SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
_____________________
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from _______ to ______
Commission file number 1-7981
Full title of the Plan:
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
AGENTS' AND MANAGERS' THRIFT PLAN
Name of the issuer of the securities held pursuant to the Plan
and the address of its principal executive office:
AMERICAN GENERAL CORPORATION
2929 Allen Parkway
Houston, Texas 77019
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THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN
DECEMBER 31, 1994
Audited Financial Statements
Report of Independent Auditors ......................................... 1
Statement of Net Assets Available for Benefits ......................... 2
Statement of Changes in Net Assets Available for Benefits .............. 4
Notes to Financial Statements .......................................... 6
Schedules
Assets Held for Investment ............................................. 10
Reportable Transactions ................................................ 11
Signature Page ............................................................ 12
Appendix: Consent of Independent Auditors ................................ 14
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Report of Independent Auditors
Administrative Board
The Variable Annuity Life Insurance Co. Agents' and Managers' Thrift Plan
We have audited the accompanying statements of net assets available for
benefits of the Variable Annuity Life Insurance Co. Agents' and Managers'
Thrift Plan as of December 31, 1994 and 1993 and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1994 and 1993, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
As discussed in Note 1 to the financial statements, in 1994 the Plan changed
its method of reporting benefit and forfeiture expense to reflect these
amounts at market value rather than cost.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of
assets held for investment as of December 31, 1994 and reportable transactions
for the year then ended are presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required
part of the financial statements. 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 benefits and changes in net
assets available for benefits of each fund. The supplemental schedules and
fund information have been subjected to the auditing procedures applied in our
audit of the financial statements and, in our opinion, are fairly stated in
all material respects in relation to the financial statements taken as a
whole.
ERNST & YOUNG LLP
Houston, Texas
June 12, 1995
1
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<TABLE>THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994
<CAPTION>
Non-
Participant
Participant Directed Directed
Stock Cash Mutual Mutual Stock
Fund Fund Fund A Fund B Fund Total
<S>
Assets
Investments at fair value
American General Corporation common stock <C> <C> <C> <C> <C> <C>
(1,585,993 shares) ....................... $18,018,941 $ - $ - $ - $26,785,353 $44,804,294
The Variable Annuity Life Insurance
Company group deposit administration
contract ................................... - 372,717 - - - 372,717
American General Series Portfolio Company -
Stock Index Fund (166,236 shares) .......... - - 2,403,774 - - 2,403,774
American General Series Portfolio Company -
Timed Opportunity Fund (12,195 shares) ..... - - - 125,491 - 125,491
Short-term investments ....................... 93,598 900 10,005 1,755 - 106,258
Total investments .......................... 18,112,539 373,617 2,413,779 127,246 26,785,353 47,812,534
Receivables
Contributions .............................. 97 - 65 23 133 318
Interest ................................... 361 7,218 51 4 - 7,634
Total receivables ........................ 458 7,218 116 27 133 7,952
Total assets ............................. 18,112,997 380,835 2,413,895 127,273 26,785,486 47,820,486
Liabilities
Payables
Purchase of securities ..................... 70,588 - - - - 70,588
VALIC from forfeitures ..................... - - - - 29,861 29,861
Excess contribution refunds ................ 107,365 6,460 52,025 4,913 490,645 661,408
Excess contribution forfeitures ............ - - - - 52,346 52,346
Total liabilities ........................ 177,953 6,460 52,025 4,913 572,852 814,203
2
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Net assets available for benefits .............. $17,935,044 $374,375 $2,361,870 $122,360 $26,212,634 $47,006,283
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1993
<CAPTION>
Non-
Participant
Participant Directed Directed
Stock Cash Mutual Mutual Stock
Fund Fund Fund A Fund B Fund Total
<S>
Assets
Investments at fair value
American General Corporation common stock <C> <C> <C> <C> <C> <C>
(1,472,339 shares) ....................... $16,709,250 $ - $ - $ - $25,436,444 $42,145,694
The Variable Annuity Life Insurance Company
group deposit administration contract ...... - 230,933 - - - 230,933
American General Series Portfolio Company -
Stock Index Fund (109,131 shares) .......... - - 1,610,772 - - 1,610,772
American General Series Portfolio Company -
Timed Opportunity Fund (6,657 shares) ...... - - - 74,886 - 74,886
Short-term investments ....................... 61,134 358 17,192 304 65,293 144,281
Total investments .......................... 16,770,384 231,291 1,627,964 75,190 25,501,737 44,206,566
Receivables
Contributions .............................. 109 - 62 23 142 336
Interest ................................... 117 3,340 13 2 124 3,596
