1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number 1-9019
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Virginia Indonesia Company Employee Thrift and Retirement Plan
1221 McKinney Street, Suite 700, Houston, TX 77010-2015
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Union Texas Petroleum Holdings, Inc. LASMO, plc
1330 Post Oak Boulevard 101 Bishopsgate
Houston, Texas 77056 London, EC2M 3XH
United Kingdom
(former address)
100 Liverpool Street
London, EC2M 2BB
United Kingdom
2
Independent Auditors' Report
The Administrative Committee
Virginia Indonesia Company
Employee Thrift and Retirement Plan:
We have audited the accompanying statements of net assets available for thrift
and retirement plan benefits (with fund information) of the Virginia Indonesia
Company Employee Thrift and Retirement Plan (the Plan) as of December 31, 1997
and 1996, and the related statements of changes in net assets available for
thrift and retirement plan benefits (with fund information) for the years then
ended. These financial statements are the responsibility of the Plan's
Administrative 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
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 financial position of the Virginia Indonesia Company
Employee Thrift and Retirement Plan as of December 31, 1997 and 1996, and the
changes in net assets available for thrift and retirement plan benefits for the
years then ended, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules 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 Fund Information in the
statements of net assets available for thrift and retirement plan benefits as of
December 31, 1997 and 1996, and the Fund Information in the related statements
of changes in net assets available for thrift and retirement plan benefits for
the years then ended is presented for the purposes of additional analysis rather
than to present the net assets available for benefits of each fund 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 audits of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
KPMG Peat Marwick LLP
Houston, Texas
June 26, 1998
3
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR THRIFT AND RETIREMENT PLAN BENEFITS
(WITH FUND INFORMATION)
December 31, 1997
Balanced
fund
Growth (previously Daily Intermediate
Equity Balanced opportunities income & MMF bond
fund fund fund growth fund fund fund
---------- ---------- ------------- ----------- ---------- ------------
Assets:
Investments at market value:
Common trust funds
(cost $20,465) $ -- -- -- -- -- --
Mutual funds
(cost $20,185,729) -- -- 5,093,160 3,501,936 2,569,328 --
Common Stocks
(cost $239,957) -- -- -- -- -- --
Loan to participants
(cost $95,890) -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total investments -- -- 5,093,160 3,501,936 2,569,328 --
Cash -- -- -- -- -- --
Receivables:
Employer's contribution -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total receivables -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total assets -- -- 5,093,160 3,501,936 2,569,328 --
---------- ---------- ---------- ---------- ---------- ----------
Liabilities:
Accounts payable - purchase
of securities -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total liabilities -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Net assets available for
thrift and retirement
plan benefits $ -- -- 5,093,160 3,501,936 2,569,328 --
========== ========== ========== ========== ========== ==========
Equity Equity High Emerging
growth Overseas Stein Roe income yield markets
fund fund fund fund fund fund
---------- ---------- ---------- ---------- ---------- ----------
Assets:
Investments at market value:
Common trust funds
(cost $20,465) -- -- -- -- -- --
Mutual funds
(cost $20,185,729) 3,348,874 1,435,621 828,601 733,734 484,648 530,650
Common Stocks
(cost $239,957) -- -- -- -- -- --
Loan to participants
(cost $95,890) -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total investments 3,348,874 1,435,621 828,601 733,734 484,648 530,650
Cash -- -- -- -- -- --
Receivables:
Employer's contribution -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total receivables -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total assets 3,348,874 1,435,621 828,601 733,734 484,648 530,650
---------- ---------- ---------- ---------- ---------- ----------
Liabilities:
Accounts payable - purchase
of securities -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total liabilities -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Net assets available for
thrift and retirement
plan benefits 3,348,874 1,435,621 828,601 733,734 484,648 530,650
========== ========== ========== ========== ========== ==========
Strong
government Dreyfus UTP LASMO
securities appreciation stock stock Loan Working
fund fund fund fund fund account
---------- ------------ ---------- ----------- ---------- ----------
Assets:
Investments at market value:
Common trust funds
(cost $20,465) -- -- 8,565 11,900 -- --
Mutual funds
(cost $20,185,729) 522,398 2,072,247 -- -- -- (10,328)
Common Stocks
(cost $239,957) -- -- 98,133 129,874 -- --
Loan to participants
(cost $95,890) -- -- -- -- 95,890 --
---------- ---------- ---------- ---------- ---------- ----------
Total investments 522,398 2,072,247 106,698 141,774 95,890 (10,328)
Cash -- -- 189 10 -- 10,724
Receivables:
Employer's contribution -- -- 6 12 -- --
---------- ---------- ---------- ---------- ---------- ----------
Total receivables -- -- 6 12 -- --
---------- ---------- ---------- ---------- ---------- ----------
Total assets 522,398 2,072,247 106,893 141,796 95,890 396
---------- ---------- ---------- ---------- ---------- ----------
Liabilities:
Accounts payable - purchase
of securities -- -- 7,814 10,852 -- --
---------- ---------- ---------- ---------- ---------- ----------
Total liabilities -- -- 7,814 10,852 -- --
---------- ---------- ---------- ---------- ---------- ----------
Net assets available for
thrift and retirement
plan benefits 522,398 2,072,247 99,079 130,944 95,890 396
========== ========== ========== ========== ========== ==========
Total
----------
Assets:
Investments at market value:
Common trust funds
(cost $20,465) 20,465
Mutual funds
(cost $20,185,729) 21,110,869
Common Stocks
(cost $239,957) 228,007
Loan to participants
(cost $95,890) 95,890
----------
Total investments 21,455,231
Cash 10,923
Receivables: --
Employer's contribution 18
----------
Total receivables 18
----------
Total assets 21,466,172
----------
Liabilities:
Accounts payable - purchase
of securities 18,666
----------
Total liabilities 18,666
----------
Net assets available for
thrift and retirement
plan benefits 21,447,506
==========
See accompanying notes to financial statements.
