SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 1995
Commission File Number I-8889
MORRISON KNUDSEN CORPORATION SAVINGS PLAN
----------------------------------------------------
(Full Title of Plan)
MORRISON KNUDSEN CORPORATION
MORRISON KNUDSEN PLAZA
BOISE, IDAHO 83729
----------------------------------------------------
(Name and Address of Issuer of the Securities)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Morrison Knudsen Corporation Savings Plan
/s/ John Zabala
Date: July 15, 1996 -----------------------------------------
John Zabala
Plan Committee Member
MORRISON KNUDSEN CORPORATION
SAVINGS PLAN
____________________
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITORS' REPORT
December 31, 1995 and 1994
MORRISON KNUDSEN CORPORATION
SAVINGS PLAN
TABLE OF CONTENTS
-----------------
Page
----
Independent Auditors' Report 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 4
Notes to Financial Statements 5-15
Supplemental Schedules:
Item 27(a) - Schedule of Assets Held for Investment Purposes
as of December 31, 1995 16
Item 27(d) - Schedule of Reportable Transactions
for the Year Ended December 31, 1995 17
[LETTERHEAD OF DELOITTE & TOUCHE LLP]
INDEPENDENT AUDITORS' REPORT
- ----------------------------
Administrative Committee
Morrison Knudsen Corporation Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Morrison Knudsen Corporation Savings Plan (the 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 are the
responsibility of the Plan's management. 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
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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the 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 conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents 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 information in Note 3 (Fund Information) is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund.
These supplemental schedules and Fund Information are the responsibility of the
Plan's management. The supplemental schedules and Fund Information disclosed in
Note 3 have been subjected to the auditing procedures applied in our audits of
the basic financial statements and, in our opinion, are fairly stated in all
material respects when considered in relation to the basic financial statements
taken as a whole.
/s/ Deloitte & Touche LLP
- -------------------------
June 28, 1996
MORRISON KNUDSEN CORPORATION
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE
FOR BENEFITS
December 31, 1995 and 1994
-----------------
1995 1994
ASSETS ---- ----
Cash $ 6,011 $ 19,799
Investments at fair value (Notes 3 and 9):
Mutual funds 139,598,138 101,716,080
Common stock 11,856,531 16,207,064
Participant notes receivable 3,283,844 3,211,325
------------ ------------
Total investments 154,738,513 121,134,469
------------ ------------
Receivables:
Participants' contributions 664,630 765,552
Employer's contributions 398,632 183,605
------------ ------------
Total receivables 1,063,262 949,157
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $155,807,786 $122,103,425
============ ============
The accompanying notes are an integral part of these financial statements.
3
MORRISON KNUDSEN CORPORATION
SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
Years Ended December 31, 1995 and 1994
-----------------
1995 1994
---- ----
Participants' contributions $ 29,917,121 $ 23,288,969
Employer's contributions 9,952,715 5,294,752
Investment income - net 9,514,050 7,579,076
Net appreciation (depreciation)
in fair value of investments (Note 3) 1,860,774 (17,822,871)
Participants' withdrawals (17,540,299) (16,155,305)
------------ ------------
Increase in net assets 33,704,361 2,184,621
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 122,103,425 119,918,804
------------ ------------
End of year $155,807,786 $122,103,425
============ ============
The accompanying notes are an integral part of these financial statements.
4
MORRISON KNUDSEN CORPORATION
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
------------------
1. DESCRIPTION OF THE PLAN
The Morrison Knudsen Corporation (the Company) Savings Plan (the Plan) is a
defined contribution plan covering all salaried employees of the Company and
its subsidiaries who (1) have attained the age of 21, (2) are citizens of the
United States of America, and (3) are not covered by a collective bargaining
agreement. The following description of 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 is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA), as amended.
Forfeitures: Forfeited amounts are first used to restore previously forfeited
-----------
accounts, if the participants repay the full amount of the distribution
received upon termination prior to 6 consecutive breaks in service. Any
remaining forfeitures are then used to offset employer's contributions.
Contributions: Participants can elect to contribute from 1 to 15 percent of
-------------
annual eligible pre-tax compensation to the Plan. The maximum allowable
annual contribution by a participant was $9,240 in 1995 and 1994. Such
contributions are tax deferred under sections 401(a) and 401(k) of the
Internal Revenue Code. Prior to January 1, 1989 participants were also
permitted to make after-tax, voluntary contributions to the Plan.
Compensation, as defined by the Plan, includes salaries, commissions,
bonuses, and overtime pay. Compensation does not include amounts deferred
into the Morrison Knudsen Deferred Compensation Pla n.
