-----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, QPI7zvDGdPA4pUP/MJ9bhBcwWVvKkH7QFVWOI7RbbMUeASNW/NCP514y+Lb1njfX kBmZUmvNJgnFKmqapQU2fA== 0000094328-99-000014.txt : 19990629 0000094328-99-000014.hdr.sgml : 19990629 ACCESSION NUMBER: 0000094328-99-000014 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEWART & STEVENSON SERVICES INC CENTRAL INDEX KEY: 0000094328 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 741051605 STATE OF INCORPORATION: TX FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-11443 FILM NUMBER: 99653645 BUSINESS ADDRESS: STREET 1: 2707 N LOOP W CITY: HOUSTON STATE: TX ZIP: 77008 BUSINESS PHONE: 7138687700 MAIL ADDRESS: STREET 1: P O BOX 1637 CITY: HOUSTON STATE: TX ZIP: 77251-1637 11-K 1 401(K) PLAN 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 [NO FEE REQUIRED]FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM ____________________ TO ____________________ COMMISSION FILE NUMBER 0-8493 A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM THAT OF THE ISSUER NAMED BELOW: STEWART & STEVENSON 401(K) SAVINGS PLAN B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE: STEWART & STEVENSON SERVICES, INC. 2707 NORTH LOOP WEST HOUSTON, TEXAS 77008 FINANCIAL STATEMENTS In accordance with Item 4 of the Required Information for Form 11-K, the following statements of financial condition for the Stewart & Stevenson 401(k) Savings Plan have been prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder. INDEX TO THE FINANCIAL STATEMENTS AND SCHEDULE Report of Independent Public Accountants Item 1. Statement of Net Assets Available for Benefits as of December 31, 1998 and 1997. Item 2. Statement of Changes in Net Assets Available for Benefits for the Years Ended December 31, 1998 and December 31, 1997. Notes to Financial Statements Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1998. Schedule II - Item 27d - Schedule of Reportable Transactions for the Year Ended December 31, 1998. STEWART & STEVENSON 401(K) SAVINGS PLAN FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 TOGETHER WITH AUDITORS' REPORT REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Administrative Committee of the Stewart & Stevenson 401(k) Savings Plan: We have audited the accompanying statements of net assets available for benefits of the Stewart & Stevenson 401(k) Savings Plan as of December 31, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements and the supplemental schedules referred to below are the responsibility of the Plan's administrator. Our responsibility is to express an opinion on these financial statements and supplemental schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Stewart & Stevenson 401(k) Savings Plan as of December 31, 1998 and 1997, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes as of December 31, 1998, and reportable transactions for the year ended December 31, 1998, 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 supplemental schedules 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. /s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Houston, Texas June 15, 1999 STEWART & STEVENSON 401(k) SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1998 AND 1997
1998 1997 ASSETS: Investments, at fair value- Merrill Lynch Global Allocation Fund, Inc. $6,676,284 $6,667,131 Merrill Lynch Corporate Bond Fund, Inc., Intermediate Term 2,733,894 1,734,374 Merrill Lynch Retirement Preservation Trust 3,929,727 2,660,658 AIM Value Fund 17,196,524 11,138,933 American Balanced Fund 5,033,648 3,988,951 Stewart & Stevenson Services, Inc., Common Stock 995,812 1,789,246 Franklin Small Cap Growth Fund 590,274 - Hotchkis & Wiley International Fund 421,998 - MFS - Massachusetts Investors Trust 1,145,066 - Participant loans 1,449,798 890,184 ----------- ----------- Total investments 40,173,025 28,869,477 Receivables- Employer contributions 86,386 31,454 Participant contributions 269,644 170,168 Cash 21,740 66 ----------- ----------- 377,770 201,688 NET ASSETS AVAILABLE FOR BENEFITS $40,550,795 $29,071,165 =========== ===========
The accompanying notes are an integral part of these financial statements. STEWART & STEVENSON 401(k) SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997 ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income- Dividends $2,725,323 $2,648,260 Interest 94,324 65,432 Net depreciation in fair value of common stock (1,144,502) (164,015) Net appreciation in fair value of mutual funds 2,393,021 658,468 ----------- ----------- Total investment income 4,068,166 3,208,145 Contributions- Employer 1,736,118 1,079,221 Participant 7,377,837 5,875,460 Participant rollovers 222,737 306,513 Other additions- Transfer from the Sierra Plan (Note 7) - 1,562,178 Other receipts - 38,347 ----------- ----------- Total contributions and other additions 9,336,692 8,861,719 ----------- ----------- Total additions 13,404,858 12,069,864 ----------- ----------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Distributions to participants 1,676,623 1,967,231 Withdrawals 159,427 50,105 Administrative expenses 89,178 69,418 ----------- ----------- Total deductions 1,925,228 2,086,754 ----------- ----------- NET INCREASE 11,479,630 9,983,110 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 29,071,165 19,088,055 ----------- ----------- End of year $40,550,795 $29,071,165 =========== ===========
