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
For the Year Ended December 31, 1993
Commission File Number 1-3939
Kerr-McGee Corporation Savings Investment Plan
(full title of the Plan)
Kerr-McGee Corporation
Kerr-McGee Center
Oklahoma City, Oklahoma 73102
(Name of the issuer of the securities held pursuant to
the Plan and address of its principal executive office)
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Kerr-McGee Corporation Benefits Committee,
Kerr-McGee Corporation:
We have audited the accompanying Statements of Net Assets
Available for Plan Benefits of the KERR-McGEE CORPORATION
SAVINGS INVESTMENT PLAN (the Plan) as of December 31, 1993
and 1992, and the related Statement of Changes in Net Assets
Available for Plan Benefits for the year ended December 31, 1993.
These financial statements and the schedules referred to below are
the responsibility of the Plan'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 Plan as of December 31, 1993 and 1992, and the
changes in its net assets available for plan benefits for the year
ended December 31, 1993, 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
Schedule of Assets Held for Investment Purposes as of December 31,
1993, and Schedule of Reportable Transactions for the year ended
December 31, 1993, 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. Such schedules
have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements
taken as a whole.
(Arthur Andersen & Co.)
ARTHUR ANDERSEN & CO.
Oklahoma City, Oklahoma,
April 22, 1994
<PAGE>
<TABLE>
KERR-MCGEE CORPORATION SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 1993
(Thousands of dollars)
<CAPTION>
Fund A Fund B Fund C Fund D Fund E
Kerr-McGee Government Interest Equity Equity Loan
Stock Securities Income Growth Income Account Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments-
Fund A - Common stock of Kerr-McGee Corpo-
ration (1,399,014 shares, cost $47,948) $63,305 $ $ $ $ $ $ 63,305
Fund B - U.S. Treasury Securities
(cost $16,072) 16,324 16,324
Fund C - Guaranteed Investment Contracts
with insurance companies (cost $4,837) 4,837 4,837
Fund C - Fidelity Managed Income Portfolio
(8,324,596 units, cost $8,324) 8,324 8,324
Fund D - Units in Fidelity Retirement Growth Fund
(687,808 units, cost $11,146) 12,477 12,477
Fund E - Units in Fidelity Equity Income Fund
(370,983 units, cost $10,362) 12,554 12,554
Loans to participants 11,377 11,377
Short-term investments 612 235 901 75 75 1,898
Total Investments 63,917 16,559 14,062 12,552 12,629 11,377 131,096
Dividends receivable 533 533
Other assets 3 115 118
Due from (to) other funds 399 (314) (250) 132 33
Total assets 64,852 16,245 13,927 12,684 12,662 11,377 131,747
LIABILITIES:
Payables to terminating and withdrawing
participants 5,453 970 1,662 566 803 9,454
Other payables 345 116 210 36 99 806
Total liabilities 5,798 1,086 1,872 602 902 - 10,260
Net assets available for plan benefits $59,054 $15,159 $12,055 $12,082 $11,760 $11,377 $121,487
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
KERR-MCGEE CORPORATION SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 1992
(Thousands of dollars)
<CAPTION>
Fund A Fund B Fund C Fund D Fund E
Kerr-McGee Government Interest Equity Equity Loan
Stock Securities Income Growth Income Account Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments-
Fund A - Common stock of Kerr-McGee Corpo-
ration (1,407,122 shares, cost $47,555) $63,320 $ $ $ $ $ $ 63,320
Fund B - U.S. Treasury Securities
(cost $15,813) 16,158 16,158
Fund C - Guaranteed Investment Contracts
with insurance companies (cost $8,779) 8,779 8,779
Fund C - Fidelity Managed Income Portfolio
(1,552,317 units, cost $1,552) 1,552 1,552
Fund D - Units in Fidelity Retirement Growth Fund
(432,296 units, cost $6,564) 7,107 7,107
Fund E - Units in Fidelity Equity Income Fund
(249,625 units, cost $6,425) 7,242 7,242
Loans to participants 9,397 9,397
