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 (No fee required)
For the fiscal years ended December 31, 1998 and 1997
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 33-59853
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
NORTHROP GRUMMAN SAVINGS AND INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
NORTHROP GRUMMAN CORPORATION
1840 Century Park East
Los Angeles, California 90067
-1-
<PAGE>
SIGNATURES
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.
NORTHROP GRUMMAN SAVINGS AND INVESTMENT PLAN
/s/ Alan M. Roth
-------------------------------------
Dated: June 29, 1999 By Alan M. Roth
Vice President Taxes and Benefits Compliance
-2-
<PAGE>
NORTHROP GRUMMAN SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 4
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Benefits
and Supplemental Information by Fund as of
December 31, 1998 and 1997 5-7
Statement of Changes in Net Assets Available for Plan Benefits
and Supplemental Information by Fund for the
Year Ended December 31, 1998 8-9
Notes to Financial Statements 10-16
SUPPLEMENTAL SCHEDULES:
Item 27a - Assets Held for Investment Purposes
at December 31, 1998 18-33
-3-
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Administrative Committee of the
Northrop Grumman Savings and Investment Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Northrop Grumman Savings and Investment Plan (the "Plan") as of
December 31, 1998 and 1997, and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 1998. 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, such financial statements present fairly, in all material
respects, the net assets available for plan benefits as of December 31, 1998 and
1997, and the changes in net assets available for plan benefits for the year
ended December 31, 1998, in conformity with generally accepted accounting
principles.
Our audits were conducted 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 at December 31, 1998 is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements but is 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 supplemental information by fund in
the statements of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for the purpose
of additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of the individual
funds. The supplemental schedules and supplemental information by fund are the
responsibility of the Plan's management. Such supplemental schedules and
supplemental information by fund have been subjected to the auditing procedures
applied in our audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
June 24, 1999
-4-
<PAGE>
NORTHROP GRUMMAN SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Supplemental Information by Fund
----------------------------------------------------------------------------------
Northrop Stable Fixed U.S. Equity
Grumman Value Income Equity Growth
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value (Note B):
Temporary investments $ 7,323,712 $ 34,854,574 $ 35,221,747
U.S. government securities 183,978,389
Corporate debt instruments 118,993,375
Corporate Stocks 359,145,979 9,635,729 1,347,237,845 435,431,452
Investments, at contract value (Note C):
Northrop Grumman Stable Value Master
Trust (Note D) 868,475,534
Participant loans
------------ ------------ ------------ -------------- ------------
Total investments 366,469,691 868,475,534 347,462,067 1,382,459,592 435,431,452
------------ ------------ ------------ -------------- ------------
Other receivables:
Contribution receivable - Employee 719,108 2,024,003 1,236,807 5,747,218
Contribution receivable - Employer 1,812,782 598,904 349,152 1,391,853
Due from broker for securities sold 12,092,143 7,725,460 26,315
Dividends and interest receivable 45,967 2,503,935 1,262,624 14
------------ ------------ ------------ -------------- ------------
Total assets 369,047,548 871,098,441 363,644,104 1,398,586,747 435,457,781
LIABILITIES:
Options outstanding 4,022,600
Due to broker for securities purchased 962,735 67,318,476 4,422,029
------------ ------------ ------------ -------------- ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $368,084,813 $871,098,441 $292,303,028 $1,394,164,718 $435,457,781
============ ============ ============ ============== ============
</TABLE>
-5-
<PAGE>
NORTHROP GRUMMAN SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (Continued)
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------
Small International
Cap Equity Balanced Loan
Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value (Note B):
Temporary investments $ 1,117,602 $ 3,767 $ 78,521,402
U.S. government securities 183,978,389
Corporate debt instruments 118,993,375
Corporate Stocks 59,557,099 35,223,795 77,429,071 2,323,660,970
Investments, at contract value (Note C):
Northrop Grumman Stable Value Master 868,475,534
Trust (Note D)
Participant loans 56,363,709 56,363,709
----------- ----------- ----------- ----------- --------------
Total investments 60,674,701 35,227,562 77,429,071 56,363,709 3,629,993,379
----------- ----------- ----------- ----------- --------------
Other receivables:
Contribution receivable - Employee 469,208 254,194 435,244 10,885,782
Contribution receivable - Employer 131,782 66,343 131,393 4,482,209
Due from broker for securities sold 498,921 20,342,839
Dividends and interest receivable 20,183 17 3,832,740
----------- ----------- ----------- ----------- --------------
Total assets 61,794,795 35,548,116 77,995,708 56,363,709 3,669,536,949
LIABILITIES:
Options outstanding 4,022,600
Due to broker for securities purchased 201,812 2,249 534,956 73,442,257
----------- ----------- ----------- ----------- --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $61,592,983 $35,545,867 $77,460,752 $56,363,709 $3,592,072,092
=========== =========== =========== =========== ==============
</TABLE>
See notes to financial statements.
-6-
<PAGE>
NORTHROP GRUMMAN SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Supplemental Information by Fund
--------------------------------------------------------------------------------
Northrop Stable Fixed U.S. Equity
Grumman Value Income Equity Growth
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in Northrop Grumman Corporation Savings
and Investment Plan Master Trust at Fair Value
(Notes B, C, D and E) $606,926,596 $891,256,604 $252,714,747 $1,149,008,061 $387,039,424
Due from (to) other fund 74,882 -
Contributions receivable:
Employer 4,086,608 958,642 603,107 2,361,890 -
Employee 1,510,036 4,165,708 2,218,527 11,112,146 -
------------ ------------ ----------- -------------- ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $612,598,122 $896,380,954 $255,536,381 $1,162,482,097 $387,039,424
------------ ------------ ----------- -------------- ------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------
Small International
Capital Equity Balanced PAYSOP Loan
Fund Fund Fund Savings Fund Total
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in Grumman Corporation Savings and
Investment Plan Master Trust at Fair Value
(Notes B, C D and E) $60,545,598 $30,581,971 $56,890,237 $ 74,882 $51,819,246 $3,486,857,366
Due from (to) other fund - - - (74,882) - -
Contributions receivable:
Employer 218,507 115,398 143,694 - - 8,487,846
Employee 882,170 493,059 611,551 - - 20,993,197
----------- ----------- ------------ --------- ----------- --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $61,646,275 31,190,428 $57,645,482 $ - $51,819,246 $3,516,338,409
=========== ========== =========== ======== =========== ==============
See notes to financial statements.
</TABLE>
-7-
<PAGE>
NORTHROP GRUMMAN SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Supplemental Information by Fund
-----------------------------------------------------------------------------
Northrop Stable Fixed U.S. Equity
Grumman Value Income Equity Growth
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Net appreciation/depreciation $(210,474,258) $ 55,162,752 $ 5,814,967 $ 275,914,292 $ 95,943,818
Interest 807,197 78,175 16,360,843 6,851,899 17,867
Dividends 8,049,250 552,763 13,811,461 21,846,779
------------- ------------ ------------ -------------- -------------
Total investment income (201,617,811) 55,240,927 22,728,573 296,577,652 117,808,464
Less: Investment expenses 728,587 768,294 3,193,574
------------- ------------ ------------ -------------- -------------
Net investment income (201,617,811) 54,512,340 21,960,279 293,384,078 117,808,464
------------- ------------ ------------ -------------- -------------
CONTRIBUTIONS
Employee 7,729,671 21,011,422 12,337,633 65,517,829
Employer 21,657,791 6,342,892 3,719,663 15,776,450
------------ ----------- ------------ --------------
Total contributions 29,687,462 27,354,314 16,057,296 81,294,279
------------- ------------ ------------ -------------- -------------
Total additions (171,930,349) 81,866,654 38,017,575 374,678,357 117,808,464
------------- ------------ ------------ -------------- -------------
DEDUCTIONS:
Benefits/loans paid to participants 72,753,546 152,090,573 35,289,946 128,819,912 55,771,871
Administrative expenses 2,431,609 3,167,547 1,129,434 2,422,902 48,481
------------- ----------- ----------- -------------- -------------
Total deductions 75,185,155 155,258,120 36,419,380 131,242,814 55,820,352
------------- ------------ ------------ -------------- -------------
TRANSFERS BETWEEN FUNDS 2,602,195 18,617,482 31,069,694 (45,986,485) (15,606,156)
MERGED PLAN TRANSFERS 29,491,472 4,098,757 34,233,563 2,036,400
------------- ------------ ------------ -------------- -------------
NET INCREASE (DECREASE) (244,513,309) (25,282,512) 36,766,646 231,682,621 48,418,356
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 612,598,122 896,380,954 255,536,381 1,162,482,097 387,039,424
------------- ------------ ------------ -------------- -------------
End of Year $368,084,813 $871,098,442 $292,303,027 $1,394,164,718 $ 435,457,780
============= ============ ============ ============== =============
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------
Small International
Cap Equity Balanced Loan
Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Net appreciation/depreciation $ 68,037 $ 3,705,278 $ 9,885,574 $ $236,020,460
Interest 112,786 35,480 5,997,837 30,262,084
Dividends 386,837 44,647,090
------------- ------------ ------------ -------------- -------------
Total investment income 567,660 3,740,758 9,885,574 5,997,837 310,929,634
Less: Investment expenses 422,366 164,543 116,261 5,393,625
------------- ------------ ------------ -------------- -------------
Net investment income 145,294 3,576,215 9,769,313 5,997,837 305,536,009
------------- ------------ ------------ -------------- -------------
CONTRIBUTIONS
Employee 5,332,122 2,925,140 4,489,701 119,343,518
Employer 1,512,248 806,999 1,313,087 51,429,130
------------ --------- ----------- ----------- ------------
Total contributions 6,844,370 3,732,139 5,802,768 170,772,648
------------- ---------- ----------- ----------- --------------
Total additions 6,989,664 7,308,354 15,572,081 5,997,837 476,308,657
------------- ---------- ----------- ---------- --------------
DEDUCTIONS:
Benefits/loans paid to participants 5,899,746 3,048,582 10,777,741 464,451,917
Administrative expenses 293,351 211,770 254,827 9,959,921
------------- ----------- ----------- ------------ -------------
Total deductions 6,193,097 3,260,352 11,032,568 474,411,838
------------- ------------ ------------ ----------- --------------
TRANSFERS BETWEEN FUNDS (2,802,316) (407,825) 13,966,785 (1,453,374)
MERGED PLAN TRANSFERS 1,952,457 715,262 1,308,953 73,836,864
------------- ------------ ------------ ----------- --------------
NET INCREASE (DECREASE) (53,292) 4,355,439 19,815,271 4,544,463 75,733,683
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 61,646,275 31,190,428 57,645,482 51,819,246 3,516,338,409
------------- ------------ ----------- ----------- --------------
End of Year $ 61,592,983 $35,545,867 $77,460,753 $56,363,709 $3,592,072,092
============= ============ ============ =========== ==============
</TABLE>
-9-
<PAGE>
NORTHROP GRUMMAN SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
A. DESCRIPTION OF THE PLAN
The following description of the Northrop Grumman Savings and Investment
Plan (the "Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General - The Northrop Grumman Savings and Investment Plan is a qualified
profit sharing and employee stock ownership plan sponsored by Northrop
Grumman Corporation (the "Company"). It was established February 1, 1962
and restated effective January 1, 1995, covering all hourly and salaried
employees who are at least 18 years old, citizens or residents of the
United States of America, and are not covered under another plan. It is
subject to the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA").
On January 1, 1998, the Company merged the plan assets of the Northrop
Grumman Retirement and Savings Plan with the Plan. On April 1, 1998, the
Company merged the plan assets of the Grumman Technical Services, Inc.
Aircraft Services Unit (Operations and Maintenance) Capital Accumulation
Plan, Grumman Technical Services, Inc. Represented Employee Investment
Plan, Grumman Technical Services, Inc. Capital Accumulation Plan SPC -
Represented Employees, Grumman St. Augustine Corporation Capital
Accumulation Plan, Grumman Aerospace Corporation Electronics Systems
Division (Salisbury, Maryland Operations) Capital Accumulation Plan, and
Georgia Production Site Retirement and Savings Plan with the Plan. On July
1, 1998, the Company merged the plan assets of the Grumman Systems Support
Corporation Money Purchase Pension Plan with the Plan. Effective July 1,
1998, with the completion of all the Plan mergers, the Plan no longer
participated in the Northrop Grumman Corporation Savings and Investment
Plan Master Trust (the "Master Trust").
