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
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED].
For the fiscal year ended December 31, 1995.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]. For the transition period from ____________ to
____________.
Commission File Number 1-4235.
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
AMP Incorporated Employee Savings and Thrift Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
AMP Incorporated
470 Friendship Road
Harrisburg, Pennsylvania 17111
Includes an Exhibit Index
REQUIRED INFORMATION
The AMP Incorporated Employee Savings and Thrift Plan (the "Plan") is a plan
that is subject to the Employee Retirement Income Security Act of 1974
("ERISA"), and therefore the Plan is providing, as Exhibit 1 hereto, Plan
financial statements and schedules prepared in accordance with the financial
reporting requirements of ERISA. These financial statements include audited
statements of net assets available for benefits at December 31, 1995 and
December 31, 1994, and audited statements of changes in net assets available for
benefits for the fiscal year ended December 31, 1995.
The Plan financial statements have been examined by Arthur Andersen LLP. A
currently dated and manually signed written consent of Arthur Andersen LLP with
respect to the Plan financial statements that relate to the fiscal year ended
December 31, 1995, and the Plan financial statements themselves, have been
incorporated by reference in a Registration Statement on Form S-8 under the
Securities Act of 1933, as amended. This written consent of Arthur Andersen LLP
is provided as Exhibit 2 to this annual report.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMP Incorporated Employee Savings
and Thrift Plan (the "Plan")
AMP Incorporated (Plan Administrator)
/s/ Philip G. Guarneschelli
Date: June 27, 1996 By:_______________________________
Philip G. Guarneschelli
Vice President,
Chief Human Resource Officer
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
1 Audited financial statements for AMP Incorporated
Employee Savings and Thrift Plan
2 Consent of Independent Public Accountants
AMP INCORPORATED EMPLOYEE SAVINGS AND
THRIFT PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND 1994
TOGETHER WITH AUDITORS' REPORT
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1995 AND 1994
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December 31,
1995 and 1994
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1995
Notes to Financial Statements
SCHEDULES:
Schedule I -- Item 27(A) -- Schedule of Investments as of December 31,
1995
Schedule II -- Item 27(D) -- Schedule of Reportable Transactions for the
Year Ended December 31, 1995
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrator of the
AMP Incorporated Employee Savings and Thrift Plan:
We have audited the accompanying statements of net assets available for benefits
of the AMP Incorporated Employee Savings and Thrift Plan as of December 31, 1995
and 1994, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1995. 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 as of
December 31, 1995 and 1994, and the changes in net assets available for benefits
for the year ended December 31, 1995 in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
accompanying index are presented for the purpose 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 statements 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 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.
/s/ Arthur Andersen LLP
Philadelphia, PA
June 20, 1996
<TABLE>
<CAPTION>
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
| The Vanguard Group Funds
------------------------
Money Market Index Trust
ASSETS Total Prime Wellington 500 Windsor II PrimeCap
------ ----- ------------ ---------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS, at market
(Notes 2 and 3):
Commingled trusts $ 228,523,475 $ 16,694,265 $ 27,135,443 $ 100,840,348 $ 21,636,242 $ 43,572,956
Common stock 56,375,561 -- -- -- -- --
Participant loans
(Note 1) 27,578,514 -- -- -- -- --
---------- ---------- ---------- ----------- ---------- ----------
312,477,550 16,694,265 27,135,443 100,840,348 21,636,242 43,572,956
