<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 11-K
----------------
[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:
PACKAGING CORPORATION OF AMERICA
401(K) SAVINGS PLAN
1603 ORRINGTON AVENUE
EVANSTON, ILLINOIS 60204
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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Employee Benefits Committee of
Tenneco Packaging Inc.:
We have audited the accompanying statements of net assets available for benefits
of the PACKAGING CORPORATION OF AMERICA 401(k) SAVINGS PLAN as of December 31,
1995 and 1994, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements and the schedules
referred to below are the responsibility of the Tenneco Packaging Inc. Employee
Benefits Committee (formerly known as Packaging Corporation of America Benefits
Committee). 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 Packaging
Corporation of America 401(k) Savings Plan as of December 31, 1995 and 1994, and
the changes in net assets available for benefits for the years then ended, 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 and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
June 15, 1996
<PAGE>
PACKAGING CORPORATION OF AMERICA 401(k) SAVINGS PLAN
----------------------------------------------------
TABLE OF CONTENTS
-----------------
DECEMBER 31, 1995 AND 1994
--------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 2
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of
December 31, 1995 and 1994 3
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 1995 and
1994 5
Notes to Financial Statements 7
SUPPLEMENTAL SCHEDULES:
Schedule I--Item 27(a)--Schedule of Assets Held for
Investment Purposes as of December 31, 1995 14
Schedule II--Item 27(d)--Schedule of Reportable
Transactions for the Year Ended December 31, 1995 15
</TABLE>
<PAGE>
PACKAGING CORPORATION OF AMERICA 401(k) SAVINGS PLAN
----------------------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
----------------------------------------------
AS OF DECEMBER 31, 1995
-----------------------
<TABLE>
<CAPTION>
Dreyfus
Money Market
Tenneco Dreyfus Dreyfus Instruments,
Inc. Capital Strategic Dreyfus Government Dreyfus
Common Preservation Investing Balanced Securities Appreciation Loan
Stock Fund Fund Fund Fund Series Fund Fund Total
---------- ------------ ---------- ---------- ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at quoted
market value-
Tenneco Inc. common stock $7,161,086 $ - $ - $ - $ - $ - $ - $ 7,161,086
Investment funds - 7,444,622 2,235,578 4,167,516 5,975,765 5,427,322 - 25,250,803
Cash equivalents 580,650 - - - - - - 580,650
Participant notes receivable
(Note 5) - - - - - - 132,984 132,984
---------- ------------ ---------- ---------- ---------- ------------ ------------ -----------
Total investments 7,741,736 7,444,622 2,235,578 4,167,516 5,975,765 5,427,322 132,984 33,125,523
---------- ------------ ---------- ---------- ---------- ------------ ------------ -----------
Contributions receivable-
Employee 46,484 34,752 17,054 27,995 42,401 29,267 - 197,953
Employer 12,846 11,302 5,549 8,548 12,855 8,751 - 59,851
Profit sharing (Note 3) 4,810 23,776 17,764 30,307 36,970 38,699 - 152,326
---------- ------------ ---------- ---------- ---------- ------------ ------------ -----------
Total contributions
receivable 64,140 69,830 40,367 66,850 92,226 76,717 - 410,130
---------- ------------ ---------- ---------- ---------- ------------ ------------ -----------
NET ASSETS AVAILABLE FOR
BENEFITS $7,805,876 $7,514,452 $2,275,945 $4,234,366 $6,067,991 $5,504,039 $132,984 $33,535,653
========== ============ ========== ========== ========== ============ ============ ===========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
<PAGE>
PACKAGING CORPORATION OF AMERICA 401(k) SAVINGS PLAN
----------------------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
----------------------------------------------
AS OF DECEMBER 31, 1994
-----------------------
<TABLE>
<CAPTION>
Dreyfus
Money Market
Tenneco Dreyfus Dreyfus Instruments,
Inc. Capital Strategic Dreyfus Government Dreyfus
Common Preservation Investing Balanced Securities Appreciation