Short-term investments 354 329 2,153 74 74 2,984
Total Investments 63,674 16,487 12,484 7,181 7,316 9,397 116,539
Dividends receivable 534 534
Other assets 5 1 1 1 8
Due from (to) other funds (280) 19 (126) 248 139
Total assets 63,933 16,507 12,358 7,430 7,456 9,397 117,081
LIABILITIES:
Payables to terminating and withdrawing
participants 5,720 1,103 1,115 257 504 8,699
Other payables 220 99 69 41 49 478
Total liabilities 5,940 1,202 1,184 298 553 - 9,177
Net assets available for plan benefits $57,993 $15,305 $11,174 $ 7,132 $ 6,903 $ 9,397 $107,904
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
KERR-MCGEE CORPORATION SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the Year Ended December 31, 1993
(Thousands of dollars)
<CAPTION>
Fund A Fund B Fund C Fund D Fund E
Kerr-McGee Government Interest Equity Equity Loan
Stock Securities Income Growth Income Account Total
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 2,131 $ $ $ 85 $ 360 $ $ 2,576
Interest 302 680 922 104 92 2,100
Net appreciation of investments 433 1,870 1,425 3,728
2,866 680 922 2,059 1,877 8,404
Contributions 6,103 2,618 2,296 2,191 1,936 15,144
Total additions 8,969 3,298 3,218 4,250 3,813 23,548
Distributions to terminating and withdrawing
participants 5,498 1,187 1,360 782 896 242 9,965
Loans to participants, net of repayments 1,276 455 250 168 73 (2,222)
Transfers (from) to other funds 1,134 1,802 727 (1,650) (2,013)
Total deductions 7,908 3,444 2,337 (700) (1,044) (1,980) 9,965
Increase (decrease) in net assets 1,061 (146) 881 4,950 4,857 1,980 13,583
Net assets available for plan benefits-
Beginning of year 57,993 15,305 11,174 7,132 6,903 9,397 107,904
End of year $59,054 $15,159 $12,055 $12,082 $11,760 $11,377 $121,487
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
<PAGE>
KERR-McGEE CORPORATION SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 AND 1992
(1) DESCRIPTION OF THE PLAN
General -
The Kerr-McGee Corporation Savings Investment Plan (the Plan)
is a defined contribution plan in which eligible employees of
Kerr-McGee Corporation and its affiliated companies (collectively
referred to as the Company) may participate. The Plan and the
Trust established thereunder (the Trust) were executed on
September 26, 1975, and became fully effective on January 1,
1976.
Effective September 1, 1984, the Plan was amended and
restated, principally to allow participants to defer taxable earnings
through contributions to the Plan as provided for under Section
401(k) of the Internal Revenue Code (the Code), to establish the
Employee Stock Ownership Plan (the ESOP Program) as a part
of the Plan, and to allow participants to borrow from their
accounts within the Plan. The Company ceased contributions to
the ESOP Program after repeal of the income tax credit by the
Tax Reform Act of 1986, and the Savings Investment Plan ESOP
Program shares were distributed to participants.
Effective January 1, 1988, the Plan was amended and restated
for participants not involved in collective bargaining agreements,
principally to add three investment fund options and to provide
for vesting of the participants' share of Company contributions on
the basis of 20% for each completed year of vesting service.
Vesting service is completed years of Company service reduced
in certain limited situations as defined by the Plan.
Effective January 1, 1990, the Plan was amended and restated
principally to allow employer matching contributions to be made
to the Employee Stock Ownership Plan (ESOP), which was
established in September 1989. The amendment applies only to
participants who are not members of collective bargaining units
and provides that all matching contributions are made to the
ESOP and are invested in Kerr-McGee Corporation common
stock. The ESOP is not part of the Plan; therefore, the employer
contributions to the ESOP and the ESOP assets and earnings
are not included in the Plan's accompanying financial statements.