Interfund transfers ........................ 17,305 - - - - 17,305
Total receivables ........................ 17,531 3,340 75 25 266 21,237
Total assets ............................. 16,787,915 234,631 1,628,039 75,215 25,502,003 44,227,803
Liabilities
Payables
Interfund transfers ....................... - 1,148 16,157 - - 17,305
Purchase of securities .................... 59,827 - - - 63,898 123,725
Participants .............................. 31,707 - 15,983 - 17,154 64,844
VALIC from forfeitures .................... - - - - 15,381 15,381
Total liabilities ....................... 91,534 1,148 32,140 - 96,433 221,255
Net assets available for benefits ............. $16,696,381 $233,483 $1,595,899 $75,215 $25,405,570 $44,006,548
4
<PAGE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1994
<CAPTION>
Non-
Participant
Participant Directed Directed
Stock Cash Mutual Mutual Stock
Fund Fund Fund A Fund B Fund Total
<S>
Additions to net assets
Investment income <C> <C> <C> <C> <C> <C>
Dividends ................................. $ 703,763 $ - $ 56,077 $ 8,309 $ 1,058,561 $ 1,826,710
Interest .................................. 2,326 20,202 314 46 1,956 24,844
Total investment income ................. 706,089 20,202 56,391 8,355 1,060,517 1,851,554
Contributions
Company's ................................. - - - - 1,523,267 1,523,267
Participants' ............................. 1,728,303 102,558 842,753 77,301 - 2,750,915
Total contributions ..................... 1,728,303 102,558 842,753 77,301 1,523,267 4,274,182
Total additions ......................... 2,434,392 122,760 899,144 85,656 2,583,784 6,125,736
Deductions from net assets
Benefits
American General Corporation common stock
(68,023 shares) ......................... 983,553 - - - 913,218 1,896,771
Cash ...................................... 1,765 67,371 50,651 7,749 1,383 128,919
Forfeitures ................................. - - - - 544,562 544,562
Total deductions ........................ 985,318 67,371 50,651 7,749 1,459,163 2,570,252
Interfund transfers ........................... (20,292) 85,503 (43,762) (21,449) - -
Net unrealized appreciation (depreciation)
in fair value of investments ................ (190,119) - (38,760) (9,313) (317,557) (555,749)
Net increase ............................ 1,238,663 140,892 765,971 47,145 807,064 2,999,735
Net assets available for benefits
Beginning of year ........................... 16,696,381 233,483 1,595,899 75,215 25,405,570 44,006,548
6
<PAGE>
End of year ................................. $17,935,044 $374,375 $2,361,870 $122,360 $26,212,634 $47,006,283
The accompanying notes are an integral part of these financial statements.
7
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THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Non-
Participant
Participant Directed Directed
Stock Cash Mutual Mutual Stock
Fund Fund Fund A Fund B Fund Total
<S>
Additions to net assets
Investment income <C> <C> <C> <C> <C> <C>
Dividends ................................. $ 617,742 $ - $ 38,220 $ 2,573 $ 938,086 $ 1,596,621
Interest .................................. 1,994 9,924 205 23 2,009 14,155
Total investment income ................. 619,736 9,924 38,425 2,596 940,095 1,610,776
Contributions
Company's ................................. - - - - 1,873,448 1,873,448
Participants' ............................. 1,726,945 95,920 900,216 56,055 - 2,779,136
Total contributions ..................... 1,726,945 95,920 900,216 56,055 1,873,448 4,652,584
Total additions ......................... 2,346,681 105,844 938,641 58,651 2,813,543 6,263,360
Deductions from net assets
Benefits
American General Corporation common stock
(62,502 shares) ......................... 1,313,573 - - - 684,227 1,997,800
Cash ...................................... 1,543 6,335 31,976 298 2,045 42,197
Forfeitures ................................. - - - - 210,372 210,372
Total deductions ........................ 1,315,116 6,335 31,976 298 896,644 2,250,369
Interfund transfers ........................... 18,136 42,719 (77,704) 16,849 - -
Net unrealized appreciation (depreciation)
in fair value of investments ................ (49,048) - 66,911 13 (19,547) (1,671)
Net increase ............................ 1,000,653 142,228 895,872 75,215 1,897,352 4,011,320
Net assets available for benefits
Beginning of year ........................... 15,695,727 91,255 700,027 - 23,508,219 39,995,228
End of year ................................. $16,696,380 $233,483 $1,595,899 $ 75,215 $25,405,571 $44,006,548
8
<PAGE>
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
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THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Variable Annuity Life Insurance Co. Agents' and Managers' Thrift Plan (the
Plan) financial statements are prepared in conformity with generally accepted
accounting principles.
Investments in American General Corporation (American General) common stock
are based on published market prices. Fair values of other investments not
having an established market are reported as follows: 1) investment in The
Variable Annuity Life Insurance Co. (VALIC, also referred to as the Company)
group deposit administration contract at contract value, which represents
contributions under the contract, plus interest at the contract rate, less
funds used to pay benefits; 2) investments in the American General Series
Portfolio Company (AGSPC) Stock Index and Timed Opportunity Funds at net asset
value; and 3) short-term investments at cost which approximates fair value.
