FORM 10-K/A
Amendment No. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 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 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
--------------- ----------------
Commission file number 1-720
-------------------------------------------
Phillips Petroleum Company
(Exact name of registrant as specified in its charter)
Delaware 73-0400345
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Phillips Building, Bartlesville, Oklahoma 74004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 918-661-6600
- -----------------------------------------------------------------
Filing Additional Exhibits
<PAGE>
Item 14 - Exhibits
- ------------------
The registrant is filing with this Amendment No. 1 Annual Reports
on Form 11-K for the Thrift Plan of Phillips Petroleum Company,
the Long-Term Stock Savings Plan of Phillips Petroleum Company
and the Retirement Savings Plan of Phillips Petroleum Company.
1
<PAGE>
PHILLIPS PETROLEUM COMPANY
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- -----------
3(i) Restated Certificate of Incorporation, as filed with
the State of Delaware July 17, 1989.*
(ii) Bylaws of Phillips Petroleum Company, as amended
effective February 13, 1995 (incorporated by
reference to Exhibit 3(ii) to Quarterly Report on
Form 10-Q for the three months ended September 30,
1995).
4(a) Indenture dated as of September 15, 1990, between
Phillips Petroleum Company and First Trust National
Association (formerly Bank of America Illinois),
relating to the 9 1/2% Notes due 1997 and the 9 3/8%
Notes due 2011 (incorporated by reference to Exhibit
4(c) to Annual Report on Form 10-K for the year ended
December 31, 1990).
(b) Indenture dated as of September 15, 1990, as
supplemented by Supplemental Indenture No. 1 dated
May 23, 1991, between Phillips Petroleum Company and
First Trust National Association (formerly Bank of
America Illinois), relating to the 9.18% Notes due
September 15, 2021, the 9% Notes due 2001, the 8.86%
Notes due May 15, 2022, the 8.49% Notes due
January 1, 2023, the 7.92% Notes due April 15, 2023,
the 7.20% Notes due November 1, 2023 and the 6.65%
Notes due March 1, 2003 (incorporated by reference to
Exhibit 4(d) to Annual Report on Form 10-K for the
year ended December 31, 1991).
(c) Preferred Share Purchase Rights as described in the
Rights Agreement dated as of July 10, 1989, between
Phillips Petroleum Company and Chemical Bank
(formerly Manufacturers Hanover Trust Company).*
(d) Amendment dated May 16, 1990, to the Rights Agreement
dated July 10, 1989, between Phillips Petroleum
Company and Chemical Bank (formerly Manufacturers
Hanover Trust Company) (incorporated by reference to
Exhibit 1 to Current Report on Form 8-K dated May 16,
1990).
2
<PAGE>
PHILLIPS PETROLEUM COMPANY
INDEX TO EXHIBITS
(Continued)
Exhibit
Number Description
- ------- -----------
The company incurred during 1995 certain long-term
debt not registered pursuant to the Securities
Exchange Act of 1934. No instrument with respect to
such debt is being filed since the total amount of
the securities authorized under any such instrument
did not exceed 10 percent of the total assets of the
company on a consolidated basis. The company hereby
agrees to furnish to the Securities and Exchange
Commission upon its request a copy of such instrument
defining the rights of the holders of such debt.
Material Contracts
10(a) Agreement dated December 23, 1984, among Mesa Partners
and related entities and Phillips Petroleum Company
and the schedules, annexes and exhibit thereto.*
(b) Letter Agreement dated December 23, 1984, among Mesa
Partners and related entities and Phillips Petroleum
Company.*
(c) Trust Agreement dated December 12, 1995, between
Phillips Petroleum Company and Vanguard Fiduciary
Trust Company, as Trustee of the Phillips Petroleum
Company Compensation and Benefits Arrangements Stock
Trust.*
Management Contracts and Compensatory Plans or Arrangements
(d) 1986 Stock Plan of Phillips Petroleum Company
(Incorporated by reference to Exhibit 10(d) to Annual
Report on Form 10-K for the year ended December 31,
1992).
(e) 1990 Stock Plan of Phillips Petroleum Company.*
(f) Annual Incentive Compensation Plan of Phillips
Petroleum Company (incorporated by reference to
Exhibit 10(f) to Annual Report on Form 10-K for the
year ended December 31, 1992).
(g) Incentive Compensation Plan of Phillips Petroleum
Company (incorporated by reference to Exhibit 10(g)
to Annual Report on Form 10-K for the year ended
December 31, 1994).
3
<PAGE>
PHILLIPS PETROLEUM COMPANY
INDEX TO EXHIBITS
(Continued)
Exhibit
Number Description
- ------- -----------
10(h) Principal Corporate Officers Supplemental Retirement
Plan of Phillips Petroleum Company.*
(i) Phillips Petroleum Company Supplemental Executive
Retirement Plan (incorporated by reference to Exhibit
10(i) to Annual Report on Form 10-K for the year
ended December 31, 1993).
(j) Key Employee Deferred Compensation Plan of Phillips
Petroleum Company (incorporated by reference to
Exhibit 10(j) to Annual Report on Form 10-K for the
year ended December 31, 1994).
(k) Non-Employee Director Retirement Plan of Phillips
Petroleum Company.*
(l) Omnibus Securities Plan of Phillips Petroleum Company
(incorporated by reference to Exhibit 10 to Quarterly
Report on Form 10-Q for the quarter ended June 30,
1993).
(m) Deferred Compensation Plan for Non-Employee Directors
of Phillips Petroleum Company.*
12 Computation of Ratio of Earnings to Fixed Charges.*
21 List of Subsidiaries of Phillips Petroleum Company.*
23 Consent of Independent Auditors.*
27 Financial Data Schedule.*
99(a) Form 11-K, Annual Report, of the Thrift Plan of
Phillips Petroleum Company for the fiscal year ended
December 31, 1995.
(b) Form 11-K, Annual Report, of the Long-Term Stock
Savings Plan of Phillips Petroleum Company for the
fiscal year ended December 31, 1995.
4
<PAGE>
PHILLIPS PETROLEUM COMPANY
INDEX TO EXHIBITS
(Continued)
Exhibit
Number Description
- ------- -----------
99(c) Form 11-K, Annual Report, of the Retirement Savings
Plan of Phillips Petroleum Company for the fiscal
year ended December 31, 1995.
*Filed with the original Annual Report on Form 10-K for year
ended December 31, 1995.
Copies of the exhibits listed in this Index to Exhibits are
available upon request for a fee of $3.00 per document. Such
request should be addressed to:
Secretary
Phillips Petroleum Company
1234 Adams Building
Bartlesville, OK 74004
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned thereunto duly authorized.
PHILLIPS PETROLEUM COMPANY
/s/ L. F. Francis
--------------------------
L. F. Francis
Controller
June 24, 1996
6
<PAGE>
Exhibit 99(a)
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the 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 33-50134
---------------------------------
THRIFT PLAN OF PHILLIPS PETROLEUM COMPANY
(Full title of the Plan)
PHILLIPS PETROLEUM COMPANY
(Name of issuer of securities)
Bartlesville, Oklahoma 74004
(Address of principal executive office) (Zip code)
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
--------------------
Financial statements of the Thrift Plan of Phillips Petroleum
Company, filed as a part of this annual report, are listed in the
accompanying index.
(b) Exhibits
--------
Exhibit 1 Consent of Ernst & Young LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Thrift Plan Committee has duly caused this annual
report to be signed on its behalf by the undersigned hereunto
duly authorized.
THRIFT PLAN OF
PHILLIPS PETROLEUM COMPANY
/s/ L. F. Francis
---------------------------------
L. F. Francis
Member
Thrift Plan Committee
June 24, 1996
1
<PAGE>
- -----------------------------------------------------------------
Index To Financial Statements Thrift Plan Of Phillips
And Schedules Petroleum Company
Page
Report of Independent Auditors .............................. 3
Financial Statements
Statements of Net Assets Available for Benefits
at December 31, 1995 and 1994
Total Plan ............................................. 4
Fund A ................................................. 6
Combined Funds B and C ................................. 8
Fund D--Deposit Administration Account ................. 10
Fund D--Deferred Settlement Account .................... 12
Fund E ................................................. 14
Fund F ................................................. 16
Loan Fund .............................................. 18
Temporary Investment Fund .............................. 20
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 1995, 1994 and 1993
Total Plan ............................................. 5
Fund A ................................................. 7
Combined Funds B and C ................................. 9
Fund D--Deposit Administration Account ................. 11
Fund D--Deferred Settlement Account .................... 13
Fund E ................................................. 15
Fund F ................................................. 17
Loan Fund .............................................. 19
Temporary Investment Fund............................... 21
Notes to Financial Statements ............................. 22
Supplemental Schedules
Schedule of Assets Held for Investment Purposes
at December 31, 1995 .................................... 31
Schedule of Reportable Transactions for the
Year Ended December 31, 1995 ............................ 32
2
<PAGE>
- -----------------------------------------------------------------
Report Of Independent Auditors
The Thrift Plan Committee
Thrift Plan of Phillips Petroleum Company
We have audited the accompanying statement of net assets available
for benefits of the Thrift Plan of Phillips Petroleum Company
(Plan) as of December 31, 1995 and 1994, and the related statement
of changes in net assets available for benefits for each of the
three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Thrift Plan
Committee (Committee). 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 the Committee, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for
benefits of the Plan at December 31, 1995 and 1994, and the
changes in its net assets available for benefits for each of the
three years in the period 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 accompanying
supplemental schedules of assets held for investment purposes as
of December 31, 1995, and reportable transactions for the year
ended December 31, 1995, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act
of 1974, and are not a required part of the basic financial
statements. The fund information presented on pages 6 through 21
listed in the accompanying index to financial statements and
schedules is presented for purposes of additional analysis rather
than to present the net assets available for benefits and changes
in net assets available for benefits of each fund. The
supplemental schedules and fund information have been subjected to
the auditing procedures applied in our 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/ Ernst & Young LLP
Tulsa Oklahoma ERNST & YOUNG LLP
June 24, 1996
3
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
Thousands of Dollars
------------------------
At December 31 1995 1994
------------------------
Assets
Investments
Phillips Petroleum Company
common stock $ 704,705 676,075
Insurance contracts 285,462 332,814
BT Pyramid Government Securities
Cash Fund 9,356 18,369
BT Pyramid Large Capitalization
Equity Index Fund 71,911 51,486
BZW Barclays Global Investors
Government/Corporate
Bond Index Fund E* 74,816 70,712
BT Pyramid Discretionary Cash Fund 66,264 59,748
Loans to Plan participants 18,868 17,837
- -----------------------------------------------------------------
1,231,382 1,227,041
Cash 1 -
Contributions Receivable 568 578
Employee Deposits Receivable 204 182
Loan Repayments Receivable 73 49
Interest Receivable 1,446 1,589
Securities Sold 1,241 -
- -----------------------------------------------------------------
Total Assets 1,234,915 1,229,439
- -----------------------------------------------------------------
Liabilities
Securities Purchased - 1,493
Other Liabilities - 3
- -----------------------------------------------------------------
Total Liabilities - 1,496
- -----------------------------------------------------------------
Net Assets Available for Benefits $1,234,915 1,227,943
=================================================================
See Notes to Financial Statements.
