, end of year ............ $ 2,324,475 $ 3,705,810 $ 1,612,221 $ 5,397,061 $ 110,635,668
============= ============= ============= ============= =============
</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, 1997 AND 1996
(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. Purchases and sales of securities are
recorded on a trade-date basis. 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. 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. The total of a
member's pretax and after-tax contributions may not exceed 14% of base
salary.
-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.
Members may direct the Trustee to invest their contributions in one or
more of the investment funds listed below. 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.
Merrill Lynch Retirement Income, invests in U.S. Government
Preservation Trust Agency securities, bank and insurance
company guaranteed investment contracts
and money market instruments. Effective
yields approximated 6.4% and 6.5% for the
years ended January 31, 1997 and 1996.
Investments are recorded at contract
values, which approximate market values.
Mutual Funds
AIM Value Fund Capital appreciation, invests primarily
in equity securities.
Davis New York Capital appreciation, invests in equity
Venture Fund, Inc. and convertible securities.
Franklin Income Fund Income, invests in equity and
debt securities and cash
equivalents.
John Hancock Emerging Capital appreciation, invests in equity
Growth Fund 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, invests
Capital Fund, Inc. in equity, debt and convertible securities.
Merrill Lynch Equity Capital appreciation, invests primarily in
Index Trust I Fund equity 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, invests in
Income and Growth Fund equity and debt securities.
Templeton Capital appreciataion and
Foreign Fund 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, 1997 and 1996,
forfeitures of $44,366 and $95,041 occurred, and forfeitures of $91,335 and
$91,361 were used to reduce the Company's contributions. At January 31, 1997,
an additional $16,486 was available to reduce the Company's future
contributions. For members reemployed 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. Members may request that
distributions from the MEDC Common Stock Fund be in cash (rather than stock),
subject to procedures established by the administrative committee.
Withdrawals of members' pretax contributions are limited by Section
1.401(k)-1 of the Internal Revenue Code to instances of a member's death,
retirement, disability, separation from service, attainment of age 59-1/2 or
conditions of severe hardship. One withdrawal may be made 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. Such 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. Account balances pledged to secure loans may not be withdrawn from
the Plan.
TERMINATION
The Plan may be terminated, amended or modified by 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 of their then-existing account balances.
(2) FEDERAL INCOME TAX STATUS
The Plan is designed to operate as a non-tax-paying entity, and income
taxes have not been provided in its financial statements. 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 Code). Although the
Plan has been amended since receiving the determination letter, the
administrative committee believes that it continues to operate 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, 1997
<TABLE>
<CAPTION>
Current
Identity of Issue/Description Cost Value
- ------------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
Mitchell Energy & Development Corp. (a)
Class A Common Stock (450,672 shares).............................. $ 7,879,178 $ 10,590,796
Class B Common Stock (461,066 shares).............................. 7,991,756 10,431,616
------------ ------------
15,870,934 21,022,412
------------ ------------
Merrill Lynch Retirement Preservation Trust (a)(b)(c)................... 51,963,637 51,963,637
------------ ------------
Mutual Funds
AIM Value Fund (173,755 units)..................................... 4,454,407 5,230,020
Davis New York Venture Fund, Inc. (278,177 units).................. 4,171,313 5,171,304
Franklin Income Fund (516,799 units)............................... 1,181,919 1,229,982
John Hancock Emerging Growth Fund (64,031 units)................... 2,432,220 2,755,250
Merrill Lynch Basic Value Fund, Inc. (337,520 units)............... 8,159,177 10,979,510
Merrill Lynch Capital Fund, Inc. (332,689 units)................... 9,251,046 10,569,529
Merrill Lynch Equity Index Trust I Fund (12,264 units) ............ 587,127 640,492
Merrill Lynch Global Allocation Fund, Inc. (215,567 units)......... 2,987,922 3,192,550
Oppenheimer Main Street Income and Growth Fund (200,694 units)..... 5,229,953 6,097,082
Templeton Foreign Fund (216,039 units)............................. 2,082,666 2,268,405
------------ ------------
40,537,750 48,134,124
------------ ------------
Participants' loans, at interest rates ranging from 10.25% to 10.5%..... -- 5,796,126
------------ ------------
$108,372,321 $126,916,299
============ ============
</TABLE>
- --------------------------------------------------
(a) Party-in-interest to the Plan.