Contributions - The Plan offers employees a choice between the type of
contributions they can make, and such contributions may be between 1% and
18% of eligible compensation. A participant can elect tax-deferred
(before-tax) contributions, after-tax contributions or a combination of
both. An active participant may change the percentage of his or her
contributions. Contributions are subject to certain limitations.
The Company's matching contribution is as follows:
Employee Contribution Company Match
First 2% of eligible compensation 100%
Next 2% of eligible compensation 50%
Next 4% of eligible compensation 25%
Contribution over 8% 0%
Participant Accounts - A separate account is maintained for each
participant. Each participant's account is credited with the participant's
contribution and allocations of (a) the Company's contribution, (b) Plan
earnings, and (c) administrative expenses. Allocations are based on
-10-
<PAGE>
participant earnings on account balances, as defined in the Plan agreement.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
Vesting - Plan participants are fully vested (100%) at all times in the
balance of their accounts (both employee and employer contributions), none
of which may be forfeited for any reason.
Investment Options - Upon enrollment in the Plan, each participant may
direct that his or her employee contributions and Company matching
contributions, in 1% increments, be invested in any of the following seven
investment funds.
U.S. Equity Fund - The U.S.Equity Fund consists of holdings in large-and
medium-sized U.S. company stocks. These stocks are selected by
independent professional investment managers appointed by the Plan's
Investment Committee. This fund is designed to provide results that
closely match those of the Standard & Poor's 500 Stock Index.
Fixed Income Fund - The Fixed Income Fund is broadly diversified and
maintains an average maturity of 10 years. This fund consists of holdings
in marketable fixed income securities rated within the three highest
investment grades (i.e., A or better) assigned by Moody's Investor
Services or Standard & Poor's Corporation, U.S. Treasury or federal
agency obligations, or cash equivalent instruments. The securities are
selected by independent professional investment managers appointed by the
Plan's Investment Committee.
Stable Value Fund - The Stable Value Fund is diversified among U.S.
government securities and obligations of government agencies, bonds,
short-term investments, cash and contracts issued by insurance companies
and banks. The fund is managed by an independent professional investment
manager appointed by the Plan's Investment Committee.
Northrop Grumman Fund - The Northrop Grumman Fund invests exclusively in
Northrop Grumman Corporation common stock.
Balanced Fund - The Balanced Fund is a fully diversified portfolio
consisting of fixed portions of five of the savings plan funds (Stable
Value Fund, U.S. Equity Fund, Fixed Income, International Equity Fund,
and Small Cap Fund). The fund seeks to exceed the return of the bond
market and approach the return of the stock market, but with less risk
than an investment only in stocks.
International Equity Fund - The International Equity Fund consists of
stocks of a diversified group of companies in developed countries outside
the United States. The fund's objective is capital appreciation over the
long term, along with some current income (dividends).
Small Cap Fund - The Small Cap Fund consists of stocks of a diversified
group of small-capitalization U.S. companies. The stocks purchased by the
fund typically have a market capitalization similar to companies in the
Russell 2000 Index, which are companies with an average market
capitalization of $500 million. The fund's objective is capital
appreciation over the long term, rather than current income (dividends).
Participants may change their investment options once per month.
-11-
<PAGE>
The Equity Growth Fund and the PAYSOP Fund were transferred from the
Employee Investment Plan of Grumman Corporation, which was merged with the
Plan on August 1, 1995. These two funds were frozen, and no employee
contributions have been allowed subsequent to the Merger. Distributions
from the Equity Growth Fund are made under the provisions of the Plan. The
PAYSOP Fund was terminated in 1997 and the assets of the fund were
distributed to the participants of the fund.
Contributions deposited into each investment fund buy a number of units in
each fund. The value of each participant's account within each fund depends
on two factors: (1) the number of units purchased to date, and (2) the
current value of each unit. Unit values are updated prior to any plan
transactions, including contributions, withdrawals, distributions and
transfers.
Participant Notes Receivable - Participants may borrow from their fund
accounts a minimum of $1,000, up to a maximum equal to the lesser of
$50,000 or 50% of their account balance. A participant may not have more
than one outstanding loan at any given time. Loans will be prorated across
all investment funds and are secured by the balance in the participant's
account. The interest rate is fixed on the first business day of each month
at the prime rate of the Plan's trustee plus 1%. Repayments are made from
monthly payroll deductions (for active employees) or personal check (for
former employees or employees on a leave of absence). The maximum loan
period is five years, or ten years for a loan used to acquire a dwelling
that is to be the principal residence of the participant. Loans may be
repaid in full; partial prepayments are not permitted.
Payment of Benefits - On termination of service due to death, disability or
retirement, a participant may receive a lump-sum payment of his or her
account balance. A participant may also delay his or her lump-sum payment
until the age of 70-1/2 if the account balance exceeds $5,000.
Distribution from the Northrop Grumman Fund will be paid in cash, stock or
a combination of both, depending on the participant's election.
Withdrawals - A participant may withdraw all or a portion of his or her
after-tax contributions (plus earnings) at any time. In addition, a
participant may withdraw all or a portion of his or her company matching
contribution (plus earnings) which have been in the Plan for at least 24
months. A participant may withdraw all or a portion of his or her
before-tax contributions for any reason after reaching age 59 1/2, or prior
to reaching age 59 1/2 in the case of hardship (as described in the Plan
document).
B. SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting - The financial statements of the Plan are prepared
under the accrual basis of accounting.
Use of Estimates - 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,
liabilities, and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
-12-
<PAGE>
Investment Valuation and Income Recognition - In the accompanying
statements of net assets available for Plan benefits as of December 31,
1998, the Plan's investments are stated at fair value, except for the
investments in insurance and investment contracts included in the Northrop
Grumman Stable Value Master Trust, which are stated at contract value (see
Note C). Quoted market prices are used to determine the fair value of the
investments. In the accompanying statements of net assets available for
plan benefits, the Plan's interest in the Northrop Grumman Corporation
Savings and Investment Plan Master Trust (the "Master Trust") is stated at
fair value, except for the investments in insurance and investment
contracts, which are stated at contract value (see Note C). Quoted market
prices are used to value investments (except insurance and investment
contracts) in the Master Trust.
Notes receivable from participants are valued at cost, which approximates
fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
Broker commissions, transfer taxes, and other charges and expenses incurred
in connection with the purchase, sale or other disposition of securities or
other investments held by the Master Trust are added to the cost of such
securities or other investments, or are deducted from the proceeds of the
sale or other disposition thereof, as appropriate. Taxes (if any) on the
assets of the funds, or on any gain resulting from the sale or other
disposition of such assets, or on the earnings of the funds, are
apportioned in such a manner as the trustees deem equitable among the
participants and former participants (if any) whose interests in the Plan
are affected, and the share of such taxes apportioned to each such person
is charged against his or her account in the Plan.
Payment of Benefits - Benefits are recorded when paid. As of December 31,
1998 and 1997, benefits payable in cash to participants are $14,796,768 and
$36,108,483, respectively. Additionally, the market values of shares of
Northrop Grumman Corporation common stock to be distributed as of December
31, 1998 and 1997 are $8,785 and $574,050, respectively.
C. INVESTMENT CONTRACTS WITH INSURANCE COMPANIES
All investment and insurance contracts held by the Northrop Grumman Stable
Value Master Trust (the "Stable Value Master Trust") as of December 31,
1998, and the Master Trust as of December 31, 1997, are considered to be
fully benefit - responsive and, therefore, are reported at contract value.
Contract value represents contributions made under the contract, plus
interest at the contract rate, less withdrawals and administrative
expenses.
The following information is disclosed for the investment and insurance
contracts within the Stable Value Master Trust as of December 31, 1998, and
the Master Trust as of December 31, 1997 (in millions):
-13-
<PAGE>
1998 1997
Contract value of assets $1,299 $869
Fair value of assets $1,343 $899
Average yield on assets for on December 31 7.09 % 7.27 %
Crediting interest rate of assets
at December 31 7.08 % 6.50 %
Duration 2.58 Years 2.89 years
D. INVESTMENTS
Except for its insurance and investment contracts (see Note C), the Plan's
investments as of December 31, 1998 and 1997, are stated at fair value as
determined by quoted market prices.
On January 1, 1998, Northrop Grumman Corporation pooled all of the insurance
and investment contracts for the Northrop Grumman Corporation Savings and
Investment Plan Master Trust, the Northrop Grumman Master Trust, and the
contracts held by the Northrop Grumman Electronic Sensors and Systems
Division Savings and Investment Program into the Master Trust.
Investments held at contract value in the Master Trust as of December 31,
1998 are as follows (in thousands):
Guaranteed and Bank Investment Contracts $1,298,790
Northrop Retirement Savings Temporary Investment Fund 60,090
Accrued Income 113
----------
Total $1,358,993
The Plan's investment in the Master Trust as of December 31, 1998 is as
follows (in thousands):
Contract Value of Guaranteed and Bank Investment Contracts $ 868,476
Net securities sales pending settlement -
Total $ 868,476
----------
Percentage of ownership 63.91%
Investment income in the Master Trust was $91,158,197 for the year ended
December 31, 1998.
Except for its insurance and investment contracts (see Note C), the Plan's
investments as of December 31, 1997 are stated at fair values
determined and reported by Bankers Trust Company, the trustee, in
accordance with the Master Trust Agreement established by Northrop Grumman
Corporation. Proportionate interests of each participating plan are
ascertained on the basis of the trustee's equitable share accounting method
for master trust arrangements. Plan assets represent 98% of total net
assets reported by the trustee of the Master Trust as of December 31, 1997.
The trustee's administration fees and investment management fees are
charged to the Plan.
-14-
<PAGE>
The net assets of the Master Trust at fair value consist of the following
as of December 31, 1997:
Assets:
Temporary investments $ 209,385,012
U.S. government securities 163,627,269
Corporate debt instruments 86,611,718
Corporate stocks 2,203,605,503
Investment and insurance contracts 869,768,970
Dividends and interest receivable 5,447,669
Due from broker for securities sold 19,233,354
Notes receivable from participants 51,819,246
---------------
Total assets 3,609,498,741
---------------
Liabilities:
Options outstanding (2,043)
Due to broker for securities purchased 51,395,425
---------------
Total liabilities 51,393,382
---------------
Net assets of the Master Trust $ 3,558,105,359
===============
The Master Trust held approximately 5,234,524 shares of Northrop Grumman
Corporation common stock with a fair value of $601,970,260 as of December
31, 1997, which are included in the determination of net
assets available to the Plan at December 31, 1997.
Investment income for the Master Trust for the period ended July 1, 1998 is
as follows:
Net appreciation (depreciation) in fair value of investments:
U.S. government securities $ 1,153,393
Corporate debt instruments 762,666
Corporate stocks 239,962,559
Other 356,441
-----------
$242,235,060
Interest 15,757,575
Dividends 21,410,553
Investment expense (3,744,175)
-----------
Total $239,900,801
============
E. UNIT VALUES
Participation units outstanding at December 31, 1998 and 1997, and
participant's equity per unit at the end of each quarter within the years
then ended, are as follows:
-15-
<PAGE>
Participant's Equity per Unit
Units ---------------------------------------
Outstanding March June September December
1998 December 31 31 30 30 31
Northrop Grumman Fund 6,801,043.744 $61.06 $48.73 $29.62 $54.12
Stable Value Fund 225,429,267.648 3.80 3.70 3.76 3.86
Fixed Income Fund 19,988,067.843 14.94 12.91 13.50 14.61
U.S. Equity Fund 24,926,961.203 52.84 50.88 44.23 55.93
Equity Growth Fund 126,844,030.400 2.98 3.04 2.70 3.43
Small Cap Fund 61,805,012.515 1.45 1.15 0.99 1.19
International Fund 28,620,501.816 1.55 1.03 1.80 1.24
Balanced Fund 57,665,557.698 1.37 1.28 1.20 1.34
1997
Northrop Grumman Fund 7,091,622.483 $53.67 $61.87 $88.84 $86.38
Stable Value Fund 243,021,711.265 3.54 3.60 3.66 3.69
Fixed Income Fund 18,817,505.962 12.78 13.16 13.48 13.58
U.S. Equity Fund 26,024,135.621 35.76 40.59 45.72 44.67
Equity Growth Fund 149,344,975.088 2.09 2.41 2.64 2.59
PAYSOP Fund .000 75.63 87.61 121.38 0.00
Small Cap Fund 53,311,302.140 0.91 1.05 1.02 1.16
International Fund 27,571,892.043 0.84 1.06 1.12 1.13
Balanced Fund 50,611,393.693 0.83 0.99 1.13 1.14
F. TRANSACTIONS WITH PARTIES-IN-INTEREST
In Plan management's opinion, fees paid during the year for services
rendered by parties-in-interest were based upon customary and reasonable
rates for such services.
G. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of the
Plan's termination, the interests of all participants in their accounts are
100% vested and nonforfeitable.
H. INCOME TAXES
The Internal Revenue Service (the "IRS") ruled in 1989 that the Plan
qualifies under Section 401(a) of the Internal Revenue Code (the "IRC"),
and therefore, the related trust is not subject to tax under the present
income tax law. Once qualified, the Plan is required to operate in
conformity with the IRC to maintain its qualification. The Company is not
aware of any course of action or series of events that have occurred which
might adversely affect the Plan's qualified status. On November 6, 1996,
the Company received a favorable determination letter from the IRS stating
that the Plan, as amended, continues to meet the requirements of Section
401(a) of the IRC.
-16-
<PAGE>
I. DESCRIPTION OF PLAN MERGERS
Effective January 1, 1998, plan assets of $49,348,374 of the Northrop
Grumman Retirement and Savings Plan were merged into the Plan.
Effective April 1, 1998, the following plan assets were merged into the
Plan:
$8,994,131 of the Grumman Technical Services, Inc. Aircraft Services
Unit (Operations and Maintenance) Capital Accumulation Plan
$480,298 of the Grumman Technical Services, Inc. Represented Employee
Investment Plan
$140,345 of the Grumman Technical Services, Inc. Capital Accumulation
Plan SPC - Represented Employees
$4,096,989 of the Grumman St. Augustine Corporation Capital
Accumulation Plan
$399,275 of the Grumman Aerospace Corporation Electronics Systems
Division (Salisbury, Maryland Operations) Capital Acquisition Plan
$5,238,270 of the Georgia Production Site Retirement and Savings Plan
Effective July 1, 1998, plan assets of $5,139,182 of the Grumman Systems
Support Corporation Money Purchase Pension Plan were merged into the Plan.
The total transferred net assets of $73,836,864 have been recognized in the
accounts of the Plan at their balances as previously carried in the
accounts of the former plans.
******
-17-
<PAGE>
NORTHROP GRUMMAN SAVINGS AND INVESTMENT PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of Issuer, Borrower, Lessor Description of Investment Cost Current Value
or Similar Party
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* Northrop Grumman Participation in Stable Value Unitized Fund 824,511,528 878,911,835
* Fidelity Magellan Fund 226,756,196 427,406,112
* Northrop Grumman Common Stock 130,893,625 359,145,979
* Bankers Trust Pyramid Equity Index Fund 82,044,941 91,307,092
* Bankers Trust Participation in Pyramid Directed Cash Account 45,583,753 45,583,753
* Bankers Trust Participation in Pyramid Directed Cash Account 35,221,748 35,221,748
MCI Worldcom Inc. Common Stock 13,951,322 30,538,136
Pfizer Inc. Common Stock 9,686,927 27,750,000
General Electric Co. Common Stock 13,819,283 25,979,400
Microsoft Corp. Common Stock 9,464,506 23,771,123
Citigroup Inc. Common Stock 21,221,073 23,432,861
RCM Growth Equity Fund #8760 Mutual Fund Shares 25,804,914 22,446,916
Cisco Systems Inc. Common Stock 7,469,159 20,827,237
* Bankers Trust Participation in Pyramid Broad Market Fixed Income Fund 18,986,843 19,202,282
International Business Machines Corp. Common Stock 8,348,907 17,589,375
Intel Corp. Common Stock 8,303,873 16,954,509
Chase Manhattan Corp (New) Common Stock 10,124,492 16,034,356
Capital Guardian Trust Co Small Cap Daily Fund 11,981,056 15,541,425
Federal National Mortgage Assn. TBA 6.0% 30 Year 1/1/2028 14,070,469 14,112,241
Bank of America Corp Common Stock 10,741,848 14,042,915
Home Depot Inc. Common Stock 5,924,241 13,755,062
Applied Materials Inc. Common Stock 6,757,916 13,446,720
Ford Motor Co. Common Stock 7,690,904 13,082,318
Capital Guardian International Equity Daily Fund 10,012,873 12,349,961
Tyco International LTD. Common Stock 6,265,924 12,205,868
Nokia Corp Common Stock 2,256,051 12,200,369
Federal National Mortgage Assn. TBA 6.5% 30 Year 1/1/2028 12,048,594 12,078,720
Medtronic Inc. Common Stock 2,592,797 12,063,234
PIC Small Cap Investment Fund Debt 10,189,668 11,487,819
America Online Inc. Common Stock 2,297,195 11,479,250
America Home Products Corp. Common Stock 8,693,303 11,308,825
United States Treasury Treasury Bond DTD 08/15/1997 6.375% 08/15/2027 10,801,273 11,246,585
Texas Instruments Inc. Common Stock 6,507,314 11,054,188
Warner Lambert Co Common Stock 5,829,540 10,947,373
Lincoln National Corp Common Stock 5,454,370 10,505,025
Time Warner Inc. Common Stock 3,604,219 10,432,790
USG Corp. Common Stock 10,302,440 10,325,133
United States Treasury Treasury Notes DTD 02/15/1993 6.250% 02/15/2003 9,926,239 10,204,875
Aetna Inc. Common Stock 9,291,660 9,666,944
Amgen Inc Common Stock 5,662,030 9,515,233
Scudder International Equity International Equity Retirement Trust 8,750,000 9,488,755
Altera Corp. Common Stock 5,992,568 9,459,975
Airtouch Communication Common Stock 4,237,402 9,416,940
-18-
<PAGE>
American International Group Inc. Common Stock 4,970,095 9,396,781
Philip Morris Cos Inc. Common Stock 6,849,690 9,367,850
Foreign Discover Rowe T Price Trust Fund 7,950,000 9,328,208
Ascend Communications Inc. Common Stock 6,081,057 9,231,300
McDonalds Corp Common Stock 7,872,298 8,979,440
Merck & Co. Common Stock 6,995,883 8,850,000
Countrywide Credit Industries Inc. Common Stock 4,571,656 8,742,750
Wal Mart Stores Inc Common Stock 4,460,898 8,632,428
Schroder Capital Funds 9,028,862 8,625,159
Bank One Corp. Common Stock 7,833,864 8,355,439
Merrill Lynch & Co. Common Stock 9,518,319 8,350,425
DaimlerChrysler Common Stock 4,598,149 8,299,363
Networks Associates Inc. Common Stock 5,295,031 8,251,438
* Bankers Trust Pyramid Equity Index Fund 7,586,193 8,025,340
Federal National Mortgage Association Common Stock 5,121,332 8,006,800
United States Treasury Treasury Notes DTD 03/15/1995 6.875% 03/31/2000 7,990,091 8,003,502
GTE Corp Common Stock 6,002,376 7,995,000
Exel LTD Class A ORD 3,757,043 7,875,000
Mobil Corp. Common Stock 5,686,205 7,684,425
Federal Home Loan MTG Corp. TBA 15 Year 6.0% 1/1/2013 7,540,563 7,575,897
Adobe Systems Inc. Common Stock 6,431,485 7,564,150
Dell Computer Corp. Common Stock 2,594,758 7,523,726
Lowes Cos Inc. Common Stock 2,636,855 7,376,191
SLM Holding Corp. Common Stock 4,254,783 7,372,800
* Bankers Trust Russell 2000 Equity Index Fund 6,566,624 7,343,076
* Bankers Trust Participation in Pyramid Directed Cash Account 7,323,712 7,323,712
* CBS Corp. Common Stock 6,533,652 7,222,141
Washington Mutual Inc Common Stock 5,951,815 7,220,256
Burlington North Santa Fe Corp. Common Stock 5,861,848 7,106,875
Government National MTG Assn Pass thru CTF Pool #780191 7.5% 7/15/2025 6,853,833 6,957,878
Hewlett Packard Co. Common Stock 5,254,993 6,913,276
Schering Plough Corp. Common Stock 4,720,544 6,746,025
Federal Home Loan MTG Corp. Series A DTD 6/24/1998 6.22% 6/24/2008 6,545,000 6,677,929
Rite Aid Corp Common Stock 4,437,958 6,606,800
Proctor & Gamble Co. Common Stock 3,319,224 6,181,891
Associates First Cap Corp. Common Stock 5,406,483 6,169,546
Federal National Mortgage Assn. TBA 6.0% 15 Year 1/1/2013 5,990,000 6,015,000
United States Treasury Treasury Notes DTD 12/31/1998 4.625% 12/31/2000 5,907,836 5,909,204
Kohl's Corp Common Stock 4,692,730 5,887,744
Oracle Corp. Common Stock 3,678,595 5,817,563
* Bankers Trust Pyramid Balanced Fund 5,532,180 5,714,129
Atlantic Richfield Co. Common Stock 6,120,227 5,700,700
Lockheed Martin Corp Common Stock 6,200,120 5,695,200
Morgan Stanley Dean Witter Discover &
Co. Common Stock 3,548,237 5,692,070
Household International Corp Common Stock 4,818,149 5,678,263
Bell Atlantic Corp. Common Stock 3,842,539 5,621,940
Clear Channel Communictions Inc. Common Stock 3,672,979 5,618,950
Johnson & Johnson Common Stock 4,122,187 5,586,075
Bristol Myers Squibb Co. Common Stock 2,298,150 5,553,240
AES Corp. Common Stock 4,557,323 5,448,125
KLA-Tencor Corp Common Stock 3,658,551 5,417,538
Xerox Corp Common Stock 4,194,573 5,404,400
UNUM Corp . Common Stock 3,890,661 5,335,475
Baxter International Inc. Common Stock 4,125,160 5,286,529
-19-
<PAGE>
ICN Pharmaceutical Inc Common Stock 9,581,753 5,190,175
Lucent Technologies Inc Common Stock 1,720,606 5,171,264
Eli Lilly & Co. Common Stock 1,292,781 5,142,361
United States Treasury Treasury Bonds Stripped Prin Pmt 12.000% 05/15/2005 DTD
11/15/1985 4,740,370 5,124,292
AT&T Corp. Common Stock 3,230,530 5,090,400
Tele Communications Inc Liberty Media Group Ser A 1,622,483 5,089,962
Bank New York Inc. Common Stock 4,002,972 5,071,500
3Com Corp Common Stock 3,994,758 5,052,666
Guidant Corp Common Stock 1,925,098 5,038,000
Centaur FDG Corporation Preferred shares Series B 144 A 4,800,000 5,019,000
Federal Home Loan MTG Corp. Discount note 1/20/1999 4,976,011 4,989,000
EMC Corp Mass Common Stock 1,725,784 4,972,500
Air Products & Chemicals Inc. Common Stock 4,064,518 4,948,000
Fort James Corp Common Stock 4,461,392 4,948,000
Coca Cola Co. Common Stock 3,781,818 4,924,500
Gap Stores Inc. Common Stock 1,515,530 4,892,697
Aluminum Co. America Common Stock 4,111,978 4,734,751
K N Energy Inc SR Note Dated 11/25/1998 6.450% 11/30/2001 4,696,616 4,717,155
MBNA Corp Common Stock 3,324,725 4,714,147
Colgate Palmolive Co. Common Stock 2,269,740 4,699,475
