-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RJeScQJaAa/BMOPktDiJ3if/I1OzpsIkSIJmB3w0Z80DedBHBmiTzp2x84PNe8JA WyopHyKbFEhiTyYe44mYlg== 0000060512-97-000008.txt : 19970630 0000060512-97-000008.hdr.sgml : 19970630 ACCESSION NUMBER: 0000060512-97-000008 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970627 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOUISIANA LAND & EXPLORATION CO CENTRAL INDEX KEY: 0000060512 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 720244700 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00959 FILM NUMBER: 97630982 BUSINESS ADDRESS: STREET 1: 909 POYDRAS ST CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045666500 MAIL ADDRESS: STREET 1: P O BOX 60350 CITY: NEW ORLEANS STATE: LA ZIP: 70160 11-K 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, 1996 OR [ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 THE LL&E SAVINGS PLAN (Full title of the plan) THE LOUISIANA LAND AND EXPLORATION COMPANY (Name of the issuer of the securities held pursuant to the plan) 909 Poydras Street P. O. Box 60350 New Orleans, Louisiana 70160 (Address of principal executive office) Financial Statements and Exhibits Page Number (a) Financial statements: Herein Independent Auditors' Report .................. 3 Statements of Net Assets Available for Benefits - December 31, 1996 and 1995................... 4 Statements of Changes in Net Assets Available for Benefits - years ended December 31, 1996 and 1995..................................... 12 Notes to Financial Statements.................. 20 Schedules: Schedule I - Item 27a - Schedule of Assets held for Investment Purposes.............. 30 Schedule II - Item 27c - Schedule of Reportable Transactions.............................. 31 (b) Exhibits: Exhibit No. Description 23 Consent of KPMG Peat Marwick LLP SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the administrators of The LL&E Savings Plan have duly caused this annual report to be signed by the undersigned, thereunto duly authorized. THE LL&E SAVINGS PLAN Date: June 27, 1997 /s/Louis A. Raspino, Jr. Louis A. Raspino, Jr. Benefits Committee INDEPENDENT AUDITORS' REPORT The Louisiana Land and Exploration Company Benefits Committee: We have audited the statements of net assets available for benefits of The LL&E Savings Plan as of December 31, 1996 and 1995, 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1996 and 1995, and the changes in net assets available for 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 information included in Schedules I and II is presented to comply with the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. s/ KPMG Peat Marwick LLP KPMG Peat Marwick LLP New Orleans, Louisiana May 31, 1997 THE LL&E SAVINGS PLAN Statement of Net Assets Available for Benefits by Fund December 31, 1996
Participant Directed FUND FUND FUND A B C ASSETS Cash and cash equivalents at cost plus accrued interest $ - - - Capital Stock of The Louisiana Land and Exploration Company 1,736,970 - - LL&E Royalty Trust Units of Beneficial Interest - - 201,779 Investment in Funds: Schwab Value Advantage - - - Vanguard Bond Index - - - Vanguard Index Trust 500 Portfolio - - - PBHG Growth - - - Janus Worldwide - - - Loans to participants - 3,161,633 - 1,736,970 3,161,633 201,779 LIABILITIES Loans payable to LL&E - - - Interest payable to LL&E - - - Net Assets Available for Benefits $ 1,736,970 3,161,633 201,779 Number of units outstanding 32,372 41,382 Per unit $ 53.6566 4.8760 (Continued) /TABLE THE LL&E SAVINGS PLAN Statement of Net Assets Available for Benefits by Fund December 31, 1996
Participant Directed FUND FUND FUND D E F ASSETS Cash and cash equivalents at cost plus accrued interest $ - - - Capital Stock of The Louisiana Land and Exploration Company - - - LL&E Royalty Trust Units of Beneficial Interest - - - Investment in Funds: Schwab Value Advantage 9,308,031 - - Vanguard Bond Index - 2,776,207 - Vanguard Index Trust 500 Portfolio - - 13,263,744 PBHG Growth - - - Janus Worldwide - - - Loans to participants - - - 9,308,031 2,776,207 13,263,744 LIABILITIES Loans payable to LL&E $ - - - Interest payable to LL&E - - - Net Assets Available for Benefits $ 9,308,031 2,776,207 13,263,744 Number of units outstanding 9,308,031 282,135 191,783 Per unit $ 1.0000 9.8400 69.1602 (Continued)
THE LL&E SAVINGS PLAN Statement of Net Assets Available for Benefits by Fund December 31, 1996
