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, 1993
-------------------------------------
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)
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.
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 22, 1994
1
- - - -----------------------------------------------------------------
Index To Financial Statements Thrift Plan Of Phillips
And Schedules Petroleum Company
Page
Report of Independent Auditors .............................. 4
Financial Statements
Statements of Net Assets Available for Benefits
at December 31, 1993 and 1992
Total Plan ............................................. 5
Fund A ................................................. 7
Fund B ................................................. 9
Fund C ................................................. 11
Fund D--Deposit Administration Account ................. 13
Fund D--Deferred Settlement Account .................... 15
Temporary Investment Fund .............................. 23
Statements of Net Assets Available for Benefits
at December 31, 1993
Fund E ................................................. 17
Fund F ................................................. 19
Loan Fund .............................................. 21
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 1993, 1992 and 1991
Total Plan ............................................. 6
Fund A ................................................. 8
Fund B ................................................. 10
Fund C ................................................. 12
Fund D--Deposit Administration Account ................. 14
Fund D--Deferred Settlement Account .................... 16
Fund E ................................................. 18
Temporary Investment Fund............................... 24
Statements of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1993
Fund F ................................................. 20
Loan Fund .............................................. 22
Notes to Financial Statements ............................. 25
2
- - - -----------------------------------------------------------------
Index To Financial Statements Thrift Plan Of Phillips
And Schedules Petroleum Company
Page
Supplemental Schedules
Schedule of Assets Held for Investment Purposes
at December 31, 1993 .................................... 32
Schedule of Reportable Transactions for the
Year Ended December 31, 1993 ............................ 34
3
- - - -----------------------------------------------------------------
Report Of Independent Auditors
The Thrift Plan Committee
Thrift Plan of Phillips Petroleum Company
We have audited the financial statements of the Thrift Plan of
Phillips Petroleum Company (Plan) listed in the accompanying
index to financial statements and schedules. 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 listed in the
accompanying index to financial statements and schedules present
fairly, in all material respects, the net assets available for
benefits of the Plan at December 31, 1993 and 1992, and the
changes in net assets available for plan benefits for each of the
three years in the period ended December 31, 1993, 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 accompanying
supplemental schedules of assets held for investment purposes as
of December 31, 1993, and reportable transactions for the year
ended December 31, 1993, are presented for the 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 supplemental schedules have been
subjected to the auditing procedures applied in our audit of the
1993 financial statements and, in our opinion, are fairly stated
in all material respects in relation to the 1993 basic financial
statements taken as a whole.
/s/ ERNST & YOUNG
-------------
ERNST & YOUNG
Tulsa, Oklahoma
June 22, 1994
4
- - - -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
Thousands of Dollars
------------------------
At December 31 1993 1992
------------------------
Assets
Investments
Common stock $ 634,567 640,231
Insurance contracts 403,121 407,596
U.S. government securities - 65,645
BT Pyramid Government Securities
Cash Fund 19,106 27,880
BT Pyramid Equity Index Fund 37,590 -
Wells Fargo Government/Corporate
Bond Index Fund E 90,558 -
BT Pyramid Discretionary Cash Fund 19,665 -
Loans to Plan participants 14,157 -
- - - -----------------------------------------------------------------
1,218,764 1,141,352
Cash 1 -
Contributions Receivable 629 567
Employee Deposits Receivable 238 107
Loan Repayments Receivable 33 -
Interest Receivable 105 1,398
- - - -----------------------------------------------------------------
Total Assets 1,219,770 1,143,424
- - - -----------------------------------------------------------------
Liabilities
Benefits Payable - 9
Securities Purchased 1,786 4,070
Other Liabilities 14 -
- - - -----------------------------------------------------------------
Total Liabilities 1,800 4,079
- - - -----------------------------------------------------------------
Net Assets Available for Benefits $1,217,970 1,139,345
=================================================================
See Notes to Financial Statements.