Beginning with the March 31, 1995 paychecks, the Company matches, on a dollar
for dollar basis, the participants' contributions to the Plan up to 5% of
their annual eligible compensation. Prior to March 3, 1995, the Company
matched up to 2% of the employees' contributions to the Plan and
additionally, participants who contributed to the Plan's restricted stock
fund were eligible for an allocation of shares in the Employee Stock
Ownership Plan (ESOP) not to exceed 3% of participants' eligible
compensation. On the March 3, 1995 and March 17, 1995 paychecks, the Company
matched up to 2% of the employees' contributions to the Plan and additionally
participants who contributed to any of the Plan's funds were eligible for an
allocation of shares in the ESOP not to exceed 3% of participants' eligible
compensation. Additionally, the Company may make elective contributions to
the Plan in such amounts as it determines. Elective Company contributions and
participants' non-vested forfeitures are allocated to accounts established on
behalf of participants in the proportion each participant's compensation
bears to the total compensation of all participants. As of December 31, 1995,
the Company has not made any elective contributions to the Plan.
Vesting: Participants vest 100% in their salary deferral and voluntary
--------
contribution accounts. Participants vest in the Company contributions over a
five year period at 20 percent per year, or upon retirement, death or
disability.
5
Payment of Benefits: Upon a participant's retirement, death, or separation
-------------------
from service, a distribution of benefits shall be made in the form of a lump
sum cash payment unless an election is made to retain the account balance in
the Plan. Upon a participant's retirement or separation from service, a
participant, with an account balance of up to $3,500, may choose to retain
their account balance in the Plan for up to one year. If a participant's
account balance is $3,500 or more, the participant may retain the account
balance in the Plan until age 65.
2. SUMMARY OF ACCOUNTING POLICIES
The financial statements of the Plan are presented on the accrual basis of
accounting.
Investments are stated at fair value as determined by quoted market prices.
Participant notes receivable are valued at nominal cost plus accrued interest
which approximates fair value.
Dividend income is recorded on the ex-dividend date. Interest is recorded as
earned on the accrual basis.
Purchases and sales of investments are recorded on the trade date.
3. INVESTMENT OF FUNDS AND FUND PERFORMANCE
Participants' accounts are held in a trust and invested at the participants'
direction in investment funds selected by the Plan's Administrative Committee
(the Committee). The Committee also determines the manner in which
participants may direct the investment of their accounts. Each participant
must allocate Plan contributions among one or more of these investment funds
in 1% increments.
Except as otherwise indicated, T. Rowe Price is the investment manager for
each of the investment funds. Earnings (net of administrative expenses) for
each fund are allocated to a participant's account in that fund in the
proportion that the value of such account has to the value of all accounts in
that investment fund.
The Committee has selected the following investment funds:
1. THE MK STOCK FUND. Effective February 22, 1995 the Restricted Stock Fund
was combined with the Unrestricted Stock Fund and the combined fund was
renamed the MK Stock Fund. The MK Stock Fund invests in common stock of the
Company. This fund is not a diversified fund as its performance will depend
entirely on the performance of the common stock of the Company, which may
increase or decrease. Dividends received with respect to the shares held in
the MK Stock Fund will be reinvested in the fund.
The following table sets forth the market price per share of Common Stock of
the Company, adjusted to give effect to the two-for-one stock split in May,
1992.
6
YEAR RANGE DURING YEAR AT DECEMBER 31 ANNUAL DIVIDENDS
1984 $13.38-17.13 $17.00 $.70
1985 16.50-23.94 23.63 .74
1986 19.63-26.13 21.38 .74
1987 14.75-27.81 16.63 .74
1988 15.75-22.00 19.69 .74
1989 18.38-24.25 23.31 .74
1990 15.19-30.25 21.44 .74
1991 18.88-30.37 24.81 .74
1992 17.87-28.63 21.63 .80
1993 19.38-27.13 25.13 .80
1994 12.50-29.87 12.75 .80
1995 4.00-12.87 4.50 .00
Fund assets were $11,856,531 and $2,302,103 at December 31, 1995 and 1994.
2. RESTRICTED STOCK FUND. Effective February 22, 1995, the Restricted Stock
Fund was combined with the Unrestricted Stock Fund and the combined fund was
renamed the MK Stock Fund. Each participant in the Company's Employee Stock
Ownership Plan ("ESOP") had shares of common stock of the Company allocated
to their ESOP accounts based on the participant's salary deferral in the
Plan's Restricted Stock Fund. Under these circumstances, the greater the
investment in the Restricted Stock Fund, generally the greater the allocation
in the ESOP. The Restricted Stock Fund was not a diversified fund as its
performance depended entirely on the performance of the common stock of the
Company. Dividends received with respect to shares held in the Restricted
Stock Fund were reinvested in the fund. Furthermore, amounts invested in the
Restricted Stock Fund could not be withdrawn, except in the case of financial
hardship or until a participant separated from service with the Company. The
market price per share of common stock of the Company is set forth above in
the discussion of the MK Stock Fund. Fund assets were $0 and $13,904,961 at
December 31, 1995 and 1994.
3. THE STABLE VALUE FUND. The Stable Value Fund invests primarily in a
portfolio of GICs, BICs and SICs, issued by U.S. and Canadian insurance
companies, banks and other issuers deemed to be creditworthy by T. Rowe
Price. Fund assets were $30,963,673 and $30,969,188 at December 31, 1995 and
1994.