(b) Unit value of $1.00.
(c) The average yield for this trust was approximately
6.4% for the year ended January 31, 1997.
-10-
<PAGE> 12
SCHEDULE II
Mitchell Energy & Development Corp. Thrift and Savings Plan
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED JANUARY 31, 1997
<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 (a) Sold (b) Gain
- ------------------------------------------ --------- ------------- ---------- ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Mitchell Energy & Development Corp. .
Class A Common Stock............ 425 $ 1,787,030 331 $ 4,697,363 $ 4,391,039 $ 306,324
Class B Common Stock............ 437 2,275,295 331 5,629,974 5,251,300 378,674
Merrill Lynch Retirement
Preservation Trust.............. 733 19,408,088 464 14,521,269 14,521,269 --
</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.
-11-
<PAGE> 13
Exhibit
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report dated April 25, 1997, 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, 1997) into the previously filed Form S-8 Registration
Statement Nos. 33-26276, 2-86550 and 333-24335.
ARTHUR ANDERSEN LLP
Houston, Texas
June 2, 1997
<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, 1997
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, 1997 ......................................................................... 3
January 31, 1996 ......................................................................... 4
Statement of Changes in Net Assets Available for
Plan Benefits with Fund Information for the Year Ended
January 31, 1997 ......................................................................... 5
January 31, 1996 ......................................................................... 6
Notes to Financial Statements--January 31, 1997 and 1996...................................... 7
Schedule I--Schedule of Assets Held for
Investment Purposes at January 31, 1997 ................................................... 10
Schedule II--Schedule of Reportable Transactions
for the Year Ended January 31, 1997 ....................................................... 11
</TABLE>
-1-
<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, 1997 and 1996, 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 MND
Hospitality, Inc. Thrift and Savings Plan at January 31,1997 and 1996, 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, 1997 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.
Houston, Texas
April 25, 1997
-2-
<PAGE> 4
MND Hospitality, Inc. Thrift and Savings Plan
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
AT JANUARY 31, 1997
<TABLE>
<CAPTION>
Mutual Funds
Merrill ----------------------------------
MEDC Lynch Davis
Common Retirement New
Stock Preservation AIM York Franklin
Fund Trust Value Venture Income
------------ -------------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
Investments (at current value)
MEDC Common Stock
Class A ........................... $ 317,606 $ - $ - $ - $ -
Class B ........................... 281,916 - - - -
Merrill Lynch Retirement
Preservation Trust ................ - 2,356,694 - - -
Mutual funds ........................ - - 125,423 100,854 60,172
Participants' loans ................. - - - - -
------------ -------------- ---------- --------- ----------
599,522 2,356,694 125,423 100,854 60,172
Cash ................................... 2,095 7,220 636 483 448
------------ -------------- ---------- --------- ----------
Net assets available for plan benefits.. $ 601,617 $ 2,363,914 $ 126,059 $ 101,337 $ 60,620
============ ============== ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
----------------------------------------------------------------
John Merrill Merrill
Hancock Lynch Merrill Lynch
Emerging Basic Lynch Equity Index
Growth Value Capital Trust I
------------ ------------ ----------------- ---------------
<S> <C> <C> <C> <C>