4
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR THRIFT AND RETIREMENT PLAN BENEFITS
(WITH FUND INFORMATION)
December 31, 1996
Growth Income & Daily
Equity Balanced opportunities growth MMF
fund fund fund fund fund
---------- ---------- ------------- ---------- ----------
Assets:
Investments at market value:
Common trust funds (cost $222,053) $ 123,483 98,570 -- -- --
Mutual funds (cost $14,452,367) -- 78 3,227,239 2,183,789 1,719,690
Common stocks (cost $1,436,972) 1,594,847 565,096 -- -- --
Government obligations (cost $540,312) -- 540,720 -- -- --
Loan to participants (cost $34,177) -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total investments 1,718,330 1,204,464 3,227,239 2,183,789 1,719,690
Cash -- -- -- -- --
Receivables:
Employer's contribution 4,209 1,967 -- -- --
Accrued interest and dividends 2,890 15,236 -- -- --
---------- ---------- ---------- ---------- ----------
Total receivables 7,099 17,203 -- -- --
---------- ---------- ---------- ---------- ----------
Total assets 1,725,429 1,221,667 3,227,239 2,183,789 1,719,690
---------- ---------- ---------- ---------- ----------
Liabilities:
Accrued administrative expenses 3,010 3,207 -- -- --
---------- ---------- ---------- ---------- ----------
Total liabilities 3,010 3,207 -- -- --
---------- ---------- ---------- ---------- ----------
Net assets available for thrift
and retirement plan benefits $1,722,419 1,218,460 3,227,239 2,183,789 1,719,690
========== ========== ========== ========== ==========
Intermediate Equity
bond growth Overseas Stein Roe Equity
fund fund fund fund income fund
---------- ---------- ---------- ---------- -----------
Assets:
Investments at market value:
Common trust funds (cost $222,053) -- -- -- -- --
Mutual funds (cost $14,452,367) 951,915 3,811,868 1,601,811 511,897 272,910
Common stocks (cost $1,436,972) -- -- -- -- --
Government obligations (cost $540,312) -- -- -- -- --
Loan to participants (cost $34,177) -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total investments 951,915 3,811,868 1,601,811 511,897 272,910
Cash -- -- -- -- --
Receivables:
Employer's contribution -- -- -- -- --
Accrued interest and dividends -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total receivables -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total assets 951,915 3,811,868 1,601,811 511,897 272,910
---------- ---------- ---------- ---------- ----------
Liabilities:
Accrued administrative expenses -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total liabilities -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Net assets available for thrift
and retirement plan benefits 951,915 3,811,868 1,601,811 511,897 272,910
========== ========== ========== ========== ==========
High Emerging Loan Working
yield fund markets fund fund account Total
---------- ------------ ---------- ---------- ----------
Assets:
Investments at market value:
Common trust funds (cost $222,053) -- -- -- -- 222,053
Mutual funds (cost $14,452,367) 74,867 161,218 -- (1,841) 14,515,441
Common stocks (cost $1,436,972) -- -- -- -- 2,159,943
Government obligations (cost $540,312) -- -- -- -- 540,720
Loan to participants (cost $34,177) -- -- 34,177 -- 34,177
---------- ---------- ---------- ---------- ----------
Total investments 74,867 161,218 34,177 (1,841) 17,472,334
Cash -- -- -- 9,163 9,163
Receivables:
Employer's contribution -- -- -- (6,176) --
Accrued interest and dividends -- -- -- -- 18,126
---------- ---------- ---------- ---------- ----------
Total receivables -- -- -- (6,176) 18,126
---------- ---------- ---------- ---------- ----------
Total assets 74,867 161,218 34,177 1,146 17,499,623
---------- ---------- ---------- ---------- ----------
Liabilities:
Accrued administrative expenses -- -- -- -- 6,217
---------- ---------- ---------- ---------- ----------
Total liabilities -- -- -- -- 6,217
---------- ---------- ---------- ---------- ----------
Net assets available for thrift
and retirement plan benefits 74,867 161,218 34,177 1,146 17,493,406
========== ========== ========== ========== ==========
See accompanying notes to financial statements.
