-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, knZQNO8bKX8buf1xJKFjSR2Ybk31+e0peNBULoA9L3Czb5PzwdkgT7qakBpVuUgh wMGrP3FfRG3z2lZOTZgRMg== 0000078214-94-000025.txt : 19940702 0000078214-94-000025.hdr.sgml : 19940702 ACCESSION NUMBER: 0000078214-94-000025 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940627 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHILLIPS PETROLEUM CO CENTRAL INDEX KEY: 0000078214 STANDARD INDUSTRIAL CLASSIFICATION: 2911 IRS NUMBER: 730400345 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-00720 FILM NUMBER: 94535750 BUSINESS ADDRESS: STREET 1: PHILLIPS BUILDING STREET 2: 800 PLAZA OFFICE BUILDING CITY: BARTLESVILLE STATE: OK ZIP: 74004 BUSINESS PHONE: 9186616600 10-K/A 1 1993 FORM 10-K/A, AMENDMENT NUMBER 1 FORM 10-K/A Amendment No. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1993 ---------------------------------------- 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 1-720 ------------------------------------------- Phillips Petroleum Company (Exact name of registrant as specified in its charter) Delaware 73-0400345 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Phillips Building, Bartlesville, Oklahoma 74004 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 918-661-6600 - - - ----------------------------------------------------------------- Filing Additional Exhibits Item 14 - Exhibits - - - ------------------ The registrant is filing with this Amendment No. 1 Annual Reports on Form 11-K for the Thrift Plan of Phillips Petroleum Company, the Long-Term Stock Savings Plan of Phillips Petroleum Company and the Retirement Savings Plan of Phillips Petroleum Company Subsidiaries. 1 PHILLIPS PETROLEUM COMPANY INDEX TO EXHIBITS Exhibit Number Description - - - ------- ----------- 3(i) Restated Certificate of Incorporation, as filed with the State of Delaware July 17, 1989 (incorporated by reference to Exhibit 4(a) to Quarterly Report on Form 10-Q for the quarter ended June 30, 1989). (ii) Bylaws of Phillips Petroleum Company, as amended effective October 11, 1993 (incorporated by reference to Exhibit 4 to Quarterly Report on Form 10-Q for the quarter ended September 30, 1993). 4(a) Indenture dated as of September 15, 1990, between Phillips Petroleum Company and Continental Bank, National Association, relating to the 9 1/2% Notes due 1997 and the 9 3/8% Notes due 2011 (incorporated by reference to Exhibit 4(c) to Annual Report on Form 10-K for the year ended December 31, 1990). (b) Indenture dated as of September 15, 1990, as supplemented by Supplemental Indenture No. 1 dated May 23, 1991, between Phillips Petroleum Company and Continental Bank, National Association, relating to the 9.18% Notes due September 15, 2021, the 9% Notes due 2001, the 8.86% Notes due May 15, 2022, the 8.49% Notes due January 1, 2023, the 7.92% Notes due April 15, 2023, the 7.20% Notes due November 1, 2023 and the 6.65% Notes due March 1, 2003 (incorporated by reference to Exhibit 4(d) to Annual Report on Form 10-K for the year ended December 31, 1991). (c) Preferred Share Purchase Rights as described in the Rights Agreement dated as of July 10, 1989, between Phillips Petroleum Company and Chemical Bank (formerly Manufacturers Hanover Trust Company) (incorporated by reference to Exhibit 1 to Current Report on Form 8-K dated July 10, 1989). (d) Amendment dated May 16, 1990, to the Rights Agreement dated July 10, 1989, between Phillips Petroleum Company and Chemical Bank (formerly Manufacturers Hanover Trust Company) (incorporated by reference to Exhibit 1 to Current Report on Form 8-K dated May 16, 1990). 2 PHILLIPS PETROLEUM COMPANY INDEX TO EXHIBITS (Continued) Exhibit Number Description - - - ------- ----------- The company incurred during 1993 certain long-term debt not registered pursuant to the Securities Exchange Act of 1934. No instrument with respect to such debt is being filed since the total amount of the securities authorized under any such instrument did not exceed 10 percent of the total assets of the company on a consolidated basis. The company hereby agrees to furnish to the Securities and Exchange Commission upon its request a copy of such instrument defining the rights of the holders of such debt. 10(a) Agreement dated December 23, 1984, among Mesa Partners and related entities and Phillips Petroleum Company and the schedules, annexes and exhibit thereto (incorporated by reference to Exhibit 10(a) to Annual Report on Form 10-K for the year ended December 31, 1989). (b) Letter Agreement dated December 23, 1984, among Mesa Partners and related entities and Phillips Petroleum Company (incorporated by reference to Exhibit 10(b) to Annual Report on Form 10-K for the year ended December 31, 1989). (c) Deferred Compensation Plan for Non-Employee Directors of Phillips Petroleum Company (incorporated by reference to Exhibit 10(d) to Annual Report on Form 10-K for the year ended December 31, 1990). (d) 1986 Stock Plan of Phillips Petroleum Company (incorporated by reference to Exhibit 10(d) to Annual Report on Form 10-K for the year ended December 31, 1992). (e) 1990 Stock Plan of Phillips Petroleum Company (incorporated by reference to Exhibit 10(f) to Annual Report on Form 10-K for the year ended December 31, 1989). (f) Annual Incentive Compensation Plan of Phillips Petroleum Company (incorporated by reference to Exhibit 10(f) to Annual Report on Form 10-K for the year ended December 31, 1992). (g) Incentive Compensation Plan of Phillips Petroleum Company (incorporated by reference to Exhibit 10(f) to Annual Report on Form 10-K for the year ended December 31, 1988). 3 PHILLIPS PETROLEUM COMPANY INDEX TO EXHIBITS (Continued) Exhibit Number Description - - - ------- ----------- 10(h) Principal Corporate Officers Supplemental Retirement Plan of Phillips Petroleum Company (incorporated by reference to Exhibit 10(h) to Annual Report on Form 10-K for the year ended December 31, 1989). (i) Phillips Petroleum Company Supplemental Executive Retirement Plan.* (j) Key Employee Deferred Compensation Plan of Phillips Petroleum Company.* (k) Non-Employee Director Retirement Plan of Phillips Petroleum Company (incorporated by reference to Exhibit 10(k) to Annual Report on Form 10-K for the year ended December 31, 1992). (l) Omnibus Securities Plan of Phillips Petroleum Company (incorporated by reference to Exhibit 10 to Quarterly Report on Form 10-Q for the quarter ended June 30, 1993). (m) Natural Gas Liquids Output Purchase and Sale Agreement effective as of January 1, 1992, by and between Phillips 66 Company, a division of Phillips Petroleum Company, and GPM Gas Corporation (incorporated by reference to Exhibit 10.3 to GPM Gas Corporation's Registration Statement on Form S-1, File No. 33-45693, filed February 14, 1992). 12 Computation of Ratio of Earnings to Fixed Charges.* 21 List of Subsidiaries of Phillips Petroleum Company.* 23 Consent of Independent Auditors.* 99(a) Form 11-K, Annual Report, of the Thrift Plan of Phillips Petroleum Company for the fiscal year ended December 31, 1993. (b) Form 11-K, Annual Report, of the Long-Term Stock Savings Plan of Phillips Petroleum Company for the fiscal year ended December 31, 1993. 4 PHILLIPS PETROLEUM COMPANY INDEX TO EXHIBITS (Continued) Exhibit Number Description - - - ------- ----------- 99(c) Form 11-K, Annual Report, of the Retirement Savings Plan of Phillips Petroleum Company Subsidiaries for the fiscal year ended December 31, 1993. *Filed with the original Annual Report on Form 10-K for year ended December 31, 1993. Copies of the exhibits listed in the Index to Exhibits are available upon request for a fee of $3.00 per document. Such request should be addressed to: Secretary Phillips Petroleum Company 1234 Adams Building Bartlesville, OK 74004 5 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned thereunto duly authorized. PHILLIPS PETROLEUM COMPANY /s/ L. F. Francis ---------------------------------- L. F. Francis Controller and General Tax Officer June 22, 1994 6 EX-99.(A) 2 THRIFT PLAN Exhibit 99(a) FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the year ended December 31, 1993 ------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to ----------- ---------- Commission file number 33-50134 --------------------------------- THRIFT PLAN OF PHILLIPS PETROLEUM COMPANY (Full title of the Plan) PHILLIPS PETROLEUM COMPANY (Name of issuer of securities) Bartlesville, Oklahoma 74004 (Address of principal executive office) (Zip code) FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements -------------------- Financial statements of the Thrift Plan of Phillips Petroleum Company, filed as a part of this annual report, are listed in the accompanying index. (b) Exhibits -------- Exhibit 1 Consent of Ernst & Young. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Thrift Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. THRIFT PLAN OF PHILLIPS PETROLEUM COMPANY /s/ L. F. Francis --------------------------------- L. F. Francis Member Thrift Plan Committee June 22, 1994 1 - - - ----------------------------------------------------------------- Index To Financial Statements Thrift Plan Of Phillips And Schedules Petroleum Company Page Report of Independent Auditors .............................. 4 Financial Statements Statements of Net Assets Available for Benefits at December 31, 1993 and 1992 Total Plan ............................................. 5 Fund A ................................................. 7 Fund B ................................................. 9 Fund C ................................................. 11 Fund D--Deposit Administration Account ................. 13 Fund D--Deferred Settlement Account .................... 15 Temporary Investment Fund .............................. 23 Statements of Net Assets Available for Benefits at December 31, 1993 Fund E ................................................. 17 Fund F ................................................. 19 Loan Fund .............................................. 21 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 1993, 1992 and 1991 Total Plan ............................................. 