*Formerly Wells Fargo
4
<PAGE>
- -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
Thousands of Dollars
------------------------------------
Years Ended December 31 1995 1994 1993
------------------------------------
Additions
Contributions and Deposits
Company contributions
Matching $ 5,742 5,854 5,986
Before-tax deposits 17,601 17,313 16,518
Employee deposits 15,865 16,429 17,913
Transfer from Other Plans - - 34
- -----------------------------------------------------------------
39,208 39,596 40,451
- -----------------------------------------------------------------
Investment Income
Dividends 24,471 24,213 26,091
Interest
Participant loans 1,179 919 -
Other 30,530 33,492 35,642
Net appreciation 60,994 82,085 109,944
- -----------------------------------------------------------------
117,174 140,709 171,677
- -----------------------------------------------------------------
Total Additions 156,382 180,305 212,128
- -----------------------------------------------------------------
Deductions
Distributions to
Participants or Their
Beneficiaries
Cash 109,754 123,967 96,790
Phillips Petroleum Company
common stock 39,221 45,868 36,256
Forfeitures 12 2 9
Administrative Expense 404 452 425
Interest Expense 19 43 23
- -----------------------------------------------------------------
Total Deductions 149,410 170,332 133,503
- -----------------------------------------------------------------
Net Increase 6,972 9,973 78,625
Net Assets Available for
Benefits
Beginning of Year 1,227,943 1,217,970 1,139,345
- -----------------------------------------------------------------
End of Year $1,234,915 1,227,943 1,217,970
=================================================================
See Notes to Financial Statements.
5
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND A
Thousands of Dollars
------------------------
At December 31 1995 1994
------------------------
Assets
Investments
BZW Barclays Global Investors
Government/Corporate
Bond Index Fund E* $74,816 70,712
- -----------------------------------------------------------------
74,816 70,712
Due from Temporary Investment Fund 107 123
Cash 1 -
- -----------------------------------------------------------------
Total Assets 74,924 70,835
- -----------------------------------------------------------------
Liabilities
Other Liabilities - 1
- -----------------------------------------------------------------
Total Liabilities - 1
- -----------------------------------------------------------------
Net Assets Available for Benefits $74,924 70,834
=================================================================
Number of Units 6,156,676 6,939,191
Unit Value $12.1696 10.2079
- -----------------------------------------------------------------
See Notes to Financial Statements.
*Formerly Wells Fargo
6
<PAGE>
- -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
FUND A
Thousands of Dollars
---------------------------------
Years Ended December 31 1995 1994 1993
---------------------------------
Additions
Investment Income
Interest $ 2 2 300
Net appreciation
(depreciation) 12,772 (3,127) 7,894
- -----------------------------------------------------------------
12,774 (3,125) 8,194
Allocation of Deposits and
Earnings from Temporary
Investment Fund 1,117 1,333 1,347
- -----------------------------------------------------------------
Total Additions 13,891 (1,792) 9,541
- -----------------------------------------------------------------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries 7,591 9,561 12,745
Administrative Expense 68 124 92
- -----------------------------------------------------------------
Total Deductions 7,659 9,685 12,837
- -----------------------------------------------------------------
Interfund Transfers (2,142) (8,410) 17,681
- -----------------------------------------------------------------
Net Increase (Decrease) 4,090 (19,887) 14,385
Net Assets Available for
Benefits
Beginning of Year 70,834 90,721 76,336
- -----------------------------------------------------------------
End of Year $74,924 70,834 90,721
=================================================================
See Notes to Financial Statements.
7
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
COMBINED FUNDS B AND C
Thousands of Dollars
------------------------
At December 31 1995 1994
------------------------
Assets
Investments
Phillips Petroleum Company
common stock $704,705 676,075
BT Pyramid Government Securities
Cash Fund 6,020 15,019
- -----------------------------------------------------------------
710,725 691,094
Due from Temporary Investment Fund
--Fund B 2,523 2,591
Contributions Receivable--Fund C 452 487
Interest Receivable 54 60
Securities Sold 1,241 -
- -----------------------------------------------------------------
Total Assets 714,995 694,232
- -----------------------------------------------------------------
Liabilities
Securities Purchased - 1,493
- -----------------------------------------------------------------
Total Liabilities - 1,493
- -----------------------------------------------------------------
Net Assets Available for Benefits $714,995 692,739
=================================================================
Net Assets Available for Benefits
Fund B $472,537 451,491
Fund C 242,458 241,248
- -----------------------------------------------------------------
$714,995 692,739
=================================================================
Number of Units
Fund B 6,285,468 6,248,165
Fund C 3,225,073 3,338,624
- -----------------------------------------------------------------
9,510,541 9,586,789
- -----------------------------------------------------------------
Unit Value $75.1793 72.2598
- -----------------------------------------------------------------
See Notes to Financial Statements.
8
<PAGE>
- -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
COMBINED FUNDS B AND C
Thousands of Dollars
----------------------------------
Years Ended December 31 1995 1994 1993
----------------------------------
Additions
Investment Income
Dividends $ 24,471 24,213 26,091
Interest 702 434 396
Net appreciation 29,404 84,226 99,550
- -----------------------------------------------------------------
54,577 108,873 126,037
Matching Company
Contributions--Fund C 5,742 5,854 5,986
Allocation of Deposits and
Earnings from Temporary
Investment Fund--Fund B 26,050 25,932 26,322
- -----------------------------------------------------------------
Total Additions 86,369 140,659 158,345
- -----------------------------------------------------------------
Deductions
Distributions to Participants
or Their Beneficiaries
Cash--Fund B 19,781 29,130 28,438
Cash--Fund C 10,295 13,557 12,036
Phillips Petroleum Company
common stock--Fund B 26,953 33,655 26,297
Phillips Petroleum Company
common stock--Fund C 12,268 12,213 9,959
Forfeitures--Fund C 12 2 9
Administrative Expense 122 119 229
Interest Expense 19 43 23
- -----------------------------------------------------------------
Total Deductions 69,450 88,719 76,991
- -----------------------------------------------------------------
Interfund Transfers 5,337 (11,161) (84,113)
- -----------------------------------------------------------------
Net Increase (Decrease) 22,256 40,779 (2,759)
Net Assets Available for
Benefits
Beginning of Year 692,739 651,960 654,719
- -----------------------------------------------------------------
End of Year $714,995 692,739 651,960
=================================================================
Net Assets Available for
Benefits
Fund B $472,537 451,491 451,092
Fund C 242,458 241,248 200,868
- -----------------------------------------------------------------
$714,995 692,739 651,960
=================================================================
See Notes to Financial Statements.
9
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND D--DEPOSIT ADMINISTRATION ACCOUNT
Thousands of Dollars
----------------------
At December 31 1995 1994
----------------------
Assets
Investments
Insurance contracts
Travelers Insurance Company,
Group Annuity Contract GR-15505 $127,316 158,442
The Prudential Insurance Company of
America, Group Annuity Contract
GA-5991 - 19,932
Continental Assurance Company,
Group Annuity, Contract GP-12692 67,946 65,837
Group Annuity, Contract GP-12787 23,537 23,312
Provident National Assurance,
Group Annuity, Contract GC-05048 66,060 64,447
BT Pyramid Government Securities
Cash Fund - 14
- -----------------------------------------------------------------
284,859 331,984
Interest Receivable 1,041 1,219
- -----------------------------------------------------------------
Total Assets 285,900 333,203
- -----------------------------------------------------------------
Net Assets Available for Benefits $285,900 333,203
=================================================================
Number of Units (A) (A)
Unit Values (A) (A)
- -----------------------------------------------------------------
(A) See Note 5.
See Notes to Financial Statements.
10
<PAGE>
- -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
FUND D--DEPOSIT ADMINISTRATION ACCOUNT
Thousands of Dollars
----------------------------------
Years Ended December 31 1995 1994 1993
----------------------------------
Additions
Investment Income
Interest $ 25,576 30,956 34,444
Allocation of Deposits and
Earnings from Temporary
Investment Fund - - 2,124
- -----------------------------------------------------------------
Total Additions 25,576 30,956 36,568
- -----------------------------------------------------------------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries 52,263 51,376 38,509
Administrative Expense 75 97 55
- -----------------------------------------------------------------
Total Deductions 52,338 51,473 38,564
- -----------------------------------------------------------------
Interfund Transfers (20,541) (48,168) (2,654)
- -----------------------------------------------------------------
Net Decrease (47,303) (68,685) (4,650)
Net Assets Available for
Benefits
Beginning of Year 333,203 401,888 406,538
- -----------------------------------------------------------------
End of Year $285,900 333,203 401,888
=================================================================
See Notes to Financial Statements.
11
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND D--DEFERRED SETTLEMENT ACCOUNT
Thousands of Dollars
----------------------
At December 31 1995 1994
----------------------
Assets
Investments
Insurance contract $603 844
- -----------------------------------------------------------------
Total Assets 603 844
- -----------------------------------------------------------------
Net Assets Available for Benefits $603 844
=================================================================
See Notes to Financial Statements.
12
<PAGE>
- -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
FUND D--DEFERRED SETTLEMENT ACCOUNT
Thousands of Dollars
--------------------------------
Years Ended December 31 1995 1994 1993
--------------------------------
Additions
Investment Income
Interest $ 66 118 89
- -----------------------------------------------------------------
Total Additions 66 118 89
- -----------------------------------------------------------------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries 307 507 608
- -----------------------------------------------------------------
Total Deductions 307 507 608
- -----------------------------------------------------------------
Net Decrease (241) (389) (519)
Net Assets Available for
Benefits
Beginning of Year 844 1,233 1,752
- -----------------------------------------------------------------
End of Year $ 603 844 1,233
=================================================================
See Notes to Financial Statements.
13
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND E
Thousands of Dollars
----------------------
At December 31 1995 1994
----------------------
Assets
Investments
BT Pyramid Large Capitalization
Equity Index Fund $71,911 51,486
Due From Temporary Investment Fund 358 375
- -----------------------------------------------------------------
Total Assets 72,269 51,861
- -----------------------------------------------------------------
Net Assets Available for Benefits $72,269 51,861
=================================================================
Number of Units 46,684,257 46,125,102
Unit Value 1.5480 1.1243
- -----------------------------------------------------------------
See Notes to Financial Statements.