Burlington Res Inc Common Stock 5,051,576 4,691,503
Home Ownership Funding 144A Preferred 4,804,297 4,616,730
Staples Inc. Common Stock 3,287,723 4,582,871
Federated Departent Stores Inc. Common Stock 4,096,472 4,578,471
IBP Inc. Common Stock 3,538,999 4,502,725
Columbia HCA Healthcare Corp. Common Stock 5,038,720 4,487,175
Merita Bk Ltd Cap Secs Step-up Perpetual 144A 12/29/2049 4,499,460 4,353,930
SBC Commuications Inc. Common Stock 2,670,205 4,338,263
United States Treasury Treasury Bond DTD 11/15/1997 6.125% 11/15/2027 4,201,640 4,281,590
Du Pont E I De Nemours &Co Common Stock 3,832,648 4,245,040
United States Treasury Treasury Note Stripped Prin Pmt 11/15/2001 3,991,333 4,136,785
Provident Cos. Common Stock 3,221,642 4,129,250
RJR Nabisco Holdings Corp. Common Stock 4,031,249 4,126,632
Hasro Inc. Common Stock 2,942,130 4,118,250
Praxair Inc. Common Stock 5,746,275 4,117,200
Federal National Mortgage Assn Dwarf TBA 6.5% 15 Year 1/1/2013 4,001,250 4,056,240
First UN Corp Common Stock 2,049,138 4,013,658
Comcast Corp. Common Stock 2,288,279 4,002,522
Wells Fargo & Co Common Stock 2,366,354 3,993,800
Omnicom Group Common Stock 1,148,983 3,990,400
Chubb Corp. Common Stock 3,418,761 3,936,800
Tellabs Inc. Common Stock 1,845,717 3,908,091
Associates Corp. North America SR Note DTD 10/30/1998, 5.750%, 11/01/2003 3,848,499 3,884,535
Eastman Kodak Co. Common Stock 4,051,464 3,866,400
CSX Corporation Note DTD 10/28/98 6.25% 10/15/2008 3,815,998 3,855,290
Interstate Bakeries Corp. Common Stock 3,888,329 3,828,222
Monsanto Co. Common Stock 4,334,673 3,800,000
Unocal Corp Common Stock 4,602,186 3,765,252
Qwest Commuications International Inc.Common Stock 2,883,025 3,750,000
United States Treasury Treasury Notes DTD 11/61/1998 4.750% 11/15/2008 3,721,853 3,723,858
Cigna Corp Common Stock 2,805,459 3,718,755
HBO & CO Common Stock 3,923,621 3,709,358
Schwab Charles Corp Common Stock 1,217,585 3,708,408
Safeway Inc NT DTD 11/09/1998 5.750% 11/15/2000 3,691,638 3,707,400
-20-
<PAGE>
Viacom Inc Class B Common Non-voting Stock 2,857,557 3,700,000
Archer Daniels Midland Co. Common Stock 3,829,069 3,675,453
Halliburton Co. Common Stock 4,347,255 3,655,725
PNC Bank Corp. Common Stock 3,525,766 3,650,400
Coca Cola Enterprise Inc. Common Stock 1,714,783 3,646,500
Deere & Co. Common Stock 4,510,850 3,629,400
AMR Corp. Common Stock 2,865,500 3,497,188
Amkor Techology Inc. Common Stock 2,624,770 3,485,030
Masco Corp Common Stock 2,309,165 3,481,625
Dover Corp Common Stock 2,535,814 3,479,375
Global Marine Inc. Common Stock 6,807,097 3,477,600
Motorola Inc. Common Stock 2,945,942 3,462,272
ACE LTD Common Stock 3,111,141 3,426,581
Quintiles Transnational Corp. Common Stock 1,908,441 3,416,000
Texaco Inc. Common Stock 3,188,096 3,413,200
Avon Products Inc. Common Stock 3,189,991 3,407,250
Schlumberger LTD. Common Stock 2,986,612 3,390,013
Micron Electronics Common Stock 3,511,009 3,344,872
Federal Home Loan MTG Corp. PARTN CTF Group #G10381 6.50% 9/1/2010 3,213,721 3,328,363
Williams Co Common Stock 3,143,143 3,274,740
United Technologies Corp Common Stock 2,199,749 3,262,500
Allstate Corp. Common Stock 2,818,032 3,260,950
Dana Corp. Common Stock 3,956,659 3,257,738
Teradyne Inc. Common Stock 2,437,486 3,254,400
Kmart Corp Common Stock 2,900,939 3,227,980
United States Treasury Treasury Bonds DTD 02/15/1991 7.875% 02/15/2021 2,894,130 3,156,384
Nike Inc. Common Stock 4,073,748 3,155,801
Payless Shoesource Inc. Common Stock 3,777,086 3,145,700
Government National MTG Assn TBA 8.0% 1/1/2028 30 Year 3,119,219 3,118,110
St. Paul Cos. Inc. Common Stock 3,601,633 3,077,469
Tenet Healthcare Corp Common Stock 3,292,570 3,026,625
Abbott Labs Common Stock 1,454,105 3,008,600
LB Commercial Conduit Mtg Trust 1998-C4 Mtg Pass Thru CTF CL A-1-A 5.970% 08/15/2006 3,001,928 3,003,834
Arrow Electronics Inc. Common Stock 2,424,012 2,999,731
Consolidated Stores Corp. Common Stock 4,473,338 2,991,862
Newell Co. Common Stock 3,098,542 2,978,250
Bowater Inc. Common Stock 3,250,197 2,975,248
Queens Health Sys Commercial Paper Disc DTD 11/23/1998 Due 1/19/1999 2,975,063 2,975,063
Cadence Design Systems Common Stock 2,869,400 2,972,025
Raytheon Co. Common Stock 3,103,728 2,961,722
Trinity Industries Inc. Common Stock 2,868,581 2,933,700
Federal-Mogl Fing TR GTD TR Preferred SECS CONV % 144A Stock 2,252,275 2,930,625
Alza Corp. Common Stock 2,480,760 2,926,000
CSX Corp. Common Stock 3,197,860 2,900,850
Conagra Inc. Common Stock 2,647,895 2,885,400
United States Treasury Treasury Notes Series J DTD 05/31/1996 6.500% 05/31/2001 2,784,999 2,833,478
Infinity Broadcasting Corp Common Stock 2,121,750 2,833,313
Allied Signal Inc Common Stock 2,167,786 2,791,719
Hilton Hotels Corp Common Stock 2,965,822 2,780,775
Astra AB Sponsored ADR RESTG A SH 2,251,461 2,758,393
Texas Utilities Co. Common Stock 2,252,000 2,754,592
FFTW International Hedge Fund Participation in FFTW #30242R873 2,677,467 2,745,942
Dun & Bradstreet Corp Common Stock 2,534,503 2,739,668
Solectron Corp Common Stock 708,924 2,732,377
-21-
<PAGE>
Compaq Computer Corp. Common Stock 2,419,403 2,730,000
Emerson Electronic Co. Common Stock 2,657,420 2,722,500
General Mills Inc. Common Stock 2,391,686 2,721,250
Autodesk Inc. Common Stock 2,580,271 2,693,613
Gannett Inc. Common Stock 2,196,944 2,689,650
Noble Drilling Corp. Common Stock 5,710,248 2,688,516
Fleet Financial Group Inc. Common Stock 2,191,112 2,672,342
Ensco International Common Stock 6,054,594 2,637,798
Avnet Inc. Common Stock 2,169,882 2,613,600
PNC Mtg Secs Corp Mtg Pass Thru CTF 98-2 CL IIIA7 6.750% 03/25/2013 2,570,279 2,602,039
Goodyear Tire & Robber Co. Common Stock 2,985,036 2,582,426
* Bankers Trust Pyramid Daily International Equity Index 2,339,643 2,536,784
General Motors Corp. Common Stock 1,861,163 2,526,174
Residential Fdg Mtg Secs I Inc Mtg Pass Thru CTF Ser 1997-S122 CL A-18 6.750% 08/25/2027 2,445,939 2,511,688
Black & Decker Holding Inc. Serial Note 144A DTD 6/26/98 7.05% 7/1/2028 2,495,925 2,502,425
Tele Communications Inc TCI Group SER A 823,633 2,498,599
Raytheon Co. Common Stock 2,441,808 2,470,800
Owens Ill Inc. Common Stock 2,853,132 2,465,313
Sealed Aid Corp Common Stock 1,762,932 2,451,024
Promus Hotel Corp. Common Stock 2,494,076 2,415,175
General Re Corp. Common Stock 1,621,287 2,391,000
Lockheed Martin Corp Common Stock 2,640,798 2,372,577
Sears Roebuck & Co. Common Stock 2,589,311 2,367,250
United States Treasury Treasury Notes DTD 08/15/1995 6.500% 08/15/2005 2,272,335 2,362,979
Occidental Pete Corp. Common Stock 3,119,763 2,359,125
Textron Inc. Common Stock 1,190,329 2,354,078
Pharmacia & Upjohn Inc. Common Stock 2,001,013 2,338,613
Sundstrand Corp. Common Stock 1,906,818 2,334,375
Parker Hannifin Corp Common Stock 2,412,284 2,321,975
Illinois Tool Works Inc. Common Stock 1,184,104 2,320,000
Annheuser Busch Companies Inc. Common Stock 1,479,617 2,296,875
PPG Industries Inc. Common Stock 2,031,944 2,286,788
Ameritech Corp. Common Stock 1,726,305 2,281,500
Conoco Inc. Common Stock 2,591,627 2,222,325
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 420778 6.5% 6/1/2028 2,168,747 2,198,778
Jostens Inc. Common Stock 1,796,728 2,173,604
Lucasvarity Common Stock 2,360,984 2,167,450
Sun Microsystems Com. Common Stock 1,031,238 2,157,750
Dayton Hudson Corp. Common Stock 1,888,547 2,115,750
Republic Industries Inc Common Stock 2,183,856 2,115,225
United Healthcare Corp Common Stock 2,210,396 2,110,087
Kellogg Co Common Stock 2,060,962 2,081,625
Jones Apparel Group Inc. Common Stock 2,250,271 2,073,922
United States Treasury Treasury Notes DTD 07/31/1998 5.375% 07/31/2000 2,064,094 2,072,427
Allied Waste Industries Inc. Common Stock 1,663,135 2,071,913
Bestfoods Common Stock 1,426,621 2,066,100
Crown Cork & Seal Inc. Common Stock 2,840,824 2,064,471
United States Treasury Treasury Bond DTD 08/15/1998 5.500% 08/15/2028 2,084,435 2,056,805
Federal National Mortgage Assn. TBA 7.5% 30 Year 1/1/2028 2,055,625 2,054,360
Federal National Mortgage Assn. 30 Year TBA 7.0% 1/1/2028 2,039,375 2,040,000
Fox Entertainment Group Inc Common Stock 1,853,754 2,035,125
LOEWS Corp Common Stock 1,617,651 2,004,300
Unilever N V Common Stock 848,509 1,990,512
Repsol Intl Financing Commercial Paper Disc DTD 12/29/1998 Due 3/29/1999 1,974,650 1,974,650
-22-
<PAGE>
Government National MTG Assn Pass thru CTF Pool #354686 7.5% 11/15/2023 1,965,324 1,973,983
Nabisco Holdings Corp. Common Stock 1,802,856 1,971,250
Analog Devices INC Common Stock 1,356,195 1,938,975
Gateway 2000 Inc. Common Stock 1,729,422 1,934,906
Amerada Hess Corp. Common Stock 1,978,695 1,920,350
United States Treasury Treasury Bonds DTD 11/15/1996 6.500% 11/15/2026 1,663,922 1,918,637
Saks Inc. Common Stock 1,375,294 1,909,562
First Data Corp. Common Stock 1,846,746 1,896,563
Internpublic Group Cos Inc. Common Stock 472,750 1,854,188
Government National MTG Assn Remic TR 1998-17 CL F floating rate 7/16/2028 1,849,310 1,839,241
Union Pac. Corp. Common Stock 1,762,041 1,829,558
Baker Hughes Inc. Common Stock 1,645,232 1,828,065
Dollar Gen Corp Common Stock 1,536,211 1,823,850
First Energ Corp. Common Stock 1,733,890 1,817,015
Federal Home Loan MTG Corp. PARTN CTF Group #E00544 7.0% 4/1/2013 1,802,368 1,813,466