AGSPC is an open-end management investment company (mutual fund) whose
investment adviser is VALIC.
Dividends are recorded as income on ex-dividend dates and interest income is
recorded using the accrual method of accounting.
Participants' accounts are credited monthly with the number of shares of
American General common stock or the number of shares in the AGSPC Stock Index
or Timed Opportunity Funds purchased and the cost thereof. Purchases under
the VALIC group deposit administration contract are also credited to the
participants' accounts at cost.
Contributions are recorded as income on the date they become payable to the
Plan.
Interfund transfers are recorded at the market value of the amount
transferred.
Beginning in 1994, benefits paid to participants and related forfeitures are
recorded upon distribution at the market value of the assets distributed or
forfeited. Prior to this, benefits paid and related forfeitures were recorded
at cost. This change was made to conform the Plan's accounting procedures
with the predominant industry practice of recording benefits paid and related
forfeitures at market value. The 1993 amounts have been restated to reflect
this change in accounting principle which had no effect on net assets
available for benefits.
Due to a clarification in the application of an accounting principle, benefits
payable to participants are no longer accrued as liabilities in the 1994
financial statements. A difference of $157,560 in net assets available for
benefits and benefits paid to participants exists between the financial
statements contained herein and the financial information disclosed in the
Form 5500.
NOTE 2--DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information. The
Plan document provides more complete descriptions of the Plan's provisions.
10
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THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE 2--DESCRIPTION OF THE PLAN--Continued
General
The Plan, which is subject to certain provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA), is a defined contribution
plan offered to eligible agents and managers of VALIC who have completed at
least one year of service and have reached age twenty-one. The Plan provides
for participant elective salary deferrals (participant pretax contributions)
in accordance with Section 401(k) of the Internal Revenue Code of 1986, as
amended (IRC).
The cost of administering the Plan is paid by VALIC.
Investment Options
The plan was amended effective January 1, 1993 to allow for investment in
shares of the AGSPC Timed Opportunity Fund (Mutual Fund B). The participants
may elect to have their contributions invested in one of four funds or a
combination of two funds. The funds invest in: 1) shares of American General
common stock (Stock Fund); 2) a group deposit administration contract issued
by VALIC (Cash Fund); 3) the AGSPC Stock Index Fund (Mutual Fund A); or 4) the
AGSPC Timed Opportunity Fund (Mutual Fund B). The Cash Fund has a guaranteed
rate of 5% through March 31, 1994; effective April 1, 1994 the rate remained
unchanged at 5%; this rate is declared annually by VALIC. The Company's
contributions are invested solely in the Stock Fund. Investments are held in
a bank-administered trust fund.
Amounts which have not yet been used to purchase investments in either the
Stock, Cash, or Mutual Funds are temporarily invested in money-market fund
investments. These investments are held in a bank-administered trust fund and
income from these investments is allocated to Plan participants based on
current contributions.
Contributions
Participants may contribute, on a pretax basis, a basic amount ranging from
one to six percent of base pay and an additional amount ranging from one to
four percent of base pay subject to the contribution limitations discussed
below. The Company contributes an amount ranging from 50 percent to 100
percent of the participants' basic contribution.
The Plan was amended effective January 1, 1994 to allow participants to change
their contribution rate and investment election for future contributions, as
well as transfer all or part of their pretax and after-tax account balances
from one fund to another once a month.
Contribution Limitations
For 1994 and 1995, the total amount of participant pretax contributions is
limited to $9,240. Additionally, the total amount of annual participant and
Company contributions (including forfeitures) must not exceed the lesser of 25
percent of compensation or $30,000. During 1994 and 1995, the total amount of
base pay that can be considered under the Plan is $150,000.
11
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THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE 2--DESCRIPTION OF THE PLAN--Continued
The IRC provides that plans such as Variable Annuity Life Insurance Company
Agents' and Managers' Thrift and Retirement Plans cannot discriminate in favor
of highly compensated individuals. To comply with these laws, certain highly
compensated individuals in the plans may receive refunds of contributions in
excess of IRC Sections 401(k)(3) and 401(m) limits for employee pretax
contributions and employer matching contributions, respectively, and all
earnings attributable to such contributions. Refunds will be made from the
VALIC Agents' and Managers' Retirement Plan to the extent possible. Any
amounts that cannot be refunded from the VALIC Agents' and Managers' Retire-
ment Plan will be refunded from the VALIC Agents' and Managers' Thrift Plan.