The accompanying notes are an integral part of these financial statements. STEWART & STEVENSON 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. DESCRIPTION OF THE PLAN: General The Stewart & Stevenson 401(k) Savings Plan (the Plan or the Stewart & Stevenson Plan), adopted effective January 1, 1994, is a trusteed, defined contribution plan established for the benefit of all eligible employees of Stewart & Stevenson Services, Inc., and its subsidiaries, C. Jim Stewart & Stevenson, Inc., Stewart & Stevenson Power, Inc., Stewart & Stevenson Operations, Inc., Stewart & Stevenson Transportation, Inc., Stewart & Stevenson International, Inc., Stewart & Stevenson Technical Services, Inc., Stewart & Stevenson de Venezuela, S.A., Creole Stewart & Stevenson, Inc., Stewart & Stevenson Vehicle Services, Inc., Sierra Detroit Diesel Allison, Inc., Stewart & Stevenson Oiltools, Inc., Ipsc Co., Inc., PAMCO Services International, Inc., Stewart & Stevenson Tug, LLC, Stewart & Stevenson Vehicle Systems, L.P., and Pow-R-Quik Limited (the Participating Stewart & Stevenson Employers). In conjunction with the sale of Stewart & Stevenson Service, Inc.'s gas turbine operations, the following entities became additional participating employers of the Plan effective February 1, 1998: Canyon East Wind, L.P., GE Packaged Power, Inc., GE Packaged Power Services, Inc., GE Energy Plant Operations, Inc., and GE Packaged Power Sales, Inc., or their successors (the Participating GE Employers). All of these entities are collectively referred to as "the Employers" or "the Company." Eligible employees of the gas turbine operations who became employees of the Participating GE Employers continued to participate in the Plan. Employees of the Participating GE Employers who were hired after the sale are eligible to participate in the Plan after completing the eligibility requirements of the Plan. As a result of the acquisition of Sierra Detroit Diesel Allison, Inc., by the Company, the Sierra Detroit Diesel Allison, Inc. Retirement Plan (the Sierra Plan) merged into the Stewart & Stevenson Plan, effective April 14, 1997. All assets were transferred in-kind and each member of the Sierra Plan became a participant in the Stewart & Stevenson Plan (see Note 7). The following description of the Plan provides a summary of the Plan. Participants should refer to the Plan document for a more complete description of the Plan's provisions. Plan Administration The Plan is administered by a committee (the Administrative Committee) which is appointed by the board of directors of Stewart & Stevenson Services, Inc. This committee is empowered to act on all matters affecting the Plan including, among other things, interpreting the Plan's provisions, determining the eligibility of employees to become participants in the Plan, selecting the funds to be made available in the Plan and determining any person's right to a benefit under the Plan. The members of the Administrative Committee do not receive compensation for services rendered to the Plan. Custodial safekeeping of Plan assets is performed by Merrill Lynch Trust Company (the Trustee). Individual participant record keeping is performed under Merrill Lynch, Pierce, Fenner & Smith Incorporated (the Recordkeeper). Among other duties, the Trustee is to receive contributions, collect the income from the Plan's assets and make disbursements from the Plan's assets as directed by the Administrative Committee. The Recordkeeper's duties include processing and maintaining participant data, participant statements, and contributions and distributions for purposes of recordkeeping. Participation Employee participation in the Plan is voluntary. All employees who are at least 21 years of age are eligible to participate in the Plan after completion of one year of service during which 1,000 or more hours are worked. Investments The following details the investment funds available to Plan participants: Fund 1 Merrill Lynch Global Allocation Fund, Inc., Class A (ML Global) Fund 2 Merrill Lynch Corporate Bond Fund, Inc., Intermediate Term, Class A (ML Corporate) Fund 3 Merrill Lynch Retirement Preservation Trust (ML Retirement) Fund 4 AIM Value Fund (AIM) Fund 5 American Balanced Fund (American) Fund 6 Stewart & Stevenson Services, Inc., Common Stock (S&S Services) Effective April 1, 1998, the following investment funds were added to the Plan and made available to Plan participants: Fund 7 Franklin Small Cap Growth Fund (Franklin) Fund 8 Hotchkis & Wiley International Fund (Hotchkis & Wiley) Fund 9 MFS - Massachusetts Investors Trust (MFS) Also, effective April 1, 1998, participants were given the option to choose among the following model fund portfolios (shown collectively