5
- - - -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
Thousands of Dollars
------------------------------------
Years Ended December 31 1993 1992 1991
------------------------------------
Additions
Contributions and Deposits
Company contributions
Matching $ 5,986 5,952 6,105
Before-tax deposits 16,518 15,388 15,656
Employee deposits 17,913 17,533 18,476
- - - -----------------------------------------------------------------
40,417 38,873 40,237
- - - -----------------------------------------------------------------
Investment Income
Dividends 26,091 30,231 30,513
Interest 35,642 40,991 47,178
Net appreciation
(depreciation) 109,944 34,307 (57,023)
- - - -----------------------------------------------------------------
171,677 105,529 20,668
- - - -----------------------------------------------------------------
Total Additions 212,094 144,402 60,905
- - - -----------------------------------------------------------------
Deductions
Distributions to
Participants or Their
Beneficiaries
Cash 96,790 127,974 130,030
Common stock 36,256 59,735 13,041
Forfeitures 9 6 14
Administrative Expense 425 - -
Interest Expense 23 - -
Transfer to (from) Other
Plans (34) - 403
- - - -----------------------------------------------------------------
Total Deductions 133,469 187,715 143,488
- - - -----------------------------------------------------------------
Net Increase (Decrease) 78,625 (43,313) (82,583)
Net Assets Available for
Benefits
Beginning of Year 1,139,345 1,182,658 1,265,241
- - - -----------------------------------------------------------------
End of Year $1,217,970 1,139,345 1,182,658
=================================================================
See Notes to Financial Statements.
6
- - - -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND A
Thousands of Dollars
------------------------
At December 31 1993 1992
------------------------
Assets
Investments
U.S. government securities $ - 65,645
Wells Fargo Government/Corporate
Bond Index Fund E 90,558 -
BT Pyramid Government Securities
Cash Fund 22 9,272
- - - -----------------------------------------------------------------
90,580 74,917
Due from Temporary Investment Fund 140 88
Cash 1 -
Interest Receivable - 1,331
- - - -----------------------------------------------------------------
Total Assets 90,721 76,336
- - - -----------------------------------------------------------------
Net Assets Available for Benefits $90,721 76,336
=================================================================
Number of Units 8,552,717 7,876,597
Unit Value $10.6073 9.6916
- - - -----------------------------------------------------------------
See Notes to Financial Statements.
7
- - - -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
FUND A
Thousands of Dollars
---------------------------------
Years Ended December 31 1993 1992 1991
---------------------------------
Additions
Investment Income
Interest $ 300 5,239 5,334
Net appreciation
(depreciation) 7,894 (986) 2,395
- - - -----------------------------------------------------------------
8,194 4,253 7,729
Allocation of Deposits and
Earnings from Temporary
Investment Fund 1,347 887 723
- - - -----------------------------------------------------------------
Total Additions 9,541 5,140 8,452
- - - -----------------------------------------------------------------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries 12,745 16,214 5,031
Administrative Expense 92 - -
Transfer to Other Plans - - 32
- - - -----------------------------------------------------------------
Total Deductions 12,837 16,214 5,063
- - - -----------------------------------------------------------------
Interfund Transfers 17,681 10,903 8,825
- - - -----------------------------------------------------------------
Net Increase (Decrease) 14,385 (171) 12,214
Net Assets Available for
Benefits
Beginning of Year 76,336 76,507 64,293
- - - -----------------------------------------------------------------
End of Year $90,721 76,336 76,507
=================================================================
See Notes to Financial Statements.
8
- - - -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND B
Thousands of Dollars
------------------------
At December 31 1993 1992
------------------------
Assets
Investments
Common stock $434,165 439,957
BT Pyramid Government Securities
Cash Fund 15,432 15,200
- - - -----------------------------------------------------------------
449,597 455,157
Due from Temporary Investment Fund 2,655 2,347
Interest Receivable 28 42
- - - -----------------------------------------------------------------
Total Assets 452,280 457,546
- - - -----------------------------------------------------------------
Liabilities
Benefits Payable - 7
Securities Purchased 1,179 2,808
Other Liabilities 9 -
- - - -----------------------------------------------------------------
Total Liabilities 1,188 2,815
- - - -----------------------------------------------------------------
Net Assets Available for Benefits $451,092 454,731
=================================================================
Number of Units 6,682,406 8,094,364
Unit Value $64.0916 55.8629
- - - -----------------------------------------------------------------
See Notes to Financial Statements.