Investments (at current value)
MEDC Common Stock
Class A ........................... $ - $ - $ - $ -
Class B ........................... - - - -
Merrill Lynch Retirement
Preservation Trust ................ - - - -
Mutual funds ........................ 80,597 391,139 485,369 32,091
Participants' loans ................. - - - -
------------ ------------ ----------------- ---------------
80,597 391,139 485,369 32,091
Cash ................................... 332 1,214 1,597 15
------------ ------------ ----------------- ---------------
Net assets available for plan benefits.. $ 80,929 $ 392,353 $ 486,966 $ 32,106
============ ============ ================= ===============
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
---------------------------------------------
Merrill Oppenheimer
Lynch Main Street Tem-
Global Income and pleton Loan
Allocation Growth Foreign Fund Total
------------ --------------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Investments (at current value)
MEDC Common Stock
Class A ........................... $ - $ - $ - $ - $ 317,606
Class B ........................... - - - - 281,916
Merrill Lynch Retirement
Preservation Trust ................ - - - - 2,356,694
Mutual funds ........................ 97,878 190,879 51,220 - 1,615,622
Participants' loans ................. - - - 359,599 359,599
------------ --------------- --------- ---------- ------------
97,878 190,879 51,220 359,599 4,931,437
Cash ................................... 680 841 328 - 15,889
------------ --------------- --------- ---------- -----------
Net assets available for plan benefits.. $ 98,558 $ 191,720 $ 51,548 $ 359,599 $ 4,947,326
============ =============== ========= ========== ===========
</TABLE>
- ------------------------------------------
The accompanying notes are an 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, 1996
<TABLE>
<CAPTION>
Mutual Funds
Merrill ---------------------------------
MEDC Lynch Davis
Common Retirement New
Stock Preservation AIM York Franklin
Fund Trust Value Venture Income
------------- ------------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Investments (at current value)
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
Participants' loans ................. - - - - -
------------- ------------- --------- ---------- -----------
494,736 2,091,335 106,253 59,642 26,865
Other .................................. 9,837 14,221 - 299 -
------------- ------------- --------- ---------- -----------
Net assets available for plan benefits..
$ 504,573 $ 2,105,556 $ 106,253 $ 59,941 $ 26,865
============= ============= ========= ========== ==========
</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 value)
MEDC Common Stock
Class A ........................... $ - $ - $ - $ -
Class B ........................... - - - -
Merrill Lynch Retirement
Preservation Trust ................ - - - -
Mutual funds ........................ 36,412 349,485 453,991 72,382
Participants' loans ................. - - - -
---------- ----------- ------------- -------------
36,412 349,485 453,991 72,382
Other .................................. - 287 243 234
---------- ----------- ------------- -------------
Net assets available for plan benefits..
$ 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>
Investments (at current value)
MEDC Common Stock
Class A ........................... $ - $ - $ - $ 255,765
Class B ........................... - - - 238,971
Merrill Lynch Retirement
Preservation Trust ................ - - - 2,091,335
Mutual funds ........................ 97,341 37,947 - 1,240,318
Participants' loans ................. - - 339,215 339,215
-------------- ---------- ------------ -----------
97,341 37,947 339,215 4,165,604
Other .................................. - 197 - 25,318
-------------- ---------- ------------ -----------
Net assets available for plan benefits..