Employer Participant Directed Directed FUND FUND FUND G H A ASSETS Cash and cash equivalents at cost plus accrued interest $ - - 47 Capital Stock of The Louisiana Land and Exploration Company - - 43,719,426 LL&E Royalty Trust Units of Beneficial Interest - - - Investment in Funds: Schwab Value Advantage - - - Vanguard Bond Index - - - Vanguard Index Trust 500 Portfolio - - - PBHG Growth 10,654,683 - - Janus Worldwide - 5,738,877 - Loans to participants - - - 10,654,683 5,738,877 43,719,473 LIABILITIES AND PLAN EQUITY Loans payable to LL&E - - 24,148 Interest payable to LL&E - - 48 Net Assets Available for Benefits $ 10,654,683 5,738,877 43,695,277 Number of units outstanding 405,584 170,344 815,273 Per unit $ 26.2700 33.6900 53.5959 (Continued)
THE LL&E SAVINGS PLAN Statement of Net Assets Available for Benefits by Fund December 31, 1996
TOTAL ASSETS Cash and cash equivalents at cost plus accrued interest $ 47 Capital Stock of The Louisiana Land and Exploration Company 45,456,396* LL&E Royalty Trust Units of Beneficial Interest 201,779 Investment in Funds: Schwab Value Advantage 9,308,031* Vanguard Bond Index 2,776,207 Vanguard Index Trust 500 Portfolio 13,263,744* PBHG Growth 10,654,683* Janus Worldwide 5,738,877* Loans to participants 3,161,633 90,561,397 LIABILITIES Loans payable to LL&E 24,148 Interest payable to LL&E 48 Net assets available for benefits $90,537,201 *Represents more than 5% of Plan assets.
THE LL&E SAVINGS PLAN Statement of Net Assets Available for Benefits by Fund December 31, 1995
Participant Directed FUND FUND FUND A B C ASSETS Cash and cash equivalents at cost plus accrued interest $ - - - Capital Stock of The Louisiana Land and Exploration Company 3,663,652 - - LL&E Royalty Trust Units of Beneficial Interest - - 174,254 Investment in Funds: Schwab Value Advantage - - - Vanguard Bond Index - - - Vanguard Index Trust 500 Portfolio - - - PBHG Growth - - - Janus Worldwide - - - Loans to participants - 4,173,607 - 3,663,652 4,173,607 174,254 LIABILITIES Loans payable to LL&E - - - Interest payable to LL&E - - - $ 3,663,652 4,173,607 174,254 Number of units outstanding 85,434 48,065 Plan equity per unit $ 42.8828 3.6254 (Continued) /TABLE THE LL&E SAVINGS PLAN Statement of Net Assets Available for Benefits by Fund December 31, 1995
Participant Directed FUND FUND FUND D E F ASSETS Cash and cash equivalents at cost plus accrued interest $ - - - Capital Stock of The Louisiana Land and Exploration Company - - - LL&E Royalty Trust Units of Beneficial Interest - - - Investment in Funds: Schwab Value Advantage 10,037,264 - - Vanguard Bond Index - 3,574,287 - Vanguard Index Trust 500 Portfolio - - 11,238,516 PBHG Growth - - - Janus Worldwide - - - Loans to participants - - - 10,037,264 3,574,287 11,238,516 LIABILITIES Loans payable to LL&E - - - Interest payable to LL&E - - - $ 10,037,264 3,574,287 11,238,516 Number of units outstanding 10,037,264 352,494 195,113 Plan equity per unit $ 1.0000 10.1400 57.6000 (Continued)
THE LL&E SAVINGS PLAN Statement of Net Assets Available for Benefits by Fund December 31, 1995
Employer Participant Directed Directed FUND FUND FUND G H A ASSETS Cash and cash equivalents at cost plus accrued interest $ - - 47 Capital Stock of The Louisiana Land and Exploration Company - - 43,437,971 LL&E Royalty Trust Units of Beneficial Interest - - - Investment in Funds: Schwab Value Advantage - - - Vanguard Bond Index - - - Vanguard Index Trust 500 Portfolio - - - PBHG Growth 8,497,014 - - Janus Worldwide - 3,506,524 - Loans to participants - - - 8,497,014 3,506,524 43,438,018 LIABILITIES Loans payable to LL&E - - 1,913,564 Interest payable to LL&E - - 3,925 $ 8,497,014 3,506,524 41,520,529 Number of units outstanding 355,226 123,469 1,013,096 Plan equity per unit $ 23.9200 28.4000 40.9838 (Continued)
THE LL&E SAVINGS PLAN Statement of Net Assets Available for Benefits by Fund December 31, 1995
TOTAL ASSETS Cash and cash equivalents at cost plus accrued interest $ 47 Capital Stock of The Louisiana Land and Exploration Company 47,101,623* LL&E Royalty Trust Units of Beneficial Interest 174,254 Investment in Funds: Schwab Value Advantage 10,037,264* Vanguard Bond Index 3,574,287 Vanguard Index Trust 500 Portfolio 11,238,516* PBHG Growth 8,497,014* Janus Worldwide 3,506,524 Loans to participants 4,173,607 88,303,136 LIABILITIES Loans payable to LL&E $ 1,913,564 Interest payable to LL&E 3,925 86,385,647 *Represents more than 5% of Plan assets.