6 Fund A ................................................. 8 Fund B ................................................. 10 Fund C ................................................. 12 Fund D--Deposit Administration Account ................. 14 Fund D--Deferred Settlement Account .................... 16 Fund E ................................................. 18 Temporary Investment Fund............................... 24 Statements of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1993 Fund F ................................................. 20 Loan Fund .............................................. 22 Notes to Financial Statements ............................. 25 2 - - - ----------------------------------------------------------------- Index To Financial Statements Thrift Plan Of Phillips And Schedules Petroleum Company Page Supplemental Schedules Schedule of Assets Held for Investment Purposes at December 31, 1993 .................................... 32 Schedule of Reportable Transactions for the Year Ended December 31, 1993 ............................ 34 3 - - - ----------------------------------------------------------------- Report Of Independent Auditors The Thrift Plan Committee Thrift Plan of Phillips Petroleum Company We have audited the financial statements of the Thrift Plan of Phillips Petroleum Company (Plan) listed in the accompanying index to financial statements and schedules. These financial statements are the responsibility of the Thrift Plan Committee (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 the Committee, 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 listed in the accompanying index to financial statements and schedules present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1993 and 1992, and the changes in net assets available for plan benefits for each of the three years in the period ended December 31, 1993, 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 accompanying supplemental schedules of assets held for investment purposes as of December 31, 1993, and reportable transactions for the year ended December 31, 1993, are presented for the purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the 1993 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1993 basic financial statements taken as a whole. /s/ ERNST & YOUNG ------------- ERNST & YOUNG Tulsa, Oklahoma June 22, 1994 4 - - - ----------------------------------------------------------------- Statement Of Net Assets Thrift Plan Of Phillips Available For Benefits Petroleum Company Thousands of Dollars ------------------------ At December 31 1993 1992 ------------------------ Assets Investments Common stock $ 634,567 640,231 Insurance contracts 403,121 407,596 U.S. government securities - 65,645 BT Pyramid Government Securities Cash Fund 19,106 27,880 BT Pyramid Equity Index Fund 37,590 - Wells Fargo Government/Corporate Bond Index Fund E 90,558 - BT Pyramid Discretionary Cash Fund 19,665 - Loans to Plan participants 14,157 - - - - ----------------------------------------------------------------- 1,218,764 1,141,352 Cash 1 - Contributions Receivable 629 567 Employee Deposits Receivable 238 107 Loan Repayments Receivable 33 - Interest Receivable 105 1,398 - - - ----------------------------------------------------------------- Total Assets 1,219,770 1,143,424 - - - ----------------------------------------------------------------- Liabilities Benefits Payable - 9 Securities Purchased 1,786 4,070 Other Liabilities 14 - - - - ----------------------------------------------------------------- Total Liabilities 1,800 4,079 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $1,217,970 1,139,345 ================================================================= See Notes to Financial Statements. 5 - - - ----------------------------------------------------------------- Statement Of Changes In Net Thrift Plan Of Phillips Assets Available For Benefits Petroleum Company Thousands of Dollars ------------------------------------ Years Ended December 31 1993 1992 1991 ------------------------------------ Additions Contributions and Deposits Company contributions Matching $ 5,986 5,952 6,105 Before-tax deposits 16,518 15,388 15,656 Employee deposits 17,913 17,533 18,476 - - - ----------------------------------------------------------------- 40,417 38,873 40,237 - - - ----------------------------------------------------------------- Investment Income Dividends 26,091 30,231 30,513 Interest 35,642 40,991 47,178 Net appreciation (depreciation) 109,944 34,307 (57,023) - - - ----------------------------------------------------------------- 171,677 105,529 20,668 - - - ----------------------------------------------------------------- Total Additions 212,094 144,402 60,905 - - - ----------------------------------------------------------------- Deductions Distributions to Participants or Their Beneficiaries Cash 96,790 127,974 130,030 Common stock 36,256 59,735 13,041 Forfeitures 9 6 14 Administrative Expense 425 - - Interest Expense 23 - - Transfer to (from) Other Plans (34) - 403 - - - ----------------------------------------------------------------- Total Deductions 133,469 187,715 143,488 - - - ----------------------------------------------------------------- Net Increase (Decrease) 78,625 (43,313) (82,583) Net Assets Available for Benefits Beginning of Year 1,139,345 1,182,658 1,265,241 - - - ----------------------------------------------------------------- End of Year $1,217,970 1,139,345 1,182,658 ================================================================= See Notes to Financial Statements. 6 - - - ----------------------------------------------------------------- Statement Of Net Assets Thrift Plan Of Phillips Available For Benefits Petroleum Company FUND A Thousands of Dollars ------------------------ At December 31 1993 1992 ------------------------ Assets Investments U.S. government securities $ - 65,645 Wells Fargo Government/Corporate Bond Index Fund E 90,558 - BT Pyramid Government Securities Cash Fund 22 9,272 - - - ----------------------------------------------------------------- 90,580 74,917 Due from Temporary Investment Fund 140 88 Cash 1 - Interest Receivable - 1,331 - - - ----------------------------------------------------------------- Total Assets 90,721 76,336 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $90,721 76,336 ================================================================= Number of Units 8,552,717 7,876,597 Unit Value $10.6073 9.6916 - - - ----------------------------------------------------------------- See Notes to Financial Statements. 7 - - - ----------------------------------------------------------------- Statement Of Changes In Net Thrift Plan Of Phillips Assets Available For Benefits Petroleum Company FUND A Thousands of Dollars --------------------------------- Years Ended December 31 1993 1992 1991 --------------------------------- Additions Investment Income Interest $ 300 5,239 5,334 Net appreciation (depreciation) 7,894 (986) 2,395 - - - ----------------------------------------------------------------- 8,194 4,253 7,729 Allocation of Deposits and Earnings from Temporary Investment Fund 1,347 887 723 - - - ----------------------------------------------------------------- Total Additions 9,541 5,140 8,452 - - - ----------------------------------------------------------------- Deductions Cash Distributions to Participants or Their Beneficiaries 12,745 16,214 5,031 Administrative Expense 92 - - Transfer to Other Plans - - 32 - - - ----------------------------------------------------------------- Total Deductions 12,837 16,214 5,063 - - - ----------------------------------------------------------------- Interfund Transfers 17,681 10,903 8,825 - - - ----------------------------------------------------------------- Net Increase (Decrease) 14,385 (171) 12,214 Net Assets Available for Benefits Beginning of Year 76,336 76,507 64,293 - - - ----------------------------------------------------------------- End of Year $90,721 76,336 76,507 ================================================================= See Notes to Financial Statements. 8 - - - ----------------------------------------------------------------- Statement Of Net Assets Thrift Plan Of Phillips Available For Benefits Petroleum Company FUND B Thousands of Dollars ------------------------ At December 31 1993 1992 ------------------------ Assets Investments Common stock $434,165 439,957 BT Pyramid Government Securities Cash Fund 15,432 15,200 - - - ----------------------------------------------------------------- 449,597 455,157 Due from Temporary Investment Fund 2,655 2,347 Interest Receivable 28 42 - - - ----------------------------------------------------------------- Total Assets 452,280 457,546 - - - ----------------------------------------------------------------- Liabilities Benefits Payable - 7 Securities Purchased 1,179 2,808 Other Liabilities 9 - - - - ----------------------------------------------------------------- Total Liabilities 1,188 2,815 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $451,092 454,731 ================================================================= Number of Units 6,682,406 8,094,364 Unit Value $64.0916 55.8629 - - - ----------------------------------------------------------------- See Notes to Financial Statements. 9 - - - ----------------------------------------------------------------- Statement Of Changes In Net Thrift Plan Of Phillips Assets Available For Benefits Petroleum Company FUND B Thousands of Dollars ---------------------------------- Years Ended December 31 1993 1992 1991 ---------------------------------- Additions Investment Income (Loss) Dividends $ 17,220 20,859 21,064 Interest 262 242 245 Net appreciation (depreciation) 66,019 24,832 (40,696) - - - ----------------------------------------------------------------- 83,501 45,933 (19,387) Allocation of Deposits and Earnings from Temporary Investment Fund 26,322 26,105 27,177 - - - ----------------------------------------------------------------- Total Additions 109,823 72,038 7,790 - - - ----------------------------------------------------------------- Deductions Distributions to Participants or Their Beneficiaries Cash 28,438 35,046 19,497 Common stock 26,297 45,971 10,474 Administrative Expense 151 - - Interest Expense 15 - - Transfer to Other Plans - - 186 - - - ----------------------------------------------------------------- Total Deductions 54,901 81,017 30,157 - - - ----------------------------------------------------------------- Interfund Transfers (58,561) (9,810) 4,135 - - - ----------------------------------------------------------------- Net Decrease (3,639) (18,789) (18,232) Net Assets Available for Benefits Beginning of Year 454,731 473,520 491,752 - - - ----------------------------------------------------------------- End of Year $451,092 454,731 473,520 ================================================================= See Notes to Financial Statements. 