9
- - - -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
FUND B
Thousands of Dollars
----------------------------------
Years Ended December 31 1993 1992 1991
----------------------------------
Additions
Investment Income (Loss)
Dividends $ 17,220 20,859 21,064
Interest 262 242 245
Net appreciation
(depreciation) 66,019 24,832 (40,696)
- - - -----------------------------------------------------------------
83,501 45,933 (19,387)
Allocation of Deposits and
Earnings from Temporary
Investment Fund 26,322 26,105 27,177
- - - -----------------------------------------------------------------
Total Additions 109,823 72,038 7,790
- - - -----------------------------------------------------------------
Deductions
Distributions to
Participants or Their
Beneficiaries
Cash 28,438 35,046 19,497
Common stock 26,297 45,971 10,474
Administrative Expense 151 - -
Interest Expense 15 - -
Transfer to Other Plans - - 186
- - - -----------------------------------------------------------------
Total Deductions 54,901 81,017 30,157
- - - -----------------------------------------------------------------
Interfund Transfers (58,561) (9,810) 4,135
- - - -----------------------------------------------------------------
Net Decrease (3,639) (18,789) (18,232)
Net Assets Available for
Benefits
Beginning of Year 454,731 473,520 491,752
- - - -----------------------------------------------------------------
End of Year $451,092 454,731 473,520
=================================================================
See Notes to Financial Statements.
10
- - - -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND C
Thousands of Dollars
------------------------
At December 31 1993 1992
------------------------
Assets
Investments
Common stock $200,402 200,274
BT Pyramid Government Securities
Cash Fund 557 439
- - - -----------------------------------------------------------------
200,959 200,713
Contributions Receivable 507 520
Interest Receivable 14 19
- - - -----------------------------------------------------------------
Total Assets 201,480 201,252
- - - -----------------------------------------------------------------
Liabilities
Securities Purchased 607 1,262
Other Liabilities 5 2
- - - -----------------------------------------------------------------
Total Liabilities 612 1,264
- - - -----------------------------------------------------------------
Net Assets Available for Benefits $200,868 199,988
=================================================================
Number of Units 3,489,916 3,625,762
Unit Value $64.0916 55.8629
- - - -----------------------------------------------------------------
See Notes to Financial Statements.
11
- - - -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
FUND C
Thousands of Dollars
----------------------------------
Years Ended December 31 1993 1992 1991
----------------------------------
Additions
Company Contributions--
Matching $ 5,986 5,952 6,105
- - - -----------------------------------------------------------------
Investment Income (Loss)
Dividends 8,871 9,372 9,449
Interest 134 105 114
Net appreciation
(depreciation) 33,531 10,751 (18,018)
- - - -----------------------------------------------------------------
42,536 20,228 (8,455)
- - - -----------------------------------------------------------------
Total Additions (Deductions) 48,522 26,180 (2,350)
- - - -----------------------------------------------------------------
Deductions
Distributions to
Participants or Their
Beneficiaries
Cash 12,036 17,408 8,084
Common stock 9,959 13,764 2,567
Forfeitures 9 6 14
Administrative Expense 78 - -
Interest Expense 8 - -
Transfer to Other Plans - - 141
- - - -----------------------------------------------------------------
Total Deductions 22,090 31,178 10,806
- - - -----------------------------------------------------------------
Interfund Transfers (25,552) (3,072) (409)
- - - -----------------------------------------------------------------
Net Increase (Decrease) 880 (8,070) (13,565)
Net Assets Available for
Benefits
Beginning of Year 199,988 208,058 221,623
- - - -----------------------------------------------------------------
End of Year $200,868 199,988 208,058
=================================================================
See Notes to Financial Statements.
12
- - - -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND D--DEPOSIT ADMINISTRATION ACCOUNT
Thousands of Dollars
----------------------
At December 31 1993 1992
----------------------
Assets
Investments
Insurance contracts
Travelers Insurance Company,
Group Annuity Contract GR-15505 $178,356 186,546
Group Annuity Contract GR-14128 - 8,026
The Prudential Insurance Company of
America, Group Annuity Contract
GA-5991 71,323 71,043
Continental Assurance Company,
Group Annuity, Contract GP-12692 63,945 62,825
Group Annuity, Contract GP-12787 25,270 15,083
Provident National Assurance,
Group Annuity, Contract GC-05048 62,994 62,321
BT Pyramid Government Securities
Cash Fund - 195
- - - -----------------------------------------------------------------
401,888 406,039
Due from Temporary Investment Fund - 499
- - - -----------------------------------------------------------------
Total Assets 401,888 406,538
- - - -----------------------------------------------------------------
Net Assets Available for Benefits $401,888 406,538
=================================================================
Number of Units (A)
Unit Values (A)
- - - -----------------------------------------------------------------
(A) See Note 4.
See Notes to Financial Statements.