Neiman Marcus Group Common Stock 1,824,088 1,805,511
Costco Cos. Common Stock 1,666,107 1,804,700
May Dept. Stores Co. Common Stock 1,643,758 1,799,175
Northeast Utils. Com. Common Stock 1,448,017 1,772,800
Gartner Group Inc. Common Stock 1,738,903 1,748,875
Keycorp Common Stock 1,630,192 1,731,200
Pacificare Health Systemes Inc. Common Stock 1,535,952 1,716,900
Chevron Corp. Common Stock 1,039,103 1,716,817
Vornado Realty Tr Common Stock 2,065,000 1,675,000
Computer Associates International Inc Common Stock 1,467,090 1,674,097
Nextel Communications Inc. Common Stock 1,634,718 1,641,938
York International Corp Common Stock 1,762,592 1,632,520
Hibernia Corp Common Stock 788,748 1,612,400
Sprint Corp. Common Stock 1,188,757 1,598,375
Pacificare Health Systemes Inc. Common Stock 1,240,562 1,590,000
Black & Decker Corp Common Stock 966,352 1,580,977
Tenneco Inc. Common Stock 1,915,243 1,560,085
R&B Falcon Corp. Common Stock 5,036,230 1,529,375
American Standard CDS Inc. Common Stock 1,498,229 1,526,400
Delta Airlines Inc. Common Stock 1,567,570 1,518,400
CNF Transportation Inc. Common Stock 1,564,530 1,506,276
Western Digital Corp Common Stock 1,933,068 1,491,237
Minnesota MNG & MFG Co. Common Stock 1,770,828 1,486,513
Seagate Techology Common Stock 1,409,191 1,479,225
Continental Airlines Inc. Common Stock 1,628,820 1,474,000
Advanced Micro Devices Inc. Common Stock 1,215,675 1,450,000
B F GoodrichCo. Common Stock 1,489,862 1,438,588
Gilette Co. Common Stock 1,251,505 1,434,390
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 439939 6.5% 10/1/2028 1,427,032 1,428,813
Peoplesoft Inc. Common Stock 1,629,514 1,420,350
Government National MTG Assn Pass thru CTF Pool #405558 7.5% 1/15/2026 1,394,925 1,409,657
Money Store Tr 1998-A Asset Bkd CTF CL Av Var RT 06/15/2029 1,395,508 1,384,672
Peak Trends Trust Enhanced Dividend Securities 2,113,055 1,383,113
Nordstrom Inc. Com. Common Stock 1,170,823 1,380,582
United States Treasury Treasury Bond DTD 02/15/1997 6.625% 02/15/2027 1,304,783 1,360,232
Corning Inc. Common Stock 948,404 1,345,500
Weatherford Intlo Inc Common Stock 1,995,697 1,340,266
American Power Conversion Common Stock 657,050 1,336,889
Financing Corp Coupon FICO Strips SER 12-INT PMT on 9.9% 2018 6/6/2003 1,232,512 1,334,410
Federal National Mortgage Assn. GTD MTG pass thru CTF pool #190750 6.0% 4/1/2009 1,278,330 1,325,120
Green Tree Financial Corp 97-5 MFD Housing SR/SUB Pass thru CTF A-4 6.42% 5/15/2029 1,299,391 1,311,375
Quebec Prov CDA Medium Term NTS Book Entry Tranche # TR 00049 03/02/2026 1,150,000 1,304,146
-23-
<PAGE>
Sony Corp. Common Stock 1,554,485 1,296,000
United States Treasury Treasury Notes DTD 05/31/1998 5.500% 05/31/2003 1,273,730 1,290,625
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 437266 5.5% 8/1/2028 1,290,580 1,285,552
Cablevision Systems Corp Common Stock 867,425 1,278,188
US Bancorp Common Stock 1,203,832 1,278,000
Ford Motor CR Co. Global Bond Issue # US345397RP0 6.5% 2/28/2002 1,261,823 1,277,758
BP Amoco PLC Common Stock 1,221,031 1,270,500
Union Camp Corp. Common Stock 931,481 1,261,950
Champion International Corp. Common Stock 1,272,898 1,255,500
IMS Health Inc. Common Stock 870,287 1,244,727
Government National MTG Assn Pass thru CTF Pool #454195 7.0% 8/15/2028 1,204,169 1,211,564
Tricon Global Restaurants Inc. Common Stock 908,333 1,203,000
United States Treasury Treasury Bonds DTD 08/15/1995 6.875% 08/15/2025 1,114,061 1,181,729
Cendant Corp Common Stock 1,280,079 1,174,230
Best Buy Inc. Common Stock 720,727 1,169,194
AMP Inc. Common Stock 911,361 1,167,825
Symbol Technologies Inc. Common Stock 648,521 1,157,278
Bausch & Lomb Inc. Common Stock 1,035,878 1,140,000
Hospitality Properties TR SR Note DTD 2/24/1998 7.0% 3/1/2008 1,222,795 1,131,484
Bankers Trust Participation in Pyramid Directed Cash Account 1,117,602 1,117,602
Office Depot Inc. Common Stock 912,033 1,111,890
United States Treasury Treasury Notes DTD 07/15/1996 7.000% 07/15/2006 1,035,549 1,098,739
Capital Desjardins Inc. Serial Note Series A 144A 7.37% 8/8/2005 1,015,550 1,086,280
Circuit City Stores Inc. Common Stock 1,037,181 1,083,655
Federal National Mortgage Assn. GTD Remic pass thru CTF CL 157E RT93-157 5/25/2022 prin only 783,897 1,080,613
Royal Carribean Cruises Common Stock 805,303 1,058,200
Donaldson Lufkin & Jenrette Common Stock 992,380 1,037,300
Barnes & Noble Inc. Common Stock 778,304 1,028,500
Cardinal Health Inc. Common Stock 743,951 1,024,313
Mattel Inc. Common Stock 1,165,934 1,019,900
Associates Corp. North America Medium Term SR Notes , Tranche # TR00195 6.670% 7/28/2000 1,012,620 1,019,730
Boeing Co. Common Stock 606,154 1,011,375
Federal National Mortgage Assn. GTD MTG pass thru CTF pool #199434 6.0% 3/25/2009 958,281 1,005,620
Federal Home Loan MTG Corp. Multiclass MTG PARTN CTFS GTD SER G024 CL G024-J 6.25%
11/25/2023 1,023,594 1,003,750
Barclays Bank PLC Institutional CTF DEP CD (Book E), 5.200% DTD
11/24/98, Due 1/24/1999 1,000,000 1,000,000
Union Pac Res Group Inc Common Stock 2,732,121 988,773
Federal National Mortgage Assn. GTD Remic pass thru CTF TR 1993-G40 CL-FA variable rate
12/25/2023 986,580 983,443
Structured Asset Secs Corp Mtg Pass Thru CTF Ser 1998-4 CL A-2 5.896% 05/25/2028 1,000,000 977,110
Government National MTG Assn Pass thru CTF Pool #345036 7.5% 10/15/2023 960,059 960,199
Merit Securities Corp Coll Bd Ser 11 CL 3-a1 5.960% 05/28/2031 961,391 957,507
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 452415 6.0% 12/1/2028 953,184 952,789
Kenametal Inc Common Stock 1,737,962 952,000
Wisconsin Central Transportation Common Stock 1,261,584 947,059
Federal Home Loan MTG Corp. Gold 15 Year TBA 6.0% 1/1/2014 941,763 942,350
MediaOne Group Common Stock 909,064 940,000
General Nutrition Cos Inc. Common Stock 1,558,468 932,750
United States Treasury Treasury Note Stripped Prin Pmt 7.875% 08/15/2001 930,752 931,350
Dominion Res Inc Common Stock 803,964 930,325
Massachusetts Mutual Life Ins Co Surplus NT 144A 7.500% 03/01/2024 916,978 911,123
General Motors Corp. Common Stock 1,083,075 904,886
Federal National Mortgage Assn. GTD Remic pass thru CTF Remic TR 1992-138 CL-FB variable
rate 8/25/2022 906,211 904,748
Nucor Corp. Common Stock 920,108 903,925
-24-
<PAGE>
AAMES 98-B Mortgage Pass Through CTF CL A-1A, ADJ 6/15/2028 902,059 895,672
SUSA Partnership L P NT DTD 11/07/1996 7.125% 11/01/2003 918,414 892,377
BMC Software Inc. Common Stock 919,117 891,260
Texas Utils Co Sr NT Ser B 6.375% 10/01/2004 859,450 886,841
Beverly Enterprise Common Stock 1,134,527 885,600
Structured Asset Secs Corp Multicl Pass Thru CTF 98-C2 Var 144A CL A 01/25/2013 880,798 877,257
WorldCom Inc GA NT DTD 08/11/1998 6.950% 08/15/2028 815,104 875,017
Zeneca Group PLC Sponsored Common Stock 538,635 870,575
General Electric Cap Corp Medium term notes Tranche # TR 00412 5.13% 4/1/2004 Steps
up to 8.09% 841,938 867,274
Harrahs Entertainment Common Stock 1,335,269 862,840
Federal Home Loan MTG Corp. Multiclass MTG PARTN CTFS GTD SER 01404 CL F 3.50%
11/15/2007 802,222 834,634
Metropolitan Life Ins Co Surplus NT 144A 6.300% 11/01/2003 802,560 812,176
First NBC Credit Card Master TR 97-1 Asset backed CTF CL A 6.15% 9/15/2004 779,878 806,788
Green Tree Financial Corp SER 1996-2 CL-A1 6.45% 4/15/2027 783,000 805,744
Agco Corp. Common Stock 2,208,963 804,038
Atlantic City Electric Co. 1st Mortgage, DTD 9/01/1993, 7.00% 9/01/2023 712,845 800,078
Pennsylvania Pwr & Lt Co 6.000% 06/01/2000 782,321 794,511
United States Treasury Treasury Notes DTD 03/02/1998 5.500% 02/28/2003 769,639 793,223
Indymac Mortgage Holdings, Inc Common Stock 1,928,889 792,225
United States Treasury Treasury Bills DTD 05/28/1998 MAT 05/27/1999 783,592 783,592
Banco Latinoamericano de ExportacionesS A European Note 44A, Tranche # TR0017, DTD 5/28/1997,
7.200%, 5/28/2002 2,735 782,025
Student Ln Marketing Assn DTD 12/02/1987 9.400% 05/31/2002 775,600 779,016
Prudential Ins Co Amer Cap NT 144A 6.875% 04/15/2003 743,903 775,200
Federal National Mortgage Assn. GTD Remic pass thru TR 1994-17 CL-F variable rate
2/25/2009 764,455 766,948
Green Tree Financial Corp 97-6 MFD Housing SR/SUB Pass thru CTF A-4 6.47% 1/15/2029 749,883 754,688
Oryx Energy Co. Common Stock 1,313,302 739,090
GMAC Commercial Mortgage Securties IncMTG pass thru SER 1997-C1 CL A-3 6.869% 7/15/2029 700,348 735,616
Federal Express Corp Pass thru 1998-1-A 6.72% 1/15/2022 707,273 733,432
Quebec Prov CDA Deb DTD 02/09/1994 7.125% 02/09/2024 713,168 731,586
MBNA Master Credit Card Tr II Ser 97-F Asset Backed CTF CL A 6.600% 11/15/2004 698,810 725,809
Xerox Corp Medium Term Notes Book Entry 5.910% 04/01/2037 700,000 718,529
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 313638 7.0% 7/1/2012 717,800 717,140
Thermo Electron Corp. Common Stock 1,437,520 713,937
Lehman Bros Holdings Inc Medium Term NTS Book Entry Tranche #TR 00262 6.625%
12/27/2002 709,569 704,641
Pier 1 Imports Inc. Common Stock 1,032,285 700,442
New American Holdings Inc GTD Sr Deb 10.125% 10/15/2012 683,040 697,458
Firstplus Home Loan Owner TR 1998-1 Asset backed note CL A-6 5/10/2020 699,827 696,717
Fairfax Final Holdings LTD Note 6.875% 4/15/2008 699,097 696,500
CIT RV TR 1998-A Asset backed note CL A-4 6.09% 2/15/2012 679,926 692,002