4. INTERNATIONAL STOCK FUND. The International Stock Fund invests in common
stocks of non-United States companies. The portfolio is both geographically
and industrially diversified around the world. However, like any
international undertaking, the International Stock Fund can be subject to
risks and market cycles that cannot be controlled by the economic policies of
the United States. In addition, investment returns do not necessarily
parallel those realized through domestic investments. Fund assets were
$7,430,560 and $6,578,740 at December 31, 1995 and 1994.
5. NEW ASIA FUND. The New Asia Fund invests in companies in the newly
emerging countries of Asia and the Pacific Basin. Its goal is to take
advantage of the expected new growth opportunities in these countries which
are in an earlier, more dynamic stage of development than more mature
economies such as Japan. It is the most aggressive international fund
offered. Fund assets were $3,848,937 and $3,299,430 at December 31, 1995 and
1994.
7
6. GROWTH STOCK FUND. The Growth Stock Fund invests in established,
profitable companies, both at home and abroad. The portfolio focuses on
industry leaders that have proven their ability to produce rising sales and
earnings over a number of business cycles. The Fund's primary goal is long-
term capital appreciation, with increasing future dividends as a secondary
goal. Fund assets were $18,884,271 and $14,137,055 at December 31, 1995 and
1994.
7. NEW ERA FUND. The New Era Fund focuses on companies which own or develop
natural resources like gold, oil, chemicals, forest products and other basic
commodities. It is designed to provide an inflation hedge with the potential
for high capital growth. Fund assets were $689,451 and $365,799 at December
31, 1995 and 1994.
8. NEW HORIZONS FUND. The New Horizons Fund invests primarily in the common
stock of emerging growth companies. Investing in emerging growth companies
can be quite risky, and the New Horizons Fund can experience a high level of
price volatility. Fund assets were $10,181,656 and $5,452,599 at December 31,
1995 and 1994.
9. NEW INCOME FUND. The New Income Fund invests in investment-grade debt
securities. Focus is on longer-term U.S. Government issues, finance industry
bonds and other securities. The average maturity of the portfolio is adjusted
based on interest rate forecasts. Fund assets were $486,261 and $346,626 at
December 31, 1995 and 1994.
10. PRIME RESERVE FUND. The Prime Reserve Fund invests in a diversified
portfolio of domestic and foreign U.S. dollar-denominated money market
securities rated within the two highest credit categories assigned by
established rating agencies or, if not rated, of equivalent investment
quality as determined by T. Rowe Price. At least 65% of the Prime Reserve
Fund total assets is maintained in prime money market instruments with the
highest credit category assigned by an established rating agency. Fund assets
were $3,731,270 and $3,028,066 at December 31, 1995 and 1994.
11. SMALL-CAP VALUE FUND. The Small-Cap Value Fund targets small-
capitalization company stocks, which provide higher returns than large-
capitalization companies, but with greater risk. The Fund seeks to reduce
this risk through in-depth research to target small-cap companies whose
values are not reflected in their stock prices. Fund assets were $3,194,252
and $1,889,893 at December 31, 1995 and 1994.
12. EQUITY INDEX FUND. The Equity Index Fund invests in common stocks that
compose the Standard & Poor's 500 Stock Index. It seeks capital appreciation
and performance in line with the overall U.S. stock market. Fund assets were
$1,626,096 and $791,317 at December 31, 1995 and 1994.
13. GLOBAL GOVERNMENT BOND FUND. The Global Government Bond Fund is a
conservative international bond fund. It takes a prudent approach to
delivering the highest yield from government bonds worldwide. In pursuit of
high current income, the fund diversifies its assets across a wide range of
high-quality foreign and U.S. Government bonds. Fund assets were $143,521 and
$93,836 at December 31, 1995 and 1994.
8
14. U.S. TREASURY MONEY FUND. The U.S. Treasury Money Fund invests
exclusively in securities guaranteed by the full faith and credit of the U.S.
Government. The Fund generates income and provides capital protection. Fund
assets were $3,210,628 and $2,223,448 at December 31, 1995 and 1994.
15. GROWTH AND INCOME FUND. The Growth and Income Fund searches out
opportunities in undervalued, out-of-favor stocks in order to provide both
capital growth and current income. Fund assets were $3,462,566 and $2,010,211
at December 31, 1995 and 1994.
16. SHORT-TERM BOND FUND. The Short-Term Bond Fund invests in short- and
intermediate-term securities, focusing on high-quality treasuries,
certificates of deposit, and finance industry bonds. It is designed to yield
higher than money market income and offers more stability than longer term
bond funds. Fund assets were $362,728 and $314,932 at December 31, 1995 and
1994.
17. HIGH YIELD FUND. The High Yield Fund invests aggressively in a wide range
of medium-to-lower quality, longer term bonds. It is designed for investors
seeking the highest yielding opportunities in the bond market and is the
highest yielding corporate fund offered. It is expected to be the most
volatile. Fund assets were $906,033 and $659,457 at December 31, 1995 and
1994.
18. NEW AMERICA GROWTH FUND. The New America Growth Fund invests in companies
in the financial services, health care, travel and leisure, food service,
airline, media, and computer software industries, as well as other companies
in the service sector. Fund assets were $4,034,841 and $2,327,023 at December
31, 1995 and 1994.