----------- ---------- ---------- ----------- ---------- ----------
DEPOSITS WITH
INSURANCE COMPANIES,
at contract value
(Notes 2 and 4) 197,382,184 -- -- -- -- --
----------- ---------- ---------- ----------- ---------- ----------
Total investments 509,859,734 16,694,265 27,135,443 100,840,348 21,636,242 43,572,956
----------- ---------- ---------- ----------- ---------- ----------
RECEIVABLES:
Employer contributions
(Note 1) 184,071 4,899 10,703 24,462 8,285 16,820
Employee deposits
(Note 1) 606,978 18,568 44,990 113,744 36,933 75,120
Accrued interest and
dividends 3,830 -- -- -- -- --
Other 528,975 -- -- -- -- --
------- ---------- ---------- ----------- ---------- ----------
Total receivables 1,323,854 23,467 55,693 138,206 45,218 91,940
--------- ------ ------ ------- ------ ------
TOTAL ASSETS 511,183,588 16,717,732 27,191,136 100,978,554 21,681,460 43,664,896
----------- ---------- ---------- ----------- ---------- ----------
LIABILITIES
-----------
PAYABLES:
Investments purchased (744,887) -- -- -- -- --
-------- ---------- ---------- ----------- ---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 510,438,701 $ 16,717,732 $ 27,191,136 $ 100,978,554 $ 21,681,460 $ 43,664,896
============= ============= ============= ============= ============= =============
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
CONTINUED
The Vanguard Group Funds|
------------------------
World Fund AMP Fixed AMP Stock
U.S. Growth Income Fund Fund Loan Fund
----------- ----------- --------- ---------
ASSETS
------
INVESTMENTS, at market
(Notes 2 and 3):
Commingled trusts $ 16,256,998 $ 1,844,368 $ 542,855 $ --
Common stock -- -- 56,375,561 --
Participant loans
(Note 1) -- -- -- 27,578,514
---------- --------- ---------- ----------
16,256,998 1,844,368 56,918,416 27,578,514
---------- --------- ---------- ----------
DEPOSITS WITH
INSURANCE COMPANIES,
at contract value
(Notes 2 and 4) -- 197,382,184 -- --
---------- ----------- ---------- ----------
Total investments 16,256,998 199,226,552 56,918,416 27,578,514
---------- ----------- ---------- ----------
RECEIVABLES:
Employer contributions
(Note 1) 6,999 75,622 36,281 --
Employee deposits
(Note 1) 30,261 253,649 33,713 --
Accrued interest and
dividends -- -- 3,830 --
Other -- -- 521,615 7,360
------ ------- ------- -----
Total receivables 37,260 329,271 595,439 7,360
------ ------- ------- -----
TOTAL ASSETS 16,294,258 199,555,823 57,513,855 27,585,874
---------- ----------- ---------- ----------
LIABILITIES
-----------
PAYABLES:
Investments purchased -- -- (744,887) --
---------- ----------- -------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 16,294,258 $ 199,555,823 $ 56,768,968 $ 27,585,874
============= ============= ============= =============
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
<TABLE>
<CAPTION>
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994
| The Vanguard Group Funds
------------------------
Money Market Index Trust
ASSETS Total Prime Wellington 500 Windsor II PrimeCap
------ ----- ------------ ---------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS, at market
(Notes 2 and 3):
Commingled trusts $ 163,323,979 $ 15,730,883 $ 17,782,267 $ 73,277,630 $ 14,270,871 $ 17,910,770
Common stock 36,100,732 -- -- -- -- --
Participant loans
(Note 1) 23,789,159 -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
223,213,870 15,730,883 17,782,267 73,277,630 14,270,871 17,910,770
----------- ---------- ---------- ---------- ---------- ----------
DEPOSITS WITH
INSURANCE COMPANIES,
at contract value
(Notes 2 and 4) 189,813,480 -- -- -- -- --
----------- ---------- ---------- ---------- ---------- ----------
Total investments 413,027,350 15,730,883 17,782,267 73,277,630 14,270,871 17,910,770
----------- ---------- ---------- ---------- ---------- ----------
RECEIVABLES:
Employer contributions
(Note 1) 166,591 5,510 8,785 22,717 6,591 9,080
Employee deposits
(Note 1) 523,356 20,552 35,544 100,488 28,059 39,091
Accrued interest and
dividends 4,435 -- -- -- -- --
Other 101,001 -- -- -- -- --
------- ------ ------ ------- ------ ------
Total receivables 795,383 26,062 44,329 123,205 34,650 48,171
------- ------ ------ ------- ------ ------
TOTAL ASSETS 413,822,733 15,756,945 17,826,596 73,400,835 14,305,521 17,958,941