Stock Fund Fund Fund Fund Series Fund Total
---------- ------------ ---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash on hand $ 33,841 $ - $ - $ - $ - $ - $ 33,841
---------- ------------ ---------- ---------- ---------- ------------ -----------
Investments, at quoted market value-
Tenneco Inc. common stock 4,778,615 - - - - - 4,778,615
Investment funds - 5,505,803 1,296,115 2,135,826 4,456,695 2,446,791 15,841,230
Cash equivalents 22,470 - - - - - 22,470
---------- ------------ ---------- ---------- ---------- ------------ -----------
Total investments 4,801,085 5,505,803 1,296,115 2,135,826 4,456,695 2,446,791 20,642,315
---------- ------------ ---------- ---------- ---------- ------------ -----------
Contributions receivable-
Employee 86,116 66,011 35,379 43,058 80,160 43,058 353,782
Employer 26,443 20,296 10,870 13,221 24,644 13,221 108,695
---------- ------------ ---------- ---------- ---------- ------------ -----------
Total contributions receivable 112,559 86,307 46,249 56,279 104,804 56,279 462,477
---------- ------------ ---------- ---------- ---------- ------------ -----------
NET ASSETS AVAILABLE FOR BENEFITS $4,947,485 $5,592,110 $1,342,364 $2,192,105 $4,561,499 $2,503,070 $21,138,633
========== ============ ========== ========== ========== ============ ===========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
<PAGE>
PACKAGING CORPORATION OF AMERICA 401(k) SAVINGS PLAN
----------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<TABLE>
<CAPTION>
Tenneco Dreyfus Dreyfus
Inc. Capital Strategic Dreyfus
Common Preservation Investing Balanced
Stock Fund Fund Fund Fund
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
ADDITIONS:
Contributions-
Employee $1,116,050 $ 871,540 $ 422,088 $ 613,764
Employer 312,832 279,066 130,793 181,825
Profit sharing (Note 3) 4,810 23,776 17,764 30,307
---------- ---------- ---------- ----------
Total contributions 1,433,692 1,174,382 570,645 825,896
---------- ---------- ---------- ----------
Investment income-
Interest income - 371,896 - -
Dividend income 253,910 - 230,181 320,583
Realized gain (loss) - - (16,373) 37,836
Unrealized gain 913,133 - 149,265 305,012
Loan interest income - - - -
---------- ---------- ---------- ----------
Total investment income 1,167,043 371,896 363,073 663,431
---------- ---------- ---------- ----------
Transfer in of assets from various plans
(Note 1) 647,579 439,312 262,510 561,284
---------- ---------- ---------- ----------
TOTAL ADDITIONS 3,248,314 1,985,590 1,196,228 2,050,611
INTERFUND TRANSFERS (95,482) 120,119 (189,368) 219,801
LOANS TO PARTICIPANTS (191) (2,907) (2,799) (6,471)
LOAN REPAYMENTS 1,170 3,869 3,245 5,631
DEDUCTIONS:
Distributions to participants (286,889) (184,329) (72,551) (222,671)
Transfer out of assets from Sylva plan (8,531) - (1,174) (4,640)
---------- ---------- ---------- ----------
Net additions 2,858,391 1,922,342 933,581 2,042,261
PARTICIPANTS' EQUITY, January 1, 1995 4,947,485 5,592,110 1,342,364 2,192,105
---------- ---------- ---------- ----------
PARTICIPANTS' EQUITY, December 31, 1995 $7,805,876 $7,514,452 $2,275,945 $4,234,366
========== ========== ========== ==========
</TABLE>
<TABLE>
Dreyfus
Money Market
Instruments,
Government Dreyfus
Securities Appreciation Loan
Series Fund Fund Total
----------- ------------- ------------- ----------
<S> <C> <C> <C> <C>
ADDITIONS:
Contributions-
Employee $1,003,272 $ 637,968 $ - $4,664,682
Employer 284,839 184,056 - 1,373,411
Profit sharing (Note 3) 36,970 38,699 - 152,326
---------- ---------- -------- -----------
Total contributions 1,325,081 860,723 - 6,190,419
---------- ---------- -------- -----------
Investment income-
Interest income - - - 371,896
Dividend income 267,389 92,567 - 1,164,630
Realized gain (loss) - 40,361 - 61,824
Unrealized gain - 1,076,588 - 2,443,998
Loan interest income - - 5,813 5,813
---------- ---------- -------- -----------
Total investment income 267,389 1,209,516 5,813 4,048,161
---------- ---------- -------- -----------
Transfer in of assets from various plans
(Note 1) 1,107,381 740,218 135,248 3,893,532
---------- ---------- -------- -----------
TOTAL ADDITIONS 2,699,851 2,810,457 141,061 14,132,112