10 - - - ----------------------------------------------------------------- Statement Of Net Assets Thrift Plan Of Phillips Available For Benefits Petroleum Company FUND C Thousands of Dollars ------------------------ At December 31 1993 1992 ------------------------ Assets Investments Common stock $200,402 200,274 BT Pyramid Government Securities Cash Fund 557 439 - - - ----------------------------------------------------------------- 200,959 200,713 Contributions Receivable 507 520 Interest Receivable 14 19 - - - ----------------------------------------------------------------- Total Assets 201,480 201,252 - - - ----------------------------------------------------------------- Liabilities Securities Purchased 607 1,262 Other Liabilities 5 2 - - - ----------------------------------------------------------------- Total Liabilities 612 1,264 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $200,868 199,988 ================================================================= Number of Units 3,489,916 3,625,762 Unit Value $64.0916 55.8629 - - - ----------------------------------------------------------------- See Notes to Financial Statements. 11 - - - ----------------------------------------------------------------- Statement Of Changes In Net Thrift Plan Of Phillips Assets Available For Benefits Petroleum Company FUND C Thousands of Dollars ---------------------------------- Years Ended December 31 1993 1992 1991 ---------------------------------- Additions Company Contributions-- Matching $ 5,986 5,952 6,105 - - - ----------------------------------------------------------------- Investment Income (Loss) Dividends 8,871 9,372 9,449 Interest 134 105 114 Net appreciation (depreciation) 33,531 10,751 (18,018) - - - ----------------------------------------------------------------- 42,536 20,228 (8,455) - - - ----------------------------------------------------------------- Total Additions (Deductions) 48,522 26,180 (2,350) - - - ----------------------------------------------------------------- Deductions Distributions to Participants or Their Beneficiaries Cash 12,036 17,408 8,084 Common stock 9,959 13,764 2,567 Forfeitures 9 6 14 Administrative Expense 78 - - Interest Expense 8 - - Transfer to Other Plans - - 141 - - - ----------------------------------------------------------------- Total Deductions 22,090 31,178 10,806 - - - ----------------------------------------------------------------- Interfund Transfers (25,552) (3,072) (409) - - - ----------------------------------------------------------------- Net Increase (Decrease) 880 (8,070) (13,565) Net Assets Available for Benefits Beginning of Year 199,988 208,058 221,623 - - - ----------------------------------------------------------------- End of Year $200,868 199,988 208,058 ================================================================= See Notes to Financial Statements. 12 - - - ----------------------------------------------------------------- Statement Of Net Assets Thrift Plan Of Phillips Available For Benefits Petroleum Company FUND D--DEPOSIT ADMINISTRATION ACCOUNT Thousands of Dollars ---------------------- At December 31 1993 1992 ---------------------- Assets Investments Insurance contracts Travelers Insurance Company, Group Annuity Contract GR-15505 $178,356 186,546 Group Annuity Contract GR-14128 - 8,026 The Prudential Insurance Company of America, Group Annuity Contract GA-5991 71,323 71,043 Continental Assurance Company, Group Annuity, Contract GP-12692 63,945 62,825 Group Annuity, Contract GP-12787 25,270 15,083 Provident National Assurance, Group Annuity, Contract GC-05048 62,994 62,321 BT Pyramid Government Securities Cash Fund - 195 - - - ----------------------------------------------------------------- 401,888 406,039 Due from Temporary Investment Fund - 499 - - - ----------------------------------------------------------------- Total Assets 401,888 406,538 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $401,888 406,538 ================================================================= Number of Units (A) Unit Values (A) - - - ----------------------------------------------------------------- (A) See Note 4. See Notes to Financial Statements. 13 - - - ----------------------------------------------------------------- Statement Of Changes In Net Thrift Plan Of Phillips Assets Available For Benefits Petroleum Company FUND D--DEPOSIT ADMINISTRATION ACCOUNT Thousands of Dollars ---------------------------------- Years Ended December 31 1993 1992 1991 ---------------------------------- Additions Investment Income Interest $ 34,444 34,726 38,818 Allocation of Deposits and Earnings from Temporary Investment Fund 2,124 6,017 6,369 - - - ----------------------------------------------------------------- Total Additions 36,568 40,743 45,187 - - - ----------------------------------------------------------------- Deductions Cash Distributions to Participants or Their Beneficiaries 38,509 58,360 95,431 Administrative Expense 55 - - Transfer to Other Plans - - 39 - - - ----------------------------------------------------------------- Total Deductions 38,564 58,360 95,470 - - - ----------------------------------------------------------------- Interfund Transfers (2,654) 19,265 (9,862) - - - ----------------------------------------------------------------- Net Increase (Decrease) (4,650) 1,648 (60,145) Net Assets Available for Benefits Beginning of Year 406,538 404,890 465,035 - - - ----------------------------------------------------------------- End of Year $401,888 406,538 404,890 ================================================================= See Notes to Financial Statements. 14 - - - ----------------------------------------------------------------- Statement Of Net Assets Thrift Plan Of Phillips Available For Benefits Petroleum Company FUND D--DEFERRED SETTLEMENT ACCOUNT Thousands of Dollars ---------------------- At December 31 1993 1992 ---------------------- Assets Investments Insurance contract $1,233 1,752 - - - ----------------------------------------------------------------- Total Assets 1,233 1,752 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $1,233 1,752 ================================================================= See Notes to Financial Statements. 15 - - - ----------------------------------------------------------------- Statement Of Changes In Net Thrift Plan Of Phillips Assets Available For Benefits Petroleum Company FUND D--DEFERRED SETTLEMENT ACCOUNT Thousands of Dollars -------------------------------- Years Ended December 31 1993 1992 1991 -------------------------------- Additions Investment Income Interest $ 89 137 179 - - - ----------------------------------------------------------------- Total Additions 89 137 179 - - - ----------------------------------------------------------------- Deductions Cash Distributions to Participants or Their Beneficiaries 608 837 1,213 - - - ----------------------------------------------------------------- Total Deductions 608 837 1,213 - - - ----------------------------------------------------------------- Net Decrease (519) (700) (1,034) Net Assets Available for Benefits Beginning of Year 1,752 2,452 3,486 - - - ----------------------------------------------------------------- End of Year $1,233 1,752 2,452 ================================================================= See Notes to Financial Statements. 16 - - - ----------------------------------------------------------------- Statement Of Net Assets Thrift Plan Of Phillips Available For Benefits Petroleum Company FUND E Thousands of Dollars ---------- At December 31 1993 ---------- Assets Investments BT Pyramid Equity Index Fund $37,590 Due From Temporary Investment Fund 350 - - - ---------------------------------------------------------------- Total Assets 37,940 - - - ---------------------------------------------------------------- Net Assets Available for Benefits $37,940 ================================================================ Number of Units 34,189,510 Unit Value $1.1097 - - - ---------------------------------------------------------------- See Notes to Financial Statements. 17 - - - ----------------------------------------------------------------- Statement Of Changes In Net Thrift Plan Of Phillips Assets Available For Benefits Petroleum Company FUND E Thousands of Dollars --------------------------------- Years Ended December 31 1993 1992 1991 --------------------------------- Additions Investment Income Interest Debt securities of Phillips Petroleum Company $ - 452 2,347 Other - 2 4 Net appreciation (depreciation) 2,500 (290) (704) - - - ----------------------------------------------------------------- 2,500 164 1,647 Allocation of Deposits and Earnings from Temporary Investment Fund 3,026 - - - - - ----------------------------------------------------------------- Total Additions 5,526 164 1,647 - - - ----------------------------------------------------------------- Deductions Cash Distributions to Participants or Their Beneficiaries 1,950 109 774 Administrative Expense 42 - - Transfers to Other Plans - - 5 - - - ----------------------------------------------------------------- Total Deductions 1,992 109 779 - - - ----------------------------------------------------------------- Interfund Transfers 34,406 (17,286) (2,689) - - - ----------------------------------------------------------------- Net Increase (Decrease) 37,940 (17,231) (1,821) Net Assets Available for Benefits Beginning of Year - 17,231 19,052 - - - ----------------------------------------------------------------- End of Year $37,940 - 17,231 ================================================================= See Notes to Financial Statements. 