----------- ---------- ---------- ---------- ---------- ----------
LIABILITIES
-----------
PAYABLES:
Investments purchased (77,996) -- -- -- -- --
------- ---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 413,744,737 $ 15,756,945 $ 17,826,596 $ 73,400,835 $ 14,305,521 $ 17,958,941
============= ============= ============= ============= ============= =============
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994
CONTINUED
The Vanguard Group Funds|
------------------------
World Fund AMP Fixed AMP Stock
ASSETS U.S. Growth Income Fund Fund Loan Fund
------ ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
INVESTMENTS, at market
(Notes 2 and 3):
Commingled trusts $ 8,836,436 $ 15,506,216 $ 8,906 $ --
Common stock -- -- 36,100,732 --
Participant loans
(Note 1) -- -- -- 23,789,159
--------- ---------- ---------- ----------
8,836,436 15,506,216 36,109,638 23,789,159
--------- ---------- ---------- ----------
DEPOSITS WITH
INSURANCE COMPANIES,
at contract value
(Notes 2 and 4) -- 189,813,480 -- --
--------- ----------- ---------- ----------
Total investments 8,836,436 205,319,696 36,109,638 23,789,159
--------- ----------- ---------- ----------
RECEIVABLES:
Employer contributions
(Note 1) 5,845 75,390 32,673 --
Employee deposits
(Note 1) 22,217 253,747 23,658 --
Accrued interest and
dividends -- 1,170 3,265 --
Other -- -- 100,800 201
------ ------- ------- ---
Total receivables 28,062 330,307 160,396 201
------ ------- ------- ---
TOTAL ASSETS 8,864,498 205,650,003 36,270,034 23,789,360
--------- ----------- ---------- ----------
LIABILITIES
-----------
PAYABLES:
Investments purchased -- -- (77,996) --
--------- ----------- ------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 8,864,498 $ 205,650,003 $ 36,192,038 $ 23,789,360
============= ============= ============= =============
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
<TABLE>
<CAPTION>
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
| The Vanguard Group Funds
------------------------
Money Market Index Trust
Total Prime Wellington 500 Windsor II PrimeCap
----- ------------ ---------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Investment income-
Net appreciation
in market value of
investments (Note 3) $ 46,156,023 $ -- $ 4,654,940 $ 24,403,524 $ 4,175,343 $ 7,061,777
Interest and dividends 22,699,410 836,086 1,248,979 2,290,889 1,214,518 1,253,730
---------- ------- --------- --------- --------- ---------
68,855,433 836,086 5,903,919 26,694,413 5,389,861 8,315,507
---------- ------- --------- ---------- --------- ---------
Contributions and deposits
(Note 1)
Employer 11,056,969 756,040 649,066 1,606,474 473,377 874,838
Employees 41,117,454 3,248,600 2,874,471 7,871,128 2,216,593 4,229,643
---------- --------- --------- --------- --------- ---------
52,174,423 4,004,640 3,523,537 9,477,602 2,689,970 5,104,481
---------- --------- --------- --------- --------- ---------
Total additions 121,029,856 4,840,726 9,427,456 36,172,015 8,079,831 13,419,988
----------- --------- --------- ---------- --------- ----------
DEDUCTIONS:
Payments to participants 24,297,593 911,792 694,381 3,265,195 382,152 825,727
Loan maintenance fees 55,250 9,530 6,160 12,220 1,670 1,950
------ ----- ----- ------ ----- -----
Total deductions 24,352,843 921,322 700,541 3,277,415 383,822 827,677
---------- ------- ------- --------- ------- -------
INTERFUND TRANSFERS--NET -- (2,959,514) 636,728 (5,317,797) (320,514) 13,102,701
ASSETS TRANSFERRED IN 16,951 897 897 916 444 10,943
------ --- --- --- --- ------
Net additions
(deductions) 96,693,964 960,787 9,364,540 27,577,719 7,375,939 25,705,955
---------- ------- --------- ---------- --------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 413,744,737 15,756,945 17,826,596 73,400,835 14,305,521 17,958,941
----------- ---------- ---------- ---------- ---------- ----------
End of year $ 510,438,701 $ 16,717,732 $ 27,191,136 $ 100,978,554 $ 21,681,460 $ 43,664,896
============= ============= ============= ============= ============= =============
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
The Vanguard Group Funds|
------------------------
World Fund AMP Fixed AMP Stock
U.S. Growth Income Fund Fund Loan Fund