13
- - - -----------------------------------------------------------------
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 1993 1992 1991
----------------------------------
Additions
Investment Income
Interest $ 34,444 34,726 38,818
Allocation of Deposits and
Earnings from Temporary
Investment Fund 2,124 6,017 6,369
- - - -----------------------------------------------------------------
Total Additions 36,568 40,743 45,187
- - - -----------------------------------------------------------------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries 38,509 58,360 95,431
Administrative Expense 55 - -
Transfer to Other Plans - - 39
- - - -----------------------------------------------------------------
Total Deductions 38,564 58,360 95,470
- - - -----------------------------------------------------------------
Interfund Transfers (2,654) 19,265 (9,862)
- - - -----------------------------------------------------------------
Net Increase (Decrease) (4,650) 1,648 (60,145)
Net Assets Available for
Benefits
Beginning of Year 406,538 404,890 465,035
- - - -----------------------------------------------------------------
End of Year $401,888 406,538 404,890
=================================================================
See Notes to Financial Statements.
14
- - - -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND D--DEFERRED SETTLEMENT ACCOUNT
Thousands of Dollars
----------------------
At December 31 1993 1992
----------------------
Assets
Investments
Insurance contract $1,233 1,752
- - - -----------------------------------------------------------------
Total Assets 1,233 1,752
- - - -----------------------------------------------------------------
Net Assets Available for Benefits $1,233 1,752
=================================================================
See Notes to Financial Statements.
15
- - - -----------------------------------------------------------------
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 1993 1992 1991
--------------------------------
Additions
Investment Income
Interest $ 89 137 179
- - - -----------------------------------------------------------------
Total Additions 89 137 179
- - - -----------------------------------------------------------------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries 608 837 1,213
- - - -----------------------------------------------------------------
Total Deductions 608 837 1,213
- - - -----------------------------------------------------------------
Net Decrease (519) (700) (1,034)
Net Assets Available for
Benefits
Beginning of Year 1,752 2,452 3,486
- - - -----------------------------------------------------------------
End of Year $1,233 1,752 2,452
=================================================================
See Notes to Financial Statements.
16
- - - -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND E
Thousands
of Dollars
----------
At December 31 1993
----------
Assets
Investments
BT Pyramid Equity Index Fund $37,590
Due From Temporary Investment Fund 350
- - - ----------------------------------------------------------------
Total Assets 37,940
- - - ----------------------------------------------------------------
Net Assets Available for Benefits $37,940
================================================================
Number of Units 34,189,510
Unit Value $1.1097
- - - ----------------------------------------------------------------
See Notes to Financial Statements.
17
- - - -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
FUND E
Thousands of Dollars
---------------------------------
Years Ended December 31 1993 1992 1991
---------------------------------
Additions
Investment Income
Interest
Debt securities of
Phillips Petroleum
Company $ - 452 2,347
Other - 2 4
Net appreciation
(depreciation) 2,500 (290) (704)
- - - -----------------------------------------------------------------
2,500 164 1,647
Allocation of Deposits and
Earnings from Temporary
Investment Fund 3,026 - -
- - - -----------------------------------------------------------------
Total Additions 5,526 164 1,647
- - - -----------------------------------------------------------------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries 1,950 109 774
Administrative Expense 42 - -
Transfers to Other Plans - - 5
- - - -----------------------------------------------------------------
Total Deductions 1,992 109 779
- - - -----------------------------------------------------------------
Interfund Transfers 34,406 (17,286) (2,689)
- - - -----------------------------------------------------------------
Net Increase (Decrease) 37,940 (17,231) (1,821)
Net Assets Available for
Benefits
Beginning of Year - 17,231 19,052
- - - -----------------------------------------------------------------
End of Year $37,940 - 17,231
=================================================================
See Notes to Financial Statements.
18
- - - -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
FUND F
Thousands
of Dollars
----------
At December 31 1993
----------
Assets
Investments
BT Pyramid Discretionary Cash Fund $19,665
Due from Temporary Investment Fund 350
Interest Receivable 56
- - - -----------------------------------------------------------------
Total Assets 20,071
- - - -----------------------------------------------------------------
Net Assets Available for Benefits $20,071
=================================================================
Number of Units 19,802,851
Unit Value $1.0135
- - - -----------------------------------------------------------------
See Notes to Financial Statements.