18 - - - ----------------------------------------------------------------- Statement Of Net Assets Thrift Plan Of Phillips Available For Benefits Petroleum Company FUND F Thousands of Dollars ---------- At December 31 1993 ---------- Assets Investments BT Pyramid Discretionary Cash Fund $19,665 Due from Temporary Investment Fund 350 Interest Receivable 56 - - - ----------------------------------------------------------------- Total Assets 20,071 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $20,071 ================================================================= Number of Units 19,802,851 Unit Value $1.0135 - - - ----------------------------------------------------------------- See Notes to Financial Statements. 19 - - - ----------------------------------------------------------------- Statement Of Changes In Net Thrift Plan Of Phillips Assets Available For Benefits Petroleum Company FUND F Thousands of Dollars ---------- Year Ended December 31 1993 ---------- Additions Investment Income Interest $ 228 Allocation of Deposits and Earnings from Temporary Investment Fund 1,682 - - - ----------------------------------------------------------------- Total Additions 1,910 - - - ----------------------------------------------------------------- Deductions Cash Distributions to Participants or Their Beneficiaries 2,491 Transfer from Other Plans (34) Administrative Expense 7 - - - ----------------------------------------------------------------- Total Deductions 2,464 - - - ----------------------------------------------------------------- Interfund Transfers 20,625 - - - ----------------------------------------------------------------- Net Increase 20,071 Net Assets Available for Benefits Beginning of Year - - - - ----------------------------------------------------------------- End of Year $20,071 ================================================================= See Notes to Financial Statements. 20 - - - ----------------------------------------------------------------- Statement Of Net Assets Thrift Plan Of Phillips Available For Benefits Petroleum Company LOAN FUND Thousands of Dollars ---------- At December 31 1993 ---------- Assets Investments Loans to participants $14,157 - - - ----------------------------------------------------------------- Total Assets 14,157 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $14,157 ================================================================= See Notes to Financial Statements. 21 - - - ----------------------------------------------------------------- Statement Of Changes In Net Thrift Plan Of Phillips Assets Available For Benefits Petroleum Company LOAN FUND Thousands of Dollars ---------- Year Ended December 31 1993 ---------- Deductions Cash Distributions to Participants or Their Beneficiaries $ 13 Loan repayments from Plan participants 523 - - - ----------------------------------------------------------------- Total Deductions 536 - - - ----------------------------------------------------------------- Interfund Transfers 14,693 - - - ----------------------------------------------------------------- Net Increase 14,157 Net Assets Available for Benefits Beginning of Year - - - - ----------------------------------------------------------------- End of Year $14,157 ================================================================= See Notes to Financial Statements. 22 - - - ----------------------------------------------------------------- Statement Of Net Assets Thrift Plan Of Phillips Available For Benefits Petroleum Company TEMPORARY INVESTMENT FUND Thousands of Dollars ---------------------- At December 31 1993 1992 ---------------------- Assets Investments BT Pyramid Government Securities Cash Fund $3,095 2,774 Contributions Receivable 122 47 Employee Deposits Receivable 238 107 Loan Repayments Receivable 33 - Interest Receivable 7 6 - - - ----------------------------------------------------------------- Total Assets 3,495 2,934 - - - ----------------------------------------------------------------- Liabilities Due to Fund A 140 88 Due to Fund B 2,655 2,347 Due to Fund D--Deposit Administration Account - 499 Due to Fund E 350 - Due to Fund F 350 - - - - ----------------------------------------------------------------- Total Liabilities 3,495 2,934 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $ - - ================================================================= See Notes to Financial Statements. 23 - - - ----------------------------------------------------------------- Statement Of Changes In Net Thrift Plan Of Phillips Assets Available For Benefits Petroleum Company TEMPORARY INVESTMENT FUND Thousands of Dollars ---------------------------------- Years Ended December 31 1993 1992 1991 ---------------------------------- Additions Contributions and Deposits Company contributions Before-tax deposits $16,518 15,388 15,656 Employee deposits 17,913 17,533 18,476 Loan repayments from Plan participants 523 - - - - - ----------------------------------------------------------------- 34,954 32,921 34,132 Investment Income Interest 185 88 137 - - - ----------------------------------------------------------------- Total Additions 35,139 33,009 34,269 - - - ----------------------------------------------------------------- Deductions Allocation of Deposits and Earnings 34,501 33,009 34,269 - - - ----------------------------------------------------------------- Total Deductions 34,501 33,009 34,269 - - - ----------------------------------------------------------------- Interfund Transfers (638) - - Net Increase - - - Net Assets Available for Benefits Beginning of Year - - - - - - ----------------------------------------------------------------- End of Year $ - - - ================================================================= See Notes to Financial Statements. 24 - - - ----------------------------------------------------------------- Notes To Financial Statements Thrift Plan Of Phillips Petroleum Company Note 1--Plan Description The following description of the Thrift Plan of Phillips Petroleum Company (Plan) is subject to and qualified by the more complete information appearing in the Plan document. The Plan was known as the Thrift Plan of Phillips Petroleum Company and Subsidiary Companies until June 10, 1992. Beginning January 1, 1993, changes were made to the Plan to add new investment funds and provide participants with more flexibility in directing their savings investments. The Plan is a defined contribution plan available to certain employees of Phillips Petroleum Company and participating subsidiaries (Company). Generally, any regular employee on the direct dollar payroll of the Company is eligible to participate. Non-managerial retail outlet marketing employees are not eligible. Effective September 16, 1991, certain former employees elected to transfer assets and liabilities associated with their accounts to the Applied Automation, Inc. Incentive Savings Plan. Effective August 23, 1993, assets and liabilities associated with accounts from the Salary Reduction Thrift Plan for Employees of Incinatrol, Inc. were transferred to the Plan. The Company has a trust agreement with Bankers Trust Company, New York, New York (Trustee). Plan investments are held by the Trustee. Through December 31, 1992, WestStar Bank, N.A., Bartlesville, Oklahoma, was the investment manager for Fund A of the Plan. Since then, Fund A has been managed by the Trustee, with Wells Fargo Institutional Trust Company managing Fund A assets invested in the Wells Fargo Government/Corporate Bond Index Fund E. Participants may have up to 15 percent of their pay deposited in the Plan each month. The first 5 percent is designated as regular deposits with any excess being designated as supplemental deposits. Deposits may be further designated by a participant as before-tax or after-tax deposits. Before-tax deposits are made by the Company on behalf of a participant who has elected the before-tax feature of the Plan. Total deposit amounts and allocation of deposits between after-tax and before-tax accounts are subject to limitations imposed by the Internal Revenue Code. Participants may change their investment direction and deposit rate semiannually during designated enrollment periods. Employee deposits may be suspended in certain circumstances. The Company contributes an amount equal to 25 percent of an employee's regular deposits made to Fund B and 15 percent of regular deposits made to any other investment fund. 25 Employee and before-tax deposits, and loan repayments are first placed in the Temporary Investment Fund and invested in certain specified short-term securities for up to 45 days after receipt by the Trustee. Loan repayments and any earnings thereon are transferred to the Loan Fund and then allocated to Funds A, B, E or F based on a participant's regular deposits. Employee deposits and the earnings thereon are paid into Funds A, B, E or F as directed by the participant, and invested as follows: Fund A (prior to January 1, 1993, in United States government securities; after December 31, 1992, in the commingled Wells Fargo Government/Corporate Bond Index Fund E managed by Wells Fargo Institutional Trust Company), Fund B (common stock of Phillips Petroleum Company), Fund E (after December 31, 1992, in the commingled BT Pyramid Equity Index Fund managed by Bankers Trust Company) and Fund F (effective July 1, 1993, in the BT Pyramid Discretionary Cash Fund, a commingled money market fund managed by Bankers Trust Company). After June 30, 1993, Fund D (investment contracts which guarantee repayment of principal invested and a fixed rate of interest) no longer accepts deposits. Fund E held Phillips debt securities until March 15, 1992, when Phillips redeemed all of its 13 7/8 percent senior notes due in 1997 and 14 3/4 percent subordinated debentures