19. SCIENCE & TECHNOLOGY FUND. The Science and Technology Fund invests in a
wide range of industries, including computers, genetic engineering,
communications, health care and waste management. Fund assets were
$15,092,185 and $6,301,175 at December 31, 1995 and 1994.
20. U.S. TREASURY INTERMEDIATE FUND. The U.S. Treasury Intermediate Fund
invests in Government securities featuring higher than money market income,
more stability than long-term bonds and maximum credit safety. Fund assets
were $1,035,686 and $569,101 at December 31, 1995 and 1994.
21. U.S. TREASURY LONG-TERM FUND. The U.S. Treasury Long-Term Fund invests
primarily in long-term Treasury bonds to provide high income and maximum
credit safety. It is expected to earn the highest yields and have the
greatest price swings of any of the offered Treasury Funds. Fund assets were
$839,732 and $486,192 at December 31, 1995 and 1994.
22. GNMA FUND. The GNMA Fund invests in mortgage-backed securities that are
100 percent guaranteed for timely payment of principal and interest by the
U.S. Treasury. The Fund's share price and yield are not guaranteed. This Fund
seeks the highest current income that is consistent with preserving the
investor's capital and providing maximum credit protection. Fund assets were
$783,951 and $552,102 at December 31, 1995 and 1994.
23. EQUITY INCOME FUND. The Equity Income Fund invests primarily in dividend-
paying common stocks of companies chosen by T. Rowe Price. This fund also has
the flexibility to invest in corporate, government and municipal bonds,
preferred stock warrants and options. Fund assets
9
were $21,549,559 and $15,058,349 at December 31, 1995 and 1994.
24. CAPITAL APPRECIATION FUND. The Capital Appreciation Fund invests in
undervalued and out-of-favor stocks and balances its aggressive approach with
prudent risk management. The Fund has the flexibility to move into short-term
money market investments during times of market uncertainty. The Fund's
primary goal is capital growth. Fund assets were $1,805,211 and $1,101, 989
at December 31, 1995 and 1994.
25. INTERNATIONAL BOND FUND. The International Bond Fund invests primarily in
high-quality government and corporate bonds issued in foreign currencies. It
is designed to provide high current income, capital growth potential and the
benefits of diversifying investments worldwide. Fund assets were $951,400 and
$478,120 at December 31, 1995 and 1994.
26. EUROPEAN STOCK FUND. The European Stock Fund invests primarily in
European companies in markets and sectors which have strong growth potential.
The Fund's goal is long-term capital appreciation. Fund assets were
$1,148,794 and $790,848 at December 31, 1995 and 1994.
27. SPECTRUM INCOME FUND. The Spectrum Income Fund offers broad
diversification in meeting long-term goals by investing in T. Rowe Price
funds and continually monitoring its mix. Managers select from a variety of
income instruments including: Treasuries, GNMAs, and high-quality bonds;
high-yield "junk" bonds; foreign issues; and dividend-producing stocks. Fund
assets were $1,018,646 and $656,619 at December 31, 1995 and 1994.
28. SPECTRUM GROWTH FUND. The Spectrum Growth Fund seeks long-term capital
growth and, secondarily, income by diversifying investments in T. Rowe Price
funds and continually monitoring its mix. It invests in domestic and
international stocks for growth, stocks with growth and income potential, and
money market securities to add some stability. Fund assets were $2,216,230
and $1,233,965 at December 31, 1995 and 1994.
Investments that represent 5 percent or more of the Plan's net assets
available for benefits are separately identified below:
December 31, 1995 December 31, 1994
---------------------- -----------------------
Number of Fair Number of Fair
Shares Value Shares Value
---------- ---------- ---------- -----------
Investments at Fair Value
Stable Value Fund 30,963,673 30,963,673 30,969,188 $30,969,188
Equity Income Fund 1,076,939 21,549,559 942,325 15,058,349
Growth Stock Fund 808,748 18,884,271 753,976 14,137,055
Morrison Knudsen Corporation
MK Stock Fund 2,634,785 11,856,531
Restricted Stock Fund 1,090,585 13,904,961
International Stock Fund 581,161 6,578,740
Science & Technology Fund 518,276 15,092,185 291,182 6,301,175
New Horizons Fund 496,666 10,181,656
10
During 1995 and 1994, the Plan's investments (including investments bought,
sold, and held during the year), appreciated, (depreciated) in value by
$1,860,774 and $(17,822,871), respectively, as follows:
1995 1994
------------- -------------
Mutual Funds $ 16,081,682 $ (4,042,493)
Common Stock (14,220,908) (13,780,378)
------------ ------------
$ 1,860,774 $(17,822,871)
============= =============
Following is a statement of changes in net assets available for benefits by
fund at December 31, 1995 and 1994.