The amendment also increased the maximum Company
matching contribution to 6% of salary, increased the maximum
employee contribution to 15% of salary, and allowed employees
to participate in the Plan from their initial date of employment.
The participants' contributions to the Plan and earnings thereon
are fully vested at all times. After the January 1, 1988,
amendment, the participants' share of the Company contributions
and earnings thereon vest on the basis of 20% for each
completed year of service. Company contributions are fully
vested in the event of retirement, death, or disability. Forfeitures
may be used to reduce Company contributions or to pay
expenses of administration.
The Plan or any portion thereof may be discontinued by the
Board of Directors of the Company. In the event of such
discontinuance or other termination of the Plan, each participant
shall be fully vested.
The Plan is administered by the Kerr-McGee Corporation Benefits
Committee (the Committee), which is appointed by the Board of
Directors of the Company. Accounting and administration for the
Plan are provided by the Company at no cost to the Plan. In
addition, all expenses of the Trust are borne by the Company.
The following is a description of the funds and the number of
participants in each of these funds at December 31, 1993 and
1992:
<TABLE>
<CAPTION>
Fund 1993 1992
<S> <C> <C> <C>
A Kerr-McGee Stock Fund - common stock of the Company. 2,680 2,719
B U.S. Government Securities Fund - obligations issued or
guaranteed by the United States Government. 1,458 1,695
C Interest Income Fund - guaranteed investment contracts
and other investment contracts issued by insurance
companies, banks, and other financial institutions. 1,211 1,280
D Equity Growth Fund - shares of stock of companies that
are believed to have the potential for strong capital growth. 1,391 1,065
E Equity Income Fund - stock, bonds, and convertible
debentures of companies that have had stable profit levels
and a record of high dividends. 1,365 1,052
</TABLE>
Effective January 1, 1993, the Guaranteed Investment Contract
Fund was renamed the Interest Income Fund. Prior to December
1992, holdings in this fund consisted of guaranteed investment
contracts issued by insurance companies. Since December
1992, funds from maturing contracts and contribu- tions are
invested in a managed income portfolio consisting of a
commingled pool of investment contracts issued by insurance
companies and other approved institutions.
The U.S. Government Securities Fund, Interest Income Fund,
Equity Growth Fund, and Equity Income Fund are entirely
participant-directed. The Kerr-McGee Stock Fund consists of
both participant-directed investments and Company matching
contributions as follows:
<TABLE>
<CAPTION>
Participant- Company Total
(Dollars in thousands) Directed Matching Fund
<S> <C> <C> <C> >
1993
Market Value $ 40,622 $ 22,683 $ 63,305
Shares 897,717 501,297 1,399,014
1992
Market Value $ 39,721 $ 23,599 $ 63,320
Shares 882,693 524,429 1,407,122
</TABLE>
SMART and CAPITAL Savings Programs -
Since the amendment of September 1, 1984,
participants who are not members of collective
bargaining units participate in the Plan under the
SMART and CAPITAL Savings Programs. This
encompasses most of the participants in the Plan.
These participants may direct their savings, up to
a maximum of 15% of salary, to be invested
among one or more of Funds A through E in 1%
increments. Since the amendment of January 1,
1990, the Company matches the participant's
contribution to the Plan, limited to 6% of the
participant's salary. All Company contributions are
made to the ESOP and invested in Kerr-McGee
Corporation common stock.
Contributions to the SMART Savings Program are
from a participant's salary, before income taxes.
The participant's income taxes on the pre-tax
contributions are deferred until the contributions
are distributed after termination or at the time of
hardship withdrawal. The annual SMART Savings
Program contribution limitation is subject to annual
adjustments for inflation and was $8,994 for 1993
in accordance with the Code. Participant
contributions in excess of this amount are
considered to be contributions to the CAPITAL
Savings Program.
Contributions to the CAPITAL Savings Program
are from a participant's salary, after income taxes.