14
<PAGE>
- -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
FUND E
Thousands of Dollars
---------------------------------
Years Ended December 31 1995 1994 1993
---------------------------------
Additions
Investment Income
Net appreciation $18,818 986 2,500
- -----------------------------------------------------------------
Allocation of Deposits and
Earnings from Temporary
Investment Fund 3,698 3,818 3,026
- -----------------------------------------------------------------
Total Additions 22,516 4,804 5,526
- -----------------------------------------------------------------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries 5,377 3,928 1,950
Administrative Expense 23 73 42
- -----------------------------------------------------------------
Total Deductions 5,400 4,001 1,992
- -----------------------------------------------------------------
Interfund Transfers 3,292 13,118 34,406
- -----------------------------------------------------------------
Net Increase 20,408 13,921 37,940
Net Assets Available for
Benefits
Beginning of Year 51,861 37,940 -
- -----------------------------------------------------------------
End of Year $ 72,269 51,861 37,940
=================================================================
See Notes to Financial Statements.
15
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND F
Thousands of Dollars
----------------------
At December 31 1995 1994
----------------------
Assets
Investments
BT Pyramid Discretionary Cash Fund $66,264 59,748
Due from Temporary Investment Fund 259 278
Interest Receivable 337 297
- -----------------------------------------------------------------
Total Assets 66,860 60,323
- -----------------------------------------------------------------
Liabilities
Other Liabilities - 2
- -----------------------------------------------------------------
Total Liabilities - 2
- -----------------------------------------------------------------
Net Assets Available for Benefits $66,860 60,321
=================================================================
Number of Units 59,671,680 57,120,734
Unit Value 1.1205 $1.056
- -----------------------------------------------------------------
See Notes to Financial Statements.
16
<PAGE>
- -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
FUND F
Thousands of Dollars
---------------------------------
Years Ended December 31 1995 1994 1993
---------------------------------
Additions
Investment Income
Interest $ 4,015 1,867 228
Allocation of Deposits and
Earnings from Temporary
Investment Fund 2,770 2,773 1,682
Transfer from Other Plans - - 34
- -----------------------------------------------------------------
Total Additions 6,785 4,640 1,944
- -----------------------------------------------------------------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries 13,420 15,426 2,491
Administrative Expense 116 39 7
- -----------------------------------------------------------------
Total Deductions 13,536 15,465 2,498
- -----------------------------------------------------------------
Interfund Transfers 13,290 51,075 20,625
- -----------------------------------------------------------------
Net Increase 6,539 40,250 20,071
Net Assets Available for
Benefits
Beginning of Year 60,321 20,071 -
- -----------------------------------------------------------------
End of Year $66,860 60,321 20,071
=================================================================
See Notes to Financial Statements.
17
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
LOAN FUND
Thousands of Dollars
----------------------
At December 31 1995 1994
----------------------
Assets
Investments
Loans to participants $18,868 17,837
Due from Temporary Investment Fund 496 304
- -----------------------------------------------------------------
Total Assets 19,364 18,141
- -----------------------------------------------------------------
Net Assets Available for Benefits $19,364 18,141
=================================================================
See Notes to Financial Statements.
18
<PAGE>
- -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
LOAN FUND
Thousands of Dollars
---------------------------------
Years Ended December 31 1995 1994 1993
---------------------------------
Additions
Interest--Participant Loans $ 1,179 919 -
- -----------------------------------------------------------------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries 720 482 13
Loan Repayments from Plan
Participants 7,867 5,934 523
- -----------------------------------------------------------------
Total Deductions 8,587 6,416 536
- -----------------------------------------------------------------
Interfund Transfers 8,631 9,481 14,693
- -----------------------------------------------------------------
Net Increase 1,223 3,984 14,157
Net Assets Available for
Benefits
Beginning of Year 18,141 14,157 -
- -----------------------------------------------------------------
End of Year $19,364 18,141 14,157
=================================================================
See Notes to Financial Statements.
19
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
TEMPORARY INVESTMENT FUND
Thousands of Dollars
----------------------
At December 31 1995 1994
----------------------
Assets
Investments
BT Pyramid Government Securities
Cash Fund $3,336 3,336
Contributions Receivable 116 91
Employee Deposits Receivable 204 182
Loan Repayments Receivable 73 49
Interest Receivable 14 13
- -----------------------------------------------------------------
Total Assets 3,743 3,671
- -----------------------------------------------------------------
Liabilities
Due to Fund A 107 123
Due to Fund B 2,523 2,591
Due to Fund E 358 375
Due to Fund F 259 278
Due to Loan Fund 496 304
- -----------------------------------------------------------------
Total Liabilities 3,743 3,671
- -----------------------------------------------------------------
Net Assets Available for Benefits $ - -
=================================================================
See Notes to Financial Statements.
20
<PAGE>
- -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
TEMPORARY INVESTMENT FUND
Thousands of Dollars
----------------------------------
Years Ended December 31 1995 1994 1993
----------------------------------
Additions
Contributions and Deposits
Company contributions--
before-tax deposits $17,601 17,313 16,518
Employee deposits 15,865 16,429 17,913
Loan repayments from
Plan participants 7,867 5,934 523
- -----------------------------------------------------------------
41,333 39,676 34,954
Investment Income
Interest 169 115 185
- -----------------------------------------------------------------
Total Additions 41,502 39,791 35,139
- -----------------------------------------------------------------
Deductions
Allocation of Deposits and
Earnings 33,635 33,856 34,501
- -----------------------------------------------------------------
Interfund Transfers (7,867) (5,935) (638)
Net Increase - - -
Net Assets Available for
Benefits
Beginning of Year - - -
- -----------------------------------------------------------------
End of Year $ - - -
=================================================================
See Notes to Financial Statements.
21
<PAGE>
- -----------------------------------------------------------------
Notes To Financial Statements Thrift Plan Of Phillips
Petroleum Company
Note 1--Plan Description
The following description of the Thrift Plan of Phillips
Petroleum Company (Plan) is subject to and qualified by the more
complete information appearing in the Plan document.
The Plan is a defined contribution plan available to certain
employees of Phillips Petroleum Company and participating
subsidiaries (Company). Generally, any regular employee on the
direct dollar payroll of the Company is eligible to participate.
Non-managerial retail outlet marketing employees are not
eligible. Effective August 23, 1993, assets and liabilities
associated with accounts from the Salary Reduction Thrift Plan
for Employees of Incinatrol, Inc. were transferred to the Plan.
The Company has a trust agreement with Bankers Trust Company, New
York, New York (Trustee). Plan investments are held by the
Trustee. Fund A is managed by the Trustee, with BZW Barclays
Global Investors, N.A. (formerly Wells Fargo Institutional Trust
Company) managing Fund A assets invested in the BZW Barclays
Global Investors Government/Corporate Bond Index Fund E.
Effective at the close of business on December 31, 1995, the
Trustee for Funds B and C was changed to Vanguard Fiduciary Trust
Company (Vanguard), and during 1996, Vanguard is scheduled to
become Trustee for all other funds except Fund D. (See Note 11.)
Participants may have up to 15 percent of their pay deposited in
the Plan each month. The first 5 percent is designated as
regular deposits with any excess being designated as supplemental
deposits. Deposits may be further designated by a participant as
before-tax or after-tax deposits. Before-tax deposits are made
by the Company on behalf of a participant who has elected the
before-tax feature of the Plan. Total deposit amounts and
allocation of deposits between after-tax and before-tax accounts
are subject to limitations imposed by the Internal Revenue Code.
Participants may change their investment direction and deposit
rate semiannually during designated enrollment periods. Employee
deposits may be suspended in certain circumstances.
The Company contributes an amount equal to 25 percent of an
employee's regular deposits made to Fund B and 15 percent of
regular deposits made to any other investment fund.
22
<PAGE>
Employee and before-tax deposits and loan repayments are first
placed in the Temporary Investment Fund and invested in certain
specified short-term securities for up to 45 days after receipt
by the Trustee. Loan repayments are transferred to the Loan Fund
and then allocated to Funds A, B, E or F based on a participant's
regular deposits. Employee deposits and earnings are paid into
Funds A, B, E or F as directed by the participant, and invested
as follows: Fund A (commingled BZW Barclays Global Investors
Government/Corporate Bond Index Fund E managed by BZW Barclays
Global Investors, N.A., Fund B (common stock of Phillips
Petroleum Company), Fund E (commingled BT Pyramid Large
Capitalization Equity Index Fund managed by Bankers Trust
Company) and Fund F (effective July 1, 1993, in the BT Pyramid
Discretionary Cash Fund, a commingled money market fund managed
by Bankers Trust Company). After June 30, 1993, Fund D
(investment contracts which guarantee repayment of principal
invested and a fixed rate of interest) no longer accepted
deposits. Company matching contributions are invested in Fund C
(common stock of Phillips Petroleum Company). The Loan Fund is
used to record transactions resulting from loans made to active
employees against their accounts. Except for the Temporary
Investment Fund and the Loan Fund, the interest of participants
in each fund is represented by units allocated to them.
The Plan provides for monthly transfers among funds; however,
plan participants may not direct transfers to Fund C, the Loan
Fund, or the Temporary Investment Fund. Transfers to Fund D were
permitted only in certain circumstances until June 15, 1993, but
transfers were not allowed out of Fund D after January 15, 1993.
A participant is vested at all times with respect to his
deposits. Through June 30, 1995, a participant was generally
vested with respect to his interest in Company contributions
(a) if he made, or had made on his behalf, regular deposits for 12
months; (b) upon retirement pursuant to a Company retirement
plan; (c) upon death; (d) upon becoming totally and permanently
disabled; (e) upon reaching age 65; (f) upon being laid off; or
(g) upon completion of five years of vesting service. Effective
July 1, 1995, a participant is vested at all times with respect
to his interest in Company contributions.
Prior to January 1, 1996, generally a participant could, as of
any valuation date, withdraw any portion of his vested interest
in his after-tax account. Effective January 1, 1996, Company
contributions made after December 31, 1995, may not be withdrawn
until 24 months after they are contributed unless the participant
has been in the Plan for at least five years. A participant may
not withdraw his interest in his before-tax account unless he is
at least age 59 1/2, experiences a specified financial hardship,
becomes totally and permanently disabled, or separates from
service. Upon death of a participant, the beneficiary may
withdraw the participant's before-tax account balance.
23
<PAGE>
Through June 30, 1995, forfeitures arising from non-vested
withdrawals were used to reduce future Company contributions.
Forfeitures could be restored under certain circumstances if the
participant later repaid the amount withdrawn.
Distributions occur upon separation from service, but may be
deferred. For a participant who retires or becomes totally
disabled, distribution will be deferred to a date not later than
the first valuation date of February of the year after the year
age 70 1/2 is attained. If the participant dies, distribution to
a surviving spouse beneficiary will be deferred to the first
valuation date of the second month preceding the month in which
the participant would have attained age 70 1/2. This deferral is
revocable by the participant or the surviving spouse.
Distributions to non-spouse beneficiaries may be deferred
approximately five years. Distributions are based on the
valuation of the participant's interest in the trust fund.