THE LL&E SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits by Fund December 31, 1996
Participant Directed FUND FUND FUND A B C Investment income: Interest and royalties $ - - 38,772 Dividends: Capital Stock of The Louisiana Land and Exploration Company - - - Other investments - - - - - - Interest income on loans to participants 13,764 (1,681,670) - Net realized gains (losses) on disposition of invest- ments (3,225,187) - 9,265 Net unrealized appreciation (depreciation) of invest- ments 3,897,546 - 44,364 Contributions: Employer allocated - - - Employer unallocated - - - Employees 134,705 - - Benefit payments for terminations and with- drawals (626,180) (633,469) (49,066) Interest expense - - - Transfers between funds - net (2,121,330) 1,303,165 (15,810) Changes in net assets available for benefits (1,926,682) (1,011,974) 27,525 Net assets available for benefits - beginning of year 3,663,652 4,173,607 174,254 Net assets avilable for benefits - end of year $ 1,736,970 3,161,633 201,779 (Continued) /TABLE THE LL&E SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits by Fund December 31, 1996
Participant Directed FUND FUND FUND D E F Investment income: Interest and royalties $ 433,926 208,976 - Dividends: Capital Stock of The Louisiana Land and Exploration Company - - - Other investments - - 295,112 - - 295,112 Interest income on loans to participants 258,636 209,319 525,265 Net realized gains (losses) on disposition of invest- ments - (59,423) 335,238 Net unrealized appreciation (depreciation) of invest- ments - (50,340) 1,907,677 Contributions: Employer allocated - - - Employer unallocated - - - Employees 306,212 222,559 887,551 Benefit payments for terminations and with- drawals (1,968,167) (802,273) (2,029,114) Interest expense - - - Transfers between funds - net 240,160 (526,898) 103,499 Changes in net assets available for benefits (729,233) (798,080) 2,025,228 Net assets available for benefits - beginning of year 10,037,264 3,574,287 11,238,516 Net assets available for benefits - end of year $ 9,308,031 2,776,207 13,263,744 (Continued) /TABLE THE LL&E SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits by Fund December 31, 1996
Employer Participant Directed Directed FUND FUND FUND G H A Investment income: Interest and royalties $ - - - Dividends: Capital Stock of The Louisiana Land and Exploration Company - - 238,546 Other investments - 351,137 - - 351,137 238,546 Interest income on loans to participants 594,551 243,536 118,806 Net realized gains (losses) on disposition of invest- ments 372,266 300,738 5,820,987 Net unrealized appreciation (depreciation) of invest- ments 573,295 470,266 5,444,668 Contributions: Employer allocated - - 2,924,425 Employer unallocated - - 301,264 Employees 941,236 414,203 - Benefit payments for terminations and with- drawals (1,788,851) (1,152,315) (10,572,926) Interest expense - - (48,276) Transfers between funds - net 1,465,172 1,604,788 (2,052,746) Change in net assets available for benefits 2,157,669 2,232,353 2,174,748 Net assets available for benefits - beginning of year 8,497,014 3,506,524 41,520,529 Net assets available for benefits - end of year $ 10,654,683 5,738,877 43,695,277 (Continued) /TABLE THE LL&E SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits by Fund December 31, 1996
TOTAL Investment income: Interest and royalties $ 681,674 Dividends: Capital Stock of The Louisiana Land and Exploration Company 238,546 Other investments 646,249 884,795 Interest income on loans to participants 282,207 Net realized gains (losses) on disposition of invest- ments 3,553,884 Net unrealized appreciation (depreciation) of invest- ments 12,287,476 Contributions: Employer allocated 2,924,425 Employer unallocated 301,264 Employees 2,906,466 Benefit payments for terminations and with- drawals (19,622,361) Interest expense (48,276) Transfers between funds - net - Changes in net assets available for benefits 4,151,554 Net assets available for benefits - beginning of year 86,385,647 Net assets available for benefits - end of year $90,537,201 /TABLE THE LL&E SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits by Fund December 31, 1995