5
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR THRIFT AND
RETIREMENT PLAN BENEFITS (WITH FUND INFORMATION)
For the Year Ended December 31, 1997
Balanced
fund
Growth (previously Daily
Equity Balanced opportunities income & MMF
fund fund fund growth fund) fund
----------- ----------- ------------- ----------- -----------
Receipts:
Contributions:
Employer $ 5,365 137 186,391 95,253 122,635
Employee 33,279 11,993 198,546 94,858 96,866
----------- ----------- ----------- ----------- -----------
Total contributions 38,644 12,130 384,937 190,111 219,501
----------- ----------- ----------- ----------- -----------
Investment income:
Interest and dividends 16,581 15,599 357,266 315,822 102,834
Realized gain (loss) on sale
of investments 408,200 146,955 128,947 69,170 --
----------- ----------- ----------- ----------- -----------
Total investment
income 424,781 162,554 486,213 384,992 102,834
----------- ----------- ----------- ----------- -----------
Net appreciation (depreciation) in
fair value of investments -- -- 505,461 125,175 --
Other transfers (2,167,708) (1,385,844) 950,498 789,722 923,015
Loan payment 324 660 7,036 5,715 1,301
----------- ----------- ----------- ----------- -----------
Total receipts, net (1,703,959) (1,210,500) 2,334,145 1,495,715 1,246,651
----------- ----------- ----------- ----------- -----------
Deductions:
Benefits paid to participants 11,640 7,749 468,224 177,568 397,013
Administrative expense 6,820 211 -- -- --
----------- ----------- ----------- ----------- -----------
Total deductions 18,460 7,960 468,224 177,568 397,013
----------- ----------- ----------- ----------- -----------
Increase (decrease) in net
assets during the year (1,722,419) (1,218,460) 1,865,921 1,318,147 849,638
Net assets available for thrift
and retirement plan benefits:
Beginning of year 1,722,419 1,218,460 3,227,239 2,183,789 1,719,690
----------- ----------- ----------- ----------- -----------
End of year $ -- -- 5,093,160 3,501,936 2,569,328
=========== =========== =========== =========== ===========
Interm. Equity Equity
bond growth Overseas Stein Roe income
fund fund fund fund fund
----------- ----------- ----------- ----------- -----------
Receipts:
Contributions:
Employer 4,155 157,142 92,989 69,056 48,415
Employee 19,807 176,453 99,100 83,855 33,971
----------- ----------- ----------- ----------- -----------
Total contributions 23,962 333,595 192,089 152,911 82,386
----------- ----------- ----------- ----------- -----------
Investment income:
Interest and dividends 27,091 382,708 105,825 -- 53,461
Realized gain (loss) on sale
of investments (6,958) 268,752 62,607 (3,748) 42,102
----------- ----------- ----------- ----------- -----------
Total investment
income 20,133 651,460 168,432 (3,748) 95,563
----------- ----------- ----------- ----------- -----------
Net appreciation (depreciation) in
fair value of investments -- 242,343 20,833 70,835 62,772
Other transfers (779,896) (1,497,814) (501,160) 111,964 256,078
Loan payment 762 6,022 1,874 6,639 739
----------- ----------- ----------- ----------- -----------
Total receipts, net (735,039) (264,394) (117,932) 338,601 497,538
----------- ----------- ----------- ----------- -----------
Deductions:
Benefits paid to participants 216,876 198,600 48,258 21,897 36,714
Administrative expense -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total deductions 216,876 198,600 48,258 21,897 36,714
----------- ----------- ----------- ----------- -----------
Increase (decrease) in net
assets during the year (951,915) (462,994) (166,190) 316,704 460,824
Net assets available for thrift
and retirement plan benefits:
Beginning of year 951,915 3,811,868 1,601,811 511,897 272,910
----------- ----------- ----------- ----------- -----------
End of year -- 3,348,874 1,435,621 828,601 733,734
=========== =========== =========== =========== ===========
Strong
High Emerging government Dreyfus UTP
yield markets securities appreciation stock
fund fund fund fund fund
----------- ----------- ----------- ------------ -----------
Receipts:
Contributions:
Employer 29,986 43,908 11,142 103,117 103,213
Employee 17,998 36,911 4,406 55,093 72
----------- ----------- ----------- ----------- -----------
Total contributions 47,984 80,819 15,548 158,210 103,285
----------- ----------- ----------- ----------- -----------
Investment income:
Interest and dividends 36,857 10,720 11,298 19,437 218
Realized gain (loss) on sale
of investments 2,719 (54,012) -- 6,069 190
----------- ----------- ----------- ----------- -----------
Total investment
income 39,576 (43,292) 11,298 25,506 408
----------- ----------- ----------- ----------- -----------
Net appreciation (depreciation) in
fair value of investments 385 (200,222) 6,827 33,786 (3,197)
Other transfers 337,299 532,458 488,725 1,858,040 (1,131)
Loan payment 444 484 -- 933 --
----------- ----------- ----------- ----------- -----------
Total receipts, net 425,688 370,247 522,398 2,076,475 99,365
----------- ----------- ----------- ----------- -----------
Deductions:
Benefits paid to participants 15,907 815 -- 4,228 286
Administrative expense -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total deductions 15,907 815 -- 4,228 286
----------- ----------- ----------- ----------- -----------
Increase (decrease) in net
assets during the year 409,781 369,432 522,398 2,072,247 99,079
Net assets available for thrift
and retirement plan benefits:
Beginning of year 74,867 161,218 -- -- --
----------- ----------- ----------- ----------- -----------
End of year 484,648 530,650 522,398 2,072,247 99,079
=========== =========== =========== =========== ===========
LASMO
stock Loan Working
fund fund account Total
----------- ----------- ----------- -----------
Receipts:
Contributions:
Employer 139,330 -- -- 1,212,234
Employee 4,896 -- -- 968,104
----------- ----------- ----------- -----------
Total contributions 144,226 -- -- 2,180,338
----------- ----------- ----------- -----------
Investment income:
Interest and dividends 56 -- -- 1,455,773
Realized gain (loss) on sale
of investments (112) -- -- 1,070,881
----------- ----------- ----------- -----------
Total investment
income (56) -- -- 2,526,654
----------- ----------- ----------- -----------
Net appreciation (depreciation) in
fair value of investments (8,752) -- -- 856,246
Other transfers (2,143) 87,955 (750) (692)
Loan payment -- (26,242) -- 6,691
----------- ----------- ----------- -----------
Total receipts, net 133,275 61,713 (750) 5,569,237
----------- ----------- ----------- -----------
Deductions:
Benefits paid to participants 2,331 -- -- 1,608,106
Administrative expense -- -- -- 7,031
----------- ----------- ----------- -----------
Total deductions 2,331 -- -- 1,615,137
----------- ----------- ----------- -----------
Increase (decrease) in net
assets during the year 130,944 61,713 (750) 3,954,100
Net assets available for thrift
and retirement plan benefits:
Beginning of year -- 34,177 1,146 17,493,406
----------- ----------- ----------- -----------
End of year 130,944 95,890 396 21,447,506
=========== =========== =========== ===========
See accompanying notes to financial statements.