Available forms of distribution are:
(a) from Funds A, D, E or F in cash (distributions from
Fund F were not available until 1993);
(b) from Funds B and C in whole shares of common stock
and/or cash;
(c) with respect to a participant who retires under a
Company retirement plan or a beneficiary spouse of a
participant in the event of an active employee
participant's death, in the form of an irrevocable
nontransferable monthly annuity purchased with a
specified dollar amount of the participant's interest in
the Plan; and
(d) with respect to a participant who retired before July 1,
1992, under a Company retirement plan, monthly,
quarterly or annual payments irrevocably elected from
his interest in Fund D commencing at retirement with, at
the participant's direction, a designated life interest
beneficiary to receive any unpaid scheduled payments
following the participant's death.
A participant may elect a direct rollover of the taxable portion
of most distributions to an Individual Retirement Account or
another tax-qualified plan. The taxable portion of any such
distribution that is not rolled over directly will be subject to
20 percent federal withholding.
The Plan is administered by a Thrift Plan Committee, the members
of which are appointed by the Board of Directors of Phillips
Petroleum Company. The Plan Financial Administrator and Plan
Benefits Administrator are the persons who occupy, respectively,
24
<PAGE>
the Phillips Petroleum Company positions of Treasurer and
Compensation and Benefits Manager. Members of the Committee and
the Plan Administrators serve without compensation, but are
reimbursed by the Company for necessary expenditures incurred in
the discharge of their duties.
The Plan pays all reasonable expenses necessary for the operation
of the Plan unless such expenses are paid by the Company. The
Company pays only the Trustee's recordkeeping and accounting fees
and the class year contract administration fees of .15 percent of
the funds invested in the insured contracts in Fund D.
The Company intends to continue the Plan indefinitely, but
reserves the right to amend or terminate it at any time.
Note 2--Investments
All securities are valued at their quoted market price or, with
respect to units of participation in commingled funds, redemption
value. Insurance contracts are valued pursuant to their terms;
the value represents fund deposits plus interest credited less
distributions. Participant loans are valued at cost, which
approximates fair value.
Note 3--Contributions Receivable
Contributions receivable at December 31 included the following:
Thousands of Dollars
--------------------
1995 1994
--------------------
Receivable from the Company for
matching contributions $452 487
Before-tax deposits 116 91
- -----------------------------------------------------------------
$568 578
=================================================================
Note 4--Funds B and C
Because Funds B and C have the same investment objectives, hold
assets in common (primarily Phillips Petroleum Company common
stock) and maintain a common unit value, the financial statements
of these two funds have been presented on a combined basis.
25
<PAGE>
Note 5--Class Year Accounts
A breakdown of Fund D--Deposit Administration Account by Class
Year at December 31 follows:
Thousands
of Dollars
------------
Net Assets
Available Number Unit
for Benefits of Units Values
------------------------------------
1995
- ----
1992 $ 23,622 10,995,307 2.1484
1991 134,496 49,438,453 2.7205
1990 127,782 36,686,402 3.4831
- -----------------------------------------------------------------
$285,900
=================================================================
1994
- ----
1992 $ 23,398 11,695,202 2.0007
1991 130,768 52,038,039 2.5129
1990 159,031 49,817,416 3.1923
1989 20,006 6,284,080 3.1836
- -----------------------------------------------------------------
$333,203
=================================================================
Note 6--Loan Fund
Since July 1, 1993, the Plan has allowed loans to active
employees or parties in interest from their accounts. The
minimum loan is $1,000, and generally the maximum is the lesser
of $50,000 or half a participant's vested account. The loans may
extend for up to 60 months (180 months for a home loan) with a
rate of interest equal to the national prime lending rate, as
determined on the regular valuation date prior to the date of a
loan application. No more than one home loan and two regular
loans may be outstanding at any given time.
Loan payments and interest are repaid to the borrowing
participant's accounts through the Loan Fund, which records the
outstanding loans and related transactions. Repayments are
allocated to Funds A, B, E or F based on a participant's regular
deposits. For the periods ended December 31, the total of loans
made by fund of origin, principal repaid, and aggregate
outstanding loan balances were:
26
<PAGE>
Thousands of Dollars
---------------------------------------------
Fund A B C D E F Total
---------------------------------------------
Period ended
December 31, 1995
- -----------------
Loans Outstanding
at December 31,
1994 $17,837
Participant Loans $549 5,588 963 513 350 480 8,443
Principal Repaid 95 5,917 231 - 181 268 6,692
Distributions to
Participants 720
- -----------------------------------------------------------------
Loans Outstanding
at December 31,
1995 $18,868
=================================================================
Period ended
December 31, 1994
- -----------------
Loans Outstanding
at December 31,
1993 $14,157
Participant Loans $623 6,889 62 826 455 322 9,177
Principal Repaid 106 4,293 221 - 138 257 5,015
Distributions to
Participants 482
- -----------------------------------------------------------------
Loans Outstanding
at December 31,
1994 $17,837
=================================================================
27
<PAGE>
Note 7--Allocation of Deposits and Earnings from Temporary
Investment Fund
Allocation of deposits and earnings from the Temporary Investment
Fund represents the allocation of employee deposits and
before-tax contributions made to the Temporary Investment Fund
and related earnings thereon. A breakdown of the allocation for
each of the periods follows:
Thousands of Dollars
--------------------------------------
Fund A Fund B Fund D Fund E Fund F
--------------------------------------
December 31, 1995
- -----------------
Employee deposits $ 610 11,770 - 1,755 1,730
Before-tax contributions 504 14,268 - 1,864 965
Interest 3 12 - 79 75
- -----------------------------------------------------------------
$1,117 26,050 - 3,698 2,770
=================================================================
December 31, 1994
- -----------------
Employee deposits $ 746 11,983 - 1,926 1,774
Before-tax contributions 584 13,932 - 1,841 956
Interest 3 18 - 51 43
- -----------------------------------------------------------------
$1,333 25,933 - 3,818 2,773
=================================================================
December 31, 1993
- -----------------
Employee deposits $ 769 12,957 1,388 1,645 1,149
Before-tax contributions 575 13,308 730 1,375 530
Interest 3 57 6 6 3
- -----------------------------------------------------------------
$1,347 26,322 2,124 3,026 1,682
=================================================================
Note 8--Credit Facility
Effective July 14, 1993, the Plan established a 364-day
$50 million revolving credit facility with NationsBank of Texas,
N.A., for the purpose of financing net Fund B and Fund C
distributions, participant loans from the Plan, or transfers of
participants' interests to other funds of the Plan. The interest
rate may not exceed the Eurodollar interbank offered rate plus
0.25 percent. Effective June 17, 1994, this credit facility was
reduced to $25 million. The Plan Trustee requested that the
credit facility be renewed for this reduced amount for an
additional year. On July 12, 1995, the credit facility was
renewed for another year, but at December 31, 1995, no portion of
this credit facility was outstanding.
In 1995, the Department of Labor issued the Company a Prohibited
Transaction Exemption allowing the Plan to replace its existing
bank credit facility with a new $25 million credit agreement
between Phillips Petroleum Company and the Thrift Plan of
Phillips Petroleum Company and Trust, effective March 15, 1996.
28
<PAGE>
The agreement will be used for the same purposes as the bank
credit facility, which was cancelled. The agreement requires no
commitment fee. Borrowings are non-interest bearing, without
recourse, and must be repaid within 31 days.
Note 9--Transactions with Parties-in-Interest
During 1995, 1994 and 1993, the Plan received $24,471,000,
$24,213,000 and $26,079,000, respectively, in common stock
dividends from the Company. Fees paid for legal, accounting, and
other services rendered by parties-in-interest were based on
customary and reasonable rates for such services.
Note 10--Tax Status
The Internal Revenue Service (IRS) determined on November 30,
1995, that the Plan, as amended through June 23, 1994, is
qualified under Section 401(a) of the Internal Revenue Code of
1986 and the Trust is exempt from federal income tax under
Section 501(a). Subsequent amendments have been adopted, but are
not expected to affect the qualified status of the Plan. The
Committee is not aware of any activity that would affect the
qualified status of the Plan.
Note 11--Subsequent Events
Effective at the close of business on December 31, 1995, the
Trustee for Funds B and C was changed from Bankers Trust Company
(Bankers) to Vanguard Fiduciary Trust Company (Vanguard),
although Bankers continued to serve as custodian for those funds.
Effective July 1, 1996, Vanguard is scheduled to become Trustee
for all other funds except Fund D. Effective June 1, 1996,
Phillips Petroleum Company became contractholder for all Fund D
insurance contracts, thus excluding Fund D from the Trust. This
change in contractholder does not affect participant benefits.
Funds A, E, F and the Temporary Investment Fund were transferred
to Vanguard for investment management effective May 1, 1996. As
designated by amendment to the Plan, Vanguard will invest for
Funds A, E and F in mutual funds managed by The Vanguard Group,
Inc., which are similar to the commingled funds managed by
Bankers Trust Company, and BZW Barclays Global Investors, N.A.
Recordkeeping for all funds is scheduled to transfer to Vanguard
effective July 1, 1996.
29
<PAGE>
The Company designated a transition period which began June 18,
1996, and is scheduled to end August 26, 1996. During the
transition period, voluntary transfers between investment funds,
Plan distributions, withdrawals and loans are prohibited, while
loan repayments and contributions will continue uninterrupted.
30
<PAGE>
- -----------------------------------------------------------------------------
Schedule of Assets Held Thrift Plan Of Phillips
for Investment Purposes Petroleum Company
Item 27a EIN 73-0400345, Plan No. 002
At December 31, 1995
Description of investment
Identity of issue, including maturity date,
borrower, lessor, rate of interest, collateral, Historical Current
or similar party par or maturity value Cost Value
- --------------------- -------------------------------- --------- ---------
Phillips Petroleum Common stock, $1.25 par value,
Company* 20,686,981 shares $342,980 704,705
- -----------------------------------------------------------------------------
Bankers Trust 52,040.90 units, BT Pyramid
Company* Large Capitalization Equity
Index Fund 52,898 71,911
9,355,755.01 units, BT Pyramid
Government Securities Cash
Fund 9,356 9,356
66,264,170.71 units, BT Pyramid
Discretionary Cash Fund 66,264 66,264
- -----------------------------------------------------------------------------
128,518 147,531
- -----------------------------------------------------------------------------
BZW Barclays Global 6,068,264.85 units, Wells Fargo
Investors, N.A.*+ Government/Corporate Bond
Index Fund E 58,813 74,816
- -----------------------------------------------------------------------------
Thrift Plan of Loans to Plan participants at
Phillips Petroleum 6% - 9%
Company 18,868 18,868
- -----------------------------------------------------------------------------
Travelers Insurance Group Annuity Contract GR-15505,
Company* deposit administration account 127,316 127,316
Group Annuity Contract GR-1966A,
deferred settlement account 603 603
Continental Assurance Group Annuity Contract GP-12692,
Company* deposit administration account 67,946 67,946
Group Annuity Contract GP-12787,
deposit administration account 23,537 23,537
Provident National Group Annuity Contract
Assurance* GC-027-05048, deposit
administration account 66,060 66,060
- -----------------------------------------------------------------------------
285,462 285,462
- -----------------------------------------------------------------------------
$834,641 1,231,382
=============================================================================
*Party-in-interest
+Formerly Wells Fargo
31
<PAGE>
- ------------------------------------------------------------------------------
Schedule of Reportable Transactions Thrift Plan of Phillips
Item 27d Petroleum Company
EIN 73-0400345, Plan 022
Year Ended December 31, 1995
Total Total
number of number of Gain or
Identity of party purchases sales (loss) as a
involved and during the during the Value of Value result of
description of asset plan year plan year purchases* of Sales* transactions
- -------------------- ---------- ---------- --------- -------- ------------
Bankers Trust
Company, BT
Pyramid Government
Securities Cash
Fund 225 211 $147,689 156,702 -
Phillips Petroleum
Company, Common
Stock 105 22 53,668 15,222 8,717
Bankers Trust
Company, BT Pyramid
Discretionary Cash
Fund 51 35 36,020 29,504 -
- -------------------------------------------------------------------------------
*This is also the current value at time of transaction.