INTERFUND TRANSFERS (357,504) 302,434 - -
LOANS TO PARTICIPANTS (3,790) (5,742) 21,900 -
LOAN REPAYMENTS 6,969 7,135 (28,019) -
DEDUCTIONS:
Distributions to participants (745,340) (105,999) (1,958) (1,619,737)
Transfer out of assets from Sylva plan (93,694) (7,316) - (115,355)
---------- ---------- -------- -----------
Net additions 1,506,492 3,000,969 132,984 12,397,020
PARTICIPANTS' EQUITY, January 1, 1995 4,561,499 2,503,070 - 21,138,633
---------- ---------- -------- -----------
PARTICIPANTS' EQUITY, December 31, 1995 $6,067,991 $5,504,039 $132,984 $33,535,653
========== ========== ======== ===========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
<PAGE>
PACKAGING CORPORATION OF AMERICA 401(k) SAVINGS PLAN
----------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1994
------------------------------------
<TABLE>
<CAPTION>
Dreyfus
Money Market
Dreyfus Dreyfus Instruments,
Tenneco Inc. Capital Strategic Dreyfus Government Dreyfus
Common Stock Preservation Investing Balanced Securities Appreciation
Fund Fund Fund Fund Series Fund Total
------------- ------------- ----------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions-
Employee $1,059,290 $ 682,478 $ 382,337 $539,431 $ 964,767 $ 569,861 $ 4,198,164
Employer 346,493 205,273 124,596 167,321 311,417 178,735 1,333,835
---------- ---------- --------- -------- ---------- --------- -----------
Total contributions 1,405,783 887,751 506,933 706,752 1,276,184 748,596 5,531,999
---------- ---------- --------- -------- ---------- --------- -----------
Investment income-
Interest income - 271,152 - - - - 271,152
Dividend income 154,413 - 3,297 65,047 131,178 43,335 397,270
Realized gain - - 20,810 22,528 - 8,163 51,501
Unrealized gain (loss) (998,066) - (149,436) (10,608) - 33,390 (1,124,720)
---------- ---------- --------- -------- ---------- --------- -----------
Total investment income (loss) (843,653) 271,152 (125,329) 76,967 131,178 84,888 (404,797)
---------- ---------- --------- -------- ---------- --------- -----------
TOTAL ADDITIONS 562,130 1,158,903 381,604 783,719 1,407,362 833,484 5,127,202
INTERFUND TRANSFERS (29,357) 68,139 182,188 47,861 (154,641) (114,190) -
DEDUCTIONS--distributions to
participants (147,920) (151,833) (34,726) (55,034) (279,194) (73,542) (742,249)
---------- ---------- --------- -------- ---------- --------- -----------
Net additions 384,853 1,075,209 529,066 776,546 973,527 645,752 4,384,953
NET ASSETS AVAILABLE FOR BENEFITS,
January 1, 1993 4,562,632 4,516,901 813,298 1,415,559 3,587,972 1,857,318 16,753,680
---------- ---------- --------- -------- ---------- --------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
December 31, 1994 $4,947,485 $5,592,110 $1,342,364 $2,192,105 $4,561,499 $2,503,070 $21,138,633
========== ========== ========= ========= ========= ========= ==========
</TABLE>
<PAGE>
PACKAGING CORPORATION OF AMERICA 401(k) SAVINGS PLAN
----------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<TABLE>
<CAPTION>
Tenneco Dreyfus Dreyfus
Inc. Capital Strategic Dreyfus
Common Preservation Investing Balanced
Stock Fund Fund Fund Fund
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
ADDITIONS:
Contributions-
Employee $1,116,050 $ 871,540 $ 422,088 $ 613,764
Employer 312,832 279,066 130,793 181,825
Profit sharing (Note 3) 4,810 23,776 17,764 30,307
---------- ---------- ---------- ----------
Total contributions 1,433,692 1,174,382 570,645 825,896
---------- ---------- ---------- ----------
Investment income-
Interest income - 371,896 - -
Dividend income 253,910 - 230,181 320,583
Realized gain (loss) - - (16,373) 37,836
Unrealized gain 913,133 - 149,265 305,012
Loan interest income - - - -
---------- ---------- ---------- ----------
Total investment income 1,167,043 371,896 363,073 663,431
---------- ---------- ---------- ----------
Transfer in of assets from various plans
(Note 1) 647,579 439,312 262,510 561,284
---------- ---------- ---------- ----------
TOTAL ADDITIONS 3,248,314 1,985,590 1,196,228 2,050,611
INTERFUND TRANSFERS (95,482) 120,119 (189,368) 219,801
LOANS TO PARTICIPANTS (191) (2,907) (2,799) (6,471)
LOAN REPAYMENTS 1,170 3,869 3,245 5,631
DEDUCTIONS:
Distributions to participants (286,889) (184,329) (72,551) (222,671)
Transfer out of assets from Sylva plan (8,531) - (1,174) (4,640)
---------- ---------- ---------- ----------
Net additions 2,858,391 1,922,342 933,581 2,042,261
PARTICIPANTS' EQUITY, January 1, 1995 4,947,485 5,592,110 1,342,364 2,192,105
---------- ---------- ---------- ----------
PARTICIPANTS' EQUITY, December 31, 1995 $7,805,876 $7,514,452 $2,275,945 $4,234,366
========== ========== ========== ==========
</TABLE>
<TABLE>
Dreyfus
Money Market
Instruments,
Government Dreyfus
Securities Appreciation Loan
Series Fund Fund Total
----------- ------------- ------------- ----------
<S> <C> <C> <C> <C>
ADDITIONS:
Contributions-
Employee $1,003,272 $ 637,968 $ - $4,664,682
Employer 284,839 184,056 - 1,373,411
Profit sharing (Note 3) 36,970 38,699 - 152,326
---------- ---------- ---------- ----------
Total contributions 1,325,081 860,723 - 6,190,419
---------- ---------- ---------- ----------
Investment income-
Interest income - - - 371,896
Dividend income 267,389 92,567 - 1,164,630
Realized gain (loss) - 40,361 - 61,824
Unrealized gain - 1,076,588 - 2,443,998
Loan interest income - - 5,813 5,813
---------- ---------- ---------- ----------
Total investment income 267,389 1,209,516 5,813 4,048,161
---------- ---------- ---------- ----------
Transfer in of assets from various plans
(Note 1) 1,107,381 740,218 135,248 3,893,532
---------- ---------- ---------- ----------
TOTAL ADDITIONS 2,699,851 2,810,457 141,061 14,132,112
INTERFUND TRANSFERS (357,504) 302,434 - -
LOANS TO PARTICIPANTS (3,790) (5,742) 21,900 -
LOAN REPAYMENTS 6,969 7,135 (28,019) -
DEDUCTIONS:
Distributions to participants (745,340) (105,999) (1,958) (1,619,737)
Transfer out of assets from Sylva plan (93,694) (7,316) - (115,355)
---------- ---------- ---------- ----------
Net additions 1,506,492 3,000,969 132,984 12,397,020
PARTICIPANTS' EQUITY, January 1, 1995 4,561,499 2,503,070 - 21,138,633
---------- ---------- ---------- ----------
PARTICIPANTS' EQUITY, December 31, 1995 $6,067,991 $5,504,039 $132,984 $33,535,653
========== ========== ========== ===========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
<PAGE>
PACKAGING CORPORATION OF AMERICA 401(k) SAVINGS PLAN
----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
1. DESCRIPTION OF THE PLAN:
------------------------
The following description of the Packaging Corporation of America 401(k) Savings
Plan (the "Plan") provides only general information. Participants should refer
to the Plan Agreement for a more complete description of the Plan's provisions.
The Plan was established on November 1, 1989, to provide for tax-deferred
savings contributions for Plan participants. The effective date for initial
contributions to the Plan was January 1, 1990.
The Plan is a defined contribution plan which complies with Sections 401(a) and
401(k) of the Internal Revenue Code.
During the first year of the Plan, all active, full-time hourly rated employees
of the Packaging Corporation of America, Counce, Tennessee Mill, who had
completed one year of service, defined as 1,000 or more hours of qualified
service, were eligible for enrollment. On February 1, 1991, the Plan was
extended to include all active, full-time hourly rated employees at the
following six additional Tenneco Packaging, formerly Packaging Corporation of
America (the "Company") operations:
. Los Angeles, California Container Plant
. Rutherfordton, North Carolina Container Plant
. Salisbury, North Carolina Container Plant
. Southern Region - Woodlands, Counce, Tennessee
. Tomahawk, Wisconsin Mill
. Valdosta, Georgia Mill
Effective December 31, 1991, the Filer Mill 401(k) Savings Plan was merged with
the Plan. Assets of the Filer Mill 401(k) Savings Plan were transferred into
the Plan on January 1, 1992. All rights and obligations under the Filer Mill
401(k) Savings Plan are in accordance with the amended plan agreement for the
Plan.
Effective April 1, 1993, all assets of the Dixie Container Corporation Pretax
Savings Plan (the "Dixie Plan") were merged into the Plan. Former salaried
participants of the Dixie Plan were eligible to participate in the Tenneco Inc.