Olin Corp. Common Stock 881,825 690,837
Seagram Joseph E & Sons Inc GTD Deb 8.875% 09/15/2011 682,002 685,314
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 379750 6.5% 5/1/2012 635,998 664,565
Raytheon Co DTD 11/04/1998 6.150% 11/01/2008 650,805 661,941
Midland Bk Plc Sub NT DTD 06/24/1996 7.625% 06/15/2006 628,482 661,560
Comed Transitional FDG TR SER 1998 NT CL A-6 5.63% 6/25/2009 654,682 659,172
International Lease Finance Corp Medium Term NTS Book Entry Tranche # TR 00445 5.849%
04/02/2001 $ 644,573 $ 656,058
Quantum Corp. Common Stock 798,353 652,375
Florida Residential Property & CAS JT
Underwriting Association SER 144A 7.25% 7/1/2002 629,042 651,666
-25-
<PAGE>
Railcar Tr No 1992-1 TR NT 7.750% 06/01/2004 634,061 631,552
Citicorp Medium term note Tranche # SB 00195 DTD 11/6/1998 6.375%
11/15/2008 606,834 621,018
Advanta Mortgage Loan TR SER 97-1 Asset Backed CTF CL A-6, FLTG RT,
7/25/2027 618,491 615,248
Countrywide Home Loans Inc. Medium term notes DTD 10/21/1998 5.62% 10/16/2000 600,000 598,230
Federal Home Loan MTG Corp. Multiclass MTG PARTN CTFS GTD SER 01511 CL L 0.00% 5/15/2008 556,943 589,780
New Jersey Economic Dev Auth St Pension Fdg Rev DTD 06/15/1997 7.425% 02/15/2029 500,000 586,950
HRPT Properties TR SR Note CL A 6.75% 12/18/2002 590,790 584,166
Healthsouth Corp. Common Stock 1,062,740 574,294
RalCorp Holdings Inc NT 8.750% 09/15/2004 573,190 571,005
Newcourt Receivables Asset Tr 1997-1 Bkd NT CL A 4 6.193% 05/20/2005 550,000 559,097
American Express Commercial Paper 6.100%, DTD 12/29/98, Due 1/05/99 550,000 550,000
Prudential Ins Co Amer DTD 07/05/1995 7.650% 07/01/2007 537,900 547,050
Associated Materials Inc. Common Stock 616,643 545,200
Sun Life CFA US Cap TR I Ser 144A 8.526% 05/29/2049 500,000 542,615
Federal National Mortgage Assn. GTD Remic pass thru CTF TR 1993-169 CL-S 3.63% 9/25/2000 520,893 537,382
Total SA B ADR Sponsored ADR 455,472 537,300
Copelco Cap FDG TR 1998-A Lease backed note CL A-4 5.92% 7/15/2003 519,869 527,145
USA Waste Svcs Inc Sr NT DTD 12/17/1997 7.125% 12/15/2017 512,250 525,780
3M Employee Stock Ownership Plan TrustGTD Amortizing ESOP Note 144A 5.62% 7/15/2009 525,000 522,874
Philip Morris Cos Inc Puttable Reset Secs Purs 6.150% 03/15/2010 509,734 514,233
Money Store Tr 1998-B Asset Bkd CTF CL AF-3 6.080% 07/15/2017 510,000 510,275
Federal National Mortgage Assn. GTD Remic pass thru TR Series 1997-M7 CL V 7.8544% 9/25/2007 497,448 509,658
Time Warner Inc 7.75% 06/15/2005 506,791 508,778
Federal Home Loan MTG Corp. PARTN CTF Group #G10777 9.0% 6/1/2010 516,534 505,488
NationsLInk Fdg Corp Coml Mtg Pass Thru CTF 1998-2 CL A-1 6.001% 11/20/2007 499,877 502,622
First USA Credit Card Master TR Asset backed CTF SER 94-6 CL A FLTG RT 10/15/2003 504,824 501,090
Ford Credit Auto Owners TR 1998-A Asset backed note CL A-3 5.65% 10/15/2001 498,691 500,935
Finova Cap Corp. Note DTD 10/21/1998 5.875% 10/15/2001 497,070 500,380
Xerox Corp Medium Term Notes Book Entry Tranche # TR 00040 5.545%
07/22/2037 501,563 499,465
CSXT Trade Receivables Master Trust SER 1998-1 PARTN CTFS 6/25/2003 6.0% 7/25/2004 479,583 488,850
Petroleum Geo-Svcs A/S Sr NT DTD 04/02/1998 6.625% 03/30/2008 497,905 488,105
Prologis Trust Sr NT DTD 08/07/1998 7.050% 07/15/2006 498,925 487,875
Skandinaviska Enskilda Banken N Y Sub NT Step Up 144A 6.500% 12/29/2049 498,130 487,480
Green Tree Financial Corp 96-3 MFD Housing SR/SUB Pass thru CTF A-5 7.35% 7/15/2026 469,486 485,421
Fleet Financial Group Inc. New Sub Debt 6.7% 7/15/2028 465,534 477,746
American Express Co. Common Stock 483,429 471,500
Chase Commercial Mortgage Securities 1998-2 Mtg passthrough CTF CL A-2 6.39% 11/18/2030 455,038 464,891
Federal Home Loan MTG Corp. Multiclass MTG PARTN CTFS GTD SER 2081P CL C 6.25%
10/15/2026 452,795 464,310
NationsBank Corp 03/18/1998 5.75% 03/15/2001 458,238 463,910
Signet Helco Trust Home Equity LN Asset Bkd CTF Ser 95-A 06/20/2004 467,226 463,505
Tyco Intl Group S A NT 6.375% 06/15/2005 448,159 458,721
General Electric Cap Corp Medium term notes Tranche # TR 00269 DTD 4/3/1998 5.92%
4/3/2001 450,000 457,686
MCI Communications Corp NT Callable/Redeemable 6.125% 04/15/2002 454,851 456,849
Harman International Ind Inc Common Stock 511,780 453,688
California Infrastructure & Economic
Development SERl1997-1 CL A7 DTD 12/11/97 6.42% 12/26/2009 444,104 453,377
Capital One Bank Medium term note Tranche # 00038 6.74% 5/31/1999 452,822 451,598
Government National MTG Assn Pass thru CTF Pool #439497 7.5% 2/15/2027 450,984 451,460
Comdisco Inc. Manadatory par put remarketed securities 6.13% 8/1/2006 450,000 446,544
EOP Operating LTD Partnership Mandatory par put remarketed securities 6.376% 2/15/2002 449,330 445,851
Venator Group Inc Common Stock 1,693,833 442,000
Transocean Offshore Inc Deb 8.000% 04/15/2027 441,028 433,636
Citigroup Holdings Inc. Medium term serial note 7.125% 6/17/2002 419,094 430,795
Advanta Mortgage Loan TR SER 97-1 Asset Backed CTF CL A-2, 7.100%,
5/25/2020 424,047 426,545
-26-
<PAGE>
Amresco Residential Securities Corp. Mortgage Loan TR 1997-3 Pass Through CTF CL A-9, 6.960%,
3/25/2027 411,438 407,313
AT&T Corp. Medium Term Notes, #TR 00638 6.600%, 5/15/2005 427,270 407,176
Adaptec Inc. Common Stock 836,696 403,949
Royal Caribbean Cruises Ltd Sr NT DTD 10/14/1997 7.000% 10/15/2007 410,944 400,556
Sprint Capital Corp DTD 11/16/1998 6.125% 11/15/2008 389,711 398,514
Residential Fdg Mtg Secs II Inc Ser 1997-HS2 CL A Home Equity LN Bkd NT Fltg Rate 09/20/2022 398,747 396,142
Franklin Park Financing Corp Collateralized note SER 144A CL A floating rate 5/15/2002 399,960 396,125
Beneficial Home Equity Loan SER 1996-1 asset backed CTF CL A Variable rate 4/28/2026 397,392 394,507
Weyerhaeuser Co Common Stock 339,861 386,179
American Electric Power Inc Common Stock 374,636 376,504
Federal National Mortgage Assn. GTD MTG pass thru CTF pool #0006H2 5.0% 6/25/2007 367,123 374,420
Hercules Inc. Common Stock 636,209 365,150
Zurich Capital Trust DTD 05/30/1997 8.376% 06/01/2037 320,000 357,693
Georgia Pacific Corp. Common Stock 348,180 357,234
UCFC Loan Trust Home Equity LN CTF 1997-D CL A-4 6.670% 06/15/2020 350,000 356,804
Bear Stearns Cos Inc. SR Note DTD 7/15/1998, 6.250%, 7/15/2005 349,783 352,296
Keycorp Medium Term NTS Book Entry Tranche #TR 00050 7.000%
05/11/2005 338,026 352,067
Wachovia Corp Common Stock 350,352 349,752
Novellus Systems Inc Common Stock 239,668 341,550
Ford Cap BV 9.875% 5/15/2002 340,461 338,889
Cox Communications Common Stock 273,611 338,713
State Street Instit Capital A Cap Secs Ser A144A 7.94% 12/30/2026 318,558 336,732
United States Treasury Treasury Bonds DTD 08/15/1983 12.000% 08/15/2013 340,107 335,878
Bio Rad Laboratories Inc Class A Stock 393,819 327,600
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 393419 7.0% 8/1/2012 319,786 325,513
Oshkosh Truck Corp Class B Stock 149,912 324,625
Marshall Inds Com Common Stock 423,046 323,400
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 393419 7.0% 8/1/2012 311,498 319,330
Vanderbilt Mtg & Fin Inc 96A MFD HSG Sr/Sub Pass Thru CTF 1996-A CL A-5 DTD
04/01/1996 7.425% 04/07/2026 299,625 317,734
Boise Cascade Corp. Common Stock 381,837 316,200
Government National MTG Assn Pass thru CTF Pool #472821 7.0% 8/15/2000 319,348 315,705
United States Treasury Treasury Notes Series H DTD 06/30/1997 6.250% 06/30/2002 301,265 314,907
Hutchinson Technology Inc Common Stock 255,505 313,500
Vanderbilt Mtg & Fin Inc 96A MTD HSG Sr/Sub Pass Thru CTF A-4 7.175% 04/07/2026 299,953 310,747
General Motors Accep Corp Global Note DTD 1/22/1998 6.125% 1/2/2008 307,128 308,580
Bayerische Landesbank Girozentrale NY Branch, Medium Term SR DEP Notes, Tranche # SR00048, DTD
11/30/1998 5.875%, 12/01/2008
Highwoods / Forsyth LTD Partnership Note DTD 12/1/1996 7.0% 12/1/2006 319,644 303,505
Cendant Corporation DTD 11/30/1998 7.75% 12/1/2003 299,484 303,201
Noram Energy Term Enhanced Remktable Secs DTD 11/10/1998 6.375%
11/01/2003 299,376 302,964
Heller Financial Inc Medium term note Tranche # TR 00230 DTD 10/26/1998 5.875%
11/1/2000 299,799 299,967
Scotts Co Class A Stock 226,904 299,816
California Infrastructure & Economic
Development PG&E SER 1997-1 CL A8 6.48% 12/26/2009 274,656 287,504
Hussman International Common Stock 221,175 284,812
Suntrust Bks. Inc. Common Stock 244,922 283,050
General Instruments Corp. Common Stock 179,193 281,685
Southern Peru Ltd Ser A-1 Secured Expt NT DTD 05/30/1997 7.900% 05/30/2007 300,000 276,000
-27-
<PAGE>
Kaufman & Broad Home Corp Common Stock 195,359 276,000
Telecommunications Inc Deb DTD 08/03/1993 7.875% 08/01/2013 257,310 269,461
Enron Corporation Remarketed reset note floating rate 11/15/2037 260,000 263,575
Noble International LTD. Common Stock 266,928 262,800
NationsBank Corp Sr NT DTD 05/04/1998 6.375% 05/15/2005 260,882 259,862
Furon Co Common Stock 277,955 259,358
Petroleum Geo-Svcs A/S NT 7.500% 03/31/2007 262,718 258,795
Block Drug Inc Class A Stock 260,638 257,603
Esterline Technologies Common Stock 180,048 256,650
Prudential Ins Co Amer Sr NT 144A 6.375% 07/23/2006 252,210 255,785
Corn Products International Inc Common Stock 290,504 255,150
Beneficial Home Equity Loan TR SER 1995-1 Asset Backed CTF CL A-1,
