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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER 1-9864...................................................
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
NEWPORT NEWS SHIPBUILDING
SAVINGS (401(K)) PLAN FOR UNION ELIGIBLE EMPLOYEES
4101 WASHINGTON AVENUE
NEWPORT NEWS, VIRGINIA 23607
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
TENNECO INC.
1275 KING STREET
GREENWICH, CONNECTICUT 06831
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Newport News Shipbuilding
and Dry Dock Company:
We have audited the accompanying statements of net assets available for benefits
of the Newport News Shipbuilding Savings 401(k) Plan for Union Eligible
Employees (the "Plan") as of December 31, 1995 and 1994, and the related
statement of changes in net assets available for benefits for the year ended
December 31, 1995. These financial statements and the schedules referred to
below are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Newport News
Shipbuilding Savings 401(k) Plan for Union Eligible Employees as of December 31,
1995 and 1994, and the changes in its net assets available for benefits for the
year ended December 31, 1995, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental 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
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules 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.
ARTHUR ANDERSEN LLP
Washington, D.C.,
June 7, 1996
<PAGE>
NEWPORT NEWS SHIPBUILDING SAVINGS 401(K) PLAN
FOR UNION ELIGIBLE EMPLOYEES
AS OF DECEMBER 31, 1995 AND 1994
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
Statements of Net Assets Available for
Benefits as of December 31, 1995
and 1994 1
Statement of Changes in Net Assets
Available for Benefits for the Year
Ended December 31, 1995 2
Notes to Financial Statements as of
December 31, 1995 and 1994 3
Item 27(a) - Schedule of Assets Held
for Investment Purposes as of December
31, 1995 8
Item 27(d) - Schedule of Reportable
Transactions for the Year Ended
December 31, 1995 9
Schedules Omitted as Not Applicable as
of and for the Year Ended December 31,
1995:
Item 27(b) - Schedule of Loans or
Fixed Income Obligations
Item 27(c) - Schedule of Leases in
Default or Classified as Uncollectible
Item 27(e) - Schedule of Nonexempt
Transactions
</TABLE>
<PAGE>
NEWPORT NEWS SHIPBUILDING SAVINGS 401(K) PLAN
FOR UNION ELIGIBLE EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1994
-------- --------
<S> <C> <C>
ASSETS:
Investments, at fair market value-
Signet Investment
Money Market Account $2,405,516 $1,721,704
Fidelity U.S. Equity
Index Portfolio 2,626,543 1,244,942
Fidelity U.S. Bond
Index Portfolio 971,581 590,098
Tenneco Inc. Common Stock 599,123 343,783
Employee loans receivable 238,009 106,073
---------- ----------
Total investments 6,840,772 4,006,600
---------- ----------
Contributions receivable 89,456 76,404
Dividend receivable 5,528 3,813
Interest receivable 16,622 1,907
---------- ----------
Total assets 6,952,378 4,088,724
LIABILITIES:
Management fees payable (1,486) (2,134)
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $6,950,892 $4,086,590
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
NEWPORT NEWS SHIPBUILDING SAVINGS 401(K) PLAN
FOR UNION ELIGIBLE EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
ADDITIONS:
Participant contributions $2,174,240
Net realized and unrealized gains 654,101
Dividends 129,817
Interest 123,750
----------
Total additions 3,081,908
----------
DEDUCTIONS:
Benefits paid to participants 212,227
Other payments 5,379
----------
Total deductions 217,606
----------
NET ADDITIONS 2,864,302
NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1994 4,086,590
----------
NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1995 $6,950,892
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
NEWPORT NEWS SHIPBUILDING SAVINGS 401(K) PLAN
FOR UNION ELIGIBLE EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND 1994
1. DESCRIPTION OF THE PLAN:
GENERAL
The Newport News Shipbuilding Savings 401(k) Plan for Union Eligible Employees
(the "Plan") was adopted by Newport News Shipbuilding and Dry Dock Company (the
"Company"), effective July 1, 1992. The Plan is intended to constitute a
profit-sharing plan within the meaning of Internal Revenue Code (the "Code")
sections 401(a) and 401(k). The Company and Signet Trust Company (the
"Trustee") have executed the Newport News Shipbuilding Savings 401(k) Plan Trust
Agreement, which provides for the investment and reinvestment of the assets of
the Plan.
The Plan is administered by the Company's Benefits Committee (the "Committee").
The members of the Committee are appointed by the Company's Board of Directors
(the "Board").
ELIGIBILITY AND CONTRIBUTIONS
All union employees with at least 90 days of continuous service are eligible to
participate in the Plan. Participants may elect to voluntarily contribute a
percentage of their annual before-tax compensation, not to exceed IRS-imposed
limitations, through equal pay period reductions. Contributions range from 1
percent to 15 percent of annual compensation.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution and
an allocation of the Plan's earnings or losses. Allocations are based on the
participant's account balance, as defined in the Plan document. Participants
are fully vested in their accounts.