19
- - - -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
FUND F
Thousands
of Dollars
----------
Year Ended December 31 1993
----------
Additions
Investment Income
Interest $ 228
Allocation of Deposits and
Earnings from Temporary
Investment Fund 1,682
- - - -----------------------------------------------------------------
Total Additions 1,910
- - - -----------------------------------------------------------------
Deductions
Cash Distributions to Participants
or Their Beneficiaries 2,491
Transfer from Other Plans (34)
Administrative Expense 7
- - - -----------------------------------------------------------------
Total Deductions 2,464
- - - -----------------------------------------------------------------
Interfund Transfers 20,625
- - - -----------------------------------------------------------------
Net Increase 20,071
Net Assets Available for
Benefits
Beginning of Year -
- - - -----------------------------------------------------------------
End of Year $20,071
=================================================================
See Notes to Financial Statements.
20
- - - -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
LOAN FUND
Thousands
of Dollars
----------
At December 31 1993
----------
Assets
Investments
Loans to participants $14,157
- - - -----------------------------------------------------------------
Total Assets 14,157
- - - -----------------------------------------------------------------
Net Assets Available for Benefits $14,157
=================================================================
See Notes to Financial Statements.
21
- - - -----------------------------------------------------------------
Statement Of Changes In Net Thrift Plan Of Phillips
Assets Available For Benefits Petroleum Company
LOAN FUND
Thousands
of Dollars
----------
Year Ended December 31 1993
----------
Deductions
Cash Distributions to
Participants or Their
Beneficiaries $ 13
Loan repayments from Plan
participants 523
- - - -----------------------------------------------------------------
Total Deductions 536
- - - -----------------------------------------------------------------
Interfund Transfers 14,693
- - - -----------------------------------------------------------------
Net Increase 14,157
Net Assets Available for
Benefits
Beginning of Year -
- - - -----------------------------------------------------------------
End of Year $14,157
=================================================================
See Notes to Financial Statements.
22
- - - -----------------------------------------------------------------
Statement Of Net Assets Thrift Plan Of Phillips
Available For Benefits Petroleum Company
TEMPORARY INVESTMENT FUND
Thousands of Dollars
----------------------
At December 31 1993 1992
----------------------
Assets
Investments
BT Pyramid Government Securities
Cash Fund $3,095 2,774
Contributions Receivable 122 47
Employee Deposits Receivable 238 107
Loan Repayments Receivable 33 -
Interest Receivable 7 6
- - - -----------------------------------------------------------------
Total Assets 3,495 2,934
- - - -----------------------------------------------------------------
Liabilities
Due to Fund A 140 88
Due to Fund B 2,655 2,347
Due to Fund D--Deposit Administration
Account - 499
Due to Fund E 350 -
Due to Fund F 350 -
- - - -----------------------------------------------------------------
Total Liabilities 3,495 2,934
- - - -----------------------------------------------------------------
Net Assets Available for Benefits $ - -
=================================================================
See Notes to Financial Statements.
23
- - - -----------------------------------------------------------------
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 1993 1992 1991
----------------------------------
Additions
Contributions and Deposits
Company contributions
Before-tax deposits $16,518 15,388 15,656
Employee deposits 17,913 17,533 18,476
Loan repayments from
Plan participants 523 - -
- - - -----------------------------------------------------------------
34,954 32,921 34,132
Investment Income
Interest 185 88 137
- - - -----------------------------------------------------------------
Total Additions 35,139 33,009 34,269
- - - -----------------------------------------------------------------
Deductions
Allocation of Deposits and
Earnings 34,501 33,009 34,269
- - - -----------------------------------------------------------------
Total Deductions 34,501 33,009 34,269
- - - -----------------------------------------------------------------
Interfund Transfers (638) - -
Net Increase - - -
Net Assets Available for
Benefits
Beginning of Year - - -
- - - -----------------------------------------------------------------
End of Year $ - - -
=================================================================
See Notes to Financial Statements.
24
- - - -----------------------------------------------------------------
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 was known as
the Thrift Plan of Phillips Petroleum Company and Subsidiary
Companies until June 10, 1992. Beginning January 1, 1993, changes
were made to the Plan to add new investment funds and provide
participants with more flexibility in directing their savings
investments.
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 September 16, 1991, certain former employees elected to
transfer assets and liabilities associated with their accounts to
the Applied Automation, Inc. Incentive Savings Plan. 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. Through December 31, 1992, WestStar Bank, N.A.,
Bartlesville, Oklahoma, was the investment manager for Fund A of
the Plan. Since then, Fund A has been managed by the Trustee,
with Wells Fargo Institutional Trust Company managing Fund A
assets invested in the Wells Fargo Government/Corporate Bond Index
Fund E.