$ 97,341 $ 38,144 $ 339,215 $ 4,190,922
============== ========== ============ ===========
</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, 1997
<TABLE>
<CAPTION>
Mutual Funds
----------------------------------
Merrill
MEDC Lynch Davis
Common Retirement New
Stock Preservation AIM York Franklin
Fund Trust Value Venture Income
------------ ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
Earnings on investments
Interest income ...................... $ - $ 133,457 $ - $ - $ -
Mutual fund distributions ............ - - 5,738 4,471 3,059
Cash dividends ....................... 14,016 - - - -
Realized and unrealized
appreciation of investments ........ 139,051 - 11,145 17,455 1,127
Contributions
Members .............................. 46,218 171,084 18,809 15,068 14,257
The Employer ......................... 32,094 110,611 9,751 7,404 6,870
Participants' loans
New loans made ....................... (31,626) (124,690) (3,448) (4,275) (1,950)
Principal payments received .......... 12,698 81,319 5,169 5,452 5,197
Loan administration fees ............. (129) (1,111) (17) (48) (28)
Distributions to withdrawing members .... (30,913) (225,754) (6,150) (7,547) (1,815)
Transfers from (to) Mitchell Energy & Devel-
opment Corp. Thrift and Savings Plan . (516) 9,276 - - -
Interfund transfers ..................... (83,849) 104,166 (21,191) 3,416 7,038
------------ ----------- ---------- --------- -----------
Increase in net assets .................. 97,044 258,358 19,806 41,396 33,755
Net assets available for plan
benefits, beginning of year .......... 504,573 2,105,556 106,253 59,941 26,865
------------ ----------- ---------- --------- ----------
Net assets available for plan
benefits, end of year ................ $ 601,617 $ 2,363,914 $ 126,059 $ 101,337 $ 60,620
============ =========== ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Mutual Funds
-------------------------------------------------------------
John Merrill Merrill Merrill
Hancock Lynch Merrill Lynch Lynch
Emerging Basic Lynch Equity Index Global
Growth Value Capital Trust I Allocation
---------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C>
Earnings on investments
Interest income ...................... $ - $ - $ - $ - -
Mutual fund distributions ............ 1,515 23,555 44,642 - 9,075
Cash dividends ....................... - - - - -
Realized and unrealized
appreciation of investments ........ 9,121 35,863 7,921 1,257 2,496
Contributions
Members .............................. 11,311 37,639 46,230 519 21,775
The Employer ......................... 5,081 18,599 24,475 225 10,413
Participants' loans
New loans made ....................... (1,254) (17,795) (36,692) - (8,058)
Principal payments received .......... 4,654 10,944 16,210 398 10,204
Loan administration fees ............. (28) (57) (199) - (83)
Distributions to withdrawing members .... (2,796) (32,981) (57,636) - (11,531)
Transfers from (to) Mitchell Energy & Devel-
opment Corp. Thrift and Savings Plan . - - (630) - -
Interfund transfers ..................... 16,913 (33,186) (11,589) 29,707 (8,349)
---------- ---------- --------- --------- ----------
Increase in net assets .................. 44,517 42,581 32,732 32,106 25,942
Net assets available for plan
benefits, beginning of year .......... 36,412 349,772 454,234 - 72,616
---------- ---------- --------- --------- ---------
Net assets available for plan
benefits, end of year ................ $ 80,929 $ 392,353 $ 486,966 $ 32,106 98,558
========== ========== ========= ========= =========
</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 ...................... $ - $ - $ 32,824 $ 166,281
Mutual fund distributions ............ 13,483 1,914 - 107,452
Cash dividends ....................... - - - 14,016
Realized and unrealized
appreciation of investments ........ 14,101 4,189 - 243,726
Contributions
Members .............................. 25,768 9,224 - 417,902
The Employer ......................... 12,891 5,028 - 243,442
Participants' loans
New loans made ....................... (11,670) (1,068) 242,526 -
Principal payments received .......... 11,093 2,671 (166,009) -
Loan administration fees ............. (144) (6) - (1,850)
Distributions to withdrawing members .... (8,872) (567) (56,133) (442,695)
Transfers from (to) Mitchell Energy & Devel-
opment Corp. Thrift and Savings Plan . - - - 8,130
Interfund transfers ..................... 37,729 (7,981) (32,824) -
---------- -------- ----------- -------------
Increase in net assets .................. 94,379 13,404 20,384 756,404
Net assets available for plan
benefits, beginning of year .......... 97,341 38,144 339,215 4,190,922
---------- -------- ----------- -------------
Net assets available for plan
benefits, end of year ................ $ 191,720 $ 51,548 $ 359,599 $ 4,947,326
========== ======== =========== ============