Participant Directed FUND FUND FUND A B C Investment income: Interest and royalties $ - - 16,127 Dividends: Capital Stock of The Louisiana Land and Exploration Company 27,195 - - Other investments - - - 27,195 - - Interest income on loans to participants 179,375 (1,836,295) - Net realized gains (losses) on disposition of invest- ments 173,340 - (2,337) Net unrealized appreciation (depreciation) of invest- ments 675,537 - (26,773) Contributions: Employer allocated - - - Employer unallocated - - - Employees 260,644 - - Benefit payments for terminations and with- drawals (371,897) (141,390) (1,402) Interest expense - - - Transfers between funds - net (591,910) 1,887,495 (6,710) Changes in net assets available for benefits 352,284 (90,190) (21,095) Net assets available for benefits - beginning of year 3,311,368 4,263,797 195,349 Net assets available for benefits - end of year $ 3,663,652 4,173,607 174,254 (Continued) /TABLE THE LL&E SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits by Fund December 31, 1995
Participant Directed FUND FUND FUND D E F Investment income: Interest and royalties $ 497,941 371,075 - Dividends: Capital Stock of The Louisiana Land and Exploration Company - - - Other investments - - 325,371 - - 325,371 Interest income on loans to participants 353,429 347,211 612,190 Net realized gains (losses) on disposition of invest- ments - 274,227 1,967,206 Net unrealized appreciation (depreciation) of invest- ments - 143,404 885,263 Contributions: Employer allocated - - - Employer unallocated - - - Employees 550,724 349,202 1,109,800 Benefit payments for terminations and with- drawals (1,472,712) (499,621) (1,461,358) Interest expense - - - Transfers between funds - net 3,443,564 (4,014,555) (3,170,279) Changes in net assets available for benefits 3,372,946 (3,029,057) 268,193 Net assets available for benefits - beginning of year 6,664,318 6,603,344 10,970,323 Net assets available for benefits - end of year $ 10,037,264 3,574,287 11,238,516 (Continued) /TABLE THE LL&E SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits by Fund December 31, 1995
Employer Participant Directed Directed FUND FUND FUND G H A Investment income: Interest and royalties $ 149,942 - 50 Dividends: Capital Stock of The Louisiana Land and Exploration Company - - 256,655 Other investments - 156,484 - - 156,484 256,655 Interest income on loans to participants 473,923 102,427 66,905 Net realized gains (losses) on disposition of invest- ments 811,443 291 (794,835) Net unrealized appreciation (depreciation) of invest- ments 938,680 28,679 7,449,709 Contributions: Employer allocated - - 3,095,618 Employer unallocated - - 233,339 Employees 774,799 219,386 - Benefit payments for terminations and with- drawals (377,615) (25,120) (2,640,641) Interest expense - - (255,961) Transfers between funds - net (489,444) 3,024,377 (82,538) Changes in net assets available for benefits 2,281,728 3,506,524 7,328,301 Net assets available for benefits - beginning of year 6,215,286 - 34,192,228 Net assets available for benefits - end of year $ 8,497,014 3,506,524 41,520,529 (Continued) /TABLE THE LL&E SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits by Fund December 31, 1995
TOTAL Investment income: Interest and royalties $ 1,035,135 Dividends: Capital Stock of The Louisiana Land and Exploration Company 283,850 Other investments 481,855 765,705 Interest income on loans to participants 299,165 Net realized gains (losses) on disposition of invest- ments 2,429,335 Net unrealized appreciation (depreciation) of invest- ments 10,094,499 Contributions: Employer allocated 3,095,618 Employer unallocated 233,339 Employees 3,264,555 Benefit payments for terminations and with- drawals (6,991,756) Interest expense (255,961) Transfers between funds - net - Changes in net assets available for benefits 13,969,634 Net assets available for benefits - beginning of year 72,416,013 Net assets available for benefits - end of year $86,385,647 /TABLE THE LL&E SAVINGS PLAN Notes to Financial Statements December 31, 1996 and 1995 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Presentation The accompanying financial statements have been prepared on the accrual basis and present the equity available to participants in The LL&E Savings Plan (the Plan) and changes in equity of the Plan. Certain amounts have been reclassified to conform to the current period's presen- tation. Benefits payable for terminations and withdrawals are included in Plan equity and are charged to income when paid. This accounting method differs from that required in Department of Labor Form 5500 which requires benefits payable to be accrued and charged to income in the period the liability arises. Accordingly, net assets available for benefits as of December 31, 1996 and 1995 and changes in net assets available for benefits for each of the years in the two-year period ended December 31, 1996 differ from that reported in Form 5500 as follows:
Net Assets Available for Benefits 1996 1995 As reported herein $90,537,201 86,385,647 Effect of accrued benefits payable (5,010,805) (1,122,952) As reported in Form 5500 $85,526,396 85,262,695