If a participant has authorized less than 15% of his
salary to be contributed to the SMART Savings
Program, he may contribute the remaining whole
percentages up to 15% to the CAPITAL Savings
Program. Participant contributions may be
invested in the same proportions and the same
funds as outlined above for the SMART Savings
Program. The maximum contributions allowed to
each program may be limited for highly
compensated employees, depending upon the
balance of contributions at all pay levels.
For employees who are members of collective
bargaining units whose agreements provide for
participation in the Plan under the terms and
conditions in effect subsequent to January 1,
1988, the Company matches the participant's
contribution to the Plan, limited to 3% of the
participant's salary. All matching contributions are
deposited in Fund A and invested in Kerr-McGee
Corporation common stock. These participants
may contribute up to 15% of their salary to either
the SMART or CAPITAL Savings Program.
A participant may borrow from the Plan against his
contributions to the SMART and CAPITAL Savings
Programs and against his vested interest in
Company contributions. By administrative rule
established by the Committee, effective April 1,
1990, new loans to participants bear interest at a
fixed rate equal to the national average interest
rate for five-year certificates of deposit (as
published in The Wall Street Journal), plus 1.5%.
Such interest is credited to the participant's
accounts in the Plan when repaid. The average
interest rate for new loans, which is adjusted
quarterly, was 6.5% for 1993. The minimum loan
amount, determined periodically by the
Committee, is currently $1,000. The maximum
amount of all loans to a participant under the Plan
and any other plans of any employer may not
exceed the lesser of (a) $50,000, reduced by an
amount equal to the difference between (i) the
participant's highest loan balance under the Plan
during the one-year period ending on the day
before the date on which such loan is made and
(ii) the outstanding loan balance of the participant
under the Plan on the date on which such loan
was made or (b) one-half the current value of the
participant's vested interest in his accounts.
Loans must be repaid within five years, with
certain special provisions available for military
reservists called to active duty. In the event of a
participant's termination of employment and
subsequent default on the loan, any outstanding
balance will be considered a withdrawal and will
be taxable to the participant as prescribed by the
Code.
Regular Savings Program -
The Regular Savings Program is a continuation of
the Plan as it existed prior to the September 1,
1984, amendment. It is for those participants who
are members of collective bargaining units whose
agreements provide for participation in the Plan
under the terms and conditions in effect
immediately prior to September 1, 1984.
Under the provisions of the Plan, a Regular
Savings Program participant may contribute up to
10% of his salary to the Plan and may direct that
his contributions be entirely deposited in Fund A
or Fund B or allocated between Fund A and Fund
B. The Company contributes amounts equal to
one-half of the participant's contributions, limited
to 3% of the participant's salary. The Company
contributions are all deposited in Fund A and
invested in common stock of Kerr-McGee
Corporation.
A Regular Savings Program participant may
withdraw his contributions to the program at any
time, together with earnings credited thereto. The
vested interest in the Company contributions may
be withdrawn, except that a participant who has
not been a participant for at least five years may
not make withdrawals in excess of the
contributions (and related earnings) made by the
Company to such account two or more years prior
to the withdrawal date.
(2) SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been
prepared on the accrual basis of accounting.
Investments are accounted for on the market value
basis, except for the guaranteed investment
contracts issued by insurance companies in the
Interest Income Fund, which are accounted for at
contract value. Payments to terminating and
withdrawing participants are accounted for on the
market value basis.
(3) TAX STATUS
The Plan obtained its latest determination letter on
March 17, 1992, in which the Internal Revenue
Service stated that the Plan and Trust qualify
under Section 401(a) and are entitled to
exemption from Federal income taxes under
Section 501(a) of the Code.
Participants on whose behalf Company
contributions are made are not taxed on the
amounts contributed by the Company or on any
income earned thereon until the receipt of a
distribution pursuant to the terms of the Plan. The
taxation of income earned on assets of the Plan
attributable to participants' contributions to the
Plan as well as contributions to the SMART
Savings Program is also deferred until distributed.