as Fund 10) which contain a combination of the other above-listed investment funds: a. Merrill Lynch Conservative Goal Manager Model Fund - This fund invests 35 percent of its assets in the Merrill Lynch Retirement Preservation Trust, 55 percent in the Merrill Lynch Corporate Bond Fund, Inc., Intermediate Term, 8 percent in the MFS - Massachusetts Investors Trust, 1 percent in the Franklin Small Cap Growth Fund and 1 percent in the Hotchkis & Wiley International Fund. b. Merrill Lynch Moderate Goal Manager Model Fund - This fund invests 10 percent of its assets in the Merrill Lynch Retirement Preservation Trust, 50 percent in the Merrill Lynch Corporate Bond Fund, Inc., Intermediate Term, 20 percent in the MFS - Massachusetts Investors Trust, 14 percent in the Franklin Small Cap Growth Fund and 6 percent in the Hotchkis & Wiley International Fund. c. Merrill Lynch Aggressive Goal Manager Model Fund - This fund invests 10 percent of its assets in the Merrill Lynch Retirement Preservation Trust, 10 percent in the Merrill Lynch Corporate Bond Fund, Inc., Intermediate Term, 26 percent in the MFS - Massachusetts Investors Trust, 26 percent in the Franklin Small Cap Growth Fund and 28 percent in the Hotchkis & Wiley International Fund. Effective February 1, 1998, employees of the Participating GE Employers are no longer allowed to invest contributions in the S&S Services fund or to transfer balances from other investment funds into the S&S Services fund. Contributions Participants may elect to contribute 1 percent to 15 percent of their wages as reported to the Internal Revenue Service, subject to certain limitations, as defined, in any or all six funds. Contributions from employees are recorded in the period in which the Company makes payroll deductions from Plan participants. For employees of the Participating Stewart & Stevenson Employers, the matching employer contribution is 25 percent of the first 6 percent of the participant's contribution. For employees of the Participating GE Employers, effective February 1, 1998, the matching employer contribution is 50 percent of the first 6 percent of the participant's contribution. Matching contributions from the Employers are made in the same period as the corresponding employee contributions. Participants may also make rollover contributions to the Plan representing distributions from other qualified defined benefit or contribution plans. Participants can change the allocation of their contributions in the investment funds or they can discontinue, increase or decrease their contribution rate within the 1 percent to 15 percent range as permitted by the Plan. Participants' Benefits Participants are fully vested in their participant contributions, rollovers and earnings thereon at all times. Participants shall have a 100 percent vested interest in their employer contributions upon attaining age 65, the normal retirement age according to the Plan. Those participants who terminate prior to normal retirement age are entitled to a benefit pursuant to the value of their vested interests in their accounts as follows: Vested Years of Vesting Service Interest Less than 3 years 0% 3 years 20 4 years 40 5 years 60 6 years 80 7 or more years 100 Forfeited employer contributions are used to pay Plan expenses or applied as a reduction of future employer matching contributions. The Administrative Committee anticipates and believes that the Plan will continue without interruption but reserves the right to terminate the Plan. In the event of termination, the assets of the Plan, less expenses of liquidation, will be allocated to the participants in accordance with the terms of the Plan. Withdrawals and Loans Participant benefits are payable to participants or to a designated beneficiary in the event of their retirement, death or termination of employment. In limited circumstances, account withdrawals may be made for financial hardship in accordance with the Plan. Benefit payments to withdrawing employees are made in lump-sum payments. A participant may borrow from his account up to a maximum equal to the lesser of $50,000 or 50 percent of his vested account balance. Loan transactions are treated as a transfer to (from) the investment fund from (to) the participant loan fund. The minimum loan is $1,000 and will bear interest at a rate established by the Administrative Committee to be commensurate with the interest rates charged by persons in the business of lending money. The loans shall not exceed five years, except for loans for the purpose of acquiring a principal residence. The loans are secured by the balance in the participant's account. Principal and interest are paid ratably through periodic payroll deductions. 