32
<PAGE>
Exhibit 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8, File No. 33-50134) pertaining to the Thrift
Plan of Phillips Petroleum Company and in the related Prospectus of
our report dated June 24, 1996, with respect to the financial
statements and schedules of the Thrift Plan of Phillips Petroleum
Company included in this Annual Report (Form 11-K) for the year
ended December 31, 1995.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Tulsa, Oklahoma
June 24, 1996
<PAGE>
Exhibit 99(b)
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the 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 33-50283
--------------------------------
LONG-TERM STOCK SAVINGS PLAN OF
PHILLIPS PETROLEUM COMPANY
(Full title of the Plan)
PHILLIPS PETROLEUM COMPANY
(Name of issuer of securities)
Bartlesville, Oklahoma 74004
(Address of principal executive office) (Zip code)
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
--------------------
Financial statements of the Long-Term Stock Savings Plan of
Phillips Petroleum Company, filed as part of this annual report,
are listed in the accompanying index.
(b) Exhibits
--------
Exhibit 1 Consent of Ernst & Young LLP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Long-Term Stock Savings Plan Committee has duly caused
this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
LONG-TERM STOCK SAVINGS PLAN
OF PHILLIPS PETROLEUM COMPANY
/s/ Rand C. Berney
-----------------------------
Rand C. Berney
Member
Long-Term Stock Savings
Plan Committee
June 24, 1996
1
<PAGE>
- -----------------------------------------------------------------
Index To Financial Statements Long-Term Stock Savings Plan
And Schedules Of Phillips Petroleum Company
Page
Report of Independent Auditors ............................. 3
Financial Statements
Statements of Net Assets Available for Benefits
at December 31, 1995 and 1994
Total Plan ........................................... 4
Fund EP .............................................. 6
Fund K ............................................... 8
Fund L ............................................... 10
Temporary Fund ....................................... 12
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 1995,
1994 and 1993
Total Plan ........................................... 5
Fund EP .............................................. 7
Fund K ............................................... 9
Fund L ............................................... 11
Temporary Fund ....................................... 13
Notes to Financial Statements ............................ 14
Supplemental Schedules
Schedule of Assets Held for Investment Purposes at
December 31, 1995 ...................................... 18
Schedule of Reportable Transactions for the Year Ended
December 31, 1995 ...................................... 19
2
<PAGE>
- -----------------------------------------------------------------
Report Of Independent Auditors
The Long-Term Stock Savings Plan Committee
Long-Term Stock Savings Plan of Phillips Petroleum Company
We have audited the accompanying statement of net assets
available for benefits of the Long-Term Stock Savings Plan of
Phillips Petroleum Company (Plan) as of December 31, 1995 and
1994, and the related statement of changes in net assets
available for benefits for each of the three years in the period
ended December 31, 1995. These financial statements are the
responsibility of the Long-Term Stock Savings Plan Committee
(Committee). 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 the Committee, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the Plan at December 31, 1995 and 1994,
and the changes in its net assets available for benefits for each
of the three years in the period 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
accompanying supplemental schedules of assets held for investment
purposes as of December 31, 1995, and reportable transactions for
the year ended December 31, 1995, are presented for purposes of
complying with the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, and are not a required part of the basic
financial statements. The fund information presented on pages 6
through 13 listed in the accompanying index to financial
statements and schedules is presented for purposes of additional
analysis rather than to present the net assets available for
benefits and changes in net assets available for benefits of each
fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in our 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/ Ernst & Young LLP
Tulsa, Oklahoma ERNST & YOUNG LLP
June 24, 1996
3
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Long-Term Stock Savings Plan
Available For Benefits Of Phillips Petroleum Company
Thousands of Dollars
------------------------
At December 31 1995 1994
------------------------
Assets
Investments
Common stock $1,095,085 1,079,269
Commingled fund 5,139 4,751
- -----------------------------------------------------------------
1,100,224 1,084,020
Company Contributions Receivable
Funds for debt service 172 249
Before-tax deposits 34 35
Interest Receivable 43 41
- -----------------------------------------------------------------
Total Assets 1,100,473 1,084,345
- -----------------------------------------------------------------
Liabilities
Securities Acquisition Loans 476,450 502,250
Interest Payable 2,371 2,515
Securities Purchased 245 250
Administrative Expenses Payable 97 100
- -----------------------------------------------------------------
Total Liabilities 479,163 505,115
- -----------------------------------------------------------------
Net Assets Available for Benefits $ 621,310 579,230
=================================================================
See Notes to Financial Statements.
4
<PAGE>
- -------------------------------------------------------------------
Statement Of Changes In Net Long-Term Stock Savings Plan
Assets Available For Benefits Of Phillips Petroleum Company
Thousands of Dollars
----------------------------------
Years Ended December 31 1995 1994 1993
----------------------------------
Additions
Company Contributions
Funds for debt service $ 20,828 11,797 6,605
Basic allocation requirements - 56 286
Before-tax deposits 5,832 5,988 6,449
- -------------------------------------------------------------------
26,660 17,841 13,340
- -------------------------------------------------------------------
Investment Income
Dividends 38,854 37,527 38,514
Interest 437 337 321
Net appreciation 44,821 126,928 134,935
- -------------------------------------------------------------------
84,112 164,792 173,770
- -------------------------------------------------------------------
Total Additions 110,772 182,633 187,110
- -------------------------------------------------------------------
Deductions
Distributions to Participants
or Their Beneficiaries
Common stock 37,819 41,698 31,869
Cash 26 27 20
- -------------------------------------------------------------------
37,845 41,725 31,889
Interest Expense 30,754 23,965 19,496
Administrative Expense 93 100 100
- -------------------------------------------------------------------
Total Deductions 68,692 65,790 51,485
- -------------------------------------------------------------------
Net Increase 42,080 116,843 135,625
Net Assets Available for
Benefits
Beginning of Year 579,230 462,387 326,762
- -------------------------------------------------------------------
End of Year $621,310 579,230 462,387
===================================================================
See Notes to Financial Statements.
5
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Long-Term Stock Savings Plan
Available For Benefits Of Phillips Petroleum Company
FUND EP
Thousands of Dollars
------------------------
At December 31 1995 1994
------------------------
Assets
Investments
Common stock $180,975 183,106
Commingled fund 9 12
- -----------------------------------------------------------------
180,984 183,118
Interest Receivable 3 1
- -----------------------------------------------------------------
Total Assets 180,987 183,119
- -----------------------------------------------------------------
Liabilities
Administrative Expenses Payable 97 100
- -----------------------------------------------------------------
Total Liabilities 97 100
- -----------------------------------------------------------------
Net Assets Available for Benefits $180,890 183,019
=================================================================
Number of Units 30,014,306 31,621,315
Unit Value $6.0268 5.7878
- -----------------------------------------------------------------
See Notes to Financial Statements.
6
<PAGE>
- -------------------------------------------------------------------
Statement Of Changes In Net Long-Term Stock Savings Plan
Assets Available For Benefits Of Phillips Petroleum Company
FUND EP
Thousands of Dollars
----------------------------------
Years Ended December 31 1995 1994 1993
----------------------------------
Additions
Investment Income
Dividends $ 6,480 6,465 6,734
Interest 7 3 2
Net appreciation 7,528 22,230 24,082
- -------------------------------------------------------------------
Total Additions 14,015 28,698 30,818
- -------------------------------------------------------------------
Deductions
Distributions to Participants
or Their Beneficiaries
Common stock 16,047 16,234 15,407
Cash 4 10 16
- -------------------------------------------------------------------
16,051 16,244 15,423
Administrative Expense 93 100 100
- -------------------------------------------------------------------
Total Deductions 16,144 16,344 15,523
- -------------------------------------------------------------------
Net Increase (Decrease) (2,129) 12,354 15,295
Net Assets Available for
Benefits
Beginning of Year 183,019 170,665 155,370
- -------------------------------------------------------------------
End of Year $180,890 183,019 170,665
===================================================================
See Notes to Financial Statements.
7
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Long-Term Stock Savings Plan
Available For Benefits Of Phillips Petroleum Company
FUND K
Thousands of Dollars
------------------------
At December 31 1995 1994
------------------------
Assets
Investments
Common stock $46,526 40,260
Commingled fund 430 311
- -----------------------------------------------------------------
46,956 40,571
Due from Temporary Fund 493 536
Interest Receivable 3 2
- -----------------------------------------------------------------
Total Assets 47,452 41,109
- -----------------------------------------------------------------
Liabilities
Securities Purchased 245 250
- -----------------------------------------------------------------
Total Liabilities 245 250
- -----------------------------------------------------------------
Net Assets Available for Benefits $47,207 40,859
=================================================================
Number of Units 32,392,783 29,183,701
Unit Value $1.4573 1.4000
- -----------------------------------------------------------------
See Notes to Financial Statements.
8
<PAGE>
- -------------------------------------------------------------------
Statement Of Changes In Net Long-Term Stock Savings Plan
Assets Available For Benefits Of Phillips Petroleum Company
FUND K
Thousands of Dollars
---------------------------------
Years Ended December 31 1995 1994 1993
---------------------------------
Additions
Allocation of Deposits and
Earnings from Temporary Fund $ 5,856 6,005 6,463
- -------------------------------------------------------------------
Investment Income
Dividends 1,534 1,295 1,134
Interest 22 16 12
Net appreciation 1,703 4,280 3,463
- -------------------------------------------------------------------
3,259 5,591 4,609
- -------------------------------------------------------------------
Total Additions 9,115 11,596 11,072
- -------------------------------------------------------------------
Deductions
Distributions to (refunds from)
Participants or Their
Beneficiaries
Common stock 2,765 3,451 2,278
Cash 2 1 (1)
- -------------------------------------------------------------------
Total Deductions 2,767 3,452 2,277
- -------------------------------------------------------------------
Net Increase 6,348 8,144 8,795
Net Assets Available for
Benefits
Beginning of Year 40,859 32,715 23,920
- -------------------------------------------------------------------
End of Year $47,207 40,859 32,715
===================================================================
See Notes to Financial Statements.