PAYMENT OF BENEFITS
Upon termination of employment, including layoff, distributions to participants
are generally made via single lump sum payments. Participants whose account
balances exceed $3,500 (or have ever exceeded this amount at the time of a
previous distribution) have the right to defer the distribution of their account
balances until they reach the age of 62.
2. SIGNIFICANT ACCOUNTING POLICIES:
The accompanying financial statements are prepared on the accrual basis, and all
investments are recorded at fair market value.
3
<PAGE>
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. INVESTMENTS:
Participants may choose to invest in any of the four investment funds that are
selected by the Committee. The Committee has currently selected the following
funds:
TENNECO INC. COMMON STOCK - A fund that invests entirely in the common stock of
the Company's parent - Tenneco Inc.
FIDELITY U.S. BOND INDEX PORTFOLIO - A diverse portfolio of mortgage-backed
obligations and corporate debt issues. The fund attempts to duplicate an
aggregate bond index.
FIDELITY U.S. EQUITY INDEX PORTFOLIO - A diverse common stock fund that attempts
to duplicate the Standard and Poor's Index of 500 common stocks.
SIGNET INVESTMENT MONEY MARKET ACCOUNT - A money market fund insured by FDIC up
to $100,000.
The fair value of individual investments that represent five percent of the
Plan's net assets as of December 31, 1995 and 1994, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1994
-------- --------
<S> <C> <C>
Signet Investment Money Market Account $2,405,516 $1,721,704
Fidelity U.S. Equity Index Portfolio 2,626,543 1,244,942
Fidelity U.S. Bond Index Portfolio 971,581 590,098
Tenneco Inc. Common Stock 599,123 343,783
</TABLE>
4. TAX STATUS:
The plan obtained its first determination letter on August 20, 1994, in which
the Internal Revenue Service stated that the Plan, as then designated, was in
compliance with the applicable requirements of the Internal Revenue Code. The
Plan's administrator and the Plan's legal counsel believe that the Plan is
currently designed and being operated in compliance with requirements of the
Internal Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
5. PLAN TERMINATION:
The Company does not plan to terminate the Plan, however it has the right to do
so at any time, subject to a basic labor agreement, by action of the Board.
4
<PAGE>
6. ADMINISTRATIVE EXPENSES:
The Trustee's fees, the expenses of administration of the trust fund, and the
expenses incidental to the operation and management of the Plan are paid by the
Company. These fees totaled $81,864 and $82,284 in 1995 and 1994, respectively.
Investment management and similar fees directly related to the return to
participants on amounts invested in the various investment funds are charged
against the Plan's funds as other payments.
7. LOANS TO PARTICIPANTS:
A participant may borrow up to 50 percent of his or her account balance with a
minimum loan amount of $500. Loans are repayable through payroll deductions for
a period no longer than 4-1/2 years. Interest on loans to participants is
charged at a rate of prime plus 1 percent. The interest rates at December 31,
1995 and 1994 were 9.7 percent and 9.5 percent, respectively.
8. RELATED PARTY TRANSACTIONS:
Because the Company is a subsidiary of Tenneco Inc. and the stock of the latter
is an investment option, investments in the stock represent related party
transactions.
9. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
Amounts allocated to withdrawing participants are recorded on Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
The following is a reconciliation of net assets available for benefits per
the financial statements to Form 5500.
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1995 1994
-------- --------
<S> <C> <C>
NET ASSETS AVAILABLE FOR
BENEFITS PER THE FINANCIAL
STATEMENTS $6,950,892 $4,086,590
AMOUNTS ALLOCATED TO
WITHDRAWING PARTICIPANTS (112,088) (2,749)
---------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS PER FORM 5500 $6,838,804 $4,083,841
========== ==========
</TABLE>
5
<PAGE>
The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1995
-----------------
<S> <C>
BENEFITS PAID TO PARTICIPANTS PER THE
FINANCIAL STATEMENTS $212,227
ADD: AMOUNTS ALLOCATED TO WITHDRAWING
PARTICIPANTS AT DECEMBER 31, 1995 112,088
LESS: AMOUNTS ALLOCATED TO WITHDRAWING
PARTICIPANTS AT DECEMBER 31, 1994 2,749
--------
BENEFITS PAID TO PARTICIPANTS PER
FORM 5500 $321,566
========
</TABLE>
The total amount of participant accounts related to terminated employees who
have not yet requested payment was $5,426 as of December 31, 1995.