2. SUMMARY OF ACCOUNTING POLICIES: Basis of Accounting The financial statements of the Plan have been prepared on the accrual basis of accounting. Use of Estimates and Assumptions 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 changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Investment Valuation The Merrill Lynch Retirement Preservation Trust Fund is a common/collective trust fund investing primarily in guaranteed investment contracts and U.S. Government securities. The guaranteed investment contracts are fully benefit responsive and are recorded at contract value, which approximates fair value. Contract value is determined based on contributions made under the contract plus interest earned at the contract's rate less funds used to pay investment fees and withdrawals. Effective yields of the guaranteed investment contracts are 6.55 percent and 6.56 percent for the years ended December 31, 1998 and 1997, respectively. The Plan's investments in mutual funds and common stock are recorded at cost when purchased but are adjusted to market value based upon published market prices, by the Trustee, for financial reporting purposes. Recognition of Income and Expenses The net change in the difference between market value of the investments on hand at December 31, and the market value of the investments on hand as of the beginning of the year, is recorded as unrealized appreciation (depreciation) of investments. Realized gains or losses on the sale of investments and withdrawals of investments are based on the value of the assets as of the beginning of the year or the time of purchase during the year, if later. Unrealized appreciation (depreciation) of investments and realized gains or losses are recorded in the statement of changes in net assets available for benefits as net appreciation (depreciation) in fair value of investments. Interest and dividend income is recorded on the accrual basis by the Trustee. Plan income or loss for each investment fund is allocated to the participants daily in the ratio that each participant's account balance bears to all account balances. The Company may pay all expenses incurred in the administration of the Plan, but it shall not be obligated to do so. Any such expenses and fees not paid by the Company during 1998 and 1997 were paid from the Plan. 3. RISKS AND UNCERTAINTIES: The Plan provides for various investments in common/collective trust funds, mutual funds and common stock. Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits and participant account balances. 4. FEDERAL INCOME TAXES: The Plan obtained its latest determination letter on September 3, 1994, in which the Internal Revenue Service stated that the Plan, as originally established, was in compliance with the applicable requirements of the Internal Revenue Code (the Code). Although the Plan has been amended since receiving the determination letter, the Administrative Committee believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, the Administrative Committee believes that the Plan is qualified and is tax-exempt as of December 31, 1998 and 1997. 5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500: The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31, 1998 and 1997:
1998 1997 Net assets available for benefits per the financial statements $40,550,795 $29,071,165 Less- Amounts allocated to withdrawing participants (231,295) - ----------- ----------- Net assets available for benefits per the Form 5500 $40,319,500 $29,071,165 =========== ===========
The following is a reconciliation of distributions to participants and withdrawals per the financial statements to the Form 5500 for the year ended December 31, 1998 and 1997:
1998 1997 Distributions to participants and withdrawals per the financial statements $1,836,050 $2,017,336 Add- Amounts allocated to withdrawing participants at December 31, 1998 and 1997 231,295 - Less- Amounts allocated to withdrawing participants at December 31, 1997 and 1996 - (166,435) ---------- ---------- Distributions to participants and withdrawals per the Form 5500 $2,067,345 $1,850,901 ========== ==========
Amounts allocated to withdrawing participants are recorded on the Form 5500 for distributions that have been processed and approved for payment prior to December 31 but not yet paid as of that date. 6. NONEXEMPT TRANSACTION: The reimbursement of certain forfeitures to the Company in 1996 constituted a lending of such monies to the Company until corrected on June 25, 1997. As such, this transaction represented a nonexempt transaction for the year ended December 31, 1997, between the Company and the Plan. 7. TRANSFER FROM THE SIERRA PLAN: On April 12, 1997, Stewart & Stevenson Services, Inc., purchased all of the outstanding shares of Sierra Detroit Diesel Allison, Inc. In conjunction with the purchase, effective April 14, 1997 (the Merger Date), the Sierra Detroit Diesel Allison, Inc. Retirement Plan (the Sierra Plan) merged with and into the Plan. The assets of the Sierra Plan were liquidated into cash and transferred to the Plan, along with in-kind transfers of outstanding loan amounts from the Sierra Plan trustee, totaling $1,562,178. These amounts were invested in the closest corresponding fund under the Plan, as determined by the Administrative Committee. As such, each member of the Sierra Plan became a participant