6.35%, 3/28/2000 255,505 254,587
Transcanada Pipelines LTD Medium Term NTS Tranche # TR 00005 DTD 09/21/1998 6.490%
01/21/2009 254,415 254,417
Merrill Lynch & Co Inc Medium Term NTS Book Entry DTD 06/27/1997 6.470% 06/27/2000 253,008 254,328
Mid-State Tr Vi Asset Backed NT CL A-4 7.790% 07/01/2035 242,375 252,933
Manitoba Prov CDA Deb Ser Ef DTD 09/29/1998 5.500% 10/01/2008 248,405 252,800
Potomac Electric Power Co Common Stock 232,288 252,605
Tyco Intl Group S A NT 6.125% 06/15/2001 253,988 252,408
General Motors Accep Corp Global Note DTD 11/9/1998 5.75% 11/10/2003 249,035 251,940
Mellon Financial Co DTD 11/13/1998 5.750% 11/15/2003 249,537 251,732
Comdisco Inc. Medium term notes Tranche # 00138 DTD 11/25/1998 6.32%
11/27/2000 250,000 250,513
Household Affinity Credit Card Master CTR Card PARTN CTF CL A floating rate 9/15/2000 250,219 250,000
Williams Cos Inc Extendible Synthetic Put Note 144A 5.95% 02/15/2000 250,810 249,823
Petrozuata Fin Inc BD Ser B 144A 8.220% 04/01/2017 317,265 249,375
Valero Energy Corp Common Stock 371,796 248,625
Cleco Corp Common Stock 203,832 247,054
Occidental Pete Corp Sr NT 6.400% 04/01/2013 256,885 246,043
WPS Resources Corp Common Stock 196,226 243,225
Moog Inc Class A Stock 211,208 242,575
Network Applicance Inc Common Stock 69,026 242,158
New Era of Networks Inc Common Stock 73,259 237,600
Enron Corporation DTD 7/10/1998 6.95% 7/15/2028 244,109 237,168
Harleysville Group Inc Common Stock 167,463 234,898
May Dept Stores Co NT DTD 10/30/1998 5.950% 11/01/2008 231,356 234,262
Federal Home Loan MTG Corp. PARTN CTF Group #G10830 7.0% 9/1/2013 233,855 234,141
Microage Inc Common Stock 199,587 233,700
Peco Energy Co. Common Stock 146,799 225,450
Idacorp Inc Common Stock 203,403 224,366
Legato Sys Inc Common Stock 52,693 224,189
Cabot Corp Common Stock 204,863 223,504
Interstate Energy Corp Wisc Common Stock 202,276 222,525
Partnerre Holdings Ltd. Common Stock 188,488 219,600
United States Treasury Treasury Notes DTD 10/31/1996 6.250% 10/31/2001 220,073 218,793
United States Treasury Treasury Notes Series D DTD 08/15/1997 6.125% 08/15/2007 219,290 218,438
Borg Warner Automotive Inc Common Stock 188,514 217,671
Anixter International Inc Common Stock 186,072 217,349
Pepsico Inc. Common Stock 203,531 216,638
Electronic Data Systems Corp Common Stock 175,015 215,808
Everest Reins Holdings Inc Common Stock 190,755 214,159
Ruddick Corp Common Stock 171,108 211,600
Exide Corporation Common Stock 237,210 209,625
Granite Construction Inc Common Stock 96,155 208,091
Regis Corp Minn Common Stock 132,308 208,000
-28-
<PAGE>
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 283657 6.0% 3/1/2009 200,202 207,788
Merrill Lynch & Co Inc NT DTD 11/24/1998 6.875% 11/15/2018 199,018 207,330
Coca Cola Enterprises Inc. DTD 9/11/1998 6.75% 9/15/2028 197,840 207,010
Albany International Corp. New Class A Stock 242,368 206,805
California Wtr Svc Group Common Stock 176,432 206,666
Burlington Northern Santa Fe Corp. Note DTD 12/11/95 6.375% 12/15/2005 207,388 206,180
ERP Operating LTD Partnership Note DTD 8/13/1996 7.57% 8/15/2026 200,000 205,706
Insight Enterprises Inc Common Stock 76,183 204,772
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 280117 6.0% 4/1/2009 196,448 203,892
Medpartners Inc. Common Stock 377,815 203,700
Consolidated Paper Inc Common Stock 208,982 203,500
Franchise Financing Corp of America SR note DTD 10/30/1998 8.25% 10/30/2003 199,798 203,256
Lucent Technologies Inc DTD 11/24/1998 5.500% 11/15/2008 199,124 202,272
Dean Witter Discover & Co Note DTD 3/15/1993 6.25% 3/15/2000 201,168 201,368
Tesoro Pete Corp Common Stock 241,966 201,275
Provident Cos Inc Common Stock 141,193 199,200
Heilig-Meyers Master Trust SER 98-2 Asset backed CTF CL A 144A floating rate 7/20/2005 200,000 198,813
WorldCom Inc GA NT 6.400% 08/15/2005 189,616 197,471
Read-Rite Corp Common Stock 216,711 195,109
Brinker International Inc Common Stock 106,173 193,463
Fresh Delmonte Produce Common Stock 168,049 193,023
Kellwood Company Common Stock 213,444 190,000
Quebec Prov CDA Deb 11.000% 06/15/2015 204,340 189,093
Justin Industries Inc Common Stock 182,025 189,000
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 266975 6.0% 2/1/2009 181,303 188,173
Airborne Flight Corp. Common Stock 144,278 187,528
Washington Fed Inc Common Stock 178,525 186,816
Universal Health Svcs Inc Class B Stock 161,250 186,750
Alaska Air Group Inc. Common Stock 158,620 185,850
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 287310 6.0% 5/1/2009 177,311 184,030
Dallas Semi Conductor Corporation Common Stock 172,965 183,375
Russ Berrie & Co Common Stock 179,391 183,300
Sierra Health Services Inc Common Stock 176,260 183,248
Orion Capital Corp Common Stock 200,612 183,140
Pentair Inc Common Stock 167,986 183,140
Cadmus Communications Common Stock 207,262 183,087
American National Insurance Co Common Stock 197,306 182,050
Webb Del Corp Common Stock 149,303 181,916
Alexander & Baldwin Inc. Common Stock 210,600 181,350
Astoria FINL Corp. Common Stock 143,734 180,713
Chesapeake Corp Common Stock 168,144 180,687
Exar Corporation Common Stock 203,000 180,600
World Color Press Inc Common Stock 159,331 179,584
Kulicke & Soffa Industries Inc Common Stock 172,106 179,275
Penn Engr & Mfg Corp Common Non-voting Stock 210,330 179,000
Veritas Software Co Common Stock 75,766 178,316
Helmerich & Payne Inc Common Stock 214,904 178,250
ESG Re Ltd. ISIN #BMG312151092 Common Stock 183,600 178,200
Vitesse Semiconductor Corp Common Stock 69,615 177,938
Sanmina Corp Common Stock 90,409 177,750
Credit Suisse First Boston Mortgage Commercial Mortgage pass thru CTF
Securities 1997-C2 CL A-2 6.52% 7/17/2007 170,823 177,320
Lyondell Petrochemical Co Common Stock 179,483 176,400
Coastal Corp. Common Stock 164,964 175,625
Arvin Industries Inc Common Stock 147,574 175,090
-29-
<PAGE>
Kelly Services Inc Class A Stock 169,679 174,625
Fleetwood Enterprises Inc Common Stock 172,760 173,750
Alltrista Corp Common Stock 170,097 172,800
Longs Drug Stores Inc Common Stock 136,736 172,500
Mercury Interactive Corp Common Stock 86,971 170,775
Universal Corp VA Common Stock 191,006 168,600
Russell Corp Common Stock 253,307 168,598
Fuller H B Co Common Stock 179,414 168,438
Structured Asset Secs Corp Mtg Pass Thru CTF Ser 1996-CFL CL X-1 Flt Rt 02/25/2028 159,724 168,280
Concord EFS Inc Common Stock 64,727 165,263
Transaction Sys Architects Inc Class A Common Stock 107,303 165,000
Edison International Common Stock 170,717 164,463
Bowne & Company Inc Common Stock 174,565 164,450
VLSI Technology Inc Common Stock 146,733 162,976
BJS Wholesale Club Inc Common Stock 104,976 162,095
Springs Industries Common Stock 186,529 161,608
Reliastar Financial Corp Common Stock 120,126 161,438
Express Scripts Inc Class A Stock 56,867 161,100
Sequent Computer Sys Inc Common Stock 181,286 160,438
Burlington Industries Inc Common Stock 193,276 160,200
Talbots Inc Common Stock 107,325 160,013
AAR Corporation Common Stock 175,956 159,963
International Network Svc Common Stock 61,339 159,600
Toro Company Common Stock 230,220 159,600
Stride Rite Corp Common Stock 189,411 159,250
Papa Johns Intl Inc Common Stock 111,853 158,850
Enhance Financial Svcs Group Inc Common Stock 100,581 156,000
Complete Business Solutions Inc Common Stock 75,995 155,825
Perrigo Company Common Stock 196,159 154,228
Tektronix Inc Common Stock 185,490 150,315
Quantum Corp Common Stock 147,900 148,750
Washington Water Power Co Common Stock 168,291 148,225
Merrill Lynch Mtg Invs Inc MTG Pass Thru CTF 1995-C2 CL IO Int Only 06/15/2021 190,349 147,872
Bay View Capital Corporation Common Stock 211,969 147,478
American Safety Razor Co Common Stock 137,250 146,400
New Jersey Res Corp Common Stock 132,082 146,150
Standard Register Co Common Stock 160,744 145,409
Millennium Chemicals Inc Common Stock 198,569 145,088
Wisconsin Energy Corp Common Stock 140,814 144,615
Commercial Metals Co Common Stock 166,552 144,300
St. Paul Bancorp Inc. Common Stock 131,467 144,260
Pediatrix Medical Group Common Stock 104,711 143,851
Medicis Pharmaceutical Corp New Class A Stock 100,511 143,700
Schweitzer-Mauduit International Inc Common Stock 202,551 143,573
United States Dept Veterans Vendee Mtg Tr 1992-2 CL IO 09/15/2022 249,425 142,661
Lam Resh Corp Common Stock 240,381 142,504
Zale Corp Common Stock 134,070 141,900
Roadway Express Inc Common Stock 225,541 141,492
Kaman Corp Class A Stock 136,939 141,354
Wind Riv Sys Inc Common Stock 104,113 141,000
Cytec Industries Inc Common Stock 165,471 140,250
Wellman Inc Common Stock 279,354 138,557
First Rep Bank San Franciso Calif Common Stock 164,089 137,846
Arch Coal Inc Common Stock 203,499 137,000
-30-
<PAGE>
Civic Bancorp Common Stock 181,532 136,475
Federal National Mortgage Assn. GTD Remic pass thru CTF Remic TR 1993-100 CL-J prin only
6/25/2023 105,609 136,352
Quanex Corp Common Stock 179,645 135,378
Midamerican Energy Holdings Co Common Stock 106,690 134,375
Southwestern Energy Co Common Stock 222,705 134,250
Documentum Inc Common Stock 82,426 133,595
Westamerica Bancorporation Common Stock 107,719 132,300
Michael Foods Inc Common Stock 46,750 132,000
Federal National Mortgage Assn. GTD MTG pass thru CTF pool #263006 6.0% 1/1/2009 126,689 131,489