Change in Net Assets Available for Benefits 1996 1995 As reported herein $ 4,151,554 13,969,634 Effect of accrued benefits payable (3,887,853) 1,510,550 As reported in Form 5500 $ 263,701 15,480,184
THE LL&E SAVINGS PLAN Notes to Financial Statements B. Investment in Trust Funds managed by the Trustees Prior to July 1995, a trust agreement between LL&E and Putnam Fiduciary Trust Company (Putnam), provided for Putnam to maintain trust funds on behalf of the Plan. In July 1995, LL&E changed the Plan's trustee to Charles Schwab Trust Company (Schwab). The major provisions of the Plan were unaffected by this change as were Funds A, B and C. However, the Participants' four investment options which were managed by Putnam as represented by Funds D, E, F and G were changed to provide five diverse mutual funds maintained by Schwab designated as Funds D, E, F, G and H. The trust funds were and are now segregated into investment funds as follows: o Fund A for employees' and employer's contributions which are invested primarily in Capital Stock of LL&E. o Fund B for loans to participants. The notes receivable resulting from loans to participants are maintained in this fund. Benefit payments for terminations and withdrawals in this fund relate to the cancellation of loans by participants with- drawing from the Plan. o Fund C contains LL&E Royalty Trust Units of Beneficial Interest. No new amounts are being invested in this fund, except that income on existing Royalty Trust Units and any repayments of loans to participants in this fund are reinvested in additional Units. o Fund D for employees' contributions which, prior to June 1995, were invested in the Putnam Daily Dividend Trust, a mutual fund which invested in money market instruments. Beginning in July 1995, these contributions are invested in the Schwab Value Advantage Money Fund, which invests in high quality short-term debt securities such as certificates of deposit, commercial paper and publically traded bonds. THE LL&E SAVINGS PLAN Notes to Financial Statements o Fund E for employees' contributions which, prior to July 1995, were invested in the Putnam U.S. Govern- ment Guaranteed Securities Income Trust, a fund which invested exclusively in securities backed by the full faith and credit of the United States government and repurchase agreements with respect to these securities. Beginning in July 1995, these contributions are invested in the Vanguard Bond Index Total Bond Market Fund, which invests in a portfolio of fixed income securities selected to match the Lehman Brothers Aggregate Bond Index which encompasses U.S. Treasury and agency securities, corporate bonds and mortgage-backed securities, with maturities greater than one year. o Fund F for employees' contributions which, prior to July 1995, were invested in the Putnam Fund for Growth and Income, a fund which invested primarily in a variety of common stocks. Beginning in July 1995, these contributions are invested in the Vanguard Index Trust 500 Portfolio, which invests in all 500 stocks in the Standard & Poor's 500 Index in approximately the same proportions as they are represented in the Index. o Fund G for employees' contributions which, prior to July 1995, were invested in the Putnam Convertible Income-Growth Trust, a fund which invested primarily in convertible bonds and convertible preferred stocks. Beginning in July 1995, these contributions are invested in the PBHG Growth Fund,which invests in common stocks and convertible securities of companies with market capitalization or annual revenues under $1.5 billion. o Fund H, a new fund for employees' contributions which, beginning in July 1995, are invested in the Janus Worldwide Fund, which invests in common stocks of foreign and domestic companies. Participants in the Plan are permitted to direct the investment of their contributions to the Plan in any of Funds A, D, E, F, G or H and up to eight transfers per year between these funds are allowed on a daily basis. THE LL&E SAVINGS PLAN Notes to Financial Statements The investment and changes therein of all funds are determined through the use of quoted market prices. Realized gains or losses and unrealized appreciation or depreciation of investments are determined in accordance with Department of Labor regulations for Form 5500. The cost basis of investments are either fair market value at the beginning of the year and/or cost of current year additions, as appropriate. Dispositions of investments are on a first-in first-out basis. The number of participants by fund at