----------- ----------- --------- ---------
ADDITIONS:
Investment income-
Net appreciation
in market value of
investments (Note 3) $ 3,143,025 $ -- $ 2,717,414 $ --
Interest and dividends 661,467 12,010,105 1,181,667 2,001,969
------- ---------- --------- ---------
3,804,492 12,010,105 3,899,081 2,001,969
--------- ---------- --------- ---------
Contributions and deposits
(Note 1)
Employer 437,188 3,766,917 2,493,069 --
Employees 1,864,842 16,355,362 2,456,815 --
--------- ---------- --------- ---------
2,302,030 20,122,279 4,949,884 --
--------- ---------- --------- ---------
Total additions 6,106,522 32,132,384 8,848,965 2,001,969
--------- ---------- --------- ---------
DEDUCTIONS:
Payments to participants 291,685 15,655,159 1,765,749 505,753
Loan maintenance fees 2,220 20,680 820 --
----- ------ --- -------
Total deductions 293,905 15,675,839 1,766,569 505,753
------- ---------- --------- -------
INTERFUND TRANSFERS--NET 1,616,699 (22,552,875) 13,494,274 2,300,298
ASSETS TRANSFERRED IN 444 2,150 260 --
--- ----- --- ---------
Net additions
(deductions) 7,429,760 (6,094,180) 20,576,930 3,796,514
--------- ---------- ---------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 8,864,498 205,650,003 36,192,038 23,789,360
--------- ----------- ---------- ----------
End of year $ 16,294,258 $ 199,555,823 $ 56,768,968 $ 27,585,874
============= ============= ============= =============
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
1. DESCRIPTION OF PLAN:
-------------------
The following description of the AMP Incorporated Employee Savings and
Thrift Plan (the Plan) provides only general information. Participants
should refer to the Plan document for a more complete description of the
Plan's provisions.
General
-------
The Plan was established effective January 1, 1982 for the benefit of the
employees of AMP Incorporated (the Company) and certain subsidiaries and
was subsequently amended on numerous occasions, most recently effective as
of May 15, 1996.
The Plan is a contributory defined contribution plan covering all employees
of the Company and certain subsidiaries who have attained age 21 and
completed one year of service. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
The Vanguard Fiduciary Trust Company is the trustee of the
Plan.
Contributions
-------------
Participants may defer up to 4% of their gross earnings as a "deferred
basic deposit" and up to an additional 11 % as a "deferred supplemental
deposit." The Company's matching contribution to the Plan is 60% of the
participant's "deferred basic deposit" which is paid out of the Company's
current and accumulated earnings.
Forfeitures in any given year are used to reduce Company matching
contributions to the Plan in the following year. Forfeitures from 1994
reducing 1995 Company contributions amounted to $84,480. Forfeitures from
1995 amounted to $114,232 and will be applied against Company contributions
in 1996.
Investment Elections
--------------------
Participants may elect to invest their deferred basic, deferred
supplemental deposits and Company matching contributions in one or more of
the available funds, which are the Money Market Prime, Wellington, Index
Trust 500, Windsor II, PrimeCap, World Fund U.S. Growth, AMP Fixed Income
and AMP Stock Fund. Effective May 15, 1996, the Vanguard International
Growth Portfolio and the T. Rowe Price New Horizons Fund were added as two
additional available investment funds under the Plan. A participant
investing in the T. Rowe Price New Horizons Fund will be charged .05% of
his or her fund balance per quarter as a direct investment fee, which will
be deducted from the fund balance each quarter. No similar charge applies
with respect to the other available funds.
Participant's Accounts Page 2
----------------------
Each participant's account is credited with the participant's deposits and
Company matching contributions and an allocation of the funds' earnings in
which the participant participates. Certain participants in the Plan are of
an inactive status at year end due to termination or retirement. The number
of inactive participants as of December 31, 1995 and 1994 is 3,114 and
2,504 of the total 17,587 and 16,278, respectively.
