UNITED STATES
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, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___________ TO _____________
COMMISSION FILE NUMBER 0-11871
Full title of the plan and the address of the plan,
if different from that of the issuer named below:
AMERICAN EXPLORATION 401(K) PLAN
Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
AMERICAN EXPLORATION COMPANY
1331 LAMAR, SUITE 900
HOUSTON, TEXAS 77010-3088
AMERICAN EXPLORATION 401(K) PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 AND 1993
AND FOR THE YEARS THEN ENDED
TOGETHER WITH THE REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
AMERICAN EXPLORATION 401(K) PLAN
TABLE OF CONTENTS
PAGE
----
Report of Independent Public Accountants .................................. 2
Financial Statements:
Statements of Net Assets Available for Benefits With Fund
Information as of December 31, 1994 and 1993 ........................ 3
Statements of Changes in Net Assets Available for
Benefits With Fund Information for the Years Ended
December 31, 1994 and 1993 .......................................... 4
Notes to Financial Statements ....................................... 5
Supplemental Schedules:
Schedule I - Schedule of Assets Held for Investment
Purposes as of December 31, 1994 .................................... 9
Schedule II - Schedule of Reportable Transactions
for the Year Ended December 31, 1994 ................................ 10
Signatures ................................................................ 11
1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Retirement Committee
of the American Exploration 401(k) Plan:
We have audited the accompanying statements of net assets available for
benefits of the American Exploration 401(k) Plan as of December 31, 1994 and
1993, 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 Retirement 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
American Exploration 401(k) Plan as of December 31, 1994 and 1993, 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 as of December 31, 1994, included as Schedule I, and
reportable transactions for the year ended December 31, 1994, included as
Schedule II, 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 Fund Information in the statement of net assets available for benefits
and the statement of changes in net assets available for benefits is presented
for purposes of additional analysis rather than to present the net assets
available for benefits and changes in net assets available for benefits of each
fund. The supplemental schedules and Fund Information have been subjected to the
auditing procedures applied in the audit 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
Houston, Texas
June 28, 1995
2
AMERICAN EXPLORATION 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1994 AND 1993
Participant-Directed
----------------------------------------------------------------------------------
T. Rowe Price Trust Company
-------------------------------------------------------------------
American Growth International New Growth Prime
Exploration Stock Stock Income and Income Reserve
Common Stock Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
-------- ---------- -------- -------- ------- --------
ASSETS:
Investments, at market value ... $211,826 $1,172,165 $ -- $561,047 $ -- $609,184
-------- ---------- -------- -------- ------- --------
Total assets ................. 211,826 1,172,165 -- 561,047 -- 609,184
-------- ---------- -------- -------- ------- --------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1993 $211,826 $1,172,165 $ -- $561,047 $ -- $609,184
======== ========== ======== ======== ======= ========
ASSETS:
Investments, at market value ... $151,547 $1,074,751 $211,730 $446,530 $37,714 $443,538
-------- ---------- -------- -------- ------- --------
Total assets ................. 151,547 1,074,751 211,730 446,530 37,714 443,538
-------- ---------- -------- -------- ------- --------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1994 $151,547 $1,074,751 $211,730 $446,530 $37,714 $443,538
======== ========== ======== ======== ======= ========
Nonparticipant-
Participant-Directed Directed
--------------------------- -------------
T. Rowe Price Trust Company
---------------------------
Stable American
Value Loan Exploration
Fund, Inc. Fund Common Stock Total
---------- ------- ------------ ----------
ASSETS:
Investments, at market value ... $ -- $66,155 $393,697 $3,014,074
------- ------- -------- ----------
Total assets ................. -- 66,155 393,697 3,014,074
------- ------- -------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1993 $ -- $66,155 $393,697 $3,014,074
======= ======= ======== ==========
ASSETS:
Investments, at market value ... $89,102 $66,357 $322,300 $2,853,569
------- ------- -------- ----------
Total assets ................. 89,102 66,357 322,300 2,853,569
------- ------- -------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1994 $89,102 $66,357 $322,300 $2,853,569
======= ======= ======== ==========
The accompanying notes are an integral part of these financial statements.
3
AMERICAN EXPLORATION 401(K) PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
Participant-Directed
---------------------------------------------------------------------------------
T. Rowe Price Trust Company
----------------------------------------------------------
American Growth International New Growth
Exploration Stock Stock Income and Income
Common Stock Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc.