December 31, 1996 was as follows: Number of Fund Participants A 682 B 304 C 99 D 315 E 267 F 483 G 493 H 359 Since, within certain limitations, investments may be made simultaneously in more than one fund by an individual participant, an individual may be included more than once in the above count. The individual participants in the Plan at December 31, 1996 numbered 682. THE LL&E SAVINGS PLAN Notes to Financial Statements 2. CONTRIBUTIONS AND BENEFITS The Plan is a contributory savings plan sponsored by LL&E. Individuals eligible for participation in the Plan are the employees of LL&E and of any affiliated corporation (as defined in the Plan) that has adopted the Plan. The major provisions of the Plan as of December 31, 1996 are as follows: A. Non-Contributory Participation The employer contributes monthly to the Plan participants' accounts an amount determined in accordance with the following schedule: Percent of Covered Credited Service Compensation Less than 5 years 2% 5 years or more 4% Non-contributory participation is not dependent on the eligible employees' contributory participation. B. Contributory Participation Employees are allowed to make tax-deferred contributions to the Plan in the amount of between 2% and 12% of compensation. The amount of tax-deferred contributions are limited by federal tax legislation. Where tax- deferred contributions elected by participants exceed these limitations, any excess tax-deferred contributions are distributed to the affected parties. The employer will contribute an amount to the participants' accounts based on a percentage of the dollar amount contributed voluntarily, if any, by the participants. The additional employer's contributions are applicable to voluntary participant contributions which are not in excess of 6% of covered compensation and are determined in accordance with the following schedule: Percent of Voluntary Contribution Matched Credited Service by Employer Less than 5 years 50% 5 years or more 100% THE LL&E SAVINGS PLAN Notes to Financial Statements Participants pay no federal income tax on their tax- deferred contributions or on the employer contributions, or on any earnings on their accounts, until withdrawals or distributions are made from their accounts. C. Other Significant Plan Provisions Participants in the Plan become fully vested in their account balance derived from employer contributions upon the earliest to occur of the following: o Completion of five years of service o Attainment of age 65 o Retirement pursuant to the early retirement provisions of The LL&E Pension Plan o Death o Termination of employment by reason of a reduction in labor force o Total disability, as defined in the Plan o In the event of a change in control, as defined in the Plan o Under certain circumstances in the event of a change in control as defined in The LL&E Special Termination Benefit Plan in the case of certain employees covered by said plan. Participants are at all times fully vested in their account balance derived from their own contributions, including any earnings or losses thereon. Participants may elect that the vested portions of employer and employee contributions, plus income or earnings thereon, be distributed to them in a lump sum i) as soon as practicable following termination of employ- ment, ii) on or about the date one year after termination of employment or iii) on or about age 65. Upon termi- nation, other than described above, nonvested employer contributions and earnings thereon are forfeited by participants and such amounts reduce employer contribu- tions under the Plan. THE LL&E SAVINGS PLAN Notes to Financial Statements Participants in the Plan may make a qualified plan rollover contribution or an individual retirement account rollover contribution, as defined in the Plan. The contributions may only be made if they meet the require- ments of a tax-free rollover for federal income tax purposes. Amounts are invested in Funds A, D, E, F, G or H as designated by the participant. Participants can withdraw all or any portion of their after-tax contributions, plus earnings thereon. Parti- cipants cannot withdraw any tax-deferred contributions or any earnings thereon while employed at LL&E. Participants may, as of any valuation date, withdraw all or any portion of their vested account balance derived from matching employer contributions, and any earnings thereon, subject to several specific rules as defined in the Plan. Participants may borrow (Fund B) from the portions of their account derived from employer contributions except ESOP's, transfers from the LL&E Benefit Plan