Thrift Plan (the "Thrift Plan") effective January 1, 1992. As the Thrift Plan
does not allow any "roll-over" contribution of assets, the assets remained in
the Dixie Plan until April 1, 1993, at which time those assets were transferred
to the Plan. Former hourly participants of the Dixie Plan continue to earn
interest on their account balances now held by the Plan but are no longer
eligible to contribute to any of the Tenneco Inc. defined contribution plans.
Effective February 1, 1994, the Plan was extended to include all active, full-
time hourly rated employees at the Company's Clayton, New Jersey, location.
Effective April 1, 1995, all assets of the Pressware International, Inc.
Employees' Profit Sharing and Salary Deferral Plan (the "Pressware Plan") were
merged into the Plan. Former salaried participants of the Pressware Plan were
eligible to participate in the Tenneco Thrift Plan (the "Thrift Plan") effective
April 1, 1995. As the Thrift Plan does not allow any "rollover" contribution of
assets, those assets were transferred to the Plan. Former hourly participants
of the Pressware Plan were eligible to participate in the Plan effective April
1, 1995. All six investment options were made available to these participants.
The hourly and salaried participants were allowed to transfer existing loan
balances into the Plan and are also eligible to request loans against their
account
<PAGE>
balances as of April 1, 1995. Additionally, participants are eligible
to receive discretionary profit-sharing contributions.
Effective March 31, 1995, the Company sold the assets of its Sylva, North
Carolina, mill and all existing balances were transferred out of the Plan.
Effective May 3, 1995, the Lux Packaging Ltd. Employee Retirement Plan (the "Lux
Plan") was merged into the Plan. Former salaried participants of the Lux Plan
were eligible to participate in the Thrift Plan effective June 1, 1995. As the
Thrift Plan does not allow any "rollover" contribution of assets, the assets
remained in the Lux Plan until December 8, 1995, at which time those assets were
transferred to the Plan. Former hourly participants of the Lux Plan were
eligible to participate in the Plan effective June 1, 1995. All six investment
options were made available to these participants.
Effective November 20, 1995, the Deline Box Windsor, Inc. 401(k) Employee
Savings Plan (the "Windsor Plan") was merged into the Plan. Former salaried
participants of the Windsor Plan were eligible to participate in the Thrift Plan
effective December 1, 1995. As the Thrift Plan does not allow any "rollover"
contribution of assets, the assets remained in the Windsor Plan until December
5, 1995, at which time those assets were transferred to the Plan. Former hourly
participants of the Windsor Plan were eligible to participate in the Plan
effective December 1, 1995. All six investment options were made available to
these participants.
Tenneco Packaging Inc. is a wholly owned subsidiary of Tenneco Inc.
Dreyfus Trust Company ("Trustee") is the Trustee of the Plan.
2. SUMMARY OF ACCOUNTING POLICIES:
-------------------------------
Basis of Accounting
- -------------------
The Plan's financial statements are maintained on the accrual basis of
accounting. Investments are reported at market value. Cost of investments sold
is determined using the average cost method.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions in
determining the reported amounts on the Company's assets, liabilities, revenues
and expenses.
3. CONTRIBUTIONS:
--------------
Eligible participants in the Plan may make tax-deferred savings contributions
via payroll deductions that range from 1% to 16% of their salary (in increments
of 1%). The Company contributes, on behalf of the participant, a matching
amount to the Plan equal to either 25% or 50%, depending on location, of the
first 4% of the participant's contributions. Additionally, active participants
of the Pressware Plan are eligible to receive discretionary profit-sharing
contributions. Tax-deferred savings contributions per employee are limited to
$9,240 in 1995 and 1994 in accordance with Section 402 of the Internal Revenue
Code.
4. INVESTMENT OPTIONS:
-------------------
Participating employees at all locations, unless otherwise noted, may invest
their tax-deferred savings contributions and the matching Company contributions
in multiples of 25% in the following funds:
<PAGE>
a. Tenneco Inc. Common Stock Fund
------------------------------
This fund invests solely in common stock of Tenneco Inc., the Company's parent.