9
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Long-Term Stock Savings Plan
Available For Benefits Of Phillips Petroleum Company
FUND L
Thousands of Dollars
---------------------------
At December 31 1995 1994
---------------------------
Assets
Investments
Common stock $867,584 855,903
Commingled fund 4,243 3,929
- -----------------------------------------------------------------
871,827 859,832
Company Contributions Receivable
Funds for debt service 172 249
Interest Receivable 35 36
- -----------------------------------------------------------------
Total Assets* 872,034 860,117
- -----------------------------------------------------------------
Liabilities
Securities Acquisition Loans 476,450 502,250
Interest Payable 2,371 2,515
- -----------------------------------------------------------------
Total Liabilities 478,821 504,765
- -----------------------------------------------------------------
Net Assets Available for Benefits $393,213 355,352
=================================================================
Number of Units 157,715,845 137,476,120
Unit Value** $1.9514 1.8728
- -----------------------------------------------------------------
See Notes to Financial Statements.
*The amount of total assets that was not allocated to
participants at December 31, 1995 and 1994 was $564,275 thousand
and $602,655 thousand, respectively.
**Unit value calculated on assets allocated to participants only.
10
<PAGE>
- -------------------------------------------------------------------
Statement Of Changes In Net Long-Term Stock Savings Plan
Assets Available For Benefits Of Phillips Petroleum Company
FUND L
Thousands of Dollars
----------------------------------
Years Ended December 31 1995 1994 1993
----------------------------------
Additions
Company Contributions
Funds for debt service $ 20,828 11,797 6,605
Basic allocation requirements - 56 286
- -------------------------------------------------------------------
20,828 11,853 6,891
- -------------------------------------------------------------------
Investment Income
Dividends 30,840 29,767 30,646
Interest 384 301 293
Net appreciation 35,590 100,418 107,390
- -------------------------------------------------------------------
66,814 130,486 138,329
- -------------------------------------------------------------------
Total Additions 87,642 142,339 145,220
- -------------------------------------------------------------------
Deductions
Distributions to Participants
or Their Beneficiaries
Common stock 19,007 22,013 14,184
Cash 20 16 5
- -------------------------------------------------------------------
19,027 22,029 14,189
Interest Expense 30,754 23,965 19,496
- -------------------------------------------------------------------
Total Deductions 49,781 45,994 33,685
- -------------------------------------------------------------------
Net Increase 37,861 96,345 111,535
Net Assets Available for
Benefits
Beginning of Year 355,352 259,007 147,472
- -------------------------------------------------------------------
End of Year $393,213 355,352 259,007
===================================================================
See Notes to Financial Statements.
11
<PAGE>
- -----------------------------------------------------------------
Statement Of Net Assets Long-Term Stock Savings Plan
Available For Benefits Of Phillips Petroleum Company
TEMPORARY FUND
Thousands of Dollars
--------------------
At December 31 1995 1994
--------------------
Assets
Investments
Commingled fund $457 499
Company Contributions Receivable
Before-tax deposits 34 35
Interest Receivable 2 2
- -----------------------------------------------------------------
Total Assets 493 536
- -----------------------------------------------------------------
Liabilities
Due to Fund K 493 536
- -----------------------------------------------------------------
Total Liabilities 493 536
- -----------------------------------------------------------------
Net Assets Available for Benefits $ - -
=================================================================
See Notes to Financial Statements.
12
<PAGE>
- -------------------------------------------------------------------
Statement Of Changes In Net Long-Term Stock Savings Plan
Assets Available For Benefits Of Phillips Petroleum Company
TEMPORARY FUND
Thousands of Dollars
--------------------------------
Years Ended December 31 1995 1994 1993
--------------------------------
Additions
Company Contributions
Before-tax deposits $5,832 5,988 6,449
Investment Income
Interest 24 17 14
- -------------------------------------------------------------------
Total Additions 5,856 6,005 6,463
- -------------------------------------------------------------------
Deductions
Allocation of Deposits and
Earnings to Fund K 5,856 6,005 6,463
- -------------------------------------------------------------------
Net Increase - - -
Net Assets Available for
Benefits
Beginning of Year - - -
- -------------------------------------------------------------------
End of Year $ - - -
===================================================================
See Notes to Financial Statements.
13
<PAGE>
- -----------------------------------------------------------------
Notes To Financial Statements Long-Term Stock Savings Plan
Of Phillips Petroleum Company
Note 1--Plan Description
The following description of the Plan is subject to and qualified
by the more complete information appearing in the Plan document.
The Plan became effective July 1, 1988, and is a defined
contribution plan available to certain employees of Phillips
Petroleum Company and participating subsidiaries (Company).
Generally, any regular employee on the direct dollar payroll of
the Company is eligible to participate, except non-managerial
retail marketing outlet employees.
Prior to December 31, 1995, the Company had a trust agreement
with Bankers Trust Company, 280 Park Avenue, New York,
New York 10017 (Trustee). Effective at the close of business on
December 31, 1995, the Trustee was changed to Vanguard Fiduciary
Trust Company. Plan investments are held by the Trustee in the
Temporary Fund, Fund K, Fund L and Fund EP. Temporary Fund
investments consist of specified short-term securities. Funds K,
L and EP are invested primarily in common stock of Phillips
Petroleum Company (Phillips Stock).
Fund L consists of Phillips Stock purchased with the proceeds of
the loans described in Note 2 or with certain Company
contributions. The Phillips Stock will be allocated to Fund L
accounts of eligible participants. The Plan provides for three
types of stock allocations: semiannual basic allocations,
dividend replacement allocations and supplemental allocations. A
basic allocation is made as of June 30 and December 31 of each
year. Prior to 1999, 716,846 shares of stock will be divided
among or "allocated to" the Fund L accounts of eligible
participants as of each June 30 and December 31. After 1998 and
through 2005, the number of shares to be allocated semiannually
will be 477,876. In December 1995, the Company extended the
LTSSP to the year 2015. Without the extension, allocations of
stock to employees would have been completed in 2005 or before.
The new extension will require additional shares to be delivered
to the LTSSP. The LTSSP will be eligible to receive shares from
the Company's Compensation and Benefits Trust, also established
in December 1995. After 2005 and through the allocation date
following the date the second loan is repaid, the number of
shares to be allocated semiannually on each basic allocation date
will be 3,877 shares for each 100 employees employed at the
beginning of each year.
14
<PAGE>
A participant's semiannual basic allocation is based on the ratio
of the participant's Fund K before-tax deposits to all eligible
participants' before-tax deposits for the allocation period. If
the Company does not elect to make a special contribution and if
eligible dividends from participants' Fund L or Fund EP accounts
are used to make loan payments, participants will receive a
dividend replacement allocation. The Plan used $14.5 million,
$12.7 million and $11.8 million in dividends from participants'
Fund L and Fund EP accounts and allocated 431,613 shares,
399,586 shares and 400,290 shares in dividend replacement
allocations in 1995, 1994 and 1993, respectively. A supplemental
allocation will be made each year-end if all shares released for
allocation, based on loan payment provisions, have not been
allocated.
The Company makes contributions to the Plan which, when
aggregated with the Plan's dividends from Fund L, certain
dividends from Fund EP and certain interest earnings from Fund L,
equal the amount necessary to enable the Plan to make its
regularly scheduled payments of principal and interest due on its
loans. The Company may also elect to make contributions to the
Plan, as an alternative to utilizing the dividends from shares in
Fund EP or allocated shares in Fund L. Finally, the Company may
make contributions to the Plan in the amount necessary to bring
the number of shares of stock released for allocation up to the
level required to complete the basic allocation.
Eligible employees may elect to have their salaries reduced and
before-tax deposits made by the Company on their behalf equal to
one percent of pay. These deposits are held in the Temporary
Fund up to 45 days, and then, with the earnings thereon, are
transferred into the employee's Fund K account. The interest of
participants in each fund is represented by units allocated to
them.
Assets of the Employee Stock Ownership Plan of Phillips Petroleum
Company (ESOP) and the Payroll Stock Ownership Plan of Phillips
Petroleum Company (PAYSOP), which were merged into the Plan on
July 1, 1988, are held in Fund EP.
Participants are always vested in their deposits and amounts
credited to their accounts. Total withdrawals from Funds K, L
and EP may be made upon the occurrence of specified events,
including attainment of age 59 1/2 (after December 31, 1998, for
Funds EP and L) or separation from service. Partial withdrawals
are permitted in cases of specified financial hardship and
certain other cases. For a participant who retires or becomes
totally disabled, unless a request for withdrawal is made as of
any earlier date, distribution will be deferred to a date not
later than February of the year after the year age 70 1/2 is
15
<PAGE>
attained. If the participant dies, distribution to a surviving
spouse beneficiary will be deferred to the first valuation date
of the second month preceding the month in which the participant
would have attained age 70 1/2. This deferral is revocable by
the participant or the surviving spouse. Distributions to
non-spouse beneficiaries may be deferred approximately five
years.
A participant may elect a direct rollover of the taxable portion
of most distributions to an Individual Retirement Account or
another tax-qualified plan. The taxable portion of any such
distribution that is not rolled over directly will be subject to
20 percent federal withholding.
The Plan is administered by the Long-Term Stock Savings Plan
Committee, the members of which are appointed by the Board of
Directors of Phillips Petroleum Company. Members of the
Committee serve without compensation, but are reimbursed by the
Company for necessary expenditures incurred in the discharge of
their duties. Administrative expenses of the Plan will be paid
by the Trustee from assets of the Plan to the extent allowable by
law, unless paid by the Company. In 1995, 1994 and 1993, the
Trustee made cash payments of $95,844, $100,000 and $100,000,
respectively, for administrative expense to Phillips from
Fund EP. Plan administrative expenses of approximately $400,000,
$402,000 and $437,000 were paid by Phillips to the Trustee in
1995, 1994 and 1993, respectively.
Note 2--Securities Acquisition Loans
The Plan borrowed $250 million (Loan 1) and $400 million (Loan 2)
in 1988 and 1990, respectively, and purchased 14,336,918 and
14,159,292 shares of common stock from Phillips Petroleum Company
(Phillips), respectively. The shares are held in a Fund L
suspense account until allocated to eligible participants based
on the provisions of the Plan. At December 31, 1995 and 1994,
the market value of unallocated shares was $560 million and
$598 million, respectively.
The Loans are guaranteed by Phillips. They are being repaid
through contributions made by the Company, dividends on
unallocated and allocated shares and earnings on the short-term
investment of dividends.