and tax-free rollovers, and employee tax-deferred contributions, and any earnings thereon, subject to several specific rules as defined in the Plan. A participant may have two loans outstanding at any given time but no loan(s) from the Plan may be in excess of the lesser of $50,000 or 50% of the participant's vested account balance. Repayments will be made through bi-weekly payroll deductions over optional terms of from twelve to sixty months (in twelve month increments) and may be prepaid by paying the full outstanding balance. The annual loan interest rate is fixed from time to time at the prime rate. Loans are secured by the applicable participants' vested account balance. The amended and restated Plan document and subsequent amendments more fully explain the details of the Plan and are made available to Plan participants by the Plan administrator. THE LL&E SAVINGS PLAN Notes to Financial Statements 3. NET REALIZED GAINS (LOSSES) ON DISPOSITION OF INVESTMENTS The following is a summary of net realized gains (losses) on the disposition of investments for the years ended December 31, 1996 and 1995:
1996 1995 Aggregate market value of Capital Stock of LL&E sold $17,896,926 9,984,928 Aggregate cost basis of Capital Stock of LL&E sold 15,301,126 10,606,424 Net realized gains (losses) on sale of Capital Stock of LL&E 2,595,800 (621,496) Aggregate market value of other investments sold 19,612,205 50,876,916 Aggregate cost basis of other investments sold 18,654,121 47,826,085 Net realized gains (losses) on sale of other investments 958,084 3,050,831 $ 3,553,884 2,429,335
4. EMPLOYEE STOCK OWNERSHIP PLAN FUND In November 1987, the Employee Stock Ownership Fund (ESOP) was created using funds borrowed from LL&E. To fund the ESOP I, LL&E borrowed $10.2 million (unsecured) from a bank and loaned the proceeds to the ESOP I. The ESOP I then used the proceeds to acquire 374,678 shares of LL&E Capital Stock at an average market price of $27 1/8 per share. The loan to the ESOP I was secured by LL&E's Capital Stock owned by the ESOP I, was subject to substantially the same repayment terms as LL&E's bank loan (November 1994) and the interest rate was fixed at 8.2%. By amendment dated November 19, 1994 to the loan agreement, LL&E's loan to ESOP I was extended to November 1997 and the interest rate was fixed at 7.4%. The ESOP I repaid the loan, with interest, from LL&E's contributions to the fund along with quarterly dividends paid on the Capital Stock acquired with the ESOP I loan proceeds. THE LL&E SAVINGS PLAN Notes to Financial Statements The Capital Stock of LL&E acquired by the ESOP I was initially classified as unallocated by the Plan. As principal payments were made to LL&E, shares of Capital Stock were reclassified to allocated in an amount equal to the principal payment divided by the average purchase price of $27 1/8. In May 1996, the final loan payment was made to LL&E and all shares of Capital Stock have been reclassified to allocated. On May 3, 1988, LL&E obtained additional financing of approximately $14 million (unsecured) from a bank and loaned the proceeds to the ESOP II. The ESOP II then used the proceeds to acquire 461,690 shares of LL&E Capital Stock at an average purchase price of $30.25 per share. The loan to the ESOP II is secured by LL&E's Capital Stock owned by the ESOP II, was subject to substantially the same repayment terms as LL&E's bank loan (May 1995) and the interest rate was fixed at 8.2%. By amendment dated May 31, 1995 to the loan agreement, LL&E's loan to ESOP II was extended to May 1998 and the interest rate was fixed at 6.1%. The ESOP II will repay the loan, with interest, from LL&E's contributions to the fund along with quarterly dividends paid on the Capital Stock acquired with the ESOP II loan proceeds. The Capital Stock of LL&E acquired by the ESOP II was initially classified as unallocated by the Plan. As principal payments are made to LL&E, shares of Capital Stock are reclassified to allocated in an amount equal to the principal payment divided by the average purchase price of $30.25. As of December 31, 1996, all shares of Capital Stock have been reclassified to allocated. The final loan payment to LL&E was made in January 1997. 