--------- ----------- -------- --------- -------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1992 ..... $ 272,857 $ 870,392 $ -- $ 385,295 $ --
--------- ----------- -------- --------- -------
ADDITIONS:
Dividends ............................ -- 59,973 -- 31,350 --
Employer contributions ............... -- -- -- -- --
Employee contributions ............... 63,280 350,311 -- 160,240 --
Employee loan interest income ........ 336 2,855 -- 1,188 --
Employee loan principal payments ..... 4,472 52,234 -- 20,828 --
Interfund transfers, net ............. (22,783) (25,372) -- 112,357 --
--------- ----------- -------- --------- -------
Total .............................. 45,305 440,001 -- 325,963 --
--------- ----------- -------- --------- -------
DEDUCTIONS:
Withdrawals .......................... 47,271 208,656 -- 135,360 --
Employee loans ....................... 3,524 23,725 -- 23,551 --
Increase (decrease) in refunds payable (3,790) (761) -- (321) --
Net depreciation (appreciation) in
fair value of investment ........... 59,331 (73,392) -- (8,379) --
--------- ----------- -------- --------- -------
Total .............................. 106,336 138,228 -- 150,211 --
--------- ----------- -------- --------- -------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1993 ..... 211,826 1,172,165 -- 561,047 --
--------- ----------- -------- --------- -------
ADDITIONS:
Dividends ............................ -- 94,489 12,566 34,685 1,852
Employer contributions ............... -- -- -- -- --
Employee contributions ............... 44,868 288,982 81,229 115,645 24,374
Employee loan interest income ........ 98 1,801 716 617 180
Employee loan principal payments ..... 2,210 21,645 7,240 9,502 2,735
Interfund transfers, net ............. (27,017) (87,845) 142,879 (87,470) 22,277
--------- ----------- -------- --------- -------
Total .............................. 20,159 319,072 244,630 72,979 51,418
--------- ----------- -------- --------- -------
DEDUCTIONS:
Withdrawals .......................... 18,719 301,389 12,385 131,734 11,069
Employee loans ....................... 1,200 24,599 250 9,551 750
Net depreciation (appreciation) in
fair value of investment ........... 60,519 90,498 20,265 46,211 1,885
--------- ----------- -------- --------- -------
Total .............................. 80,438 416,486 32,900 187,496 13,704
--------- ----------- -------- --------- -------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1994 ..... $ 151,547 $ 1,074,751 $211,730 $ 446,530 $37,714
========= =========== ======== ========= =======
Nonparticipant-
Participant-Directed Directed
---------------------------------------- -----------
T. Rowe Price Trust Company
----------------------------------------
Prime Stable American
Reserve Value Loan Exploration
Fund, Inc. Fund, Inc. Fund Common Stock Total
--------- -------- --------- -------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1992 ..... $ 831,910 $ -- $ 107,191 $317,754 $ 2,785,399
--------- -------- --------- -------- -----------
ADDITIONS:
Dividends ............................ 17,700 -- -- -- 109,023
Employer contributions ............... -- -- -- 231,730 231,730
Employee contributions ............... 182,164 -- -- -- 755,995
Employee loan interest income ........ 833 -- -- -- 5,212
Employee loan principal payments ..... 16,476 -- (94,010) -- --
Interfund transfers, net ............. (64,202) -- -- -- --
--------- -------- --------- -------- -----------
Total .............................. 152,971 -- (94,010) 231,730 1,101,960
--------- -------- --------- -------- -----------
DEDUCTIONS:
Withdrawals .......................... 380,339 -- 13,476 75,594 860,696
Employee loans ....................... 15,650 -- (66,450) -- --
Increase (decrease) in refunds payable (20,292) -- -- -- (25,164)
Net depreciation (appreciation) in
fair value of investment ........... -- -- -- 80,193 37,753
--------- -------- --------- -------- -----------
Total .............................. 375,697 -- (52,974) 155,787 873,285
--------- -------- --------- -------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1993 ..... 609,184 -- 66,155 393,697 3,014,074
--------- -------- --------- -------- -----------
ADDITIONS:
Dividends ............................ 17,410 5,032 -- -- 166,034
Employer contributions ............... -- -- -- 192,863 192,863
Employee contributions ............... 91,712 21,023 -- -- 667,833
Employee loan interest income ........ 464 92 -- -- 3,968
Employee loan principal payments ..... 4,897 1,240 (49,469) -- --
Interfund transfers, net ............. (44,271) 81,447 -- -- --
--------- -------- --------- -------- -----------
Total .............................. 70,212 108,834 (49,469) 192,863 1,030,698
--------- -------- --------- -------- -----------
DEDUCTIONS:
Withdrawals .......................... 211,738 19,732 10,799 102,934 820,499
Employee loans ....................... 24,120 -- (60,470) -- --
Net depreciation (appreciation) in
fair value of investment ........... -- -- -- 151,326 370,704
--------- -------- --------- -------- -----------
Total .............................. 235,858 19,732 (49,671) 254,260 1,191,203
--------- -------- --------- -------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1994 ..... $ 443,538 $ 89,102 $ 66,357 $332,300 $ 2,853,569
========= ======== ========= ======== ===========
The accompanying notes are an integral part of these financial statements.