Loan 1
During 1994, the Plan signed a $131 million term loan agreement
that was used to refinance the outstanding notes payable issued
in 1988. The notes were redeemed on May 16, 1994. The new term
loan requires repayment in annual installments through the year
16
<PAGE>
1998, matching the maturities of the refinanced notes, but at a
reduced cost. Principal payments totaling $26 million were made
on Loan 1 in both 1994 and 1995. The outstanding balance of
Loan 1 at December 31, 1995, was $79.6 million. Loan 1 provides
for variable interest rates. The rates were 4.88 percent and
5.35 percent at December 31, 1995 and 1994, respectively.
Loan 2
Loan 2 was amended late in 1995 to extend its term from 15 to
25 years. Loan 2 is a bank loan, requiring repayment in annual
installments beginning in 2005, through the year 2015.
Any participating bank in the syndicate of lenders may cease to
participate on November 30, 2001, by giving not less than
180 days prior notice to the Plan and Phillips. Also, each bank
participating in the loan has the optional right, if the current
directors of Phillips or their approved successors cease to be a
majority of the Board, and upon not less than 90 days' notice, to
cease to participate in the loan. Under the above conditions,
such banks' rights and obligations under the loan agreement must
be purchased by Phillips if not transferred to another bank of
Phillips' choice.
The outstanding balance of Loan 2 at December 31, 1995 was
$396.9 million. Loan 2 provides for variable interest rates.
The rates were 6.20 percent and 6.38 percent at December 31, 1995
and 1994, respectively.
Note 3--Investments
Phillips Stock is valued at the New York Stock Exchange closing
quoted market price. For commingled funds, cost and market value
are the same.
Note 4--Tax Status
The Internal Revenue Service (IRS) determined on January 16,
1996, that the Plan is qualified under Section 401(a) of the
Internal Revenue Code of 1986 and the Trust is exempt from
federal income tax under Section 501(a). Subsequent amendments
have been adopted, but are not expected to affect the qualified
status of the Plan. The Committee is not aware of any activity
that would affect the qualified status of the Plan.
17
<PAGE>
- ------------------------------------------------------------------------------
Schedule of Assets Held for Long-Term Stock Savings Plan Of
Investment Purposes Phillips Petroleum Company
Item 27a EIN 73-0400345, Plan 022
At December 31, 1995
Description of investment Thousands of Dollars
Identity of issue, including maturity date, ----------------------
borrower, lessor, rate of interest, collateral, Historical Current
or similar party par or maturity value Cost Value
- ------------------ -------------------------------- ---------- ---------
Phillips Petroleum 32,090,408 shares of common
Company* Stock, $1.25 par value $683,319 1,095,085
Bankers Trust 5,138,644 units of participation
Company* in BT Pyramid Government
Securities Cash Fund 5,139 5,139
- ------------------------------------------------------------------------------
$688,458 1,100,224
==============================================================================
*Party-in-interest
18
<PAGE>
- ------------------------------------------------------------------------------
Schedule of Reportable Transactions Long-Term Stock Savings Plan of
Item 27d Phillips Petroleum Company
EIN 73-0400345, Plan 022
Year Ended December 31, 1995
Thousands of Dollars
Total Total --------------------------------
number of number of Gain or
Identity of party purchases sales Value (loss) as a
involved and during the during the Value of of result of
description of asset plan year plan year purchases* Sales* transactions
- -------------------- ---------- ---------- ---------- ------ ------------
Bankers Trust
Company General
Employee Benefit
Trust, BT Pyramid
Government
Securities Cash
Fund 200 263 $59,495 59,107 -
- ------------------------------------------------------------------------------
*This is also the current value at time of transaction.
19
<PAGE>
Exhibit 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8, File No. 33-50283) pertaining to the Long-
Term Stock Savings Plan of Phillips Petroleum Company and in the
related Prospectus of our report dated June 24, 1996, with
respect to the financial statements and schedules of the
Long-Term Stock Savings Plan of Phillips Petroleum Company
included in this Annual Report (Form 11-K) for the year ended
December 31, 1995.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Tulsa, Oklahoma
June 24, 1996
<PAGE>
Exhibit 99(c)
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the 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 33-28669
--------------------------------
RETIREMENT SAVINGS PLAN OF
PHILLIPS PETROLEUM COMPANY
(Full title of the Plan)
PHILLIPS PETROLEUM COMPANY
(Name of issuer of securities)
Bartlesville, Oklahoma 74004
(Address of principal executive office) (Zip code)
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
--------------------
Financial statements of the Retirement Savings Plan of Phillips
Petroleum Company, filed as a part of this annual report, are
listed in the accompanying index.
(b) Exhibits
--------
Exhibit 1 Consent of Ernst & Young LLP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Retirement Savings Plan Committee has duly caused this
annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
RETIREMENT SAVINGS PLAN OF
PHILLIPS PETROLEUM COMPANY
/s/ L. F. Francis
---------------------------------
L. F. Francis
Member
Retirement Savings Plan Committee
June 24, 1996
1
<PAGE>
- -----------------------------------------------------------------
Index To Financial Statements Retirement Savings Plan Of
And Schedule Phillips Petroleum Company
Page
Report of Independent Auditors ............................. 3
Financial Statements
Statement of Net Assets Available for Benefits
at December 31, 1995 ................................... 4
Statement of Net Assets Available for Benefits
at December 31, 1994 ................................... 5
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1995 ................... 6
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1994 ................... 7
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1993 ................... 8
Notes to Financial Statements ............................ 9
Supplemental Schedule
Schedule of Assets Held for Investment Purposes at
December 31, 1995 ...................................... 13
2
<PAGE>
- ------------------------------------------------------------------
Report Of Independent Auditors
The Retirement Savings Plan Committee
Retirement Savings Plan of Phillips
Petroleum Company
We have audited the financial statements of the Retirement Savings
Plan of Phillips Petroleum Company (Plan) listed in the
accompanying index to financial statements and schedule. These
financial statements are the responsibility of the Retirement
Savings Plan Committee (Committee). 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 the Committee, 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 listed in the
accompanying index to financial statements and schedule present
fairly, in all material respects, the net assets available for
benefits of the Plan at December 31, 1995 and 1994, and the
changes in its net assets available for benefits for each of the
three years in the period 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 accompanying
supplemental schedule of assets held for investment purposes as of
December 31, 1995, is presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of
1974, and is not a required part of the basic financial
statements. The fund information in the statement of net assets
available for benefits and the statement of changes in net assets
available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for
benefits and changes in net assets available for benefits of each
fund. The supplemental schedule and fund information have been
subjected to the auditing procedures applied in our 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/ Ernst & Young LLP
ERNST & YOUNG LLP
Tulsa, Oklahoma
June 24, 1996
3
<PAGE>
- --------------------------------------------------------------------
Statement Of Net Assets Retirement Savings Plan Of
Available For Benefits Phillips Petroleum Company
At December 31, 1995
Fixed Temporary
Investment Stock Investment
Total Fund Fund Fund
--------------------------------------------
Assets
Investments
Insurance contract $ 9,850,414 9,850,414 - -
Common stock 624,146 - 624,146 -
Money market fund 19,619 - 8,615 11,004
- --------------------------------------------------------------------
10,494,179 9,850,414 632,761 11,004
Interest Receivable 86 - 38 48
Employee Deposits
Receivable 10,290 - - 10,290
Employer Contributions
Receivable 28,011 28,011 - -
Interfund Receivable
(Payable) - 20,168 1,174 (21,342)
- --------------------------------------------------------------------
Total Assets 10,532,566 9,898,593 633,973 -
- --------------------------------------------------------------------
Liabilities
Cash Distributions
Payable 36,470 36,470 - -
- --------------------------------------------------------------------
Total Liabilities 36,470 36,470 - -
- --------------------------------------------------------------------
Net Assets Available
for Benefits $10,496,096 9,862,123 633,973 -
====================================================================
Number of Units 2,479,731 135,882
Unit Values $3.9771 4.6656
- --------------------------------------------------------------------
See Notes to Financial Statements.
4
<PAGE>
- --------------------------------------------------------------------
Statement Of Net Assets Retirement Savings Plan Of
Available For Benefits Phillips Petroleum Company
At December 31, 1994
Fixed Temporary
Investment Stock Investment
Total Fund Fund Fund
Assets --------------------------------------------
Investments
Insurance contract $10,120,816 10,120,816 - -
Common stock 592,185 - 592,185 -
Money market fund 18,332 - 8,653 9,679
- --------------------------------------------------------------------
10,731,333 10,120,816 600,838 9,679
Cash 201 - 101 100
Interest Receivable 66 - 38 28
Employee Deposits
Receivable 10,123 - - 10,123
Employer Contributions
Receivable 22,971 22,971 - -
Interfund Receivable
(Payable) - 19,272 658 (19,930)
- --------------------------------------------------------------------
Total Assets 10,764,694 10,163,059 601,635 -
- --------------------------------------------------------------------
Liabilities
Cash Distributions
Payable 85,861 85,861 - -
- --------------------------------------------------------------------
Total Liabilities 85,861 85,861 - -
- --------------------------------------------------------------------
Net Assets Available
for Benefits $10,678,833 10,077,198 601,635 -
====================================================================
Number of Units 2,685,477 139,758
Unit Values $3.7525 4.3048
- --------------------------------------------------------------------
See Notes to Financial Statements.
5
<PAGE>
- ----------------------------------------------------------------------
Statement Of Changes In Net Retirement Savings Plan Of
Assets Available For Benefits Phillips Petroleum Company
Year Ended December 31, 1995
Fixed Temporary
Investment Stock Investment
Total Fund Fund Fund
--------------------------------------------
Additions
Contributions and Deposits
Participating Employer
contributions $ 316,258 316,258 - -
Employee deposits 128,135 - - 128,135
- ----------------------------------------------------------------------
444,393 316,258 - 128,135
- ----------------------------------------------------------------------
Investment Income
Interest 639,370 638,561 379 430
Dividends 21,759 - 21,759 -
Net appreciation of
common stock 28,022 - 28,022 -
- ----------------------------------------------------------------------
689,151 638,561 50,160 430
- ----------------------------------------------------------------------
Total Additions 1,133,544 954,819 50,160 128,565
- ----------------------------------------------------------------------
Deductions
Cash Withdrawals and
Distributions 1,309,461 1,309,461 - -
Forfeitures 6,820 6,820 - -
- ----------------------------------------------------------------------
Total Deductions 1,316,281 1,316,281 - -
- ----------------------------------------------------------------------
Allocation of Deposits
and Earnings - 122,754 5,811 (128,565)
- ----------------------------------------------------------------------
Interfund Transfers - 23,633 (23,633) -
- ----------------------------------------------------------------------
Net Increase (Decrease) (182,737) (215,075) 32,338 -
Net Assets Available
for Benefits
Beginning of Year 10,678,833 10,077,198 601,635 -
- ----------------------------------------------------------------------
End of Year $10,496,096 9,862,123 633,973 -
======================================================================
See Notes to Financial Statements.
