<PAGE>
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE, SECURITIES EXCHANGE ACT
OF 1934
for the fiscal year ended December 31, 1993
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
for the transition period from __________ to __________
Commission file number 1-5083
A. Full title of the plan and the address of the plan, if difference
from that of the issuer named below:
THE KANEB SERVICES, INC. SAVINGS INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
KANEB SERVICES, INC.
2400 Lakeside Blvd.
Richardson, Texas 75082
- - --------------------------------------------------------------------------------
<PAGE>
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
- - --------
the Administrator has duly caused this annual report to be signed on its behalf
by the undersigned thereunto duly authorized.
THE KANEB SERVICES, INC.
SAVINGS INVESTMENT PLAN
Date: June 24, 1994 By: /s/ WILLIAM H. KETTLER
--------------------------------
William H. Kettler, Director
Human Resources
(Plan Administrator)
<PAGE>
THE KANEB SERVICES, INC. SAVINGS INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants................................ F-2
Financial Statements:
Statement of Net Assets December 31, 1993........................ F-3
Statement of Net Assets December 31, 1992........................ F-4
Statement of Changes in Net Assets Year Ended December 31, 1993.. F-5
Statement of Changes in Net Assets Year Ended December 31, 1992.. F-6
Notes to Financial Statements.................................... F-7
Supplemental Schedules:
Item 27a - Assets Held for Investment (Schedule I)............... F-10
Item 27d - Reportable Transactions (Schedule II)................. F-11
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Administrator and Participants of The
Kaneb Services, Inc. Savings Investment Plan
In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the net assets of The Kaneb Services,
Inc. Savings Investment Plan at December 31, 1993 and 1992 and the changes in
its net assets for the years then ended, in conformity with generally accepted
accounting principles. 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 of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in Schedules I
and II is presented for purposes of additional analysis and is not a required
part of the basic financial statements but is additional information required by
ERISA. Such information has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
PRICE WATERHOUSE
Dallas, Texas
June 24, 1994
F-2
<PAGE>
THE KANEB SERVICES, INC. SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS
DECEMBER 31, 1993
<TABLE>
<CAPTION>
US
Kaneb Government Fixed
Stock Securities Equity Income Loan
Fund Fund Fund Fund Fund Total
---------- ---------- ---------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investments:
Kaneb Services, Inc.
Common Stock, at market. . . . . . . . . . . . . . . $1,028,183 $ - $ - $ - $ - $1,028,183
TCB-Federal Money Market Fund. . . . . . . . . . . . . 18,916 2,729,850 85,502 28,760 - 2,863,028
TCB-Equity Growth Fund at market . . . . . . . . . . . - - 1,748,185 - - 1,748,185
TCB-Managed Bond Fund at market. . . . . . . . . . . . - - - 560,162 - 560,162
Participants' loans. . . . . . . . . . . . . . . . . . - - - - 395,907 395,907
Accrued interest receivable. . . . . . . . . . . . . . . 50 7,156 1,078 709 - 8,993
Contributions receivable . . . . . . . . . . . . . . . . 154,386 47,828 33,634 12,882 - 248,730
---------- ---------- ---------- -------- --------- ----------
Net Assets . . . . . . . . . . . . . . . . . . . . . $1,201,535 $2,784,834 $1,868,399 $602,513 $395,907 $6,853,188
========== ========== ========== ======== ========= ==========
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
THE KANEB SERVICES, INC. SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS
DECEMBER 31, 1992
<TABLE>
<CAPTION>
US
Kaneb Government
Stock Securities Equity
Fund Fund Fund Total
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
Investments:
Kaneb Services, Inc.