6
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR THRIFT AND RETIREMENT PLAN
BENEFITS
(WITH FUND INFORMATION)
For the Year Ended December 31, 1996
Growth Income & Daily
Equity Balanced opportunities growth MMF
fund fund fund fund fund
----------- ----------- ------------- ----------- -----------
Receipts:
Contributions:
Employer $ 67,896 33,828 217,352 139,574 99,866
Employee 87,774 37,949 243,070 136,572 73,951
----------- ----------- ----------- ----------- -----------
Total contributions 155,670 71,777 460,422 276,146 173,817
----------- ----------- ----------- ----------- -----------
Investment income:
Interest and dividends 37,891 62,089 174,169 84,565 65,045
Realized gain (loss) on sale of investments 151,904 46,624 751,808 120,670 --
----------- ----------- ----------- ----------- -----------
Total investment income 189,795 108,713 925,977 205,235 65,045
----------- ----------- ----------- ----------- -----------
Net appreciation (depreciation) in fair value
of investments 201,192 11,790 (401,981) (36,073) --
Other transfers 129,714 (178,912) (696,754) (324,483) 101,023
Loan payment 332 221 1,873 785 10,516
----------- ----------- ----------- ----------- -----------
Total receipts, net 676,703 13,589 289,537 121,610 350,401
----------- ----------- ----------- ----------- -----------
Deductions:
Benefits paid to participants 324,128 9,194 269,994 119,287 231,267
Administrative expense 8,453 5,900 -- -- --
----------- ----------- ----------- ----------- -----------
Total deductions 332,581 15,094 269,994 119,287 231,267
----------- ----------- ----------- ----------- -----------
Increase (decrease) in net
assets during the year 344,122 (1,505) 19,543 2,323 119,134
Net assets available for thrift and
retirement plan benefits:
Beginning of year 1,378,297 1,219,965 3,207,696 2,181,466 1,600,556
----------- ----------- ----------- ----------- -----------
End of year $ 1,722,419 1,218,460 3,227,239 2,183,789 1,719,690
=========== =========== =========== =========== ===========
Intermediate Equity
bond growth Overseas Stein Roe Equity
fund fund fund fund income fund
----------- ----------- ----------- ----------- -----------
Receipts:
Contributions:
Employer 72,470 218,337 113,479 29,715 13,966
Employee 58,741 214,563 135,283 8,297 3,494
----------- ----------- ----------- ----------- -----------
Total contributions 131,211 432,900 248,762 38,012 17,460
----------- ----------- ----------- ----------- -----------
Investment income:
Interest and dividends 54,268 157,209 80,581 -- 8,518
Realized gain (loss) on sale of investments (7,855) 1,039,342 167,745 (466) 20
----------- ----------- ----------- ----------- -----------
Total investment income 46,413 1,196,551 248,326 (466) 8,538
----------- ----------- ----------- ----------- -----------
Net appreciation (depreciation) in fair value
of investments (16,638) (649,450) (63,681) (29,053) 2,029
Other transfers 65,241 7,133 (86,763) 503,404 244,883
Loan payment 61 1,363 10,515 -- --
----------- ----------- ----------- ----------- -----------
Total receipts, net 226,288 988,497 357,159 511,897 272,910
----------- ----------- ----------- ----------- -----------
Deductions:
Benefits paid to participants 54,621 394,230 212,029 -- --
Administrative expense -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total deductions 54,621 394,230 212,029 -- --
----------- ----------- ----------- ----------- -----------
Increase (decrease) in net
assets during the year 171,667 594,267 145,130 511,897 272,910
Net assets available for thrift and
retirement plan benefits:
Beginning of year 780,248 3,217,601 1,456,681 -- --
----------- ----------- ----------- ----------- -----------
End of year 951,915 3,811,868 1,601,811 511,897 272,910
=========== =========== =========== =========== ===========
High Emerging Loan Working
yield fund markets fund fund account Total
----------- ----------- ----------- ----------- -----------
Receipts:
Contributions:
Employer 1,551 19,338 -- -- 1,027,372
Employee 467 6,311 -- -- 1,006,472
----------- ----------- ----------- ----------- -----------
Total contributions 2,018 25,649 -- -- 2,033,844
----------- ----------- ----------- ----------- -----------
Investment income:
Interest and dividends 2,185 2,080 -- -- 728,600
Realized gain (loss) on sale of investments -- 167 -- -- 2,269,959
----------- ----------- ----------- ----------- -----------
Total investment income 2,185 2,247 -- -- 2,998,559
----------- ----------- ----------- ----------- -----------
Net appreciation (depreciation) in fair value
of investments (740) (705) -- -- (983,310)
Other transfers 71,404 134,027 29,500 148 (435)
Loan payment -- -- (23,773) -- 1,893
----------- ----------- ----------- ----------- -----------
Total receipts, net 74,867 161,218 5,727 148 4,050,551
----------- ----------- ----------- ----------- -----------
Deductions:
Benefits paid to participants -- -- -- 80,190 1,694,940
Administrative expense -- -- -- -- 14,353
----------- ----------- ----------- ----------- -----------
Total deductions -- -- -- 80,190 1,709,293
----------- ----------- ----------- ----------- -----------
Increase (decrease) in net
assets during the year 74,867 161,218 5,727 (80,042) 2,341,258
Net assets available for thrift and
retirement plan benefits:
Beginning of year -- -- 28,450 81,188 15,152,148
----------- ----------- ----------- ----------- -----------
End of year 74,867 161,218 34,177 1,146 17,493,406
=========== =========== =========== =========== ===========
See accompanying notes to financial statements.