The value of this fund changes with the market value of Tenneco Inc. common
stock and related dividend income. Included within this fund as a cash
equivalent is the Dreyfus Liquid Asset Fund, which is used as a holding account
for cash invested in Tenneco Inc. Common Stock. As of December 31, 1995 and
1994, market value of investments in the Tenneco Inc. Common Stock Fund was
$7,161,086 and $4,778,615, respectively, and represented 5% or more of net
assets available for benefits. There were 896 and 794 participants who had
elected this investment option for all or part of their account balances as of
December 31, 1995 and 1994, respectively.
b. Dreyfus Capital Preservation Fund
---------------------------------
This fund invests in money markets and floating and fixed-rate contracts placed
with approved banks and insurance carriers, with no more than 10% of the fund
invested in a single carrier. Only the Counce, Tennessee, Filer City, Michigan,
and Clayton, New Jersey locations have this investment option. As of December
31, 1995 and 1994, market value of investments in this fund was $7,444,622 and
$5,505,803, respectively, and represented 5% or more of net assets available for
benefits. There were 861 and 722 participants who had elected this investment
option for all or part of their account balances as of December 31, 1995 and
1994, respectively.
c. Dreyfus Strategic Investing Fund
--------------------------------
This fund invests mainly in publicly issued common stock. The fund may invest
in common stocks of foreign companies, convertible securities, preferred stocks
and debt securities. In an effort to increase its total return, the fund may
engage in techniques such as leveraging, short-selling, options and futures
transactions and currency transactions. As of December 31, 1995 and 1994,
market value of investments in this fund was $2,235,578 and $1,296,115,
respectively, and represented 5% or more of net assets available for benefits.
There were 656 and 492 participants who had elected this investment option for
all or part of their account balances as of December 31, 1995 and 1994,
respectively.
The fund was composed of the following as of the fund's fiscal year-end:
<TABLE>
<CAPTION>
October 31
-----------
1995 1994
----- -----
<S> <C> <C>
Common stocks 97.3% 70.2%
Short-term investments 2.7 29.8
==== ====
</TABLE>
d. Dreyfus Balanced Fund
---------------------
This fund invests in common stocks and fixed income instruments. As of December
31, 1995 and 1994, market value of investments in this fund was $4,167,516 and
$2,135,826, respectively, and represented 5% or more of net assets available for
benefits. There were 820 and 577 participants who had elected this investment
option for all or part of their account balances as of December 31, 1995 and
1994, respectively.
<PAGE>
The fund was composed of the following at its reviewed date, February 28, 1996,
and its audited date, August 31, 1995:
<TABLE>
<CAPTION>
Feb.28,1996 Aug.31,1995
------------ ------------
(Reviewed) (Audited)
<S> <C> <C>
Bonds and notes 46.7% 61.7%
Common stocks 49.3 35.3
Short-term investments 4.0 3.1
===== =====
</TABLE>
e. Dreyfus Money Market Instruments, Government Securities Series
--------------------------------------------------------------
This fund invests primarily in short-term securities issued or guaranteed by the
U.S. Government. As of December 31, 1995 and 1994, market value of investments
in this fund was $5,975,765 and $4,456,695, respectively, and represented 5% or
more of net assets available for benefits. There were 1,204 and 1,139
participants who had elected this investment option for all or part of their
account balances as of December 31, 1995 and 1994, respectively.
The fund was composed of the following at its audited date, December 31, 1995
and 1994:
<TABLE>
<CAPTION>
1995 1994
----- -----
<S> <C> <C>
Repurchase agreements 47.6% 45.8%
U.S. Treasury notes 14.3 11.9
U.S. Treasury bills 38.1 42.3
==== ====
</TABLE>
f. Dreyfus Appreciation Fund
-------------------------
This fund invests in stocks that are considered "undervalued" in terms of
current earnings, asset or growth potential. As of December 31, 1995 and 1994,
market value of investments in this fund was $5,427,322 and $2,446,791,
respectively, and represented 5% or more of net assets available for benefits.
There were 873 and 598 participants who had elected this investment option for
all or part of their account balances as of December 31, 1995 and 1994,
respectively.
The fund was composed of the following at its audited date, December 31, 1995
and 1994:
<TABLE>
<CAPTION>
1995 1994
----- -----
<S> <C> <C>
Common stocks 92.8% 93.4%
Preferred stocks .5 4.0
Short-term investments 6.7 2.6
==== ====
</TABLE>
As investments are stated at market value, the Plan's financial statements
include net unrealized appreciation of $773,451, $(7,465), $348,910 and
$1,181,172 relating to the Tenneco Inc. Common Stock Fund, Dreyfus Strategic
Investing Fund, Dreyfus Balanced Fund and Dreyfus Appreciation Fund,
respectively, as of December 31, 1995. As of December 31, 1994, the Plan's
financial statements include net unrealized appreciation (depreciation) of
$(139,683), $(156,730), $43,898 and $104,584 relating to the Tenneco Inc. Common
Stock Fund, Dreyfus Strategic Investing Fund, Dreyfus Balanced Fund and Dreyfus
Appreciation Fund, respectively.