5. DISTRIBUTION OF LL&E ROYALTY TRUST UNITS OF BENEFICIAL INTEREST LL&E Royalty Trust Units of Beneficial Interest (the Units) were distributed by LL&E to holders of record of its Capital Stock on June 22, 1983 on the basis of one Unit for each two shares of Capital Stock owned on such date. The Units received by the Plan (Fund C) were allocated among the respective accounts of participants in proportion to the number of shares of Capital Stock in each account at the record date of the distribution of the Units and are maintained separately. Monthly royalty income attributable to the Units are allocated to participants on the same basis and are reinvested in additional Units. THE LL&E SAVINGS PLAN Notes to Financial Statements Participants have the right to decide when the Units allocated to their respective accounts will be sold. Participants may exercise a single election to sell all of their Units and have the proceeds reinvested in Capital Stock of LL&E which will continue to be held in the Plan. 6. PLAN TERMINATION The Board of Directors of LL&E expects to continue the Plan indefinitely; however, they reserve the right to amend, modify or discontinue the Plan at any time. In the event of Plan termination, participants will become fully vested in their accounts. 7. FEDERAL INCOME TAXES LL&E has received a favorable determination letter from the Internal Revenue Service dated July 25, 1995, for the Plan as restated June 1, 1994, for all amendments adopted through June 15, 1994. The determination letter was approved subject to the adoption of the First Amendment to the restated Plan, which was adopted on August 21, 1995. The letter states that the Plan qualifies under the provisions of Section 401(a) of the Internal Revenue Code. The Plan has subsequently been amended. LL&E does not expect the Plan's qualifications under the provisions of 401(a) and 401(k) of the Internal Revenue Code or its federal income tax exempt status under Section 501(a) of the Internal Revenue Code to change due to the amendments since the restatement. 8. FEES AND EXPENSES Expenses incurred in administering the Plan are paid by the employer. Expenses in connection with investment security transactions are added to cost or deducted from proceeds, as applicable, of additions or retirements. SCHEDULE I THE LL&E SAVINGS PLAN Item 27a - Schedule of Assets Held for Investment Purposes December 31, 1996
Number of shares, units or principal Current amount Cost value Cash and cash equivalents 47 $ 47 47 The Louisiana Land and Exploration Company common stock ($0.15 par value 847,645 27,180,682 45,456,396 LL&E Royalty Trust units 41,382 260,744 201,779 Schwab Value Advantage Fund units 9,308,031 9,308,031 9,308,031 Vanguard Bond Index Total Bond Market Fund units 282,135 2,748,213 2,776,207 Vanguard Index Trust 500 Portfolio Fund units 191,783 10,734,608 13,263,744 PGHG Growth Fund units 405,584 9,572,864 10,654,683 Janus Worldwide Fund units 170,344 5,253,225 5,738,877 Participants loans - 3,161,633* Total Assets Held for Investment Purposes $65,058,463 90,561,397 * Participant loans bear interest between 8.25% and 8.75% and have maturities ranging from one to five years. /TABLE SCHEDULE II THE LL&E SAVINGS PLAN ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS DECEMBER 31, 1996
Expenses Identify of Purchase Selling Incurred With Party Involved Description of Assets Price Price Transaction Category (iii) - Series of Securities Transactions LL&E Common Stock $4,178,332 $ - N/A - 17,896,927 N/A Schwab Value Advantage 6,747,476 - N/A Money Fund - 7,476,709 N/A PBHG Growth Fund 5,652,830 - N/A - 4,441,525 N/A There were no (i), (ii), or (iv) reportable transactions during the year. (Continued)
SCHEDULE II (Continued) THE LL&E SAVINGS PLAN ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS DECEMBER 31, 1996
Cost Current Value Net Identify of of of assets on Gain Party Involved Description of Assets Assets Transaction Date (Loss) Category (iii) - Series of Securities Transactions LL&E Common Stock $4,178,332 $ 4,178,332 N/A 15,301,126 17,896,927 2,595,801 Schwab Value Advantage 6,747,476 6,747,476 N/A Money Fund 7,476,709 7,476,709 0 PBHG Growth Fund 5,652,830 5,652,830 N/A 4,069,259 4,441,525 372,266
EX-23 2 Exhibit 23 The Benefits Committee The Louisiana Land and Exploration Company: We consent to incorporation by reference in the Registration Statements No. 2-98948, No. 33-22338 and No. 33-56209 on Form S-8 of The Louisiana Land and Exploration Company of our report dated June 00, 1997, relating to the statements of net assets available for benefits of The LL&E Savings Plan as of December 31, 1996 and 1995 and the related statements of changes in net assets available for benefits and related schedules for each of the years then ended, which report appears in the December 31, 1996 annual report on Form 11-K of The LL&E Savings Plan. s/ KPMG PEAT MARWICK LLP KPMG PEAT MARWICK LLP New Orleans, Louisiana June 25, 1997 -----END PRIVACY-ENHANCED MESSAGE-----