Common Stock, at market. . . . . . . . . $416,543 $ - $ - $ 416,543
TCB-Federal Money Market Fund. . . . . . . 7,670 626,219 11,255 645,144
TCB-Equity Growth Fund at market . . . . . - - 135,250 135,250
Accrued interest receivable. . . . . . . . . 20 1,632 45 1,697
Contributions receivable . . . . . . . . . . 24,682 28,864 5,587 59,133
-------- -------- -------- ----------
Net Assets . . . . . . . . . . . . . $448,915 $656,715 $152,137 $1,257,767
======== ======== ======== ==========
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
THE KANEB SERVICES, INC. SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
US
Kaneb Government Fixed
Stock Securities Equity Income Loan
Fund Fund Fund Fund Fund Total
---------- ---------- ---------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Sponsor. . . . . . . . . . . . . . . . . . . $ 254,541 $ 269,428 $ 32,332 $ 33,807 $ - $ 590,108
Participants . . . . . . . . . . . . . . . . 331,945 221,028 182,312 66,686 - 801,971
---------- ---------- ---------- -------- --------- ----------
Total contributions. . . . . . . . . . . . 586,486 490,456 214,644 100,493 - 1,392,079
---------- ---------- ---------- -------- --------- ----------
Investment income:
Net appreciation (depreciation) in
fair value of assets . . . . . . . . . . . (134,520) - 35,166 (4,063) - (103,417)
Investment income. . . . . . . . . . . . . . 1,173 36,187 14,008 6,083 - 57,451
---------- ---------- ---------- -------- --------- ----------
Net investment income (loss) . . . . . . (133,347) 36,187 49,174 2,020 - (45,966)
---------- ---------- ---------- -------- --------- ----------
Transfers from other qualified plans . . . . . 372,107 1,782,631 1,487,057 500,000 395,907 4,537,702
---------- ---------- ---------- -------- --------- ----------
Total additions. . . . . . . . . . . . . . 825,246 2,309,274 1,750,875 602,513 395,907 5,883,815
---------- ---------- ---------- -------- --------- ----------
Distributions and withdrawals. . . . . . . . . (72,626) (181,155) (34,613) - - (288,394)
---------- ---------- ---------- -------- --------- ----------
Net increase . . . . . . . . . . . . . . . . . 752,620 2,128,119 1,716,262 602,513 395,907 5,595,421
Net assets, beginning of year. . . . . . . . . 448,915 656,715 152,137 - - 1,257,767
---------- ---------- ---------- -------- --------- ----------
Net assets, end of year. . . . . . . . . . . . $1,201,535 $2,784,834 $1,868,399 $602,513 $395,907 $6,853,188
========== ========== ========== ======== ========= ==========
</TABLE>
See Notes to Financial Statements
F-5
<PAGE>
THE KANEB SERVICES, INC. SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1992
<TABLE>
<CAPTION>
US
Kaneb Government
Stock Securities Equity
Fund Fund Fund Total
--------- -------- -------- ----------
<S> <C> <C> <C> <C>
Contributions:
Sponsor. . . . . . . . . . . . . . . . $ 145,148 $174,460 $ - $ 319,608
Participants . . . . . . . . . . . . . 188,068 139,584 66,186 393,838
--------- -------- -------- ----------
Total contributions. . . . . . . . . 333,216 314,044 66,186 713,446
--------- -------- -------- ----------
Investment Income:
Net appreciation (depreciation) in
fair value of assets . . . . . . . . (121,129) - 2,406 (118,723)
Investment income. . . . . . . . . . . 445 18,671 2,732 21,848
--------- -------- -------- ----------
Net investment income (loss) . . . . . (120,684) 18,671 5,138 (96,875)
--------- -------- -------- ----------
Total additions. . . . . . . . . . . 212,532 332,715 71,324 616,571
--------- -------- -------- ----------
Distributions and withdrawals. . . . . . (60,161) (31,183) (13,522) (104,866)
--------- -------- -------- ----------
Net increase . . . . . . . . . . . . . . 152,371 301,532 57,802 511,705
Net assets, beginning of year. . . . . . 296,544 355,183 94,335 746,062
--------- -------- -------- ----------
Net assets, end of year. . . . . . . . . $ 448,915 $656,715 $152,137 $1,257,767
========= ======== ======== ==========
</TABLE>
See Notes to Financial Statements
F-6
<PAGE>
THE KANEB SERVICES, INC. SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
Note 1 - Plan Description
- - -------------------------
The Kaneb Services, Inc. Savings Investment Plan (the "Plan") is a defined
contribution plan for employees of Kaneb Services, Inc. and its wholly-owned
subsidiaries: Fields Financial Services, Inc.; Furmanite America, Inc.; Kaneb
Pipe Line Company; and Viata Corporation, (the "Companies"). The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
("ERISA"). A copy of the Plan Document and amendments is available from the
Plan Administrator. Participants should refer to the Plan Document and
amendments for more detailed information regarding provisions of the Plan.