Vesting
-------
Participants are immediately vested in their deferred basic and deferred
supplemental deposits plus actual earnings thereon. Company matching
contributions and earnings become 100% vested after five years of
continuous service by a participant. Immediate vesting of Company matching
contributions occurs upon a participant's termination by retirement,
disability, death or attainment of age 65.
Payments to Participants
------------------------
Deferred basic deposits and deferred supplemental deposits cannot be
withdrawn prior to the attainment of age 59 1/2, except in the case of a
"financial hardship." Vested Company matching contributions held under the
Plan for at least two years and earnings thereon can be withdrawn any time
at the request of the participant.
Partial or total withdrawal of pre-1983 basic deposits, supplemental
deposits, Company matching contributions and earnings by a participant is
permitted at his or her request, subject to a minimum withdrawal of $100.
Loans to Participants
---------------------
Loans against a participant's account balances are secured by a promissory
note which bears a fixed interest rate of 1% over the prime rate. The term
of the loan is limited to five years and repayment is made through payroll
deductions in level amounts over the life of the loan. There are
limitations as to the amount that may be borrowed, and prepayment of a loan
is allowed. All loans requested prior to December 31, 1995 and 1994 were
disbursed to participants by that date.
Administrative Expenses
-----------------------
All expenses incurred in the administration of the Plan are paid by the
Company and amounted to $434,753 for the year ended December 31, 1995.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Basis of Accounting
-------------------
The accompanying financial statements have been prepared using the accrual
basis of accounting.
Page 3
On January 1, 1995, the Plan adopted The American Institute of Certified
Public Accountants' Statement of Position 94-4, "Reporting of Investment
Contracts Held by Health and Welfare Benefit Plans and Defined Contribution
Pension Plans" (SOP 94-4). The adoption of SOP 94-4 had no impact on the
accompanying financial statements as all of the guaranteed investment
contracts held by the Plan are fully benefit-responsive and are valued
under SOP 94-4 at contract value, which is the same basis used by the Plan
in prior years. A fully benefit-responsive investment contract is one that
provides a liquidity guarantee by a financially responsible third party of
principal and previoulsy accrued interest for liquidations, transfers or
loans initiated by plan participants exercising their rights to withdraw or
borrow under the terms of the Plan.
Valuation of Investments
------------------------
Investments, except for the deposits with insurance companies that are
carried at contract value, are stated at market value, which is equivalent
to current value as of the statement date.
Tax Status
----------
The trust established under the AMP Incorporated Employee Savings and
Thrift Plan is qualified under the Internal Revenue Code as exempt from
federal income taxes under Section 501(a). Although the Plan has a
favorable determination letter from the Internal Revenue Service (IRS)
maintaining the Plan's qualified status under Section 401(a) and 401(k),
the Plan has been recently amended and an application for an updated
determination letter from the IRS is pending. The Plan sponsor and legal
counsel are of the opinion that the Plan, as amended and administered,
meets the IRS requirements and, therefore, the trust continues to be tax
exempt.
Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. INVESTMENTS:
------------
All Plan investments are held by a trust company administered trust fund
and consist of shares of various Vanguard mutual funds, AMP stock, loans
receivable and deposits with insurance companies (Note 4). The following is
a list of assets which exceed 5% of net assets at December 31, 1995 and
1994.
DESCRIPTION OF
SECURITY DECEMBER 31, 1995 DECEMBER 31, 1994
-------------- ------------------------- -------------------------
No. of Market or No. of
Shares or Contract Shares or Market or
Principal Value Principal Contract
Amount Amount Value
---------- ------------ ---------- ------------
Money Market Prime 19,081,488 $ 19,081,488 31,246,005 $ 31,246,005
Wellington 1,110,743 27,135,443 917,084 17,782,267
Index 500 Fund 1,750,700 100,840,348 1,705,321 73,277,630
Prime Cap 1,661,188 43,572,956 896,435 17,910,770
AMP Common Stock 1,469,070 56,375,561 992,460 36,100,732
Loans Receivable 27,578,514 27,578,514 23,789,159 23,789,159
Page 4
The AMP common stock shares above reflect the effect of the 2-for-1 stock
split that was effected March 2, 1995.