11
YEAR ENDED DECEMBER 31, 1995
Participant Directed Funds
Unrestricted Restricted Participant Stable International New Growth New
Stock Stock Notes Rec. Value Stock Asia Stock Era
------------ ---------- ----------- ------ ------------- ---- ------ ---
ADDITIONS TO (DEDUCTIONS FROM)
NET ASSETS ATTRIBUTED TO:
Participants' Contributions $ 9,325,296 $ 1,121,156 $ 2,943,412 $1,215,947 $ 863,325 $ 1,668,339 $159,781
Employer's Contributions 814,186 0 1,439,494 546,351 405,532 842,520 73,293
Investment income - net 55,092 207,374 1,925,958 236,070 49,987 953,248 48,295
Net appreciation (depreciation)
in fair value of investments (10,037,500) (4,183,409) 0 536,802 79,204 3,454,252 51,397
Participants' withdrawals (612,955) (1,193,700) (569,629) (4,710,339) (766,191) (441,504) (1,600,163) (63,415)
Interfund transfers 10,010,310 (9,856,382) 642,148 (1,604,040) (919,159) (407,037) (570,980) 54,301
----------- ------------ ---------- ----------- ---------- ---------- ---------- --------
Increase (decrease) in net
assets 9,554,428 (13,904,961) 72,519 (5,515) 851,820 549,507 4,747,216 323,652
NET ASSETS AVAILABLE
FOR BENEFITS
Beginning of year 2,302,103 13,904,961 3,211,325 30,969,188 6,578,740 3,299,430 14,137,055 365,799
----------- ------------ ---------- ----------- ---------- ---------- ----------- --------
End of year $11,856,531 $0 $3,283,844 $30,963,673 $7,430,560 $3,848,937 $18,884,271 $689,451
=========== ============ ========== =========== ========== ========== =========== ========
Participant Directed Funds
New New Prime Small-Cap Equity Global U.S. Treasury Growth &
Horizons Income Reserve Value Index Govt. Bond Money Income
-------- ------ ------- --------- ------ ---------- ------------- --------
ADDITIONS TO (DEDUCTIONS FROM)
NET ASSETS ATTRIBUTED TO:
Participants' Contributions $1,133,589 $95,654 $525,719 $516,877 $329,201 $40,336 $896,869 $741,470
Employer's Contributions 560,035 50,688 242,937 253,373 155,715 19,763 122,851 351,901
Investment income - net 1,086,368 29,495 183,853 150,618 61,187 7,879 143,483 196,077
Net appreciation (depreciation)
in fair value of investments 2,171,918 41,161 0 448,521 275,686 12,373 0 513,041
Participants' withdrawals (812,775) (84,127) (779,385) (240,113) (149,232) (23,746) (497,852) (284,283)
Interfund transfers 589,922 6,764 530,080 174,883 162,222 (6,920) 321,829 (64,851)
----------- -------- ---------- ---------- ---------- -------- ---------- ----------
Increase (decrease) in net
assets 4,729,057 139,635 703,204 1,304,359 834,779 49,685 987,180 1,452,355
NET ASSETS AVAILABLE
FOR BENEFITS
Beginning of year 5,452,599 346,626 3,028,066 1,889,893 791,317 93,836 2,223,448 2,010,211
----------- -------- ---------- ---------- ---------- -------- ---------- ----------
End of year $10,181,656 $486,261 $3,731,270 $3,194,252 $1,626,096 $143,521 $3,210,628 $3,462,566
=========== ======== ========== ========== ========== ======== ========== ==========
S/T High New Science & US Treasury US Treasury Equity
Bond Yield America Technology Intermediate Long-Term GNMA Income
------- -------- ------- ---------- ------------ ----------- ---- ------
ADDITIONS TO (DEDUCTIONS FROM)
NET ASSETS ATTRIBUTED TO:
Participants' Contributions $ 96,271 $255,787 $708,728 $2,937,826 $343,828 $195,095 $191,279 $2,032,134
Employer's Contributions 55,127 132,669 349,625 1,240,406 126,801 105,734 87,568 1,005,125
Investment income - net 21,557 75,395 200,400 2,071,997 50,065 39,686 47,345 1,219,128
Net appreciation (depreciation)
in fair value of investments 10,136 38,593 911,642 2,606,143 63,099 116,015 57,496 3,969,708
Participants' withdrawals (44,890) (110,516) (407,923) (1,327,635) (87,334) (75,360) (71,628) (1,928,464)
Interfund transfers (90,405) (145,352) (54,654) 1,262,271 (29,874) (27,630) (80,211) 193,579
-------- -------- ---------- ----------- ---------- -------- -------- -----------
Increase (decrease) in net
assets 47,796 246,576 1,707,818 8,791,010 466,585 353,540 231,849 6,491,210
NET ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 314,932 659,457 2,327,023 6,301,175 569,101 486,192 552,102 15,058,349
-------- -------- ---------- ----------- ---------- -------- -------- -----------
End of year $362,726 $906,033 $4,034,841 $15,092,185 $1,035,686 $839,732 $783,951 $21,549,559
======== ======== ========== =========== ========== ======== ======== ===========
Capital International European Spectrum Spectrum
Appreciation Bond Stock Income Growth Other Total
------------ ------------- -------- --------- --------- ----- -----
ADDITIONS TO (DEDUCTIONS FROM)
NET ASSETS ATTRIBUTED TO:
Participants' Contributions $377,169 $239,425 $268,486 $323,094 $471,951 ($100,922) $ 29,917,121