Fully benefit-responsive investment contracts are valued at contract value,
which represents the principal balance of the investment contracts, plus accrued
interest at the stated contract rate, less payments received and contract
charges by the insurance company. Under the terms of the investment contracts,
the crediting interest rate is determined semiannually based on the insurance
<PAGE>
company's applicable rate schedule. The fair value of the investment contracts
as of December 31, 1995, approximated fair value.
5. PARTICIPANT LOANS:
------------------
Effective April 1, 1995, active participants of the Pressware Plan were allowed
to transfer existing loan balances into the Plan and may take a loan from their
401(k) account. Participants may borrow from their fund accounts a minimum of
$1,000 up to a maximum of the lesser of 50% of their vested balance or $50,000
less the participant's highest Plan loan balance in the last 12 months. Loan
transactions are treated as a transfer from (to) the investment funds to (from)
the Loan Fund. Loans for the purchase of a primary residence can be repaid over
a period of up to 10 years. Loans for any other reason can be repaid over a
period of up to 5 years. Loans are repaid to the participant's 401(k) account
at a fixed interest rate through payroll deductions. The interest rate is set
at 1% above the current prime rate. Outstanding interest rates at December 31,
1995, ranged from 7% to 10%.
6. VESTING:
--------
Participants at the Counce, Tennessee Mill, the Filer City, Michigan Mill, the
Clayton, New Jersey Plant, the Waco, Texas Plant, the Windsor, Colorado Plant,
the Columbus, Ohio Plant and the Dixie locations are fully vested in the portion
of their accounts attributable to their tax-deferred savings contributions and
the related earnings thereon as well as in the Company's matching contributions.
Other participants are fully vested in their own tax-deferred savings
contributions and the related earnings thereon, but vest in Company matching
contributions evenly over a five-year period. The five-year period includes
service under Georgia-Pacific Corporation ("G.P.") and with any entity acquired
by G.P. and recognized by G.P. for vesting purposes. Forfeitures are used to
reduce future employer matching contributions.
7. PLAN DISTRIBUTIONS AND WITHDRAWALS:
-----------------------------------
Upon retirement or termination, participants may elect to have the portion of
their accounts invested in the Tenneco Inc. Common Stock Fund distributed in
either stock or cash. The portion of the participant's account balance invested
in other investment options will be paid in cash. If the participant's account
balance exceeds $3,500, the participant may elect to receive distribution prior
to his or her 65th birthday. Otherwise, the distribution will begin upon the
earlier of the participant's 65th birthday, death or termination of employment
with the Company. In no event may a participant delay distribution after
reaching age 70-1/2.
Participants may withdraw all or a portion of their accounts attributable to
tax-deferred savings contributions in the event of serious financial hardship
(subject to the approval of the Plan administrator and in accordance with the
Plan agreement and the applicable regulations of the Internal Revenue Code),
subject to a minimum withdrawal. Company matching contributions may not be
withdrawn.
The Company has reserved the right to terminate the Plan at any time. However,
should the Company terminate the Plan, all participants will be fully vested in
their accounts.
8. RECONCILIATION TO FORM 5500:
----------------------------
As of December 31, 1995 and 1994, the Plan had $224,220 and $118,419,
respectively, of pending distributions to participants who elected to withdraw
from the operations and earnings of the Plan. These amounts are recorded as a
liability in the Plan's Form 5500; however, these amounts are not recorded as a
liability in accordance with generally accepted accounting principles.
<PAGE>
The following table reconciles net assets available for Plan benefits per the
financial statements to the Form 5500 as filed by the Company for the year ended
December 31, 1995:
<TABLE>
<CAPTION>
Net Assets
Benefits Available
Payable to Benefits for Plan
Participants Paid Benefits
------------ ---------- ------------
<S> <C> <C> <C>
Per financial statements $ - $1,619,737 $33,535,653
Accrued benefit payments 224,220 224,220 (224,220)
Reversal of 1994 accrual for benefit payments - (118,419) -
------- --------- ----------
Per Form 5500 $224,220 $1,725,538 $33,311,433
======== ========== ===========
</TABLE>
9. PLAN EXPENSES:
--------------
Administrative expenses may be paid from fund assets as permitted by and subject
to limitation set by law. All Trustee fees and other administrative expenses
were paid directly by the Company in 1995 and 1994.