7
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying financial statements of the Virginia Indonesia
Company Employee Thrift and Retirement Plan (the Plan) have been
prepared on an accrual basis in conformity with generally accepted
accounting principles and present the net assets available for
thrift and retirement plan benefits and changes in those net
assets.
(b) TRUST FUND MANAGEMENT
At December 31, 1997 and 1996, the Plan's investments were held in
a trust fund administered by American Industries Trust, N.A.
(Trustee, AIT), which is authorized to purchase and sell
investment securities at the direction of either the Plan's
participants or administrative committee.
The financial statements of the Plan are compiled using investment
information received from AIT. The information includes listings
of all cash receipts and disbursements of the Plan, together with
all other transactions which affect Plan investments.
(2) DESCRIPTION OF PLAN
The following description of the Plan provides only general
information. Participants should refer to the plan agreement for more
complete information.
(a) GENERAL
The Plan is a defined contribution thrift and retirement plan
sponsored by Virginia Indonesia Company (VICO or the Company).
Under the terms of the Plan, employees of VICO and certain
affiliates may join the Plan on the entry dates to the Plan, which
occur quarterly. For purposes of participation, employee service
includes years of active service with Roy M. Huffington, Inc.
(RMHI), the predecessor operator of the Indonesian Joint Venture.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA). The Plan had 110 active
participants at December 31, 1997.
(b) CONTRIBUTIONS
Participants in the Plan may make 401(k) contributions and/or
after tax contributions, in one percent increments, ranging from
2% to 14% of their annual basic compensation through payroll
deductions provided that the total of annual employee
contributions do not exceed the maximum amount deductible under
Section 402(g) of the Federal Internal Revenue Code of 1986 (the
Code). A participant may discontinue his/her contributions at any
time; increases or decreases in contributions may only be made on
January 1, April 1, July 1, and October 1.
(Continued)
8
2
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
After the end of each month on behalf of each participant who made
contributions to the Plan that month, an amount equal to 100% (50%
during 1996) of such participant's aggregate contributions made
that month which do not exceed 6% of the participants basic
compensation will be made by the Company. Effective August 1, 1997
and retroactive to January 1, 1997, 50% of such match contribution
(the Employer Stock Match) must be directed to be invested in
either the UTP Stock Fund and/or the LASMO Stock Fund by the
participant and in the absence of such direction, the Employer
Stock Match will be automatically invested equally in the UTP
Stock Fund and LASMO Stock Fund. In addition, the Company, subject
to the discretion of its board of directors, may make an annual
retirement contribution to the Plan provided that the total of
annual employer contributions does not exceed the maximum amount
deductible under Section 404 of the Code.
Each participant has the right to direct his contributions and the
Company's matching contribution between the investment funds
specified by the Plan. The investment funds are described below:
Equity Fund - Predominantly equity investments including, but
not limited to, preferred stock, common stocks, government and
corporate debt securities, prime commercial paper or quality
master note agreements. Effective July 1, 1997, the Company
eliminated the Equity Fund.
Balanced Fund - Mixed portfolio of stocks, bonds, money market
and mutual fund investments. Generally, a minimum of 95
percent of the portfolio will be in stocks and bonds.
Effective July 1, 1997, the Company eliminated the Balanced
Fund.
Fidelity Advisor Growth Opportunities Fund (Growth
opportunities fund) - Seeks capital growth by investing in at
least 65% of its assets in equity securities of companies that
management believes have long-term growth potential. It may
also purchase fixed-income securities. The fund may invest up
to 35% of its assets in debt securities rated below BBB and it
may invest, without limit, in foreign securities.
Fidelity Advisor Balanced Fund (Balanced Fund) (previously
Fidelity Advisor Income & Growth Fund) - Seeks income and
capital appreciation by investing in equities, convertibles
and fixed-income securities. This Fund's management considers
an issuer's financial strength, its outlook for increased
dividend payments and the potential for capital gains. The
fund may invest up to 35% of the fund in debt rated below BBB.
Fidelity Advisor Daily Money Market Fund (Daily MMF fund) -
Seeks income consistent with preservation of capital and
liquidity by investing in the highest-quality U.S.
dollar-denominated money market securities of domestic/foreign
issuers.
(Continued)
9
3
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Fidelity Advisor Intermediate Bond Fund (Intermediate bond
fund) - (previously Limited-Term bond fund) - Seeks to provide
a high rate of income through investment primarily in
investment-grade fixed income obligations. Under normal
conditions, the investments have a dollar weighted average
maturity of 10 years or less. Effective July 1, 1997, the
Company eliminated the intermediate bond fund.