due in 2000, the proceeds being reinvested by the Plan in Fund B at that time. Company matching contributions are invested in Fund C (common stock of Phillips Petroleum Company). The Loan Fund is used to record transactions resulting from loans made to active employees against their accounts. Except for the Temporary Investment Fund and the Loan Fund, the interest of participants in each fund is represented by units allocated to them. The Plan provides for transfers among funds; however, plan participants may not direct transfers to Fund C, the Loan Fund, or the Temporary Investment Fund. Transfers to Fund D were permitted only in certain circumstances until June 15, 1993, but due to restrictions required by the insurance companies, transfers were not allowed out of Fund D after January 15, 1993. Beginning in 1993, monthly transfers were allowed between investment funds, except as mentioned above. A participant is vested at all times with respect to his deposits. Generally, a participant is vested with respect to his interest in Company contributions (a) if he has made, or has had made on his behalf, regular deposits for 12 months; (b) upon retirement pursuant to a Company retirement plan; (c) upon death; (d) upon becoming totally and permanently disabled; (e) upon reaching age 65; (f) upon being laid off; or (g) upon completion of five years of vesting service. Generally a participant may, as of any valuation date, withdraw any portion of his vested interest in his after-tax account. A participant may not withdraw his interest in his before-tax account unless he is at least age 59 1/2, experiences a specified financial hardship, becomes totally and permanently disabled, or separates from service. 26 Forfeitures arising from nonvested withdrawals are used to reduce future Company contributions. Forfeitures may be restored under certain circumstances if the participant later repays the amount withdrawn. Distributions occur upon separation from service, but may be deferred. For a participant who retires or becomes totally disabled, distribution may be deferred to a date not later than February of the year after the year age 70 1/2 is attained. If the participant dies, distribution to a surviving spouse beneficiary may be deferred to the second valuation date prior to the date on which the participant would have attained age 70 1/2. This deferral is revocable by the participant or the surviving spouse. Distributions to non-spouse beneficiaries may be deferred approximately five years. Distributions are based on the valuation of the participant's interest in the trust fund. Available forms of distribution are: (a) from Funds A, D, E or F in cash (distributions from Fund F were not available until 1993); (b) from Funds B and C in whole shares of common stock and/or cash; (c) with respect to a participant who retires under a Company retirement plan or a beneficiary spouse of a participant in the event of an active employee participant's death, in the form of an irrevocable nontransferable monthly annuity purchased with a specified dollar amount of the participant's interest in the Plan; and (d) with respect to a participant who retires before July 1, 1992, under a Company retirement plan, monthly, quarterly or annual payments irrevocably elected from his interest in Fund D commencing at retirement with, at the participant's direction, a designated life interest beneficiary to receive any unpaid scheduled payments following the participant's death. Since January 1, 1993, a participant may elect a direct rollover of the taxable portion of most distributions to an Individual Retirement Account or another tax-qualified plan. The taxable portion of any such distribution that is not rolled over directly will be subject to 20 percent federal withholding. The Plan is administered by a Thrift Plan Committee, the members of which are appointed by the Board of Directors of Phillips Petroleum Company. The Plan Financial Administrator and Plan Benefits Administrator are the persons who occupy, respectively, the Phillips Petroleum Company positions of Risk Management and Investment Manager, and Compensation and Benefits Manager. Members of the Committee and the Plan Administrators serve without compensation, but are reimbursed by the Company for necessary expenditures incurred in the discharge of their duties. 27 The Plan pays all reasonable expenses necessary for the operation of the Plan unless such expenses are paid by the Company. Prior to 1993, the Company paid all expenses other than brokerage fees, commissions, stock transfer taxes and other charges and expenses incurred in connection with the purchase or sale of securities which were paid by the Plan. Such expenses include a fee of 0.15 percent of the funds invested in the insured contracts in Fund D, and the guaranteed rates for these contracts will be reduced by such amount if the Company declines to pay these fees. Effective January 1, 1993, the Company began paying only the Trustee's recordkeeping and accounting fees and the class year contract administration fees. The Company intends to continue the Plan indefinitely, but reserves the right to amend or terminate it at any time. In the event of termination of the Plan each participant will become fully vested. Note 2--Investments All securities are valued at their quoted market price or, with respect to units of participation in commingled funds, redemption value. Insurance contracts are valued pursuant to their terms; the value represents fund deposits plus interest credited less distributions. Participant loans are valued at cost, which approximates fair value. Note 3--Contributions Receivable Contributions receivable at December 31 included the following: Thousands of Dollars -------------------- 1993 1992 -------------------- Receivable from the Company for matching contributions $507 520 Before-tax deposits 122 47 - - - ----------------------------------------------------------------- $629 567 ================================================================= 28 Note 4--Class Year Accounts A breakdown of Fund D--Deposit Administration Account by Class Year at December 31 follows: Thousands of Dollars ------------- Net Assets Available Number Unit for Benefits of Units Values ------------------------------------ 1993 - - - ---- 1992 $ 25,270 13,387,160 1.8876 1991 126,939 54,885,147 2.3128 1990 178,356 60,899,767 2.9287 1989 19,925 6,837,204 2.9141 1988 51,398 8,904,618 5.7721 -------- $401,888 ======== 1992 - - - ---- 1992 $ 15,777 8,958,366 1.7612 1991 125,146 58,404,193 2.1428 1990 186,546 69,617,439 2.6796 1989 19,646 7,338,441 2.6772 1988 51,396 9,751,654 5.2705 1987 8,027 5,039,151 1.5929 -------- $406,538 ======== Note 5--Loan Fund Since July 1, 1993, the Plan has allowed loans to active employees or parties in interest from their accounts. The minimum loan is $1,000, and generally the maximum is the lesser of $50,000 or half a participant's vested account. The loans may extend for up to 60 months (180 months for a home loan) with a rate of interest equal to the national prime lending rate, as determined on the regular valuation date prior to the date of a loan application. No more than one home loan and two regular loans may be outstanding at any given time. 29 Loan payments and interest are repaid to the borrowing participant's accounts through the Loan Fund, which records the outstanding loans and related transactions. Repayments are allocated to Funds A, B, E or F based on a participant's regular deposits. For the period ended December 31, 1993, the total of loans made by fund of origin, principal repaid, and aggregate outstanding loan balance were: Thousands of Dollars -------------------------------------------- Fund A B C D E F Total -------------------------------------------- Period ended December 31, 1993 - - - ----------------- Participant Loans $1,500 10,428 62 1,724 834 132 14,680 Principal Repaid 12 418 35 - 37 21 523 - - - ----------------------------------------------------------------- Loans Outstanding at December 31, 1993 $14,157 ================================================================= Note 6--Allocation of Deposits and Earnings from Temporary Investment Fund Allocation of deposits and earnings from the Temporary Investment Fund represents the allocation of employee deposits and before-tax contributions made to the Temporary Investment Fund and related earnings thereon. A breakdown of the allocation for each of the periods follows: Thousands of Dollars -------------------------------------- Fund A Fund B Fund D Fund E Fund F -------------------------------------- December 31, 1993 - - - ----------------- Employee deposits $ 769 12,957 1,388 1,645 1,149 Before-tax contributions 575 13,308 730 1,375 530 Interest 3 57 6 6 3 - - - ----------------------------------------------------------------- $1,347 26,322 2,124 3,026 1,682 ================================================================= December 31, 1992 - - - ----------------- Employee deposits $480 13,183 3,871 - - Before-tax contributions 405 12,853 2,130 - - Interest 2 69 16 - - - - - ----------------------------------------------------------------- $887 26,105 6,017 - - ================================================================= December 31, 1991 - - - ----------------- Employee deposits $400 13,913 4,163 - - Before-tax contributions 320 13,156 2,180 - - Interest 3 108 26 - - - - - ----------------------------------------------------------------- $723 27,177 6,369 - - ================================================================= 30 Note 7--Credit Facility Effective July 14, 1993, the Plan established a 364-day $50 million revolving credit facility with NationsBank of Texas, N.A., for the purpose of financing net Fund B and Fund C distributions, participant loans from the Plan, or transfer of participants' interests to other funds of the Plan. The interest rate may not exceed the Eurodollar interbank offered rate plus 0.25%. On December 31, 1993, no portion of this credit facility was outstanding. Effective June 17, 1994, this credit facility was reduced to $25 million. The Plan Trustee