6
<PAGE>
10. PARTICIPANT DIRECTED INVESTMENT PROGRAMS:
STATEMENT OF CHANGES IN NET ASSETS BY INVESTMENT WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
SIGNET FIDELITY FIDELITY
INVESTMENT MONEY U.S. EQUITY U.S. BOND TENNECO INC. PARTICIPANT
MARKET ACCOUNT INDEX PORTFOLIO INDEX PORTFOLIO COMMMON STOCK LOANS OTHER TOTAL
---------------- --------------- --------------- ------------- ----------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS,
December 31, 1994 $1,721,704 $1,244,942 $590,098 $343,783 $106,073 $ 79,990 $4,086,590
ADDITIONS:
Participant
contributions 873,603 755,108 321,591 210,886 -- 13,052 2,174,240
Net realized and
unrealized gains -- 517,336 71,677 65,088 -- -- 654,101
Dividends 12,776 56,941 54,981 3,404 -- 1,715 129,817
Interest 115,437 3,128 1,402 -- -- 3,783 123,750
Fund Transfers 329,600 178,899 36,014 43,354 -- (587,867) --
Loans 10,319 24,785 10,630 -- 222,296 (268,030) --
DEDUCTIONS:
Benefits paid to
participants 113,466 49,660 31,211 17,890 -- -- 212,227
Other payments 2,376 2,163 908 580 -- (648) 5,379
Fund Transfers 450,471 26,510 58 31,102 -- (508,141) --
Loans 91,610 76,263 82,635 17,820 90,360 (358,688) --
---------- ---------- -------- -------- -------- --------- ----------
NET ASSETS,
December 31, 1995 $2,405,516 $2,626,543 $971,581 $599,123 $238,009 $ 110,120 $6,950,892
========== ========== ======== ======== ======== ========= ==========
</TABLE>
7
<PAGE>
11. SUBSEQUENT EVENT:
In March 1996, Tenneco Inc. announced that it intends to spin off the Company to
Tenneco Inc.'s shareholders in a tax-free transaction. The spin off is targeted
to be completed late in 1996 but remains subject to a number of conditions
including the receipt of a favorable ruling from the Internal Revenue Service on
the tax-free nature of the proposed transaction and authorization by Tenneco
Inc.'s board of directors. The Company is currently unable to predict the
timing or the ultimate impact that these recent developments will have on the
Plan.
8
<PAGE>
NEWPORT NEWS SHIPBUILDING SAVINGS 401(K) PLAN
FOR UNION ELIGIBLE EMPLOYEES
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
MARKET
DESCRIPTION ASSET DESCRIPTION COST VALUE
------------------ ----------------- -------- --------
<S> <C> <C> <C>
SIGNET INVESTMENT MONEY MARKET ACCOUNT Mutual Fund Shares $2,405,516 $2,405,516
FIDELITY U.S. EQUITY INDEX PORTFOLIO MUTUAL FUND SHARES 2,129,197 2,626,543
FIDELITY U.S. BOND INDEX PORTFOLIO MUTUAL FUND SHARES 942,309 971,581
TENNECO INC. COMMON STOCK COMMON STOCK SHARES 563,077 599,123
LOANS TO PARTICIPANTS (INTEREST
RATES VARIED FROM 9.5% TO 9.8%
DURING 1995) 238,009 238,009
---------- ----------
Total assets held for investment $6,278,108 $6,840,772
========== ==========
</TABLE>
The accompanying financial statements and notes are an integral part of this
schedule.
9
<PAGE>
NEWPORT NEWS SHIPBUILDING SAVINGS 401(K) PLAN
FOR UNION ELIGIBLE EMPLOYEES
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER NUMBER TOTAL TOTAL COST
OF OF AMOUNT AMOUNT OF
PURCHASE SALES OF OF ASSETS GAIN
TRANSACTIONS TRANSACTIONS DESCRIPTION PURCHASES SALES SOLD (LOSS)
------------ ------------ ----------- --------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
262 255 Signet Investment Money
Market Account $1,345,315 $661,504 $661,504 $ -
134 103 Fidelity U.S. Equity Index
Portfolio 1,027,590 163,325 139,215 24,110
115 103 Fidelity U.S. Bond Index
Portfolio 429,512 119,706 119,642 64
6 70 Tenneco Inc. Common Stock 255,314 65,062 69,355 (4,293)
</TABLE>
Note: This schedule presents all transactions or series of transactions during
the period January 1 through December 31, 1995, in excess of 5 percent of
the fair value of the Plan's assets as of the beginning of the year.
The accompanying financial statements and notes are an integral part of this
schedule.
10
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Newport News Shipbuilding and Dry Dock Company Benefits Committee
has duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEWPORT NEWS SHIPBUILDING
SAVINGS (401(k)) PLAN FOR UNION
ELIGIBLE EMPLOYEES
Date: June 24, 1996 By: /s/ JON H. FAGAN
----------------------------------
Jon H. Fagan
Chairman of the Newport News
Shipbuilding and Dry Dock Company
Benefits Committee
<PAGE>
INDEX TO EXHIBIT
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
23 --Consent of Independent Public Accountants
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report, dated June 7, 1996, included in this Annual Report on
Form 11-K for the year ended December 31, 1995, into the previously filed Form
S-8 Registration Statement of the Newport News Shipbuilding Savings (401(k))
Plan for Union Eligible Employees (File No. 33-61129).
ARTHUR ANDERSEN LLP
Washington, D.C.
June 24, 1996