Fidelity Advisor Equity Growth Fund (Equity growth fund) -
Seeks capital appreciation by investing primarily in common
and preferred stocks of companies with above average earnings
or sales growth. Generally, it will be invested in the
securities of smaller, lesser-known companies. It may also
invest in high-yield securities.
Fidelity Advisor Overseas Fund (Overseas fund) - Seeks capital
growth by investing at least 65% of assets in securities of
issuers from at least three countries outside North America.
The fund invests primarily in equities, though it may invest
up to 35% in debt securities rated below BBB.
Stein Roe Capital Opportunities Fund (Stein Roe fund) - Seeks
long-term capital appreciation by investing in equity
securities of smaller companies that may benefit from new
products, technological developments, or management changes.
The fund may also invest in established companies and up to
35% of its assets in debt securities. The fund focuses on
companies that have the potential for rapid earnings growth.
Fidelity Advisor Equity Income Fund (Equity income fund) -
Seeks income and capital appreciation by investing in at least
65% of its assets in income-producing common and preferred
stocks. These stocks may be of various quality, though the
fund does not intend to invest in companies without proven
earnings or credit histories. It may invest the balance in
debt, including convertible bonds.
Fidelity Advisor High Yield Fund (High yield fund) - Seeks
income and capital appreciation by investing in at least 65%
of its assets in debt securities, preferred stocks,
convertibles, and zero coupon bonds. It may invest in U.S.
government obligations and foreign securities. The fund may
invest up to 35% of its assets in equities.
Fidelity Emerging Markets Fund (Emerging markets fund) - Seeks
capital appreciation by investing at least 65% of its assets
in securities of emerging-markets issuers. It emphasizes
equity investments in countries with relatively low gross
national product per capita, and where the manager believes
there is potential for rapid economic growth. The fund
normally invests in at least six countries though it may
invest all assets in only one country. It may also invest up
to 35% of its assets in low-rated debt issues.
(Continued)
10
4
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Strong Government Securities Fund - Seeks current income with
moderate share-price fluctuation. The fund normally invests at
least 80% of assets in U.S. government obligations that will
include Treasuries, Agencies of the U.S. and investment-grade
fixed income.
Dreyfus Appreciation Fund - Seeks long-term growth consistent
with the preservation of capital, current income is secondary.
The fund invests primarily in common stocks of domestic and
foreign issuers. May invest up to 10% in foreign securities
not traded in the U.S. and up to 2% in stock warrants.
UTP Stock Fund - Invests in shares of common stock, par value
$.01, of Union Texas Petroleum Holdings, Inc. (UTP), a 50%
partner in the Company.
LASMO Stock Fund - Invests in American Depository Shares,
evidenced by American Depository Receipts, each representing
three ordinary shares, par value .25p per share of LASMO plc
(LASMO), a publicly traded UK company and a 50% partner in the
Company.
(c) INVESTMENTS
The fair value of individual investments that represent 5 percent
or more of the Plan's net assets at December 31, 1997 are as
follows:
Fidelity Advisor Growth Opportunities Fund $ 5,093,160
Fidelity Advisor Balanced Fund 3,501,936
Fidelity Advisor Daily Money Market Fund 2,569,328
Fidelity Advisor Equity Growth Fund 3,348,874
Fidelity Advisor Overseas Fund 1,435,621
Dreyfus Appreciation Fund 2,072,247
(d) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contributions and monthly matching contributions by the Company
and an allocation of (a) Plan earnings and (b) annual
contributions by the Company. For mutual accounts, Plan earnings
are determined daily, therefore, changing the value of each unit
in the fund on a daily basis. For non-mutual accounts, Plan
earnings are allocated monthly based on the ratio of each
participant's account balance at the beginning of the month to the
total of all participants' account balances at the beginning of
the month, both adjusted for distributions during the month. The
annual contribution by the Company is allocated to participants
employed on the last day of the year or terminated by reason of
death, disability, age 65 or involuntary termination other than
for cause on the basis of the ratio of total annual base salary of
each participant to the total annual base salary of all eligible
participants. Forfeitures of nonvested balances of Company monthly
or annual retirement contributions are allocated annually as
follows: (1) to restore accounts of any reinstated participants;
(2) to restore any amount wrongfully forfeited under the unclaimed
benefits provisions of the Plan, and (3) to reduce employer
retirement contributions.
(Continued)
11
5
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
(e) VESTING
Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Company's matching or
annual contribution is based on years of service, and the vesting
percentage is determined in accordance with the schedule below.
For purposes of vesting, participants are allowed credit for their
participation in the RMHI Thrift Plan, and in certain
circumstances for prior service with Union Texas Petroleum or
LASMO PLC, (co-owners of VICO) or other future owners of VICO.
Years Vesting
of service percentage
---------- ----------
0 0%
1 33 1/3%
2 66 2/3%
3 or more 100%
Upon reaching normal retirement age (65 years), or in the event of
the death or disability of a participant (as defined), the
participant becomes fully vested in his/her account balances.
(f) PAYMENT OF BENEFITS AND WITHDRAWALS
Benefit payments are available to participants upon retirement,
death, disability or termination of employment. The participant or
his/her beneficiary may elect benefit payments, consisting of 100%
of participant contributions and related earnings plus the vested
amount of Company contributions, as a lump sum, or in annual
installments over a period not to exceed the lesser of twenty
years or the life expectancy of the participant.