The Plan was established on April 1, 1991 and permits all full-time employees of
the Companies as of that date, or who become employees thereafter and have
completed one year of service, to contribute 2% to 12% of base compensation on a
pre-tax basis into participant accounts. In addition to a mandatory
contribution equal to 2% of base compensation per year for each plan
participant, the Companies make matching contributions of 25% to 50% of the
amount contributed by a plan participant up to 6% of base compensation.
Employee contributions, together with earnings thereon, are not subject to
forfeiture. That portion of a participant's account balance attributable to the
Companies contributions, together with earnings thereon, will be vested over a
five year period at 20% per year. Participants will be credited with their
prior years of service for vesting purposes, however, no amounts will be accrued
for the accounts of participants, including the Companies executive officers,
for years of service previous to the plan commencement date. Participants may
borrow from the Plan an amount not to exceed the lessor 50% of such
participant's vested account balance or $50,000 reduced by the highest loan
balance in the preceding 12 months. Contributions to the Plan are held in a
Trust and invested by the Plan's Trustee in the investment funds described in
Note 4. The Trustee for the Plan is Texas Commerce Bank - Dallas, N.A. The
Director of Human Resources of Kaneb Services, Inc. serves as the Plan
Administrator. All administrative and trust expenses of the plan are paid by
Kaneb Services, Inc.
Note 2 - Summary of Significant Accounting Policies
- - ---------------------------------------------------
The Plan maintains its accounts on the accrual basis of accounting.
Investments - Investments are recorded in the Plan accounts at market value.
- - -----------
Market value of the Kaneb Stock Fund is based on the quoted market price of
Kaneb's stock at year end. Market value of the remaining funds is based on
estimated values as determined by the Trustee. The appreciation or depreciation
of those investments is recorded as an unrealized increase or decrease in the
Plan's net assets.
Federal income taxes - The Internal Revenue Service has ruled that the Plan
- - --------------------
meets the requirements of Section 401(a) and 401(k) of the Internal Revenue Code
("Code") and that the Trust is exempt from federal income taxes under Section
501(a) of the Code. The Plan has been amended since receiving the determination
letter dated May 18, 1992. However, the Plan Administrator and the Plan's tax
counsel believe that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Code. Under present federal
income tax laws and regulations, a participant will not be subject to federal
income taxes on the contributions made by his employer or withheld from his
compensation under the Plan, or on the interest, dividends or profits on the
sale of securities received by the Plan Trustee, until the participant's account
is distributed or unqualifiedly made available to him.
The code limits contributions to the Plan in several respects. The total amount
deferred by each participant cannot exceed a specified dollar limit which, for
calendar year 1993 was $8,994. Participant compensation in excess of $228,860
is excluded in calculating participant deferrals and employer matching
contributions. Total contributions during any Plan year, including both
participants' deferrals and employer matching contributions, may not exceed the
maximum amount the Company may deduct for federal income tax purposes for the
year. Additional rules apply to prevent discrimination in favor of highly
compensated employees.
Change in Presentation - Certain financial statement items for 1992 have been
- - ----------------------
reclassified to conform with the 1993 presentation.