</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, 1996
<TABLE>
<CAPTION>
Mutual Funds
Merrill ------------------------------------
MEDC Lynch Davis
Common Retirement New
Stock Preservation AIM York Franklin
Fund Trust Value Venture Income
---------- ------------ ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
Earnings on investments
Interest income ........................ $ 147 $ 129,458 $ - $ - $ -
Mutual fund distributions .............. - - 4,317 2,688 1,919
Cash dividends ......................... 14,158 - - - -
Realized and unrealized
appreciation of investments .......... 34,838 - 8,556 4,149 1,516
Contributions
Members ................................ 60,761 197,373 19,556 9,800 3,979
The Employer ........................... 26,858 141,952 9,077 2,957 1,540
Participants' loans
New loans made ......................... (26,593) (165,973) (1,792) (1,603) (11,175)
Principal payments received ............ 17,332 75,041 1,479 902 159
Loan administration fees ............... (187) (755) (12) (5) -
Distributions to withdrawing members ...... (41,993) (186,463) (1,334) (1,550) (28)
Transfers from Mitchell Energy & Develop-
ment Corp. Thrift and Savings Plan ..... 42,553 68,887 13,677 7,360 5,619
Interfund transfers ....................... (55,049) (78,531) 38,261 30,879 21,726
---------- ------------ ---------- --------- -----------
Increase in net assets .................... 72,825 180,989 91,785 55,577 25,255
Net assets available for plan
benefits, beginning of year ............ 431,748 1,924,567 14,468 4,364 1,610
---------- ------------ ---------- --------- ----------
Net assets available for plan
benefits, end of year .................. $ 504,573 $ 2,105,556 $ 106,253 $ 59,941 $ 26,865
========== ============ ========== ========= ==========
</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>
Earnings on investments
Interest income ........................ $ - $ - $ - $ -
Mutual fund distributions .............. 10 15,320 47,086 5,612
Cash dividends ......................... - - - -
Realized and unrealized
appreciation of investments .......... 4,849 76,795 68,802 6,550
Contributions
Members ................................ 5,024 35,958 36,270 18,120
The Employer ........................... 1,687 15,923 18,663 6,532
Participants' loans
New loans made ......................... (2,554) (22,677) (30,958) (4,391)
Principal payments received ............ 939 10,081 13,765 3,607
Loan administration fees ............... (15) (138) (75) (58)
Distributions to withdrawing members ...... (25) (29,867) (34,806) (7,973)
Transfers from Mitchell Energy & Develop-
ment Corp. Thrift and Savings Plan ..... - 15,069 15,371 14,398
Interfund transfers ....................... 18,673 (5,339) (15,981) 509
---------- ---------- --------- -----------
Increase in net assets .................... 28,588 111,125 118,137 42,906
Net assets available for plan
benefits, beginning of year ............ 7,824 238,647 336,097 29,710
---------- ---------- --------- -----------
Net assets available for plan
benefits, end of year .................. $ 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
The Employer ........................... 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 administration 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.
-6-
<PAGE> 8
MND Hospitality, Inc. Thrift and Savings Plan
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1997 AND 1996
(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. Purchases and sales of securities are
recorded on a trade-date basis. 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. 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. The total of a member's pretax and after-tax
contributions may not exceed 14% of base salary.
-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.
Members may direct the Trustee to invest their contributions in one or
more of the investment funds listed below. 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.
Merrill Lynch Retirement Income, invests in U.S. Government
Preservation Trust Agency securities, bank and insurance
company guaranteed investment contracts
and money market instruments.
Effective yields approximated 6.4% and
6.5% for the years ended January 31,
1997 and 1996. Investments are
recorded at contract values, which
approximate market values.
Mutual Funds
AIM Value Fund Capital appreciation, invests primarily
in equity securities.
Davis New York Capital appreciation, invests in equity
Venture Fund, Inc. and convertible securities.
Franklin Income Fund Income, invests in equity and
debt securities and cash
equivalents.
John Hancock Emerging Capital appreciation, invests in equity
Growth Fund 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, invests
Capital Fund, Inc. in equity, debt and convertible securities.