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.
25
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 and any earnings thereon 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 the earnings thereon are paid into Funds A, B, E or F as
directed by the participant, and invested as follows: Fund A
(prior to January 1, 1993, in United States government securities;
after December 31, 1992, in the commingled Wells Fargo
Government/Corporate Bond Index Fund E managed by Wells Fargo
Institutional Trust Company), Fund B (common stock of Phillips
Petroleum Company), Fund E (after December 31, 1992, in the
commingled BT Pyramid 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 accepts deposits. Fund E held
Phillips debt securities until March 15, 1992, when Phillips
redeemed all of its 13 7/8 percent senior notes due in 1997 and 14
3/4 percent subordinated debentures due in 2000, the proceeds
being reinvested by the Plan in Fund B at that time. 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 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 due to
restrictions required by the insurance companies, transfers were
not allowed out of Fund D after January 15, 1993. Beginning in
1993, monthly transfers were allowed between investment funds,
except as mentioned above.
A participant is vested at all times with respect to his deposits.
Generally, a participant is vested with respect to his interest in
Company contributions (a) if he has made, or has 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.
Generally a participant may, as of any valuation date, withdraw
any portion of his vested interest in his after-tax account. 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.
26
Forfeitures arising from nonvested withdrawals are used to reduce
future Company contributions. Forfeitures may be restored under
certain circumstances if the participant later repays the amount
withdrawn.
Distributions occur upon separation from service, but may be
deferred. For a participant who retires or becomes totally
disabled, distribution may be deferred to a date not later than
February of the year after the year age 70 1/2 is attained. If
the participant dies, distribution to a surviving spouse
beneficiary may be deferred to the second valuation date prior to
the date on 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 retires 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.
Since January 1, 1993, 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,
the Phillips Petroleum Company positions of Risk Management and
Investment Manager, 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.
27
The Plan pays all reasonable expenses necessary for the operation
of the Plan unless such expenses are paid by the Company. Prior
to 1993, the Company paid all expenses other than brokerage fees,
commissions, stock transfer taxes and other charges and expenses
incurred in connection with the purchase or sale of securities
which were paid by the Plan. Such expenses include a fee of 0.15
percent of the funds invested in the insured contracts in Fund D,
and the guaranteed rates for these contracts will be reduced by
such amount if the Company declines to pay these fees. Effective
January 1, 1993, the Company began paying only the Trustee's
recordkeeping and accounting fees and the class year contract
administration fees.
The Company intends to continue the Plan indefinitely, but
reserves the right to amend or terminate it at any time. In the
event of termination of the Plan each participant will become
fully vested.
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
--------------------
1993 1992
--------------------
Receivable from the Company for
matching contributions $507 520
Before-tax deposits 122 47
- - - -----------------------------------------------------------------
$629 567
=================================================================
28
Note 4--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
------------------------------------
1993
- - - ----
1992 $ 25,270 13,387,160 1.8876
1991 126,939 54,885,147 2.3128
1990 178,356 60,899,767 2.9287
1989 19,925 6,837,204 2.9141
1988 51,398 8,904,618 5.7721
--------
$401,888
========
1992
- - - ----
1992 $ 15,777 8,958,366 1.7612
1991 125,146 58,404,193 2.1428
1990 186,546 69,617,439 2.6796
1989 19,646 7,338,441 2.6772
1988 51,396 9,751,654 5.2705
1987 8,027 5,039,151 1.5929
--------
$406,538
========
Note 5--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.
29
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 period ended December 31, 1993, the total of
loans made by fund of origin, principal repaid, and aggregate
outstanding loan balance were:
Thousands of Dollars
--------------------------------------------
Fund A B C D E F Total
--------------------------------------------
Period ended
December 31, 1993
- - - -----------------
Participant Loans $1,500 10,428 62 1,724 834 132 14,680
Principal Repaid 12 418 35 - 37 21 523
- - - -----------------------------------------------------------------
Loans Outstanding
at December 31,
1993 $14,157
=================================================================
Note 6--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, 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
=================================================================
December 31, 1992
- - - -----------------
Employee deposits $480 13,183 3,871 - -
Before-tax contributions 405 12,853 2,130 - -
Interest 2 69 16 - -
- - - -----------------------------------------------------------------
$887 26,105 6,017 - -
=================================================================
December 31, 1991
- - - -----------------
Employee deposits $400 13,913 4,163 - -
Before-tax contributions 320 13,156 2,180 - -
Interest 3 108 26 - -
- - - -----------------------------------------------------------------
$723 27,177 6,369 - -
=================================================================
30
Note 7--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 transfer of
participants' interests to other funds of the Plan. The interest
rate may not exceed the Eurodollar interbank offered rate plus
0.25%. On December 31, 1993, no portion of this credit facility
was outstanding.