F-7
<PAGE>
THE KANEB SERVICES, INC. SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
Note 3 - Plan Amendments
- - ------------------------
Effective October 1, 1993, the Plan was amended to increase the allowable
employee contribution percentage from 6% to 12%; add a fourth investment fund
(Fixed Income Fund); add a participant loan provision; increase the ability of
participants to make transfers between funds; grandfather the Plan's vesting
schedule for prior Furmanite America, Inc. plan participants; and to comply with
the Internal Revenue Code changes which were promulgated since the Plan's last
amendment.
Note 4 - Investment Programs
- - ----------------------------
<TABLE>
<CAPTION>
December 31, 1993 December 31, 1992
------------------------ ------------------------
Number Fair Number Fair
of Shares Value of Shares Value
----------- -------- ----------- --------
<S> <C> <C> <C> <C>
Investments at fair value as determined
by quoted market price:
Kaneb common stock. . . . . . . . . . . 357,629.000 $1,028,183 128,167.000 $416,543
----------- ---------- ----------- ----------
Investments at estimated fair value:
TCB - Federal Money Market Fund . . . . - 2,863,028 - 645,144
TCB - Equity Growth Fund. . . . . . . . 26,008.466 1,748,185 2,105.024 135,250
TCB - Managed Bond Fund . . . . . . . . 11,627.416 560,162 - -
Loan Fund . . . . . . . . . . . . . . . - 395,907 - -
----------- ---------- ----------- ----------
37,635.882 $5,567,282 2,105.024 $ 780,394
----------- ---------- ----------- ----------
Total investment at fair value. . . 395,264.882 $6,595,465 130,272.024 $1,196,937
=========== ========== =========== ==========
</TABLE>
Each participant has the option to specify that contributions made through
payroll deductions be invested in any one of, or divided among, the Kaneb Stock
Fund, the U.S. Government Securities Fund, the Equity Fund or the Bond Fund.
Employer contributions are invested in the Kaneb Stock Fund and the U.S.
Government Securities Fund.
Contributions designated to the Kaneb Stock Fund are invested in Kaneb Services,
Inc. Common Stock. The Plan either purchases shares in the open market at the
prevailing market price or shares are contributed directly by the Company based
upon the closing trade price on the last day of each month.
Contributions designated to the U.S. Government Securities Fund are invested in
the Federal Money Market Fund, a fund managed by Texas Commerce Bank, N.A.
Contributions designated to the Equity Fund are invested in the TCB - Equity
Growth Fund, a mutual fund managed by Texas Commerce Bank, N.A.. This fund is
invested primarily in income-producing equity securities considered by the fund
managers to have the potential for capital appreciation.
Contributions designated to the Fixed Income Fund are invested in the TCB-
Managed Bond Fund. This fund is invested primarily in intermediate term U.S.
Government and Corporate Bonds.
Note 5 - Contributions
- - ----------------------
Sponsor contributions to the Kaneb Stock Fund primarily consist of Kaneb Common
Stock with a fair market value at the time of contribution of $241,567 and
$110,853 consisting of 77,341 and 28,674 shares in 1993 and 1992, respectively.
The Sponsor contributed 103,924 and 33,573 shares with a fair market value at
the time of contribution of $323,807 and $126,463 in 1993 and 1992,
respectively, to the Kaneb Stock Fund on behalf of the participants of the Plan.
F-8
<PAGE>
THE KANEB SERVICES, INC. SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
Contributions receivable at December 31, 1993 and 1992 included $104,045 and
$27,932 of employer contributions and contributions withheld from participants
compensation of $144,685 and $31,201, respectively.
Note 6 - Distributions and Withdrawals
- - --------------------------------------
Distributions and withdrawals represent distributions to plan participants who
have retired, terminated employment or applied and qualified for a hardship
distribution.
Distributions payable as of December 31, 1993 and 1992 were $256,932 and
$23,754, respectively.
Note 7 - Forfeitures
- - --------------------
In accordance with provisions of the Plan, forfeitures of participants' equity
in employer contributions totaling $3,337 at December 31, 1993 will be credited
against future employer contributions. Employer matching contributions
forfeited by participants upon withdrawing from the Plan may be credited to
their account upon returning to the Plan if certain requirements are met.