requested that the credit facility be renewed for this reduced amount for an additional year. Note 8--Transactions with Parties-in-Interest During 1993, 1992 and 1991, the Plan received $26,079,000, $30,231,000 and $30,513,000, respectively, in common stock dividends from the Company. Fees paid for legal, accounting, and other services rendered by parties-in-interest were based on customary and reasonable rates for such services. Note 9--Taxes The Internal Revenue Service has determined that the Plan, as amended through December 5, 1990, is qualified under Section 401(a) of the Internal Revenue Code of 1986 and the Trust is exempt from federal income tax under Section 501(a). Subsequent amendments are not expected to affect the qualified status of the Plan. The Committee is not aware of any activity that would affect the qualified status of the Plan. 31 - - - ------------------------------------------------------------------------------ Schedule of Assets Held for Thrift Plan Of Phillips Investment Purposes Petroleum Company Item 27a EIN 73-0400345, Plan No. 002 At December 31, 1993 Description of investment Thousands of Dollars Identity of issue, including maturity date, rate of -------------------- borrower, lessor, or interest, collateral, par or Historical Current similar party maturity value Cost Value - - - ---------------------- -------------------------------- ---------- --------- Phillips Petroleum Common stock, $1.25 par value, Company* 21,881,604 shares $322,111 634,567 -------- --------- Bankers Trust Company* 38,021.889 units, BT Pyramid Equity Index Fund 37,590 37,590 19,105,193.88 units, BT Pyramid Government Securities Cash Fund 19,106 19,106 19,665,294.72 units, BT Pyramid Discretionary Cash Fund 19,665 19,665 -------- --------- 76,361 76,361 -------- --------- Wells Fargo 8,829,388 units, Wells Fargo Institutional Trust Government/Corporate Bond Company* Index Fund E 90,558 90,558 -------- --------- Thrift Plan of Loans to Plan participants 14,157 14,157 Phillips Petroleum -------- --------- Company Travelers Insurance Group Annuity Contract GR-15505, Company* deposit administration account 178,356 178,356 Group Annuity Contract GR-1966A, deferred settlement account 1,233 1,233 Prudential Insurance Group Annuity Contract GA-5991, Company of America* deposit administration account 71,323 71,323 32 - - - ------------------------------------------------------------------------------ Schedule of Assets Held for Thrift Plan Of Phillips Investment Purposes Petroleum Company Item 27a EIN 73-0400345, Plan No. 002 At December 31, 1993 Description of investment Thousands of Dollars Identity of issue, including maturity date, rate of -------------------- borrower, lessor, or interest, collateral, par or Historical Current similar party maturity value Cost Value - - - ---------------------- -------------------------------- ---------- --------- Continental Assurance Group Annuity Contract GP-12692, Company* deposit administration account 63,945 63,945 Group Annuity Contract GP-12787, deposit administration account 25,270 25,270 Provident National Group Annuity Contract Assurance* GC-027-05048, deposit administration account 62,994 62,994 -------- --------- 403,121 403,121 -------- --------- $906,308 1,218,764 ======== ========= *Party-in-interest 33 - - - ------------------------------------------------------------------------------ Schedule of Reportable Transactions Thrift Plan Of Phillips Item 27d Petroleum Company EIN 73-0400345, Plan No. 002 Year Ended December 31, 1993 Thousands of Dollars Total Total -------------------------------- number of number of Gain or Identity of party purchases sales Value (loss) as involved and during the during the Value of of a result of description of asset plan year plan year purchases* sales* transactions - - - --------------------- ---------- ---------- ---------- ------ ------------ Bankers Trust Company, BT Pyramid Government Securities Cash Fund 308 169 $215,275 224,050 - Wells Fargo Institutional Trust Company, Wells Fargo Government/Corporate Bond Index Fund E 29 19 $ 96,987 13,473 802 Phillips Petroleum Company Common Stock 40 118 $ 35,185 104,079 54,954 *This is also the current value at time of transaction. 34 Exhibit 1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8, File No. 33-50134) pertaining to the Thrift Plan of Phillips Petroleum Company and in the related Prospectus of our report dated June 22, 1994, with respect to the financial statements and schedules of the Thrift Plan of Phillips Petroleum Company included in this Annual Report (Form 11-K) for the year ended December 31, 1993. /s/ ERNST & YOUNG ------------- ERNST & YOUNG Tulsa, Oklahoma June 22, 1994 35 EX-99.(B) 3 LONG-TERM STOCK SAVINGS PLAN Exhibit 99(b) FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the year ended December 31, 1993 ------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to ----------- ---------- Commission file number 33-50283 --------------------------------- LONG-TERM STOCK SAVINGS PLAN OF PHILLIPS PETROLEUM COMPANY (Full title of the Plan) PHILLIPS PETROLEUM COMPANY (Name of issuer of securities) Bartlesville, Oklahoma 74004 (Address of principal executive office) (Zip code) FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements -------------------- Financial statements of the Long-Term Stock Savings Plan of Phillips Petroleum Company, filed as part of this annual report, are listed in the accompanying index. (b) Exhibits -------- Exhibit 1 Consent of Ernst & Young. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Long-Term Stock Savings Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. LONG-TERM STOCK SAVINGS PLAN OF PHILLIPS PETROLEUM COMPANY /s/ D. R. Divelbiss ----------------------------- D. R. Divelbiss Member Long-Term Stock Savings Plan Committee June 22, 1994 1 - - - ----------------------------------------------------------------- Index To Financial Statements Long-Term Stock Savings Plan And Schedules Of Phillips Petroleum Company Page Report of Independent Auditors ............................. 3 Financial Statements Statements of Net Assets Available for Benefits at December 31, 1993 and 1992 Total Plan ........................................... 4 Fund EP .............................................. 6 Fund K ............................................... 8 Fund L ............................................... 10 Temporary Fund ....................................... 12 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 1993, 1992 and 1991 Total Plan ........................................... 5 Fund EP .............................................. 7 Fund K ............................................... 9 Fund L ............................................... 11 Temporary Fund ....................................... 13 Notes to Financial Statements ............................ 14 Supplemental Schedules Schedule of Assets Held for Investment Purposes at December 31, 1993 ...................................... 18 Schedule of Reportable Transactions for the Year Ended December 31, 1993 ...................................... 19 2 - - - ------------------------------------------------------------------ Report Of Independent Auditors The Long-Term Stock Savings Plan Committee Long-Term Stock Savings Plan of Phillips Petroleum Company We have audited the financial statements of the Long-Term Stock Savings Plan of Phillips Petroleum Company (Plan) listed in the accompanying index to financial statements and schedules. These financial statements are the responsibility of the Long-Term Stock Savings Plan Committee (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 the Committee, 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 listed in the accompanying index to financial statements and schedules present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1993 and 1992, and the changes in net assets available for plan benefits for each of the three years in the period ended December 31, 1993, 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 accompanying supplemental schedules of assets held for investment purposes as of December 31, 1993, and reportable transactions for the year ended December 31, 1993, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the 1993 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1993 basic financial statements taken as a whole. /s/ ERNST & YOUNG ------------- ERNST & YOUNG Tulsa, Oklahoma June 22, 1994 3 - - - ----------------------------------------------------------------- Statement Of Net Assets Long-Term Stock Savings Plan Available For Benefits Of Phillips Petroleum Company Thousands of Dollars ---------------------- At December 31 1993 1992 ---------------------- Assets Investments Common stock $984,885 872,703 Commingled fund 7,073 10,123 - - - ----------------------------------------------------------------- 991,958 882,826 Company Contributions Receivable Before-tax deposits 79 38 Interest Receivable 27 33 - - - ----------------------------------------------------------------- Total Assets 992,064 882,897 - - - ----------------------------------------------------------------- Liabilities Securities Acquisition Loans 527,850 554,050 Interest Payable 1,553 1,765 Stock Distributions Payable 26 - Securities Purchased 148 220 Administrative Expenses Payable 100 100 - - - ----------------------------------------------------------------- Total Liabilities 529,677 556,135 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $462,387 326,762 ================================================================= See Notes to Financial Statements. 