in the Plan as of the Merger Date. Notwithstanding any provision of the Plan to the contrary, each former Sierra Plan participant with three or more years of service as of the Plan Merger Date (a Grandfathered Sierra Plan Participant) shall have a vested and nonforfeitable interest in contributions allocated to his employer contribution account in the Plan on and after the Merger Date (and earnings thereon) in accordance with the following schedule: Years of Vested Vesting Service Interest Less than 1 year 0% 1 year 20 2 years 40 3 years 60 4 years 80 5 years 100 Each former Sierra Plan participant with at least one year of service (determined under the provisions of the Sierra Plan) as of the Plan Merger Date, who is not a Grandfathered Sierra Plan Participant, shall have his vesting percentage in contributions allocated to his employer contribution account in the Plan on or after the Plan Merger Date (and earnings thereon) determined in accordance with the terms of the Plan provided, however, that in no case shall such vesting percentage be less than his vesting percentage under the Sierra Plan on the Plan Merger Date. 8. SALE OF CONSTRUCTION EQUIPMENT DIVISION: On October 6, 1997, the Company sold substantially all of the net assets of the Company's construction equipment franchise. In conjunction with the sale, the benefits of such participants under the Plan shall be distributed as soon as administratively feasible, subject to any required consents. Benefits of such participants were distributed during 1998 and 1997. 9. SUBSEQUENT EVENT: Effective January 1, 1999, the Plan was amended and restated in its entirety to incorporate the following plan changes for employees of the Participating Stewart & Stevenson Employers: a. The eligibility waiting period was changed from one year to 30 days, and the 21-year age requirement was eliminated. b. Newly eligible employees are automatically enrolled for a 1 percent contribution unless otherwise elected. This 1 percent contribution is 100 percent matched, with such match fully vested. c. Employee contributions in excess of 1 percent of compensation but not more than 6 percent are matched at 25 percent with such matching contributions and prior matching contributions to be vested under the following schedule: Years of Vested Vesting Service Interest Less than 1 year 0% 1 year 20 2 years 40 3 years 60 4 years 80 5 years 100 d. Maximum permissible employee contributions are increased from 15 percent of compensation to 20 percent of compensation. Effective January 1, 1999, Contract Employee Services, Inc. (CES), acquired certain employees of GE Energy Plant Operations, Inc., and became a participating employer of the Plan. Effective April 1, 1999, CES terminated its participation in the Plan and transferred its participation in the Plan to the trustee of a new plan to be established by CES. Effective April 1, 1999, the Participating GE Employers terminated their participation in the Plan and transferred their participation in the Plan to the trustee of a new plan to be established by the GE entities. 10. ALLOCATION TO INVESTMENT FUNDS: The following statements reflect the allocation of net assets available for benefits and changes in net assets available for benefits to the separate investment funds as of and for the years ended December 31, 1998 and 1997: Statement of Net Assets Available for Benefits by Investment Fund As of December 31, 1998
Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 ML Global ML Corporate ML Retirement AIM American S&S SERVICES --------- ------------ ------------- ------------ ------- -------------- Assets- Investments, at fair value- Merrill Lynch Global Allocation Fund, Inc. $6,676,284 $ - $ - $ - $ - $ - Merrill Lynch Corporate Bond Fund, Inc., Intermediate Term - 2,360,881 - - - - Merrill Lynch Retirement Preservation Trust - - 3,779,105 - - - AIM Value Fund - - - 17,196,524 - - American Balance Fund - - - - 5,033,648 - Stewart & Stevenson Services, Inc., Common Stock - - - - - 995,812 Franklin Small Cap Growth Fund - - - - - - Hotchkis & Wiley International Fund - - - - - - MFS - Massachusetts Investors Trust - - - - - - Participant loans - - - - - - ---------- ----------- ------------ ----------- ---------- ----------- Total investments 6,676,284 2,360,881 3,779,105 17,196,524 5,033,648 995,812 Receivables- Employer contributions 11,809 5,097 9,649 28,160 9,953 2,583 Participant contributions 35,000 14,386 30,377 89,602 29,630 8,392 Cash - - - - - - ---------- ----------- ------------ ----------- ---------- ----------- 46,809 19,483 40,026 117,762 39,583 10,975 ---------- ----------- ------------ ----------- ---------- ----------- Net assets available for benefits $6,723,093 $2,380,364 $3,819,131 $17,314,286 $5,073,231 $1,006,787 ========== ========== ========== =========== ========== ==========
(Continued)