Participants may withdraw all or a part of their contributions and
the respective interest earned in the Plan by providing written
notice to the Company. Participants may not withdraw Company
contributions to the Plan prior to termination of service. Only
one such withdrawal may be made during any twelve-month period,
and only one loan may be outstanding at any time.
(g) INVESTMENT VALUATION
If available, quoted market prices are used to value investments.
Loan Fund amounts shown in the accompanying statement of net
assets available for thrift and retirement plan benefits that have
no quoted market price represent estimated fair value.
Purchases and sales of securities are recorded on a trade-date
basis. Net realized gains and losses on disposition of investments
are reported on the revalued cost method. Revalued cost is the
fair value of the assets at the beginning of the plan year or
historical cost if the investment was acquired since the beginning
of the plan year.
(Continued)
12
6
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
(h) PLAN EXPENSES
Effective October 1, 1993, the Company began paying the Trustee
administration and recordkeeping fees of the Plan. The Company
incurred $113,858 and $77,477 in Trustee expenses for the years
ending December 31, 1997 and 1996, respectively.
The Trustee charges the direct expenses of each Investment Fund
(including the fees of an Investment Manager) against the assets
of the Plan.
(i) PLAN AMENDMENTS
Effective on October 1, 1996, the Board of Directors and the
Plan's Administrative Committee approved an amendment to the Plan
by which a Participant may change his investment direction with
respect to the current balance of his accounts and/or his future
contribution (his and the Employer's made on his behalf) on any
date during October 1996 (the "Election Period") by contacting the
Trustee. The Board and Committee also approved an amendment to add
four new funds made available for each Participant of the Plan:
the Fidelity Advisor High Yield Fund, Fidelity Advisor Equity
Income Fund, Fidelity Emerging Markets Fund, and Stein Roe Capital
Opportunities Fund.
On December 13, 1996, the Board of Directors and Plan's
Administrative Committee approved an amendment to the Plan with
respect to each Participant who completes an hour of service on or
after January 1, 1997, by changing the Vesting schedule to read as
follows:
Years Vested
of service percentage
---------- ----------
0 0%
1 33 1/3%
2 66 2/3%
3 or more 100%
On June 19, 1997, and effective August 1, 1997, the Board of
Directors and the Plan's Administrative Committee approved an
Amendment to the Plan which added two new investment options
representing Company Stock Funds: the UTP Stock Fund, which
consists of shares of common stock, par value of $.01, of Union
Texas Petroleum Holdings, Inc., a 50% partner in the Company, and
the LASMO Stock Fund, which consists of American Depository
Shares, evidenced by American Depository Receipts, each
representing three ordinary shares, par value .25p per share of
LASMO plc, a publicly traded UK company and a 50% partner in the
Company.
(Continued)
13
7
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Also on June 19, 1997, and effective August 1, 1997 and
retroactive to January 1, 1997, the Board of Directors and the
Plan's Administrative Committee approved an Amendment to the Plan
which increased the Company's contribution to 100% of participants
aggregate contributions which do not exceed 6% of the participants
basic compensation, provided however, that 50% of such matching
contribution (the Employer Stock Match) must be directed to be
invested in either the UTP Stock Fund or the LASMO Stock Fund by
the participant and in the absence of such direction, the Employer
Stock Match will be automatically invested equally in the UTP
Stock Fund and LASMO Stock Fund.
Finally, on June 19, 1997, and effective July 1, 1997, the Company
eliminated the Equity Fund, Balanced Fund and the Intermediate
Bond Fund investment options and added the following new
investment options: Strong Government Securities Fund and Dreyfus
Appreciation Fund.
(j) USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of receipts and deductions during the reporting
period. Actual results could differ from those estimates.
(3) FEDERAL INCOME TAXES
The Plan obtained its latest determination letter on November 19, 1996,
in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter to comply with changes in the law. The Plan's
Administrative Committee believes that the Plan is currently designed
and being operated in compliance with the applicable requirements of
the Internal Revenue Code and intends to file a timely request with the
Internal Revenue Service for a favorable determination letter with
respect to the above amendment. Therefore, the Plan's Administrative
Committee believes the Plan is qualified and the related trust is tax
exempt as of the financial statement date.
(Continued)
14
8
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
(4) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for thrift
and retirement plan benefits per the financial statements to the Form
5500:
December 31,
1997
------------
Net assets available for thrift and retirement plan
benefits per the financial statements $ 21,447,506
============
Net assets available for thrift and retirement plan
benefits per the Form 5500 $ 21,447,506
============
The following is a reconciliation of the increase in net assets during
the year per the financial statements to the Form 5500:
Year ended
December 31,
1997
-----------
Increase in net assets during the year
per the financial statements $ 3,954,100
1996 accrued expenses (121)
-----------
Increase in net assets during the year
per the Form 5500 $ 3,953,979
===========
(5) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event
of plan termination, participants will become 100% vested in their
accounts and are entitled to receive cash as directed by the
Administrative Committee.
(6) SUBSEQUENT EVENTS
On March 19, 1998, the Chairman of the Board approved the Ninth
Amendment to the Plan effective March 18, 1998. The Ninth Amendment to
the Plan shall allow all Participants (and Beneficiaries) who are
"Parties in interest" to the plan to have two loans outstanding at any
time.