During 1993 and 1992, approximately $37,012 and $49,000 of forfeitures were used
to offset employer contributions, respectively.
Note 8 - Transfers from other Qualified Plans
- - ---------------------------------------------
Effective October 1, 1993, the 401(K) Savings Plan of Furmanite America, Inc.
was terminated and the fair value of its assets of $4,459,976 were transferred
to the Plan. The assets transferred included cash and the balance of
participants' loans at October 1, 1993. In addition, during 1993 certain
participants transferred their account balances totalling $77,726 from
unaffiliated qualified plans to the Plan. These transfers are included in the
transfers from other qualified plans on the Statement of Changes in Net Assets
for the year ended December 31, 1993.
F-9
<PAGE>
SCHEDULE I
----------
KANEB SERVICES INC. SAVINGS INVESTMENT PLAN
ITEM 27a - ASSETS HELD FOR INVESTMENT
December 31, 1993
-----------------
<TABLE>
<CAPTION>
Name of Issuer and Number of Market
Title of Issue Shares Cost Value(a)
- - ------------------ --------- ---- --------
KANEB STOCK FUND
- - ----------------
<S> <C> <C> <C>
Kaneb Services, Inc. Common Stock. . . . . 357,629 $1,309,089 $1,028,183
TCB - Federal Money Market Fund. . . . . . - 18,916 18,916
---------- ----------
$1,328,005 $1,047,099
========== ==========
<CAPTION>
U.S. GOVERNMENT SECURITIES FUND
- - -------------------------------
<S> <C> <C> <C>
TCB - Federal Money Market Fund.... - $2,729,850 $2,729,850
========== ==========
<CAPTION>
EQUITY FUND
- - -----------
<S> <C> <C> <C>
TCB - Equity Growth Fund........... 26,008.466 $1,703,452 $1,748,185
TCB - Federal Money Market Fund.... - 85,502 85,502
---------- ----------
$1,788,954 $1,833,687
========== ==========
<CAPTION>
FIXED INCOME FUND
- - -----------------
TCB - Managed Bond Fund............ 11,627.416 564,226 560,162
TCB - Federal Money Market Fund.... - 28,760 28,760
---------- ----------
$ 592,986 $ 588,922
========== ==========
<CAPTION>
LOAN FUND
- - ---------
Participants' Loans (b)............ $ 395,907 $ 395,907
========== ==========
</TABLE>
(a) Market value represents closing prices at December 31, 1993.
(b) Interest rates ranging from 7% to 11% and maturities of 1 to 5 years.
F-10
<PAGE>
Schedule II
-----------
Kaneb Services, Inc. Savings Investment Plan
Item 27d - Reportable Transactions
For the Year Ended December 31, 1993
------------------------------------
<TABLE>
<CAPTION>
Description
of Purchase Cost of # of
Identify of Party Involved Assets Price Assets Transactions
- - -------------------------- ----------- -------- ------- ------------
<S> <C> <C> <C> <C>
Kaneb Services, Inc. 58,800 shares of 200,743 200,743 1
KSI Common Stock
Kaneb Services, Inc. 33,165 shares of 114,253 114,253 1
KSI Common Stock
Kaneb Services, Inc. 91,965 shares of 314,996 314,996 2
TCB - Equity Growth Fund 23,981.913 Units 1,574,000 1,574,000 10
TCB - Equity Growth Fund 5,212.522 Units 350,000 350,000 1
TCB - Equity Growth Fund 17,249.046 Units 1,125,000 1,125,000 1
TCB - Managed Bond Fund 11,627.416 Units 560,000 560,000 2
TCB - Managed Bond Fund 2,549.408 Units 125,000 125,000 1
TCB - Managed Bond Fund 9,078.008 Units 435,000 435,000 1
</TABLE>
F-11
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-41295) of Kaneb Services, Inc. of our
report dated June 24, 1994, appearing on Page F-2 of this Form 11-K.
PRICE WATERHOUSE
Dallas, Texas
June 28, 1994