Fund 8 Fund 10 Fund 7 Hotchikis Fund 9 Model Participant Franklin & Wiley MFS Portfolios Loan Fund General Total ---------- --------- ------- ----------- ----------- ------- ------- Assets- Investments, at fair value- Merrill Lynch Global Allocation Fund, Inc. $ - $ - $ - $ - $ - $- $ 6,676,284 Merrill Lynch Corporate Bond Fund, Inc., Intermediate Term - - - 373,013 - - 2,733,894 Merrill Lynch Retirement Preservation Trust - - - 150,622 - - 3,929,727 AIM Value Fund - - - - - - 17,196,524 American Balance Fund - - - - - - 5,033,648 Stewart & Stevenson Services, Inc., Common Stock - - - - - - 995,812 Franklin Small Cap Growth Fund 275,489 - - 314,785 - - 590,274 Hotchkis & Wiley International Fund - 139,174 - 282,824 - - 421,998 MFS - Massachusetts Investors Trust - - 799,426 345,640 - - 1,145,066 Participant loans - - - - 1,449,798 - 1,449,798 ------ --------- -------- --------- ---------- ------- ---------- Total investments 275,489 139,174 799,426 1,466,884 1,449,798 - 40,173,025 Receivables- Employer contributions 1,663 631 3,376 13,465 - - 86,386 Participant contributions 5,666 2,408 12,156 42,027 - - 269,644 Cash - - - - - 21,740 21,740 ------- -------- --------- --------- ---------- -------- --------- 7,329 3,039 15,532 55,492 - 21,740 377,770 ------- -------- --------- --------- ---------- -------- --------- Net assets available for benefits $282,818 $142,213 $814,958 $1,522,376 $1,449,798 $21,740 $40,550,795 ======== ====== ======= ========== ========= ===== ==========
Statement of Net Assets Available for Benefits by Investment Fund As of December 31, 1997
Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 ML Global ML Corporate ML Retirement AIM American Assets- Investments, at fair value- Merrill Lynch Global Allocation Fund, Inc. $ 6,667,131 $ - $ - $ - $ - Merrill Lynch Corporate Bond Fund, Inc., Intermediate Term - 1,734,374 - - - Merrill Lynch Retirement Preservation Trust - - 2,660,658 - - AIM Value Fund - - - 11,138,933 - American Balanced Fund - - - - 3,988,951 Stewart & Stevenson Services, Inc., Common Stock - - - - - Participant loans - - - - - ---------- ------------ ------------ ----------- ---------- Total investments 6,667,131 1,734,374 2,660,658 11,138,933 3,988,951 Receivables- Employer contributions 6,953 2,771 2,704 12,170 4,547 Participant contributions 37,404 13,912 14,271 67,608 25,015 Interfund receivable (payable) - - 66 - - Cash - - - - - ---------- ------------ ------------ ----------- ---------- 44,357 16,683 17,041 79,778 29,562 ---------- ------------ ------------ ----------- ---------- Net assets available for benefits $6,711,488 $1,751,057 $2,677,699 $11,218,711 $4,018,513 ========== ============ ============ =========== ==========
(Continued)
Fund 6 Participant S&S Services Loan Fund General Total Assets- Investments, at fair value- Merrill Lynch Global Allocation Fund, Inc. $ - $ - $ - $6,667,131 Merrill Lynch Corporate Bond Fund, Inc., Intermediate Term - - - 1,734,374 Merrill Lynch Retirement Preservation Trust - - - 2,660,658 AIM Value Fund - - - 11,138,933 American Balanced Fund - - - 3,988,951 Stewart & Stevenson Services, Inc., Common Stock 1,789,246 - - 1,789,246 Participant loans - 890,184 - 890,184 ---------- --------- ------ ---------- Total investments 1,789,246 890,184 - 28,869,477 Receivables- Employer contributions 2,309 - - 31,454 Participant contributions 11,958 - - 170,168 Interfund receivable (payable) - - (66) - Cash - - 66 66 ---------- --------- ------ ---------- 14,267 - - 201,688 ---------- --------- ------ ---------- Net assets available for benefits $1,803,513 $ 890,184 $ - $29,071,165 ========== ======== ===== ===========
Statement of Changes in Net Assets Available for Benefits by Investment Fund For the Year Ended December 31, 1998
Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 ML Global ML Corporate ML Retirement AIM American S&S SERVICES --------- ------------ ------------- ---------- ---------- ------------- Additions to net assets attributed to- Investment income- Dividends $ 769,775 $ 127,333 $ 181,660 $ 1,074,567 $ 466,595 $ 25,281 Interest 17,359 6,216 9,320 36,109 11,973 5,311 Net appreciation (depreciation) in fair value of investments (700,375) 18,338 - 3,016,899 15,003 (1,144,502) ---------- ----------- ------------ ----------- ---------- ----------- Total investments income 86,759 151,887 190,980 4,127,575 493,571 (1,113,910) Contributions- Employer 287,641 121,886 170,417 611,589 223,826 62,042 Participant 1,211,906 507,666 624,395 2,608,324 925,758 312,474 Participant rollovers 17,524 22,284 36,884 32,815 18,737 4,612 ---------- ----------- ------------ ----------- ---------- ----------- Total contributions 1,517,071 651,836 831,696 3,252,728 1,168,321 379,128 ---------- ----------- ------------ ----------- ---------- ----------- Total additions 1,603,830 803,723 1,022,676 7,380,303 1,661,892 (734,782) ---------- ----------- ------------ ----------- ---------- ----------- Deductions from net assets attributed to- Distributions to participants 333,831 135,179 138,371 776,009 167,706 74,308 Withdrawals 41,399 6,795 21,320 43,753 25,748 10,662 Administrative expenses - - 89,178 - - - Interfund transfers (in) out, net 1,216,995 32,442 (367,625) 464,966 413,720 (23,026) ---------- ----------- ------------ ----------- ---------- ----------- Total deductions 1,592,225 174,416 (118,756) 1,284,728 607,174 61,944 ---------- ----------- ------------ ----------- ---------- ----------- Net increase (decrease) 11,605 629,307 1,141,432 6,095,575 1,054,718 (796,726) Net assets available for benefits- Beginning of year 6,711,488 1,751,057 2,677,699 11,218,711 4,018,513 1,803,513 ---------- ----------- ------------ ----------- ---------- ----------- End of year $6,723,093 $2,380,364 $3,819,131 $17,314,286 $5,073,231 $1,006,787 ========== ========== ========== =========== ========== ==========