On May 8, 1998, Atlantic Richfield Company ("ARCO") announced a tender
offer for shares of Union Texas Petroleum Holdings, Inc. (UTP) stock.
The tender offer was completed on June 16, 1998. The remaining
outstanding UTP shares not purchased in the tender offer will be
acquired by ARCO pursuant to a merger agreement between the two
companies. In connection with this merger, the Plan eliminated the UTP
Stock Fund as an investment option. On June 24, 1998, The board of
directors of the Company approved a material modification to the Plan
authorizing future investments of the entire Employer Stock Match (50%
of the total Company matching contribution) in the LASMO Stock Fund.
15
Schedule 1
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1997
Identity of issuer, borrower, lessor Current
or similar party Description of investments Cost value
---------------- -------------------------- ---- -----
Mutual funds:
* Fidelity Advisor Growth Opportunities Fund Class A fund, 120,207 shares $ 4,536,343 5,093,160
* Fidelity Advisor Balanced Fund Class A fund, 191,782 shares 3,294,885 3,501,936
* Fidelity Advisor Daily Money Market Fund Class A fund, 2,569,328 shares 2,569,328 2,569,328
* Fidelity Advisor Equity Growth Fund Class A fund, 71,420 shares 3,139,838 3,348,874
* Fidelity Advisor Overseas Fund Class A fund, 90,920 shares 1,428,409 1,435,621
Stein Roe Capital Opportunities Fund Class A fund, 27,768 shares 787,145 828,601
Fidelity Advisor Equity Income Fund Class A fund, 28,275 shares 669,049 733,734
Fidelity Advisor High Yield Fund Class A fund, 39,243 shares 485,144 484,648
Fidelity Emerging Markets Fund Class A fund, 55,276 shares 731,654 530,650
Strong Government Securities Fund Class A fund, 48,595 shares 515,571 522,398
* Dreyfus Appreciation Fund Class A fund, 63,998 shares 2,038,690 2,072,247
----------- ----------
$20,196,056 21,121,197
=========== ==========
Common stocks:
** Union Texas Petroleum Holdings, Inc. Common Stock, 4,715 shares $ 101,331 98,133
** LASMO plc American Depository Receipts,
10236 shares 138,626 129,874
----------- ----------
$ 239,957 228,007
=========== ==========
** Participants Loan receivables bearing
interest at varying amounts
between 9.25% to 10%
maturing between 1998
and 2004 $ 95,890 95,890
=========== ==========
Common trust funds:
** American Industries Composite Benefit Trust Stock Liquidity Fund - UTP $ 8,565 8,565
** American Industries Composite Benefit Trust Stock Liquidity Fund - LASMO 11,900 11,900
----------- ----------
$ 20,465 20,465
----------- ----------
$20,552,368 21,465,559
=========== ==========
* Indicates an investment which is 5% or more of the Plan's net assets
available for plan benefits at December 31, 1997.
** Indicates a party in interest to the Plan.
See accompanying independent auditors' report.
16
Schedule 2
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND RETIREMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
Year ended December 31, 1997
Disposals
-------------------------------
Identified Purchase Selling Cost of Gain/
Party Description price price asset loss
----- ----------- ----- ----- ----- -----
Single Transactions:
American Industries Sale of 17,084 units of Fidelity Advisor
Trust Equity Growth Fund $ 893,501 737,252 156,249
American Industries Purchase of 20,617 units of Fidelity Advisor
Trust Growth Opportunities Fund 893,526
American Industries Purchase of 53,496 units of Fidelity Advisor
Trust Balanced Fund 1,019,632
American Industries Purchase of 43,842 units of Dreyfus
Trust Appreciation Fund 1,402,513
Series Transactions:
American Industries Sale of 94,213 units of Equity Fund 2,230,582 1,152,337 1,078,245
Trust
American Industries Sale of 90,962 units of Balanced Fund 1,410,527 970,928 439,599
Trust
American Industries Sale of 23,904 units of Fidelity Advisor
Trust Growth Opportunities Fund 982,766 853,819 128,947
American Industries Sale of 1,708,662 units of Fidelity Advisor
Trust Daily Money Market Fund 1,708,662 1,708,662 0
American Industries Sale of 104,609 units of Fidelity Advisor
Trust Intermediate Bond Fund 1,091,519 1,093,790 (2,271)
American Industries Sale of 22,805 units of Fidelity Advisor
Trust Equity Growth Fund 1,093,213 980,710 112,503
American Industries Purchase of 31,888 units of Fidelity Advisor
Trust Growth Opportunities Fund 1,321,084
American Industries Purchase of 2,558,299 units of Fidelity
Trust Advisor Daily Money Market Fund 2,558,299
American Industries Purchase of 21,369 units of Fidelity Advisor
Trust Equity Growth Fund 1,012,687
American Industries Purchase of 29,038 units of Dreyfus
Trust Appreciation Fund 919,095
Note: The above transactions represent "reportable transactions" as defined
in Section 2520.103-6 of ERISA. American Industries Trust represents a
party in interest to the Plan.
See accompanying independent auditors' report.
17
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Benefits Administration Committee, which administers the employee benefit
plan, has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
VIRGINIA INDONESIA COMPANY
EMPLOYEE THRIFT AND
RETIREMENT PLAN
July 8, 1998
/s/ FRED BUTTACCIO
------------------------
Fred Buttaccio
Treasurer, Virginia Indonesia Company
Member, Plan Administrative Committee
18
EXHIBIT INDEX
23 -- Independent Auditors Consent