10. INCOME TAX STATUS:
------------------
The Plan received a determination letter on February 6, 1991, in which the
Internal Revenue Service ("IRS") stated that the Plan was in compliance with the
applicable requirements of the Internal Revenue Code. The Plan has been amended
subsequent to the most recent IRS determination. The Plan administrator
continues to believe that the Plan is designed and operated in compliance with
the applicable requirements of the Internal Revenue Code and, as such, that the
Plan is qualified and the related trust income is tax-exempt.
A participant is not subject to federal income tax on employer and employee
contributions or on earnings on these contributions until distributed.
11. SUBSEQUENT EVENT:
-----------------
Effective January 1, 1996, the Hexacomb Corporation 401(k) and Profit Sharing
Plan (the "Hexacomb Plan") was merged into the Plan. Former salaried
participants of the Hexacomb Plan were eligible to participate in the Thrift
Plan effective January 1, 1996. As the Thrift Plan does not allow any
"rollover" contribution of assets, the assets remained in the Hexacomb Plan
until May 2, 1996, at which time those assets were transferred to the Plan.
Former hourly participants of the Hexacomb Plan were eligible to participate in
the Plan effective January 1, 1996. All six investment options were made
available to these participants.
<PAGE>
SCHEDULE I
PACKAGING CORPORATION OF AMERICA 401(k) SAVINGS PLAN
----------------------------------------------------
ITEM 27(a)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
-----------------------------------------------------------
AS OF DECEMBER 31, 1995
-----------------------
(Employer Identification Number 36-2552989, Plan Number 019)
------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Shares/ Current of Net
Units Cost Value Assets
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Tenneco Inc. Common Stock* $ 144,304 $ 6,387,635 $ 7,161,086 21.35%
Dreyfus Liquid Asset Fund* 580,650 580,650 580,650 1.73
Dreyfus Capital Preservation Fund* 7,444,622 7,444,622 7,444,622 22.20
Dreyfus Strategic Investing Fund* 107,791 2,243,043 2,235,578 6.67
Dreyfus Balanced Fund* 271,146 3,818,606 4,167,516 12.43
Dreyfus Money Market Instruments, Government Securities Series* 5,975,765 5,975,765 5,975,765 17.82
Dreyfus Appreciation Fund* 264,103 4,246,150 5,427,322 16.18
Dreyfus Loan Fund* 132,984 132,984 132,984 .40*
----------- ----------- ----------- -----------
T o t a l $14,921,365 $30,829,455 $33,125,523 98.78%
=========== =========== =========== ===========
</TABLE>
*Represents a party-in-interest transaction.
The accompanying notes to financial statements
are an integral part of this schedule.
<PAGE>
SCHEDULE II
PACKAGING CORPORATION OF AMERICA 401(k) SAVINGS PLAN
----------------------------------------------------
ITEM 27(d)--SCHEDULE OF REPORTABLE TRANSACTIONS
-----------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
(Employer Identification Number 36-2552989, Plan Number 019)
------------------------------------------------------------
<TABLE>
<CAPTION>
Cost of Cost of Net
Purchased Assets Proceeds Gain
Investment Assets Sold From Sales (Loss)
- ---------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Tenneco Inc. Common Stock Fund* $ 7,296,061 $5,235,525 $5,235,525 $ -
Dreyfus Capital Preservation Fund* 2,296,487 357,668 357,668 -
Dreyfus Strategic Investing Fund* 1,141,777 351,579 335,206 (16,373)
Dreyfus Balanced Fund* 2,056,963 327,285 365,121 37,836
Dreyfus Money Market Instruments
Government Securities Series* 3,107,954 1,588,884 1,588,884 -
Dreyfus Appreciation Fund* 2,096,753 192,810 233,171 40,361
Dreyfus Loan Fund* 21,900 29,977 29,977 -
----------- ---------- ---------- --------
$18,017,895 $8,083,728 $8,145,552 $ 61,824
=========== ========== ========== ========
</TABLE>
*Represents a party-in-interest transaction.
The accompanying notes to financial statements are an integral part of this
schedule.
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Packaging Corporation of America Benefits Committee has duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
PACKAGING CORPORATION OF AMERICA
401(k) SAVINGS PLAN
Date: June 26, 1996 By: /s/ JOHN POTEMPA
----------------------------------
John Potempa
Chairman of the Tenneco Packaging
Inc.
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 15, 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 Packaging Corporation of America 401(k)
Savings Plan (File No. 33-61133).
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 26, 1996