4 - - - ------------------------------------------------------------------- Statement Of Changes In Net Long-Term Stock Savings Plan Assets Available For Benefits Of Phillips Petroleum Company Thousands of Dollars ---------------------------------- Years Ended December 31 1993 1992 1991 ---------------------------------- Additions Company Contributions Funds for debt service $ 6,605 13,216 23,990 Dividend replacement - - 1,427 Basic allocation requirements 286 188 - Before-tax deposits 6,449 6,501 6,678 - - - ------------------------------------------------------------------- 13,340 19,905 32,095 - - - ------------------------------------------------------------------- Investment Income (Loss) Dividends 38,514 39,445 39,849 Interest 321 363 358 Net appreciation (depreciation) 134,935 40,582 (75,771) - - - ------------------------------------------------------------------- 173,770 80,390 (35,564) - - - ------------------------------------------------------------------- Other - 20 - - - - ------------------------------------------------------------------- Total Additions (Deductions) 187,110 100,315 (3,469) - - - ------------------------------------------------------------------- Deductions Distributions to Participants or Their Beneficiaries Common stock 31,869 32,598 7,322 Cash 20 29 3 - - - ------------------------------------------------------------------- 31,889 32,627 7,325 Interest Expense 19,496 24,015 37,037 Administrative Expense 100 100 198 - - - ------------------------------------------------------------------- Total Deductions 51,485 56,742 44,560 - - - ------------------------------------------------------------------- Net Increase (Decrease) 135,625 43,573 (48,029) Net Assets Available for Benefits Beginning of Year 326,762 283,189 331,218 - - - ------------------------------------------------------------------- End of Year $462,387 326,762 283,189 =================================================================== See Notes to Financial Statements. 5 - - - ----------------------------------------------------------------- Statement Of Net Assets Long-Term Stock Savings Plan Available For Benefits Of Phillips Petroleum Company FUND EP Thousands of Dollars ------------------------ At December 31 1993 1992 ------------------------ Assets Investments Common stock $170,772 155,462 Commingled fund 10 7 - - - ----------------------------------------------------------------- 170,782 155,469 Interest Receivable 1 1 - - - ----------------------------------------------------------------- Total Assets 170,783 155,470 - - - ----------------------------------------------------------------- Liabilities Stock Distributions Payable 18 - Administrative Expenses Payable 100 100 - - - ----------------------------------------------------------------- Total Liabilities 118 100 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $170,665 155,370 ================================================================= Number of Units 33,285,802 34,947,937 Unit Value $5.1272 4.4458 - - - ----------------------------------------------------------------- See Notes to Financial Statements. 6 - - - ------------------------------------------------------------------- Statement Of Changes In Net Long-Term Stock Savings Plan Assets Available For Benefits Of Phillips Petroleum Company FUND EP Thousands of Dollars ---------------------------------- Years Ended December 31 1993 1992 1991 ---------------------------------- Additions Investment Income (Loss) Dividends $ 6,734 7,185 7,359 Interest 2 4 17 Net appreciation (depreciation) 24,082 7,800 (14,013) - - - ------------------------------------------------------------------- 30,818 14,989 (6,637) Other - 20 - - - - ------------------------------------------------------------------- Total Additions (Deductions) 30,818 15,009 (6,637) - - - ------------------------------------------------------------------- Deductions Distributions to Participants or Their Beneficiaries Common stock 15,407 19,100 4,813 Cash 16 14 6 - - - ------------------------------------------------------------------- 15,423 19,114 4,819 Administrative Expense 100 100 198 - - - ------------------------------------------------------------------- Total Deductions 15,523 19,214 5,017 - - - ------------------------------------------------------------------- Net Increase (Decrease) 15,295 (4,205) (11,654) Net Assets Available for Benefits Beginning of Year 155,370 159,575 171,229 - - - ------------------------------------------------------------------- End of Year $170,665 155,370 159,575 =================================================================== See Notes to Financial Statements. 7 - - - ----------------------------------------------------------------- Statement Of Net Assets Long-Term Stock Savings Plan Available For Benefits Of Phillips Petroleum Company FUND K Thousands of Dollars ------------------------ At December 31 1993 1992 ------------------------ Assets Investments Common stock $31,758 23,274 Commingled fund 503 264 - - - ----------------------------------------------------------------- 32,261 23,538 Due from Temporary Fund 602 601 Interest Receivable 1 1 - - - ----------------------------------------------------------------- Total Assets 32,864 24,140 - - - ----------------------------------------------------------------- Liabilities Securities Purchased 148 220 Stock Distributions Payable 1 - - - - ----------------------------------------------------------------- Total Liabilities 149 220 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $32,715 23,920 ================================================================= Number of Units 26,428,925 22,213,066 Unit Value $1.2379 1.0768 - - - ----------------------------------------------------------------- See Notes to Financial Statements. 8 - - - ------------------------------------------------------------------- Statement Of Changes In Net Long-Term Stock Savings Plan Assets Available For Benefits Of Phillips Petroleum Company FUND K Thousands of Dollars --------------------------------- Years Ended December 31 1993 1992 1991 --------------------------------- Additions Allocation of Deposits and Earnings from Temporary Fund $ 6,463 6,518 6,704 - - - ------------------------------------------------------------------- Investment Income (Loss) Dividends 1,134 904 613 Interest 12 13 22 Net appreciation (depreciation) 3,463 830 (1,436) - - - ------------------------------------------------------------------- 4,609 1,747 (801) - - - ------------------------------------------------------------------- Total Additions 11,072 8,265 5,903 - - - ------------------------------------------------------------------- Deductions Distributions to (refunds from) Participants or Their Beneficiaries Common stock 2,278 1,883 355 Cash (1) - (1) - - - ------------------------------------------------------------------- Total Deductions 2,277 1,883 354 - - - ------------------------------------------------------------------- Net Increase 8,795 6,382 5,549 Net Assets Available for Benefits Beginning of Year 23,920 17,538 11,989 - - - ------------------------------------------------------------------- End of Year $32,715 23,920 17,538 =================================================================== See Notes to Financial Statements. 9 - - - ----------------------------------------------------------------- Statement Of Net Assets Long-Term Stock Savings Plan Available For Benefits Of Phillips Petroleum Company FUND L Thousands of Dollars ------------------------ At December 31 1993 1992 ------------------------ Assets Investments Common stock $782,355 693,967 Commingled fund 6,038 9,290 - - - ----------------------------------------------------------------- 788,393 703,257 Interest Receivable 24 30 - - - ----------------------------------------------------------------- Total Assets* 788,417 703,287 - - - ----------------------------------------------------------------- Liabilities Securities Acquisition Loans 527,850 554,050 Interest Payable 1,553 1,765 Stock Distributions Payable 7 - - - - ----------------------------------------------------------------- Total Liabilities 529,410 555,815 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $259,007 147,472 ================================================================= Number of Units 120,191,086 99,543,753 Unit Value** $1.6583 1.4368 - - - ----------------------------------------------------------------- See Notes to Financial Statements. *The amount of total assets that was not allocated to participants at December 31, 1993 and 1992 was $589,098 thousand and $560,265 thousand, respectively. **Unit value calculated on assets allocated to participants only. 10 - - - ------------------------------------------------------------------- Statement Of Changes In Net Long-Term Stock Savings Plan Assets Available For Benefits Of Phillips Petroleum Company FUND L Thousands of Dollars ---------------------------------- Years Ended December 31 1993 1992 1991 ---------------------------------- Additions Company Contributions Funds for debt service $ 6,605 13,216 23,990 Dividend replacement - - 1,427 Basic allocation requirements 286 188 - - - - ------------------------------------------------------------------- 6,891 13,404 25,417 - - - ------------------------------------------------------------------- Investment Income (Loss) Dividends 30,646 31,356 31,877 Interest 293 329 293 Net appreciation (depreciation) 107,390 31,952 (60,322) - - - ------------------------------------------------------------------- 138,329 63,637 (28,152) - - - ------------------------------------------------------------------- Total Additions (Deductions) 145,220 77,041 (2,735) - - - ------------------------------------------------------------------- Deductions Distributions to (refunds from) Participants or Their Beneficiaries Common stock 14,184 11,615 2,154 Cash 5 15 (2) - - - ------------------------------------------------------------------- 14,189 11,630 2,152 Interest Expense 19,496 24,015 37,037 - - - ------------------------------------------------------------------- Total Deductions 33,685 35,645 39,189 - - - ------------------------------------------------------------------- Net Increase (Decrease) 111,535 41,396 (41,924) Net Assets Available for Benefits Beginning of Year 147,472 106,076 148,000 - - - ------------------------------------------------------------------- End of Year $259,007 147,472 106,076 =================================================================== See Notes to Financial Statements. 