Federal income taxes applicable to participants or
their beneficiaries upon distribution are prescribed
by the Code.
(4) DISTRIBUTIONS TO PARTICIPANTS
Distributions to participants are recorded at the
approximate market value as of the date of
distribution. Nonvested Company contributions
are forfeited upon termination of employment
(unless termination occurs because of retirement,
disability, death, or in certain circumstances when
the Company deems the contributions to be fully
vested), except that if the participant is re-
employed within a specified period such amounts
are re-allocated to the employee.
Forfeitures are reflected as reductions of Company
contributions in the period in which they reduce
such contributions. Forfeitures may be re-
allocated to terminated employees upon their re-
employment, in which case the Company will fund
such re-allocated amounts.
Terminating participants with more than $3,500 in
the Plan may defer distribution until age 70-1/2.
Investments relating to these participants remain
in the Trust until the terminated participant
requests distribution. Participants who defer
distribution continue to share in earnings and
losses of the Plan. Accordingly, investment
earnings or losses and net changes in the market
value of the investments subsequent to deferral
are included in total additions and offset in
distributions to terminating and withdrawing
participants in the Statement of Changes in Net
Assets Available for Plan Benefits. At December
31, 1993 and 1992, payables to terminating and
withdrawing participants in the Statement of Net
Assets Available for Plan Benefits included
$8,957,000 and $7,750,000, respectively,
applicable to the deferred distributions.
(5) LOANS TO PARTICIPANTS
Loan activity during 1993 and 1992 is set forth below:
<TABLE>
<CAPTION>
(Thousands of dollars) 1993 1992
<S> <C> <C> >
Balance at beginning of year $ 9,397 $ 8,793
New loans 7,200 5,694
Principal repayments (4,978) (4,501)
Loans included as distributions
to terminated participants (242) (589)
Balance at end of year $ 11,377 $ 9,397
</TABLE>
Interest income applicable to these loans during
1993 was $740,000, which is reported as interest
income in the funds to which the participant is
currently contributing.
(6) CONTRIBUTIONS
The amounts contributed to the Plan during 1993
by employees of each employer and by each
employer were as follows:
<TABLE>
<CAPTION>
Employee Employer
(Thousands of dollars) Contributions Contributions
<S> <C> <C> >
Kerr-McGee Corporation $ 5,407 $ -
Kerr-McGee Refining Corporation 1,638 164
Kerr-McGee Chemical Corporation 2,976 36
Kerr-McGee Coal Corporation 3,398 -
Cato Oil & Grease Company 338 -
Southwestern Refining Company, Inc. 882 237
Cimarron Corporation 71 -
14,710 437
Less: Forfeitures - (3)
$ 14,710 $ 434
</TABLE>
The company's matching contribution for most
participants is made to the ESOP. During 1993,
this matching contribution totaled $10,336,000.
Common stock of the Company held by the ESOP
and allocated to participants' accounts totaled
831,696 shares with a market value of $37,634,000
at December 31, 1993.
The following are filed under cover of Form SE:
Item 27a - Schedule of Assets Held for Investment Purposes
Item 27d - Schedule of Reportable Transactions
<PAGE>
EXHIBIT
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the
incorporation of our report dated April 22, 1994, included in the
Kerr-McGee Corporation Savings Investment Plan 1993 annual report
in this Form 11-K, into the Company's previously filed Form S-8's
numbered 2-85844 and 33-18268.
(ARTHUR ANDERSEN & CO.)
ARTHUR ANDERSEN & CO.
Oklahoma City, Oklahoma,
May 4, 1994
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Kerr-McGee Corporation Benefits Committee has duly
caused this annual report to be signed by the undersigned thereunto
duly authorized.
KERR-McGEE CORPORATION SAVINGS INVESTMENT PLAN
By (John C. Linehan)
John C. Linehan
Chairman of the Kerr-McGee Corporation
Benefits Committee
Date: May 10, 1994