6
<PAGE>
- ----------------------------------------------------------------------
Statement Of Changes In Net Retirement Savings Plan Of
Assets Available For Benefits Phillips Petroleum Company
Year Ended December 31, 1994
Fixed Temporary
Investment Stock Investment
Total Fund Fund Fund
--------------------------------------------
Additions
Contributions and Deposits
Participating Employer
contributions $ 283,224 283,224 - -
Employee deposits 118,472 - - 118,472
- ----------------------------------------------------------------------
401,696 283,224 - 118,472
- ----------------------------------------------------------------------
Investment Income
Interest 683,550 683,081 186 283
Dividends 20,727 - 20,727 -
Net appreciation of
common stock 70,999 - 70,999 -
- ----------------------------------------------------------------------
775,276 683,081 91,912 283
- ----------------------------------------------------------------------
Total Additions 1,176,972 966,305 91,912 118,755
- ----------------------------------------------------------------------
Deductions
Cash Withdrawals and
Distributions 2,380,787 2,380,787 - -
Forfeitures 3,125 3,125 - -
- ----------------------------------------------------------------------
Total Deductions 2,383,912 2,383,912 - -
- ----------------------------------------------------------------------
Allocation of Deposits
and Earnings - 113,788 4,967 (118,755)
- ----------------------------------------------------------------------
Interfund Transfers - 41,419 (41,419) -
- ----------------------------------------------------------------------
Net Increase (Decrease) (1,206,940) (1,262,400) 55,460 -
Net Assets Available
for Benefits
Beginning of Year 11,885,773 11,339,598 546,175 -
- ----------------------------------------------------------------------
End of Year $10,678,833 10,077,198 601,635 -
======================================================================
See Notes to Financial Statements.
7
<PAGE>
- ----------------------------------------------------------------------
Statement Of Changes In Net Retirement Savings Plan Of
Assets Available For Benefits Phillips Petroleum Company
Year Ended December 31, 1993
Fixed Temporary
Investment Stock Investment
Total Fund Fund Fund
--------------------------------------------
Additions
Contributions and Deposits
Participating Employer
contributions $ 529,518 529,518 - -
Employee deposits 109,001 - - 109,001
- ----------------------------------------------------------------------
638,519 529,518 - 109,001
- ----------------------------------------------------------------------
Investment Income
Interest 814,891 814,493 211 187
Dividends 20,364 - 20,364 -
Net appreciation of
common stock 66,240 - 66,240 -
- ----------------------------------------------------------------------
901,495 814,493 86,815 187
- ----------------------------------------------------------------------
Total Additions 1,540,014 1,344,011 86,815 109,188
- ----------------------------------------------------------------------
Deductions
Cash Withdrawals and
Distributions 927,850 927,850 - -
Forfeitures 5,600 5,600 - -
- ----------------------------------------------------------------------
Total Deductions 933,450 933,450 - -
- ----------------------------------------------------------------------
Allocation of Deposits
and Earnings - 105,952 3,236 (109,188)
- ----------------------------------------------------------------------
Net Increase 606,564 516,513 90,051 -
Net Assets Available
for Benefits
Beginning of Year 11,279,209 10,823,085 456,124 -
- ----------------------------------------------------------------------
End of Year $11,885,773 11,339,598 546,175 -
======================================================================
See Notes to Financial Statements.
8
<PAGE>
- -----------------------------------------------------------------
Notes To Financial Statements Retirement Savings Plan Of
Phillips Petroleum Company
Note 1--Plan Description
The following description of the Retirement Savings Plan of
Phillips Petroleum Company (Plan) is subject to and qualified by
the more complete information appearing in the Plan document.
The Plan was known as the Retirement Savings Plan of Phillips
Petroleum Company Subsidiaries until December 7, 1994.
The Plan is a defined contribution plan sponsored by Phillips
Petroleum Company (Company) for any domestic subsidiary or
division which the Company approves for participation in the Plan
and which has adopted and become a party to the Plan for the
current participation of their active employees (Participating
Employer). For the three-year period ending December 31, 1995,
Phillips Driscopipe (with respect to hourly employees only), a
division of the Company, was the only Participating Employer.
Other subsidiaries or divisions having present or former
employees holding interests in the Plan are Catalyst Resources,
Inc. (sold March 30, 1994), Drilling Specialties Company,
Phillips Coal Company, and Phillips Uranium Corporation (now
liquidated).
Generally, an employee of a Participating Employer becomes a
participant after completing a six-month period of service of 500
or more hours. Participation in the Plan by each eligible
employee is mandatory. Although not required to do so, a
participant may make after-tax deposits, in whole percentages,
ranging from 1 to 10 percent of his regular monthly earnings. A
participant may elect to change his deposit rate once each six
months. The Participating Employer or the Company contributes an
amount equal to 5 percent of a participant's regular monthly
earnings. Effective January 1, 1996, participants are no longer
permitted to make deposits into the Plan. Instead, at the same
date the participants became eligible to participate in the
Company's Thrift Plan. The Participating Employer or Company
contributions to the Plan did not change.
Deposits and contributions are placed in a Trust fund which was
administered by WestStar Bank, Bartlesville, Oklahoma (Trustee)
prior to the close of business on February 28, 1996, when the
Trustee was changed to Vanguard Fiduciary Trust Company. Prior
to the Trustee change, the Trust fund consisted of the Stock
Fund, the Fixed Investment Fund and the Temporary Investment
Fund. Investments for each fund are as follows: Stock Fund
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(common stock of the Company); Fixed Investment Fund (an
insurance contract with The Travelers Insurance Company under
which Travelers guarantees repayment of the principal paid to it
and a minimum effective rate of interest thereon) and Temporary
Investment Fund (specified short-term securities). Effective
with the change in Trustee, the Company became contractholder of
the insurance contract with Travelers for the Fixed Fund, thus
excluding the Fixed Fund from the Trust. This change in
contractholder does not affect participant benefits. The
interest of participants in each fund is represented by units
allocated to them. Unit values reflected in the accompanying
statements are based on aggregate fund values and aggregate
units.
Participant deposits are placed first in the Temporary Investment
Fund for about 30 days. Deposits and earnings thereon are then
paid into the Stock Fund or the Fixed Investment Fund as directed
by the participant. Participants may direct that their deposits
be invested entirely in either the Stock Fund or Fixed Investment
Fund or allocated between the two funds in multiples of
10 percent. No investment directions may be made with respect to
Participating Employer contributions, all of which are invested
only in the Fixed Investment Fund. Investment directions may be
changed once each year.
The Plan allows limited transfers between the Stock Fund and the
Fixed Investment Fund.
A participant's interest in his own deposits is vested at all
times. His interest in Participating Employer contributions
becomes fully vested on the earliest of the following dates:
(a) upon attainment of age 65 or upon his normal retirement;
(b) upon completing five years of vesting service; (c) upon his
death; (d) upon becoming totally disabled; (e) upon being laid
off for lack of work; (f) upon termination or partial termination
of the Plan or discontinuance of Participating Employer
contributions; or (g) upon certain other events.
Partial vesting in Participating Employer contributions takes
place in one year increments, with complete vesting after five
years of vesting service. A participant who has made deposits
may withdraw any amount attributable to those deposits.
Withdrawals of deposits may be made only once each six months.
Suspensions of three and six months apply for partial and
complete withdrawals, respectively.
A participant's interest in the contributions of a Participating
Employer becomes available for distribution upon specified
events, including separation from service or retirement.
Termination of employment will result in forfeiture of
Participating Employer contributions if a participant's interest
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attributable to those Participating Employer contributions is not
vested. Forfeitures are used to reduce employer contributions.
A participant who retires may postpone distribution until no
later than the February valuation date following the year of
attainment of age 70 1/2.
Distributions from the Fixed Investment Fund are in cash while
those from the Stock Fund are in whole shares of the Company's
common stock plus cash for fractional shares unless the
participant directs that the distribution be wholly or partially
in cash. Distribution in the form of an annuity is also
available, as set forth in the Plan.
In the event of termination of the Plan, participants and
beneficiaries of deceased participants will be vested with
respect to, and will receive, within a reasonable time, any funds
in their accounts as of the date of the termination.
The Plan is administered by the Retirement Savings Plan
Committee, a Plan Financial Administrator and a Plan Benefits
Administrator. The members of the Committee are appointed by the
Board of Directors of the Company. The Committee has power to
interpret the Plan and the Plan Benefits Administrator has the
authority to determine eligibility for benefits. Brokerage fees,
commissions, stock transfer taxes and other charges and expenses
incurred in connection with the purchase or sale of securities
are paid by the Plan. The cost of administering the Plan is
shared by the Participating Employers on a mutually agreeable
basis.
Note 2--Investments
Common stock of the Company is valued at the closing quoted
market price on the valuation date. The value of the insurance
contract represents contributions plus interest credited less
distributions. The money market fund is valued at the current
redemption price determined by the Trustee.
Note 3--Tax Status
The Internal Revenue Service (IRS) determined on December 26,
1995, that the Plan is qualified under Section 401(a) of the
Internal Revenue Code of 1986 and the Trust is exempt from
federal income tax under Section 501(a). Subsequent amendments
have been adopted, but are not expected to affect the qualified
status of the Plan. The Committee is not aware of any activity
that would affect the qualified status of the Plan.
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Note 4--Additional Company Contributions
In accordance with the Plan document and Treasury regulations,
the Company made additional contributions totaling $258,745 to
the Plan in 1993 related to Plan years 1987, 1988 and 1989.
These contributions were required by retroactive application of
new requirements under Internal Revenue Code Section 414(s),
which provides rules for nondiscrimination in the definition of
plan compensation. The change in the definition of compensation
resulted in additional benefits and additional required
contributions.
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- ------------------------------------------------------------------------------
Schedule Of Assets Held Retirement Savings Plan Of
For Investment Purposes Phillips Petroleum Company
Item 27a EIN 73-0400345, Plan 010
At December 31, 1995
Description of investment
Identity of issue, including maturity date,
borrower, lessor, rate of interest, collateral, Historical Current
or similar party par or maturity value Cost Value
- -------------------- ------------------------------ ----------- ----------
The Travelers Group Annuity Contract
Insurance Company* GR-10462, deposit
administration fund $ 9,850,414 9,850,414
Phillips Petroleum 18,290 shares of common stock,
Company* $1.25 par value 310,765 624,146
WestStar Bank* 19,619 units of participation
in the Shearson Treasury
Trust Fund, a money market
fund 19,619 19,619
- ------------------------------------------------------------------------------
$10,180,798 10,494,179
==============================================================================
*Party-in-interest
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Exhibit 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8, File No. 33-28669) pertaining to the
Retirement Savings Plan of Phillips Petroleum Company and in the
related Prospectus of our report dated June 24, 1996, with respect
to the financial statements and schedule of the Retirement Savings
Plan of Phillips Petroleum Company included in this Annual Report
(Form 11-K) for the year ended December 31, 1995.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Tulsa, Oklahoma
June 24, 1996
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