Employer's Contributions 163,429 99,313 118,439 133,491 239,320 215,027 9,952,715
Investment income - net 144,944 57,868 38,481 60,286 152,091 623 9,514,050
Net appreciation (depreciation)
in fair value of investments 146,093 57,448 155,071 82,298 283,586 1,860,774
Participants' withdrawals (176,083) (101,102) (99,028) (96,169) (184,758) (17,540,299)
Interfund transfers 47,670 120,328 (123,503) (140,973) 20,075 (14,411) 0
---------- -------- ---------- ---------- ---------- ---------- ------------
Increase (decrease) in net
assets 703,222 473,280 357,946 362,027 982,265 100,317 33,704,361
NET ASSETS AVAILABLE
FOR BENEFITS
Beginning of year 1,101,989 478,120 790,846 656,619 1,233,965 968,956 122,103,425
---------- -------- ---------- ---------- ---------- ---------- ------------
End of year $1,805,211 $951,400 $1,148,794 $1,018,646 $2,216,230 $1,069,273 $155,807,786
========== ======== ========== ========== ========== ========== ============
12
YEAR ENDED DECEMBER 31, 1994
Participant Directed Funds
Unrestricted Restricted Participant Stable International New Growth New
Stock Stock Notes Rec. Value Stock Asia Stock Era
------------ ---------- ----------- ------ ------------- ---- ------ ---
ADDITIONS TO (DEDUCTIONS FROM)
NET ASSETS ATTRIBUTED TO:
Participants' Contributions $ 640,616 $ 7,490,031 $ 2,749,619 $1,042,337 $ 778,097 $ 1,310,716 $ 79,506
Employer's Contributions 254,806 0 878,426 308,790 245,745 432,443 27,304
Investment income - net 122,445 689,488 1,821,627 414,993 359,881 1,287,166 22,262
Net appreciation (depreciation)
in fair value of investments (1,827,660) (11,952,718) 0 (485,264) (1,015,018) (1,154,395) (11,366)
Participants' withdrawals (503,467) (2,778,164) (272,599) (4,968,492) (604,233) (353,467) (1,511,918) (22,922)
Interfund transfers 222,865 37,564 742,618 (1,246,426) 723,420 709,757 (334,893) 98,819
----------- ------------ ---------- ----------- ---------- ---------- ---------- --------
Increase (decrease) in net
assets (1,090,393) (6,513,799) 470,019 (765,246) 1,400,043 724,995 29,119 193,603
NET ASSETS AVAILABLE
FOR BENEFITS
Beginning of year 3,392,496 20,418,760 2,741,306 31,734,434 5,178,697 2,574,435 14,107,936 172,196
----------- ------------ ---------- ----------- ---------- ---------- ----------- --------
End of year $ 2,302,103 $ 13,904,961 $3,211,325 $30,969,188 $6,578,740 $3,299,430 $14,137,055 $365,799
=========== ============ ========== =========== ========== ========== =========== ========
Participant Directed Funds
New New Prime Small-Cap Equity Global U.S. Treasury Growth &
Horizons Income Reserve Value Index Govt. Bond Money Income
-------- ------ ------- --------- ------ ---------- ------------- --------
ADDITIONS TO (DEDUCTIONS FROM)
NET ASSETS ATTRIBUTED TO:
Participants' Contributions $ 774,792 $ 101,832 $ 352,409 $ 440,132 $206,960 $ 32,723 $ 600,935 $ 610,376
Employer's Contributions 291,545 28,978 112,234 143,006 78,386 9,248 286,642 195,240
Investment income - net 493,804 24,646 111,311 143,707 31,206 5,023 69,378 113,696
Net appreciation (depreciation)
in fair value of investments (455,565) (31,014) 0 (167,617) (20,279) (7,085) 0 (115,687)
Participants' withdrawals (541,629) (29,820) (576,989) (181,584) (71,099) (6,253) (264,809) (251,861)
Interfund transfers (133,584) (64,697) 121,300 88,714 (20,506) (15,720) 157,300 (214,484)
---------- -------- ---------- --------- -------- -------- ---------- ----------
Increase (decrease) in net 429,363 29,925 120,265 466,358 204,668 17,936 849,646 337,080
assets
NET ASSETS AVAILABLE
FOR BENEFITS
Beginning of year 5,023,236 316,701 2,907,801 1,423,535 586,649 75,900 1,373,802 1,673,131
---------- -------- ---------- ---------- -------- -------- ---------- ----------
End of year $5,452,599 $346,626 $3,028,066 $1,889,893 $791,317 $ 93,836 $2,223,448 $2,010,211
========== ======== ========== ========== ======== ======== ========== ==========
S/T High New Science & US Treasury US Treasury Equity
Bond Yield America Technology Intermediate Long-Term GNMA Income
------- -------- ------- ---------- ------------ ----------- ---- ------
ADDITIONS TO (DEDUCTIONS FROM)
NET ASSETS ATTRIBUTED TO:
Participants' Contributions $103,063 $235,784 $647,077 $1,247,102 $ 173,221 $133,762 $ 151,765 $1,158,398
Employer's Contributions 34,663 79,298 205,635 449,070 67,931 65,535 53,078 508,371
Investment income - net 16,498 62,466 53,295 99,137 36,612 32,298 39,386 1,247,972
Net appreciation (depreciation)
in fair value of investments (24,809) (115,348) (218,303) 748,285 (46,945) (57,122) (47,051) (588,771)
Participants' withdrawals (54,912) (111,524) (244,710) (617,274) (129,385) (65,186) (59,962) (1,502,144)