4
AMERICAN EXPLORATION 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF THE PLAN
The following description of the American Exploration 401(k) Plan (the
"Plan") provides only general information. Participants should refer to the Plan
Agreement for a more complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan established effective January 1,
1989. The Plan was established to provide eligible employees with a convenient
way to save on a regular and long-term basis through investment in various types
of accounts.
ELIGIBILITY
All salaried employees are eligible to participate in the Plan on the first
day of the month immediately following the employee's date of hire.
EMPLOYEE CONTRIBUTIONS
Employees can make Salary Deferral Contributions to the Plan, through
payroll deductions, of up to 15% of the employee's base salary, limited to the
maximum total annual contribution allowed by federal tax laws. These
contributions are deducted from the employee's salary each pay period before
federal income taxes are withheld. The Plan also provides for Voluntary Employee
Contributions of up to 10% of the employee's base salary. Such contributions are
made with after-tax dollars. However, the employee's Salary Deferral and
Voluntary Employee Contributions for any year may not exceed 15% of the
employee's base salary.
Contributions made by the employee to the Plan may be invested in one or in
a combination of six mutual funds offered under the Plan. Three of these mutual
funds, T. Rowe Price Stable Value Fund, T. Rowe Price Growth and Income Fund and
T. Rowe Price International Stock Fund, were added as investment choices under
the Plan effective February 1, 1994. In addition, an employee may choose to
invest in the common stock of American Exploration Company (the "Company"). At
any time, an employee may change the mix of his/her existing investments, or
change where future contributions are made.
EMPLOYER CONTRIBUTIONS
The Company makes Matching Contributions to the employee's account of $1.00
for each $1.00 of Salary Deferral Contributions, up to a maximum annual Matching
Contribution of 3% of the employee's base salary or $1,050, whichever is less.
These contributions are made in the form of common stock of the Company.
Discretionary Employer Contributions may also be made by the Company. These
contributions are allocated to each employee's account based upon the ratio of
each employee's base salary to the total base salaries paid to all employees
participating in the Plan. There were no Discretionary Employer Contributions
made during 1994 or 1993.
VESTING
Participating employees are always fully vested in all employee and employer
contributions, and such amounts cannot be forfeited for any reason.
5
AMERICAN EXPLORATION 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF THE PLAN - (CONTINUED)
DISTRIBUTION OF BENEFITS
An employee, or the employee's beneficiary, is entitled to receive a single
lump sum distribution of the employee's account balance upon the occurrence of
any of the following events: termination of employment with the Company, death
or permanent disability of the employee, retirement or attainment of the age of
59 1/2. There were no amounts pending distribution at December 31, 1994 or 1993.
EMPLOYEES' RIGHTS
Employees may make withdrawals from their accounts in the event of an
immediate and significant financial need based on the provisions of the Plan.
Employees may also borrow from their accounts subject to various legal
requirements regarding, among other things, the amount of the loan, interest
rate to be charged and repayment terms. The rate of interest that will be
charged on a loan is the current Prime Rate plus 1%.
As required by federal tax laws, the Plan is subject to certain limitations
on contributions by highly compensated employees, as defined under such laws.
Such limitations are designed to protect the rights of other employees. There
was no liability to refund employee contributions to highly compensated
employees at December 31, 1994 or 1993.
In addition, the sum of amounts contributed to each of the participant's
accounts in the Company's defined contribution plans may not exceed the lesser
of $30,000 or 25% of the participant's compensation. There was no liability to
refund employee contributions due to the effect of this provision at December
31, 1994 or 1993.
The Plan is also subject to certain provisions which become effective if
more than 60% of the present value of its total assets are allocated to the
accounts of key employees, as defined under federal tax laws. There were no
restrictions due to these "top-heavy" provisions during 1994 or 1993.
(2) SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements are presented on the accrual basis of accounting.
Certain prior year amounts have been reclassified to conform with current
year presentation.
In 1994, the Plan adopted the American Institute of Certified Public
Accountants Practice Bulletin 12 ("Bulletin 12"), "Reporting Separate
Investment Fund Option Information of Defined Contribution Pension Plans."
The significant changes include a separate accounting and reporting of
participant-directed and nonparticipant-directed investments. The Plan has
given retroactive effect to the change in reporting required under Bulletin
12.