(Continued)
Fund 8 Fund 10 Fund 7 Hotchkis Fund 9 Model Participant Franklin & Wiley MFS Portfolios Loan Fund General Total --------- --------- --------- ----------- ---------- ------- --------- Additions to net assets attributed to- Investment income- Dividends $ 3,836 $ 4,008 $ 34,248 $ 38,020 $ - $ - $ 2,725,323 Interest 1,796 132 2,104 4,004 - - 94,324 Net appreciation (depreciation) in fair value of investments (1,398) (7,280) 28,742 23,092 - - 1,248,519 --------- ---------- ---------- ---------- ---------- -------- ----------- Total investments income 4,234 (3,140) 65,094 65,116 - - 4,068,166 Contributions- Employer 21,698 7,766 38,455 190,798 - - 1,736,118 Participant 99,183 36,216 181,385 870,530 - - 7,377,837 Participant rollovers 6,649 - 5,775 77,457 - - 222,737 --------- ---------- ---------- ---------- ---------- -------- ----------- Total contributions 127,530 43,982 225,615 1,138,785 - - 9,336,692 --------- ---------- ---------- ---------- ---------- -------- ----------- Total additions 131,764 40,842 290,709 1,203,901 - - 13,404,858 --------- ---------- ---------- ---------- ---------- -------- ----------- Deductions from net assets attributed to- Distributions to participants 717 - 1,653 3,708 45,141 - 1,676,623 Withdrawals 4,331 10 3,500 1,909 - - 159,427 Administrative expenses - - - - - - 89,178 Interfund transfers (in) out, net (156,102) (101,381) (529,402) (324,092) (604,755) (21,740) - --------- ---------- ---------- ---------- ---------- -------- ---------- Total deductions (151,054) (101,371) (524,249) (318,475) (559,614) (21,740) 1,925,228 --------- ---------- ---------- ---------- ---------- -------- ---------- Net increase (decrease) 282,818 142,213 814,958 1,522,376 559,614 21,740 11,479,630 Net assets available for benefits- Beginning of year - - - - 890,184 - 29,071,165 --------- ---------- ---------- ---------- ---------- -------- ----------- End of year $282,818 $142,213 $ 814,958 $1,522,376 $1,449,798 $21,740 $40,550,795 ======== ========= ========= ========== ========== ======== ==========
Statement of Changes in Net Assets Available for Benefits by Investment Fund For the Year Ended December 31, 1997
Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 ML Global ML Corporate ML Retirement AIM American --------- ------------ ------------- ---------- -------- Additions to net assets attributed to- Investment income- Dividends $ 849,779 $ 92,642 $ 140,808 $1,126,699 $ 416,447 Interest 14,788 3,207 5,319 26,362 9,053 Net appreciation (depreciation) in fair value of investments (274,895) 26,238 - 706,898 200,227 ---------- ------------ ------------ ---------- ---------- Total investment income 589,672 122,087 146,127 1,859,959 625,727 Contributions- Employer 239,698 98,369 102,703 396,611 149,923 Participant 1,308,587 506,453 545,736 2,199,106 822,213 Participant rollovers 90,037 17,497 28,500 47,245 99,237 Other additions- Transfer from the Sierra Plan (Note 7) 657,124 40,262 115,889 699,031 - Other receipts - - 38,347 - - ---------- ------------ ------------ ---------- ---------- Total contributions and other additions 2,295,446 662,581 831,175 3,341,993 1,071,373 ---------- ------------ ------------ ---------- ---------- Total additions 2,885,118 784,668 977,302 5,201,952 1,697,100 ---------- ------------ ------------ ---------- ---------- Deductions from net assets attributed to- Distributions to participants 380,822 162,468 440,820 560,788 276,790 Withdrawals 4,116 8,532 12,637 12,296 2,641 Administrative expenses - - 69,418 - - Interfund transfers (in) out, net 151,258 92,203 (127,228) (64,905) 17,026 ---------- ------------ ------------ ---------- ---------- Total deductions 536,196 263,203 395,647 508,179 296,457 ---------- ------------ ------------ ---------- ---------- Net increase (decrease) 2,348,922 521,465 581,655 4,693,773 1,400,643 Net assets available for benefits- Beginning of year 4,362,566 1,229,592 2,096,044 6,524,938 2,617,870 ---------- ------------ ------------ ---------- ---------- End of year $6,711,488 $1,751,057 $2,677,699 $11,218,711 $4,018,513 ========== ========== ========== =========== ========== (Continued) Fund 6 Participant S&S Services Loan Fund General Total ------------ --------- --------- --------- Additions to net assets attributed to- Investment income- Dividends $ 21,885 $ - $ - $2,648,260 Interest 6,703 - - 65,432 Net appreciation (depreciation) in