Interfund transfers (22,157) (99,299) (217,267) 107,123 (87,069) (29,847) (123,385) (635,084)
-------- -------- ---------- ---------- --------- -------- -------- -----------
Increase (decrease) in net
assets 52,346 51,377 225,727 2,033,443 13,365 78,440 13,811 588,742
NET ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 262,586 606,680 2,101,296 4,267,732 556,736 407,752 538,291 14,469,607
-------- -------- ---------- ---------- --------- -------- -------- -----------
End of year $314,932 $659,457 $2,327,023 $6,301,175 $ 569,101 $486,192 $552,102 $15,058,349
======== ======== ========== ========== ========= ======== ======== ===========
Capital International European Spectrum Spectrum
Appreciation Bond Stock Income Growth Other Total
------------ ------------- -------- --------- --------- ----- -----
ADDITIONS TO (DEDUCTIONS FROM)
NET ASSETS ATTRIBUTED TO:
Participants' Contributions $259,856 $114,923 $156,261 $ 221,728 $317,839 $757,107 $ 23,288,969
Employer's Contributions 78,922 43,789 57,152 65,412 111,363 181,540 5,294,752
Investment income - net 90,241 37,290 13,531 45,555 95,162 7,579,076
Net appreciation (depreciation)
in fair value of investments (54,851) (43,937) 8,620 (56,461) (82,280) (17,822,871)
Participants' withdrawals (74,511) (62,571) (48,802) (104,849) (139,149) (16,155,305)
Interfund transfers (17,824) (16,587) 115,320 (21,794) 166,880 6,943 0
---------- -------- -------- --------- ---------- -------- ------------
Increase (decrease) in net
assets 281,803 72,907 302,082 149,591 471,815 945,590 2,184,621
NET ASSETS AVAILABLE
FOR BENEFITS
Beginning of year 820,186 405,213 488,766 507,028 762,150 23,366 119,918,804
---------- -------- -------- --------- ---------- -------- ------------
End of year $1,101,989 $478,120 $790,848 $ 656,619 $1,233,965 $968,956 $122,103,425
========== ======== ======== ========== ========== ======== ============
13
4. WITHDRAWALS PAYABLE
As of December 31, 1995 and 1994, net assets available for benefits included
benefits of $253,522 and $553,660, respectively, due to participants who
have withdrawn from participation in the Plan.
5. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated March 29, 1988, that the Plan is qualified under Section 401(a)
of the Internal Revenue Code and, accordingly, income of the Plan is exempt
from Federal income taxes under provisions of section 501(a) of the Code.
The Plan Administrator and its qualified tax counsel do not anticipate that
changes in the Plan after the date of the amendments covered by the Internal
Revenue Service determination letter will affect the qualified status of the
Plan. A Request for Letter of Determination was filed on March 31, 1995 with
the Internal Revenue Service and is currently pending.
6. PLAN TERMINATION
Although the Company has not expressed any intent to do so, the Company
retains the right under the Plan to discontinue contributions to or
terminate the Plan at any time, subject to the provisions of ERISA. In the
event of Plan termination, participants become 100% vested in their
accounts.
7. RELATED PARTY TRANSACTIONS
The Company incurred approximately $95,433 and $128,335 of general and
administrative expenses of the Plan for 1995 and 1994, respectively.
8. UNALLOCATED ASSETS
At December 31, 1995 and 1994, contributions receivable of $1,063,262 and
$949,157 respectively, were not allocated to participant accounts.
9. PARTICIPANT NOTES RECEIVABLE
Beginning January 1, 1993, participants may borrow from their fund accounts
a minimum of $1,000 up to a maximum equal to the lessor of $50,000 or 50
percent of their account balance. Loan transactions are treated as transfers
between the investment funds and the Participant Notes Fund. Loan terms
range from 1 to 5 years or up to 10 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's account
and bear interest at a rate of one percent above prime at the time of the
loan. The interest rate varies from 7.0 to 10.0 percent for participants'
notes outstanding at December 31, 1995. Principal and interest are paid
ratably through bi-weekly payroll deductions.
10. SUBSEQUENT EVENTS
Effective March 1, 1996, the Company amended the Plan to provide that no
additional assets could be invested in the MK Stock Fund, either through
direct contributions or transfers within the Plan from any other Fund. This
amendment also provided that the Company would seek out and engage an
independent fiduciary to govern the holding or disposition of the MK Stock
Fund.
14
On March 4, 1996, the Company retained Marine Midland Bank to act as an
independent fiduciary for the MK Stock Fund for the purpose of instructing
T. Rowe Price, the Trustee, whether to retain or sell the company stock in
the fund.