VALUATION OF INVESTMENTS
The investments of the Plan are valued on the basis of published closing
quotations as of year-end.
Net appreciation (depreciation) in the Fair Value of investments consists of
realized and unrealized gains (losses) from investments.
(3) FEDERAL INCOME TAX STATUS
The Plan obtained its latest determination letter on April 29, 1995, in
which the Internal Revenue Service stated that the Plan is in compliance with
the applicable requirements of the Internal Revenue Code. The determination
letter is applicable for amendments to the Plan adopted on or before November 1,
1994. The Plan has not been amended since November 1, 1994. Therefore, the plan
administrator believes the Plan was qualified and the related trust was tax
exempt as of the financial statement date.
6
AMERICAN EXPLORATION 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
(4) ADMINISTRATION
The Plan is administered by the Retirement Committee appointed by the Board
of Directors of the Company. The Plan trustee is T. Rowe Price Trust Company.
All administrative expenses of the Plan are borne entirely by the Company.
7
SUPPLEMENTAL SCHEDULES
Schedule I
AMERICAN EXPLORATION 401(K) PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1994
HISTORICAL CURRENT
IDENTITY OF ISSUE DESCRIPTION COST VALUE
*American Exploration Company Common stock -
516,103 shares $ 1,034,821 $ 483,847
*T. Rowe Price Trust Company Growth Stock Fund,
Inc. - 57,320 shares 1,094,871 1,074,751
*T. Rowe Price Trust Company International Stock
Fund, Inc. - 18,704 shares 231,787 211,730
*T. Rowe Price Trust Company New Income Fund,
Inc. - 53,221 shares 475,876 446,530
*T. Rowe Price Trust Company Growth and Income
Fund, Inc. - 2,413 shares 39,548 37,714
*T. Rowe Price Trust Company Prime Reserve Fund,
Inc. - 443,538 shares 443,538 443,538
*T. Rowe Price Trust Company Stable Value Fund,
Inc. - 89,102 shares 89,102 89,102
*American Exploration 401(k) Plan Participants' loans
(interest rates: 7.0% - 9.5%) 66,357 66,357
--------------- ---------------
$ 3,475,900 $ 2,853,569
=============== ===============
*These assets held for investment purposes are with a party in interest.
The foregoing notes to the financial statements are an integral part of
this schedule.
9
Schedule II
AMERICAN EXPLORATION 401(K) PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
CURRENT
VALUE ON
IDENTITY OF DESCRIPTION OF PURCHASE SELLING HISTORICAL TRANSACTION
PARTY INVOLVED ASSET PRICE PRICE COST DATE NET GAIN (LOSS)
American Exploration Common stock -
Company 174,692 shares $ 245,437 $ - $ 245,437 $ 245,437 $ -
T. Rowe Price Growth Stock Fund,
Trust Company Inc. - 24,646 shares 493,401 - 493,401 493,401 -
T. Rowe Price International Stock Fund,
Trust Company Inc. - 19,719 shares 244,630 - 244,630 244,630 -
T. Rowe Price New Income Fund,
Trust Company Inc. - 18,790 shares 164,096 - 164,096 164,096 -
T. Rowe Price Growth and Income
Trust Company Fund, Inc. - 3,160 shares 51,873 - 51,873 51,873 -
T. Rowe Price Prime Reserve Fund,
Trust Company Inc. - 239,944 shares 239,944 - 239,944 239,944 -
T. Rowe Price Stable Value Fund,
Trust Company Inc. - 147,834 shares 147,834 - 147,834 147,834 -
American Exploration Common stock -
Company 119,940 shares - 155,267 267,565 155,267 (112,298)
T. Rowe Price Growth Stock Fund,
Trust Company Inc. - 24,729 shares - 500,315 460,329 500,315 39,986
T. Rowe Price International Stock
Trust Company Fund, Inc. - 1,015 shares - 12,635 12,843 12,635 (208)
T. Rowe Price New Income Fund,
Trust Company Inc. - 26,288 shares - 232,403 236,069 232,403 (3,666)
T. Rowe Price Growth and Income
Trust Company Fund, Inc. - 747 shares - 12,275 12,325 12,275 (50)
T. Rowe Price Prime Reserve Fund,
Trust Company Inc. - 405,590 shares - 405,590 405,590 405,590 -
T. Rowe Price Stable Value Fund,
Trust Company Inc. - 58,732 shares - 58,732 58,732 58,732 -
The foregoing notes to the financial statements are an integral part of
this schedule.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Retirement Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
American Exploration 401(k) Plan
Date: June 28, 1995 By: /s/ JAMES P. ULM, II
James P. Ulm, II
Treasurer
11