fair value of investments (164,015) - - 494,453 ----------- ---------- --------- ----------- Total investment income (135,427) - - 3,208,145 Contributions- Employer 91,917 - - 1,079,221 Participant 493,365 - - 5,875,460 Participant rollovers 23,997 - - 306,513 Other additions- Transfer from the Sierra Plan (Note 7) - 49,872 - 1,562,178 Other receipts - - - 38,347 ----------- ---------- --------- ----------- Total contributions and other additions 609,279 49,872 - 8,861,719 ----------- ---------- --------- ----------- Total additions 473,852 49,872 - 12,069,864 ----------- ---------- --------- ----------- Deductions from net assets attributed to- Distributions to participants 71,555 73,988 - 1,967,231 Withdrawals 9,883 - - 50,105 Administrative expenses - - - 69,418 Interfund transfers (in) out, net 152,896 (391,373) 170,123 - ----------- ---------- --------- ----------- Total deductions 234,334 (317,385) 170,123 2,086,754 ----------- ---------- --------- ----------- Net increase (decrease) 239,518 367,257 (170,123) 9,983,110 Net assets available for benefits- Beginning of year 1,563,995 522,927 170,123 19,088,055 ----------- ---------- --------- ----------- End of year $1,803,513 $890,184 $ - $29,071,165 ========== ======== ======== ===========
SCHEDULE I STEWART & STEVENSON 401(k) SAVINGS PLAN ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1998
Number of Shares or Principal Current Identity of Issue Description of Asset Amount Cost Value Merrill Lynch Global Merrill Lynch Trust Company* Allocation Fund, Inc. 529,444 $7,506,953 $6,676,284 Merrill Lynch Corporate Bond Fund, Inc., Merrill Lynch Trust Company* Intermediate Term 234,267 2,691,185 2,733,894 Merrill Lynch Retirement Merrill Lynch Trust Company* Preservation Trust 3,929,727 3,929,727 3,929,727 AIM Family of Funds AIM Value Fund 427,881 13,312,473 17,196,524 American Funds Group American Balanced Fund 319,394 4,780,790 5,033,648 Stewart & Stevenson Services, Inc.* Common stock 102,134 2,136,188 995,812 Franklin Small Cap Franklin Growth Fund 26,153 572,052 590,274 Hotchkis & Wiley Olympic Trust International Fund 18,127 434,407 421,998 Massachusetts Massachusetts Financial Services Investors Trust 56,546 1,099,779 1,145,066 Participant loans (interest rates Stewart & Stevenson 401(k) ranging from 8.25% Savings Plan* to 10%) $1,449,798 1,449,798 1,449,798 ----------- ----------- Total assets held for investment purposes $37,913,352 $40,173,025 =========== ==========
*Identified party in interest.
SCHEDULE II STEWART & STEVENSON 401(k) SAVINGS PLAN ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1998 Current Value of Asset on Purchase Selling Cost of Transaction Net Identity of Party Involved Description of Asset Price* Price* Asset Date Gain (Loss) - -------------------------- -------------------- ---------- --------- ---------- ----------- ----------- SERIES: Merrill Lynch Trust Company Merrill Lynch Global Allocation Fund, Inc. $2,496,786 $ - $2,496,786 $2,496,786 $- Merrill Lynch Trust Company Merrill Lynch Global Allocation Fund, Inc. - 1,787,258 1,790,394 1,787,258 (3,136) Merrill Lynch Trust Company Merrill Lynch Retirement Preservation Trust 2,074,552 - 2,074,552 2,074,552 - Merrill Lynch Trust Company Merrill Lynch Retirement Preservation Trust - 805,483 805,483 805,483 - AIM Family of Funds AIM Value Fund 5,426,720 - 5,426,720 5,426,720 - AIM Family of Funds AIM Value Fund - 2,386,028 1,993,269 2,386,028 392,759 American Funds Group American Balanced Fund 1,899,920 - 1,899,920 1,899,920 - American Funds Group American Balanced Fund - 870,226 808,489 870,226 61,737
*Amounts are net of purchase/selling expenses. NOTE: This schedule includes series transactions involving the same investment activity which, in the aggregate, amounts to more than 5 percent of the current value of Plan assets at the beginning of the Plan year. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Stewart & Stevenson 401(k) Savings Plan Administrative Committee which administers the Stewart & Stevenson 401(k) Savings Plan has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized in the City of Houston and the State of Texas, on the 28th day of June, 1999. Stewart & Stevenson 401(k) Savings Plan Administrative Committee /s/ DAVID R. STEWART /s/ JOHN H. DOSTER - ------------------------- ------------------------- David R. Stewart John H. Doster Member Member /s/ DONALD E. STEVENSON /s/ J. CARSEY MANNING - ------------------------ ------------------------- Donald E. Stevenson J. Carsey Manning Member Member EX-23 2 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report dated June 15, 1999, on the financial statements and supplemental schedules of Stewart & Stevenson 401(k) Savings Plan as of and for the years ended December 31, 1998 and 1997, included in this Form 11-K, into the previously filed Stewart & Stevenson Services, Inc., Form S-8 Registration Statement file No. 33-52903. /s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Houston, Texas June 28, 1999 -----END PRIVACY-ENHANCED MESSAGE-----