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.
Note 8--Transactions with Parties-in-Interest
During 1993, 1992 and 1991, the Plan received $26,079,000,
$30,231,000 and $30,513,000, 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 9--Taxes
The Internal Revenue Service has determined that the Plan, as
amended through December 5, 1990, 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 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.
31
- - - ------------------------------------------------------------------------------
Schedule of Assets Held for Thrift Plan Of Phillips
Investment Purposes Petroleum Company
Item 27a EIN 73-0400345, Plan No. 002
At December 31, 1993
Description of investment Thousands of Dollars
Identity of issue, including maturity date, rate of --------------------
borrower, lessor, or interest, collateral, par or Historical Current
similar party maturity value Cost Value
- - - ---------------------- -------------------------------- ---------- ---------
Phillips Petroleum Common stock, $1.25 par value,
Company* 21,881,604 shares $322,111 634,567
-------- ---------
Bankers Trust Company* 38,021.889 units, BT Pyramid
Equity Index Fund 37,590 37,590
19,105,193.88 units, BT Pyramid
Government Securities Cash Fund 19,106 19,106
19,665,294.72 units, BT Pyramid
Discretionary Cash Fund 19,665 19,665
-------- ---------
76,361 76,361
-------- ---------
Wells Fargo 8,829,388 units, Wells Fargo
Institutional Trust Government/Corporate Bond
Company* Index Fund E 90,558 90,558
-------- ---------
Thrift Plan of Loans to Plan participants 14,157 14,157
Phillips Petroleum -------- ---------
Company
Travelers Insurance Group Annuity Contract GR-15505,
Company* deposit administration account 178,356 178,356
Group Annuity Contract GR-1966A,
deferred settlement account 1,233 1,233
Prudential Insurance Group Annuity Contract GA-5991,
Company of America* deposit administration account 71,323 71,323
32
- - - ------------------------------------------------------------------------------
Schedule of Assets Held for Thrift Plan Of Phillips
Investment Purposes Petroleum Company
Item 27a EIN 73-0400345, Plan No. 002
At December 31, 1993
Description of investment Thousands of Dollars
Identity of issue, including maturity date, rate of --------------------
borrower, lessor, or interest, collateral, par or Historical Current
similar party maturity value Cost Value
- - - ---------------------- -------------------------------- ---------- ---------
Continental Assurance Group Annuity Contract GP-12692,
Company* deposit administration account 63,945 63,945
Group Annuity Contract GP-12787,
deposit administration account 25,270 25,270
Provident National Group Annuity Contract
Assurance* GC-027-05048, deposit
administration account 62,994 62,994
-------- ---------
403,121 403,121
-------- ---------
$906,308 1,218,764
======== =========
*Party-in-interest
33
- - - ------------------------------------------------------------------------------
Schedule of Reportable Transactions Thrift Plan Of Phillips
Item 27d Petroleum Company
EIN 73-0400345, Plan No. 002
Year Ended December 31, 1993
Thousands of Dollars
Total Total --------------------------------
number of number of Gain or
Identity of party purchases sales Value (loss) as
involved and during the during the Value of of a result of
description of asset plan year plan year purchases* sales* transactions
- - - --------------------- ---------- ---------- ---------- ------ ------------
Bankers Trust Company,
BT Pyramid
Government
Securities Cash Fund 308 169 $215,275 224,050 -
Wells Fargo
Institutional Trust
Company, Wells Fargo
Government/Corporate
Bond Index Fund E 29 19 $ 96,987 13,473 802
Phillips Petroleum
Company Common Stock 40 118 $ 35,185 104,079 54,954
*This is also the current value at time of transaction.
34
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 22, 1994, 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, 1993.
/s/ ERNST & YOUNG
-------------
ERNST & YOUNG
Tulsa, Oklahoma
June 22, 1994
35