Amounts in excess of the limits discussed above are designated on the State-
ment of Net Assets as "Payables - Excess contribution refunds". These amounts
will be refunded to the affected highly compensated participants on or before
the last day of the subsequent plan year to ensure the tax qualified status of
the Plan. "Payables - Excess contribution forfeitures" represent the nonvest-
ed excess company contributions and are available to reduce future company
contributions.
Participant Accounts
Each participant's account is credited with the participant's contributions
and an allocation of the Company's contributions and Plan earnings. Alloca-
tions of Plan earnings are based on participants' account balances. The
benefit to which a participant is entitled is the benefit that can be provided
from the participant's account.
Vesting
Participants are immediately vested in their contributions plus the earnings
thereon. A participant obtains a vested interest in the Company's contribu-
tions and the earnings thereon at the rate determined by years of service.
The vesting schedule is provided below:
Years of Service Nonforfeitable Percentages
0 - 3 0
3 20
4 40
5 60
6 80
7 100
Vesting of Company contributions shall be 100 percent upon death, disability,
or the attainment of normal retirement age.
Payment of Benefits
Upon termination of service, and if consented to by the participant (consent
only required if the total value, both vested and nonvested, of their account
exceeds $3,500 and the participant is under the age of 65), a participant will
receive a distribution equal to the vested value of his or her account. A
12
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distribution must be made after a participant reaches age 70 1/2, regardless
of whether service has been terminated.
13
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THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE 2--DESCRIPTION OF THE PLAN--Continued
Direct Rollover
The Plan was amended to allow direct rollovers for distributions made on or
after January 1, 1993. A distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified
by the distributee in a direct rollover.
Forfeitures
Participants terminating employment shall forfeit their nonvested interest in
the Companies' contributions on the earlier of (1) the distribution of the
entire nonforfeitable portion of their account or (2) upon incurring a period
of severance equal to five consecutive one-year breaks in service. Forfei-
tures are available to reduce future Company contributions. Participants who
terminate and are reemployed with the Company before incurring five consecu-
tive one-year breaks in service are entitled to their nonvested or forfeited
amounts subject to certain provisions as stated in the Plan.
NOTE 3--FEDERAL INCOME TAXES
On June 13, 1989, the Internal Revenue Service (IRS) issued a favorable
determination that the Plan, as restated and amended effective December 21,
1988, is qualified under Section 401(a) of the Internal Revenue Code of 1986,
as amended, and therefore, exempt under Section 501(a) from federal income
taxes. VALIC has requested a favorable determination that the Plan, as
subsequently restated and amended, continues to be qualified. Management
believes a favorable determination will be received.
NOTE 4--PLAN TERMINATION
Although they have not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
withdraw from the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100 percent vested in their
accounts.
14
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THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN
ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1994
Issuer Description Cost Fair Value
American General 1,585,993 shares of $30,147,551 $44,804,294
Corporation common stock
The Variable Annuity Group deposit 372,717 372,717
Life Insurance Company administration contract
American General Series 166,236 shares 2,363,879 2,403,774
Portfolio Company
Stock Index Fund
American General Series 12,195 shares 134,351 125,491
Portfolio Company
Timed Opportunity
Fund
State Street Bank Short-term investment
& Trust money-market fund 106,258 106,258
$33,124,756 $47,812,534
15
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THE VARIABLE ANNUITY LIFE INSURANCE CO. AGENTS' AND MANAGERS' THRIFT PLAN
REPORTABLE TRANSACTIONS (A)
YEAR ENDED DECEMBER 31, 1994
Amount of
Party Involved Description Transaction
State Street Bank Purchase of money-market fund $3,614,863
& Trust investments in 69 transactions
State Street Bank Sale of money-market fund 3,647,692
& Trust investments in 69 transactions
(B) 183,952 shares of American General 5,111,783
Corporation common stock purchased
in 65 transactions
(B) 68,023 shares of American General 1,896,771
Corporation common stock distributed
to various individuals who withdrew
from or terminated participation in
the Plan in 105 transactions
(A) Reportable transactions are transactions or series of transactions in
excess of 5 percent of the current value of Plan assets at the beginning
of the year and are defined in Section 2520.103-6 of the Department of
Labor's Rules and Regulations.
(B) Parties involved are not presented, as permitted by Section 2520.103-
6(d)(1)(i) of the Department of Labor's Rules and Regulations.
16
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, The
Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan
Administrative Board has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
AGENTS' AND MANAGERS'
THRIFT PLAN
June 28, 1995 AUSTIN P. YOUNG
Austin P. Young, Member of
the Administrative Board
17
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Appendix
18
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-39202) pertaining to The Variable Annuity Life Insurance
Company Agents' and Managers' Thrift Plan and in the related prospectus of our
report dated June 12, 1995, with respect to the financial statements and
schedules of The Variable Annuity Life Insurance Company Agents' and Managers'
Thrift Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 1994.
ERNST & YOUNG LLP
June 26, 1995
19
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