Merrill Lynch Equity Capital appreciation, invests primarily in
Index Trust I Fund equity 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, invests in
Income and Growth Fund 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 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, 1997 and 1996,
forfeitures of $10,429 and $36,550 occurred, and forfeitures of $18,331 and
$20,882 were used to reduce contributions of the Employer. At January 31, 1997,
an additional $15,889 was available to reduce such future contributions. For
members re-employed before completing a break in service, as defined by the
Plan, the Employer's 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 contributions of the Employer.
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. Members may request that
distributions from the MEDC Common Stock Fund be in cash (rather than stock),
subject to procedures established by the administrative committee.
Withdrawals of members' pretax contributions are limited by Section
1.401(k)-1 of the Internal Revenue Code to instances of a member's death,
retirement, disability, separation from service, attainment of age 59-1/2 or
conditions of severe hardship. One withdrawal may be made 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. Such 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 of their then-existing account balances.
(2) FEDERAL INCOME TAX STATUS
The Plan is designed to operate as a non-tax-paying entity, and income
taxes have not been provided in its financial statements. 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 Code). Although the
Plan has been amended since receiving that determination letter, the
administrative committee believes that it continues to operate 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, 1997
<TABLE>
<CAPTION>
Current
Identity of Issue/Description Cost Value
- ----------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Mitchell Energy & Development Corp. (a)
Class A Common Stock (13,515 shares) ............................. $ 248,715 $ 317,606
Class B Common Stock (12,460 shares) ............................. 225,888 281,916
------------- -------------
474,603 599,522
------------- -------------
Merrill Lynch Retirement Preservation Trust (a)(b)(c) ................. 2,356,694 2,356,694
------------- -------------
Mutual Funds
AIM Value Fund (4,167 units) ..................................... 111,522 125,423
Davis New York Venture Fund, Inc. (5,425 units) .................. 82,891 100,854
Franklin Income Fund (25,282 units) .............................. 57,980 60,172
John Hancock Emerging Growth Fund (1,873 units) .................. 67,527 80,597
Merrill Lynch Basic Value Fund, Inc. (12,024 units) .............. 295,366 391,139
Merrill Lynch Capital Fund, Inc. (15,278 units) .................. 430,265 485,369
Merrill Lynch Equity Index Trust I Fund (614 units) .............. 30,834 32,091
Merrill Lynch Global Allocation Fund, Inc. (6,609 units) ......... 93,335 97,878
Oppenheimer Main Street Income and Growth Fund (6,283 units) ..... 169,653 190,879
Templeton Foreign Fund (4,878 units) ............................. 47,210 51,220
------------- -------------
1,386,583 1,615,622
------------- -------------
Participants' loans, at interest rates ranging from 10.25% to 10.5% ... -- 359,599
------------- -------------
$ 4,217,880 $ 4,931,437
============= =============
</TABLE>
- ----------------------
(a) Party-in-interest to the Plan.
(b) Unit value of $1.00.
(c) The average yield for this trust was approximately
6.4% for the year ended January 31, 1997.
-10-
<PAGE> 12
SCHEDULE II
MND Hospitality, Inc. Thrift and Savings Plan
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED JANUARY 31, 1997
<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 (a) Sold (b) Gain
- -------------------------------------------- ------- --------- ------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Mitchell Energy & Development Corp...........
Class A Common Stock ................... 97 $ 57,483 80 $ 72,328 $ 65,376 $ 6,952
Class B Common Stock ................... 99 49,581 72 69,001 61,134 7,867
Merrill Lynch Retirement
Preservation Trust ..................... 176 714,305 109 448,946 448,946 --
Merrill Lynch Capital Fund, Inc. ............ 124 147,094 61 123,637 112,942 10,695
</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.
-11-
<PAGE> 13
Exhibit
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report dated April 25, 1997, 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, 1997) into the previously filed Form S-8 Registration Statement
Nos. 33-2716 and 333-24335.
ARTHUR ANDERSEN LLP
Houston, Texas
June 2, 1997