On March 8, 1996 the Company amended the Plan to create a sub-account of the
MK Stock Fund named the Participant Directed Company Stock Fund.
Furthermore, the amendment provided that each participant participating in
the MK Stock Fund would be allowed to make an irrevocable election to
instruct the Trustee to segregate the Participant's company stock held in
the MK Stock Fund into the Participant Directed Company Stock Fund sub-
account. All remaining shares of company stock not affirmatively transferred
to the sub-account became the responsibility of Marine Midland Bank.
Marine Midland Bank exercised its independent discretionary judgment and
decided to sell all of the company stock under its control. The sale of the
stock occurred between March 15, 1996 to April 3, 1996. The stock was sold
at an average price of $1.407 .
15
SCHEDULE 1
MORRISON KNUDSEN CORPORATION SAVINGS PLAN
ITEM 27 (A) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
Identity of Description of
Issuer Investment Cost Current Value
- ------ ---------- ---- -------------
Common Stock
Morrison Knudsen Corporation(1) MK Stock Fund $ 32,642,670 $ 11,856,531
============ ============
Mutual Funds
- ------------
T. Rowe Price Stable Value Fund $ 30,963,673 $ 30,963,673
T. Rowe Price International Stock Fund 6,679,660 7,430,560
T. Rowe Price New Asia Fund 3,989,101 3,848,937
T. Rowe Price Growth Stock Fund 15,256,052 18,884,271
T. Rowe Price New Era Fund 667,262 689,451
T. Rowe Price New Horizons Fund 8,298,992 10,181,656
T. Rowe Price New Income Fund 468,305 486,261
T. Rowe Price Prime Reserve Fund 3,731,270 3,731,270
T. Rowe Price Small-Cap Value Fund 2,823,249 3,194,252
T. Rowe Price Equity Index Fund 1,374,709 1,626,096
T. Rowe Price Global Government Bond Fund 138,924 143,521
T. Rowe Price U.S. Treasury Money Fund 3,210,628 3,210,628
T. Rowe Price Growth and Income Fund 3,059,855 3,462,566
T. Rowe Price Short-Term Bond Fund 369,250 362,728
T. Rowe Price High Yield Fund 922,518 906,033
T. Rowe Price New America Growth Fund 3,262,676 4,034,841
T. Rowe Price Science & Technology Fund 12,598,354 15,092,185
T. Rowe Price U.S. Treasury Inter. Fund 1,008,666 1,035,686
T. Rowe Price U.S. Treasury Long-Term Fund 772,946 839,732
T. Rowe Price GNMA Fund 765,382 783,951
T. Rowe Price Equity Income Fund 17,133,559 21,549,559
T. Rowe Price Capital Appreciation Fund 1,713,072 1,805,211
T. Rowe Price International Bond Fund 927,855 951,400
T. Rowe Price European Stock Fund 983,469 1,148,794
T. Rowe Price Spectrum Income Fund 983,180 1,018,646
T. Rowe Price Spectrum Growth Fund 2,031,653 2,216,230
------------ ------------
$124,134,259 $139,598,138
============ ============
Participant Notes Receivable Promissory Notes $ 3,283,844 $ 3,283,844
============ ============
(1) There were 2,454,228 shares of Morrison Knudsen Corporation stock held at
December 31, 1995.
16
SCHEDULE 2
MORRISON KNUDSEN CORPORATION SAVINGS PLAN
ITEM 27 (D) - SCHEDULE OF REPORTABLE TRANSACTIONS
SERIES OF SECURITY TRANSACTIONS IN EXCESS OF FIVE PERCENT
OF PLAN ASSETS AT THE BEGINNING OF THE YEAR
YEAR ENDED DECEMBER 31, 1995
Identity of Description Purchase Selling Cost of Net Gain or
Party Involved of Price Price Asset (Loss)
Asset
- --------------------------------------------------------------------------------------------
Morrison Knudsen
Corporation:
Unrestricted Stock Stock $11,071,294 $11,071,294 -
Morrison Knudsen
Corporation:
Unrestricted Stock Stock $ 1,494,757 $ 2,003,538 ($508,781)
Morrison Knudsen
Corporation:
Restricted Stock Stock $ 1,354,485 $ 1,354,485 -
Morrison Knudsen
Corporation:
Restricted Stock Stock $11,140,063 $15,323,472 ($4,183,409)
T. Rowe Price: Pooled
Stable Value Fund Investment $ 6,876,074 $ 6,876,074 -
T. Rowe Price: Pooled
Stable Value Fund Investment $ 6,917,356 $ 6,917,356 -
T. Rowe Price:
Science & Tech. Fund: Mutual Fund $ 8,745,519 $ 8,745,519 -
T. Rowe Price:
Science & Tech. Fund: Mutual Fund $ 2,590,699 $ 1,924,194 $ 666,505
T. Rowe Price:
Equity Income Fund Mutual Fund $ 5,080,587 $ 5,080,587 -
T. Rowe Price:
Equity Income Fund: Mutual Fund $ 2,592,012 $ 2,236,843 $ 355,169
17
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
23 Independent Auditors' Consent