4. DEPOSITS WITH INSURANCE COMPANIES:
----------------------------------
The Plan has entered into guaranteed investment contracts with various
insurance companies (Insurance Companies). Under the terms of the
contracts, which are all fully benefit- responsive contracts, the Insurance
Companies received all plan year Fixed Income Fund deposits and
contributions, or in the case of rollovers, a lump-sum deposit, which they
maintain in plan reserve accounts until maturity. At maturity, the balances
with interest will be returned to the Plan. The accounts are credited with
interest at fixed rates for the respective periods and charged for plan
withdrawals and loans. The contracts are included in the financial
statements as of December 31, 1995 and 1994 at contract values, as reported
to the Plan by the Insurance Companies. The estimated fair market value of
the guaranteed investment contract portfolio, as of December 31, 1995 was
$200,225,000. The aggregate average yield for the Plan's guaranteed
investment contract portfolio was 6.00% and 5.99% for the years ended
December 31, 1995 and 1994, respectively. The crediting interest rate for
the Plan's guaranteed investment contract portfolio was 6.01% and 5.90% as
of December 31, 1995 and 1994, respectively. There were no valuation
allowances against contract values as of December 31, 1995 and 1994.
Included in the Plan's guaranteed investment contract portfolio as of
December 31, 1995 are two synthetic investment contracts. These contracts
were entered in 1995, with Deutsche Bank and Union Bank of Switzerland, and
operate in a manner similar to a guaranteed investment contract, except
that the assets are placed in a trust (with ownership by the Plan) rather
than in a separate account of the issuer. Also, a financially responsible
third party issues a wrapper contract that provides that the participant
execute Plan transactions at contract value. These contracts are included
in the financial statements at contract values reported to the Plan of
$22,905,043 at December 31, 1995. The market value of the underlying assets
held in trust at December 31, 1995 was $23,607,829.
During 1992, the investment manager for the Plan's Fixed Income Fund
invested $10,000,000 in Confederation Life Insurance Company's
(Confederation Life) Guaranteed Investment Contract Number 62682. This
contract provides for a rate of return of 6.16%, and is due to mature on
June 29, 1997. As of December 31, 1995 and 1994, the Plan's GIC investment
with Confederation Life had a gross recorded contract value of $10,082,223.
On August 12, 1994, the U.S. assets of Confederation Life were placed under
the regulatory supervision of the Michigan Commissioner of Insurance, and
GIC payments by Confederation Life were suspended. No interest has been
paid under the Plan's Confederation Life contract since this time, and it
is not known when interest payments will re-commence.
To enable the Plan's Trustee to continue to hold the Confederation Life GIC
as a non-segregated asset of the Fixed Income Fund and to permit Plan
participants to continue Fixed Income Fund transactions as usual, the
Company has agreed to back the GIC's gross recorded contract value,
provided such is approved by applicable governmental agencies.
Page 5
5. PLAN TERMINATION
----------------
The Company anticipates continuing the Plan indefinitely, but reserves the
right to reduce, suspend or discontinue its contributions at any time and
to discontinue or partially terminate the Plan subject to the provisions of
ERISA. In the event of Plan termination, participants will become 100%
vested in their accounts.
6. DISTRIBUTIONS TO PARTICIPANTS:
------------------------------
Distributions to participants are generally made as soon as practical after
a request is received by the trustee. There were no distributions due
participants at December 31, 1995 and 1994.