Federal National Mortgage Assn. GTD MTG pass thru CTF pool #0000F0 0.0% 8/25/2021 122,931 130,540
Andrew Corp Common Stock 138,714 130,350
Vanderbilt Mtg & Fin Inc 97B MFD HSG Sr/Sub Pass Thru CL IIA-1 Adj 07/07/2028 130,170 130,197
Whittman-Hart Inc Common Stock 66,057 129,838
Ford Motor CR Co. Note DTD 10/26/1998 5.125% 10/15/2001 129,639 129,103
Tetra Tech Inc Common Stock 70,886 128,712
Eastern Enterprises Common Stock 117,802 126,875
Suiza Foods Corp Common Stock 113,135 126,836
Pool Energy Services Co Common Stock 232,961 126,512
Federal Home Loan MTG Corp. Multiclass MTG PARTN CTFS GTD SER 1765B CL A 10.0% 1/15/2017 130,295 125,520
Wicor Inc Common Stock 126,749 122,153
Kaiser Aluminum Corp Common Stock 254,301 120,900
Federal National Mortgage Assn. GTD Remic pass thru CTF Remic TR 1993-100 CL-N prin only
6/25/2023 92,363 119,765
Golden est Financial orp Common Stock 101,761 119,194
Chelsea GCA Realty DTD 1/23/1996 7.75% 1/26/2001 120,379 119,144
Burlington Coat Factory Whse. Corp Common Stock 112,578 119,085
Interface Inc Class A Stock 172,416 118,797
Medquist Inc Common Stock 69,447 118,500
Uniphase Corp Common Stock 57,315 117,937
Qlogic Corp Common Stock 62,519 117,787
Gatx Corp Common Stock 84,243 117,412
Hexcel Corp Common Stock 298,401 117,250
Blyth Industries Inc Common Stock 97,956 117,187
Cyprus Amax Minerals Co Common Stock 181,243 116,000
RF Micro Devices Inc Common Stock 69,613 115,938
Intervoice Inc Common Stock 77,922 113,850
Applied Micro Circuits Corp Common Stock 66,743 112,098
Gucci Group NV Common Stock 141,340 111,838
Pacificorp Common Stock 113,832 109,528
Motive Power Inds Inc Common Stock 85,991 109,439
Wyman Gordon Co Common Stock 231,007 109,318
Abacus Dirct Corp. Common Stock 77,417 109,200
Aztar Corp Common Stock 146,376 107,842
Frontier Ins Group Inc Common Stock 173,905 107,635
Pinnacle Systems Inc Common Stock 107,527 107,250
Peregrine Systems Inc Common Stock 81,409 106,662
Chris Craft Industries Inc Common Stock 109,394 106,014
Prudential Home Mtg Secs Co Mtg Pass Thru CTFS Ser 1992-36 CL A-7 6.500% 11/25/1999 103,925 105,028
Medical Manager Corp Common Stock 81,095 103,537
Federal Home Loan MTG Corp. PARTN CTF Group #C16343 7.5% 10/1/2028 101,466 102,537
Concord Communications Inc Common Stock 74,168 102,150
Macromedia Inc Common Stock 58,476 101,064
Terra Industries Inc Common Stock 199,890 100,864
Marlin Wtr Tr & Marlin Wtr Cap Corp Sr Secd NT 144A DTD 12/17/1998 7.090% 12/15/2001 100,000 100,466
Vintage Pete Inc Common Stock 210,299 100,050
-31-
<PAGE>
Visio Corp Common Stock 82,795 98,720
Central Vt Public Svc Corp Common Stock 138,004 97,525
AHL Services Inc. Common Stock 98,053 96,875
Cleveland Cliffs Inc Common Stock 103,996 96,751
United Rentals Inc Common Stock 76,151 96,062
Southern Co. Common Stock 85,379 95,908
Centocor Inc. Common Stock 85,653 94,763
Tekelec Common Stock 97,978 94,409
Whole Foods Market Inc Common Stock 72,984 91,913
Dollar Tree Stores Inc Common Stock 45,078 91,745
Texas Inds Inc Common Stock 129,393 91,589
Structural Dynamics Resh Corp Common Stock 62,585 91,425
Sipex Corp Common Stock 61,227 91,325
Pacific Gateway Exchange Common Stock 78,336 91,320
CMP Group Inc Common Stock 92,199 90,600
CKE Restaurants Inc Common Stock 73,329 89,050
Thomas Industries Inc Common Stock 96,293 88,313
Coach USA Common Stock 82,026 86,720
Empire Dist Electric Co Common Stock 77,210 86,625
Kellstrom Industries Inc Common Stock 74,258 86,250
Smurfit-Stone Container Corp. Common Stock 106,150 86,102
United States Treasury Treasury Notes DTD 05/06/1998 5.625% 05/15/2008 84,200 85,362
Action Perfomance Cos Inc. Common Stock 84,168 84,900
Oneida Ltd Common Stock 87,194 83,693
Federal Home Loan MTG Corp. PARTN CTF Group #D83270 7.50% 10/1/2027 83,496 83,563
Lillian Vernon Corp Common Stock 75,879 82,500
Adelphia Communications Corp. Common Stock 61,704 82,350
Transwitch Corp Common Stock 50,580 81,770
Michaels Stores Inc Common Stock 147,482 81,423
Mueller Inds Inc Common Stock 102,940 81,252
Metro Information Services Inc Common Stock 81,977 81,000
Reliance Steel & Aluminum Co Common Stock 88,210 80,113
Polycom Inc Common Stock 45,142 80,100
Rayonier Inc Common Stock 72,565 78,095
Lubrizol Corp Common Stock 77,334 77,064
Southdown Inc Common Stock 58,185 76,944
Maxim Group Common Stock 50,874 76,800
Hunt Corporation Common Stock 158,116 75,437
Province Healthcare Co Common Stock 61,926 75,337
Ann Taylor Stores Corp Common Stock 48,809 74,932
Kroll O Gara Co Common Stock 59,112 74,932
Gymboree Corp Common Stock 167,079 73,950
Government National MTG Assn Pass thru CTF Pool #080094 6.0% 7/20/2027 71,321 71,947
CVS Corp. Common Stock 67,485 71,500
Genesco Inc Common Stock 154,153 71,100
Inland Steel Industries Inc Common Stock 109,457 70,453
Kendle International Inc Common Stock 75,822 70,125
Asyst Technologies Common Stock 46,238 69,275
Newfield Expl. Co. Common Stock 68,904 68,888
Citadel Communications Corp Common Stock 51,057 67,275
CDW Computer Centers Inc Common Stock 65,412 67,157
Best Software Inc Common Stock 70,455 66,500
Apex PC Solutions Inc Common Stock 57,492 66,412
Bindview Development Corp Common Stock 51,971 66,000
Computer Sciences Corp Common Stock 69,615 64,250
Healthcare Financial Partners Common Stock 68,292 63,800
-32-
<PAGE>
AGCO Corporation Common Stock 224,024 63,787
Diamond Technology Partners Inc Common Stock 85,547 63,112
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 275770 6.0% 3/1/2009 60,420 62,709
Metamor Worldwide Inc Common Stock 65,826 62,500
Quadramed Corp Common Stock 88,074 61,500
Brush Wellman Inc Common Stock 87,491 61,033
Allied Waste Industries Inc. Common Stock Par $001 new 39,701 59,417
Curtiss Wright Corp Common Stock 40,214 57,187
Mariner Post-Acute Nework Inc Common Stock 205,852 56,397
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 275059 6.0% 3/1/2009 53,039 54,980
Waters Corp Common Stock 21,463 52,350
United States Dept Veterans Affairs GTD Remic Pass Thru Vendee Mtg Tr 1994-3 IO VAR RT 09/15/2024 87,019 51,471
Parexel International Corp Common Stock 57,206 50,000
Schuler Homes Inc Common Stock 40,537 49,163
Rental Svc Corp Common Stock 72,698 48,633
Ciber Inc Common Stock 34,082 47,282
China Tire Holdings LTD Common Stock 88,041 45,230
Power Integrations Inc Common Stock 42,535 45,113
Guilford Mls Inc Common Stock 37,531 43,389
Building One Services Corp Common Stock 33,699 41,750
Novacare Inc Common Stock 191,082 41,250
Federal Home Loan MTG Corp. PARTN CTF Group #D82608 7.50% 9/1/2027 41,168 41,201
Rock-Tenn Co Class A Stock 40,245 40,651
Federal Home Loan MTG Corp. PARTN CTF Group #S10063 7.50% 10/1/2027 55,972 40,254
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 276664 6.0% 3/1/2009 37,972 39,410
Vendee Mtg Tr Remic Pass Thru CTF 96-1 CL IO Int Only 02/15/2026 81,139 38,128
Federal National Mortgage Assn. GTD MTG pass thru CTF pool # 390375 7.0% 7/1/2012 35,838 36,480
Wesley Jessen Visioncare Inc Common Stock 47,138 36,075
Unit Corp Common Stock 51,663 34,342
Theragenics Corp Common Stock 31,472 34,257
Foundation Health Sys Inc Common Stock 57,965 33,250
SS&C Technologies Inc Common Stock 50,491 29,700
SM&A Corp Common Stock 34,584 28,500
PC Connection Inc Common Stock 25,374 28,200
Government National MTG Assn Pass thru CTF Pool #428620 7.5% 8/15/1999 24,320 25,000
Manhattan Assoc Inc Common Stock 19,432 21,800
Structured Asset Secs Corp Mtg Pass Thru CTF Ser 1996-CFL CL X-2 1.274% 02/25/2028 30,163 20,585
Federal Home Loan MTG Corp. PARTN CTF Group SER #S01262 0.0% 1/1/2028 17,582 19,561
Traveler's PPTY AS Corp Common Stock 19,237 18,600
United States Dept Veterans Affairs GTD Remic Pass Thru Vendee Mtg Tr 1994-2 CL 3 IO 06/15/2014 25,781 17,586
Croatia ISTN#XS0068364701, SER B FLTG RATE 07/31/2006 20,075 15,298
United States Dept Veteran Vendee Mtg Tr 1994-2 CL VAR RT 06/15/2006 46,440 15,171
Atlantic Data Services Inc Common Stock 30,257 13,701
Federal National Mortgage Assn. GTD Remic pass thru SER 1992-148 CL C 11.00% 4/25/2019 23,079 11,330
United States Dept Veterans Affairs GTD Remic Pass Thru CTFS Vendee Mtg Tr 1994-3 CL 2-IO VAR RT
09/15/20 18,399 10,954
Vincam Group Inc Common Stock 16,348 10,713
NBTY Inc Common Stock 10,136 9,262
Proxim Inc Common Stock 7,923 8,006
Tarrant Apparel Group Common Stock 3,927 3,975
* Bankers Trust Participation in Pyramid Directed Cash Account 3,767 3,767
Federal Home Loan MTG Corp. PARTN CTF Group SER 0183 DTD 4/10/1997 4/1/2027 1,941 2,103
Residential Fdg Mtg Secs I Inc Mtg Pass Thru CTF Ser 1997-S122 CL A-3 7.250% 08/25/2027 470 470
Government National MTG Assn Pass thru CTF Pool #428621 7.5% 12/15/2037 63 68
* Northrop Grumman Participant Loans 56,363,709
-------------
3,629,993,379
=============
* Party in interest
</TABLE>
-33-
<PAGE>
Exhibit 1
---------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement
No. 33-59853 of Northrop Grumman Corporation on Form S-8 of our report
dated June 24, 1999, appearing in this Annual Report on Form 11-K of
the Northrop Grumman Savings and Investment Plan for the year ended
December 31, 1998.
/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP
Los Angeles, California
June 29, 1999
-34-