<TABLE>
<CAPTION>
Schedule I
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
EIN #23-0332575
PIN #003
ITEM 27(A) -- SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
Number of Shares Market Value
or or
DESCRIPTION OF SECURITY Principal Amount Cost Contract Value
- ----------------------- ---------------- ---- --------------
<S> <C> <C> <C>
Commingled Trusts and Common Stock:
Money Market Prime 19,081,488 $ 19,081,488 $ 19,081,488
Wellington Fund 1,110,743 23,108,666 27,135,443
Index Trust 500 Fund 1,750,700 73,610,924 100,840,348
Windsor II Fund 1,047,253 18,439,919 21,636,242
PrimeCap Fund 1,661,188 36,653,128 43,572,956
World Fund--U.S. Growth 798,870 13,291,513 16,256,998
AMP Common Stock 1,469,070 49,735,174 56,375,561
---------- ----------
Total Commingled Trusts & Common Stock $233,920,812 $284,899,036
------------ ------------
Deposits with Insurance Companies:
AIG Life, 5.00% due 8/31/98 6,251,115 $ 6,251,115 $ 6,251,115
CIGNA, 6.80%, due 4/1/96 10,506,795 10,506,795 10,506,795
Confederation, (Note 4) 10,082,223 10,082,223 10,082,223
Continental, 6.65%, due 11/1/96 6,265,934 6,265,934 6,265,934
Continental, 6.30%, due 12/31/97 6,007,791 6,007,791 6,007,791
Deutsche Bank, 5.79%, due on demand 10,347,219 10,347,219 10,347,219
Hartford, 6.56%, due 3/31/97 6,443,739 6,443,739 6,443,739
Metropolitan Life, 5.09%, due 3/23/98 5,737,876 5,737,876 5,737,876
Metropolitan Life, 6.18%, due 6/30/00 8,246,881 8,246,881 8,246,881
NY Life, 5.20%, due 11/2/98 13,393,128 13,393,128 13,393,128
NY Life, 7.02%, due 3/31/99 9,462,630 9,462,630 9,462,630
NY Life, 7.47%, due 6/30/99 11,134,595 11,134,595 11,134,595
Principal, 5.13%, due 4/30/98 5,715,135 5,715,135 5,715,135
Principal, 5.73%, due 6/25/98 9,205,521 9,205,521 9,205,521
Principal, 8.12%, due 10/31/99 7,667,523 7,667,523 7,667,523
Prudential, 6.01%, due 11/1/97 5,957,718 5,957,718 5,957,718
Prudential, 5.31%, due 12/31/98 11,085,465 11,085,465 11,085,465
Prudential, 6.34%, due 10/31/97 6,013,580 6,013,580 6,013,580
Sun Life, 7.12%, due 3/31/97 13,159,420 13,159,420 13,159,420
Sun Life, 7.62%, due 4/1/97 6,568,325 6,568,325 6,568,325
Sun Life, 7.47%, due 8/31/97 6,435,821 6,435,821 6,435,821
Sun Life, 5.86%, due 8/31/98 9,135,926 9,135,926 9,135,926
Union Bank of Switzerland,6.63%,
due on demand 12,557,824 12,557,824 12,557,824
---------- ----------
Total Deposits with Insurance Companies 197,382,184 197,382,184
----------- -----------
Participants Loans 27,578,514 27,578,514 27,578,514
---------- ----------
TOTAL $458,881,510 $509,859,734
============ ============
The accompanying notes are an integral part of this schedule.
</TABLE>
<TABLE>
<CAPTION>
Schedule II
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN
EIN #23-0332575
PIN #003
ITEM 27(D) -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
Number of Number of Cost of Net
Identity of Party Description of Transaction Purchases Sales Purchase Price Selling Price Items Sold Gain/(Loss)
- ----------------- -------------------------- --------- --------- -------------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Vanguard Money Market Prime 267 261 $86,835,178 $99,247,875 $99,247,875 $ --
Vanguard Index Trust 500 Fund 245 252 22,957,305 19,793,471 16,845,485 2,947,986
AMP Common Stock 131 131 42,688,527 29,665,116 24,326,689 5,338,427
Vanguard PrimeCap Fund 251 246 33,091,599 14,489,974 13,200,294 1,289,680
The purchase prices and selling prices of the above transactions represent
the current value of the assets on the transaction date.
The accompanying notes are an integral part of this schedule.
</TABLE>
EXHIBIT 2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AMP Incorporated:
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K, into the Company's previously filed
Registration Statement File No. 33-55318.
/s/ Arthur Andersen LLP
Philadelphia, PA
June 25, 1996