11 - - - ----------------------------------------------------------------- Statement Of Net Assets Long-Term Stock Savings Plan Available For Benefits Of Phillips Petroleum Company TEMPORARY FUND Thousands of Dollars -------------------- At December 31 1993 1992 -------------------- Assets Investments Commingled fund $522 562 Company Contributions Receivable Before-tax deposits 79 38 Interest Receivable 1 1 - - - ----------------------------------------------------------------- Total Assets 602 601 Liabilities Due to Fund K 602 601 - - - ----------------------------------------------------------------- Net Assets Available for Benefits $ - - ================================================================= See Notes to Financial Statements. 12 - - - ------------------------------------------------------------------- Statement Of Changes In Net Long-Term Stock Savings Plan Assets Available For Benefits Of Phillips Petroleum Company TEMPORARY FUND Thousands of Dollars -------------------------------- Years Ended December 31 1993 1992 1991 -------------------------------- Additions Company Contributions Before-tax deposits $6,449 6,501 6,678 Investment Income Interest 14 17 26 - - - ------------------------------------------------------------------- Total Additions 6,463 6,518 6,704 - - - ------------------------------------------------------------------- Deductions Allocation of Deposits and Earnings to Fund K 6,463 6,518 6,704 - - - ------------------------------------------------------------------- Net Increase - - - Net Assets Available for Benefits Beginning of Year - - - - - - ------------------------------------------------------------------- End of Year $ - - - =================================================================== See Notes to Financial Statements. 13 - - - ----------------------------------------------------------------- Notes To Financial Statements Long-Term Stock Savings Plan Of Phillips Petroleum Company Note 1--Plan Description The following description of the Plan is subject to and qualified by the more complete information appearing in the Plan document. The Plan became effective July 1, 1988, and is a defined contribution plan available to certain employees of Phillips Petroleum Company and participating subsidiaries (Company). Generally, any regular employee on the direct dollar payroll of the Company is eligible to participate, except non-managerial retail marketing outlet employees. The Company has a trust agreement with Bankers Trust Company, 280 Park Avenue, New York, New York 10017 (Trustee). Plan investments are held by the Trustee in the Temporary Fund, Fund K, Fund L and Fund EP. Temporary Fund investments consist of specified short-term securities. Funds K, L and EP are invested primarily in common stock of Phillips Petroleum Company (Phillips Stock). Fund L consists of Phillips Stock purchased with the proceeds of the loans described in Note 2 and Note 5 or with Company contributions. The Phillips Stock will be allocated to Fund L accounts of eligible participants. The Plan provides for three types of stock allocations: semiannual basic allocations, dividend replacement allocations and supplemental allocations. A basic allocation will be made as of June 30 and December 31 of each year. Prior to 1999, 716,846 shares of stock will be divided among or "allocated to" the Fund L accounts of eligible participants as of each June 30 and December 31. After 1998 and through the later of 2003 or the allocation date following the date the second loan is repaid, the number of shares to be allocated semiannually will be 477,876. A participant's semiannual basic allocation is based on the ratio of the participant's Fund K before-tax deposits to all eligible participants' before-tax deposits for the allocation period (both net of Fund K withdrawals during the period). If the Company does not elect to make a special contribution and if eligible dividends from participants' Fund L or Fund EP accounts are used to make loan payments, participants will receive a dividend replacement allocation. In 1993, the Plan used $11.8 million in dividends from participants' Fund L and Fund EP accounts and allocated 400,290 shares valued at $29.38 per share in dividend replacement allocations. In 1992, the Plan used $10.8 million in dividends from participants' Fund L and Fund EP accounts and allocated 434,518 shares valued at $24.75 per share in dividend replacement allocations. A supplemental allocation will be made each year-end if all shares released for allocation, based on loan payment provisions, have not been allocated. 14 The Company makes contributions to the Plan which, when aggregated with the Plan's dividends from Funds L and EP and interest earnings from Fund L, equal the amount necessary to enable the Plan to make its regularly scheduled payments of principal and interest due on its loans. The Company may also elect to make dividend replacement contributions to the Plan, as an alternative to utilizing the dividends from shares in Fund EP or allocated shares in Fund L. Finally, the Company may make contributions to the Plan in the amount necessary to bring the number of shares of stock released for allocation up to the level required to complete the basic allocation. Eligible employees may elect to have their salaries reduced and before-tax deposits made by the Company on their behalf equal to one percent of pay. These deposits are held in the Temporary Fund up to 45 days, and then, with the earnings thereon, are transferred into the employee's Fund K account. The interest of participants in each fund is represented by units allocated to them. Assets of the Employee Stock Ownership Plan of Phillips Petroleum Company (ESOP) and the Payroll Stock Ownership Plan of Phillips Petroleum Company (PAYSOP), which were merged into the Plan on July 1, 1988, are held in Fund EP and credited to eligible participants' accounts. Participants are always vested in their deposits and amounts credited to their accounts. Total withdrawals from Funds K, L and EP may be made upon the occurrence of specified events, including attainment of age 59 1/2 (after December 31, 1998, for Funds EP and L) or separation from service. Partial withdrawals are permitted in cases of specified financial hardship and certain other cases. For a participant who retires or becomes totally disabled, distribution will be deferred to a date not later than February of the year after the year age 70 1/2 is attained. If the participant dies, distribution to a surviving spouse beneficiary will be deferred to the second valuation date prior to the date on which the participant would have attained age 70 1/2. This deferral is revocable by the participant or the surviving spouse. Distributions to non-spouse beneficiaries may be deferred approximately five years. Since January 1, 1993, a participant may elect a direct rollover of the taxable portion of most distributions to an Individual Retirement Account or another tax-qualified plan. The taxable portion of any such distribution that is not rolled over directly will be subject to 20 percent federal withholding. The Plan is administered by the Long-Term Stock Savings Plan Committee, the members of which are appointed by the Board of Directors of Phillips Petroleum Company. Members of the Committee serve without compensation, but are reimbursed by the Company for necessary expenditures incurred in the discharge of their duties. Administrative expenses of the Plan will be paid 15 by the Trustee from assets of the Plan to the extent allowable by law, unless paid by the Company. In 1993 and 1992, the Trustee made cash payments of $100,000 for administrative expense to Phillips from Fund EP. Plan administrative expenses of approximately $437,000 and $406,000 were paid by Phillips to the Trustee in 1993 and 1992, respectively. Note 2--Securities Acquisition Loans The Plan borrowed $250 million and $400 million (Loans) in 1988 and 1990, respectively, and purchased 14,336,918 and 14,159,292 shares of common stock from Phillips Petroleum Company (Phillips), respectively. The shares are held in a Fund L suspense account until allocated to eligible participants based on the provisions of the Plan. At December 31, 1993 and 1992, the market value of unallocated shares was $583 million and $551 million, respectively. The Loans are guaranteed by Phillips. They are being repaid through contributions made by the Company, dividends on unallocated and certain allocated shares and earnings on the short-term investment of contributions and dividends. The notes payable under the $250 million loan had scheduled maturities through 1998. (See Note 5 for information regarding the refinancing of these notes.) Annual installments of $25 million and $24 million were paid on the notes in 1993 and 1992, respectively. The $400 million loan is a fifteen-year-term bank loan. Any participating bank in the syndicate of lenders may cease to participate on November 30, 1997, by giving not less than 180 days prior notice to the Plan and Phillips. Also, each bank participating in the loan has the optional right, if the current directors of Phillips or their approved successors cease to be a majority of the Board, and upon not less than 90 days' notice, to cease to participate in the loan. Under the above conditions, such banks' rights and obligations under the loan agreement must be purchased by Phillips if not transferred to another bank of Phillips' choice. Repayment of the loan is scheduled to begin in 1999 with a $30 million installment, increasing each year through the date of maturity. Early payments of $900 thousand and $2 million were made on the loan in 1993 and 1992, respectively. The Loans provide for variable interest rates. At December 31, 1993 and 1992, the rates were 2.91% and 3.25%, respectively, for the $250 million loan. The rates for the $400 million loan at December 31, 1993 and 1992, were 3.63% and 4.31%, respectively. Note 3--Investments Phillips Stock is valued at the closing quoted market price. For commingled funds, cost and market value are the same. 16 Note 4--Taxes The Internal Revenue Service has determined that the Plan, as amended through November 9, 1990, is qualified under Section 401(a) of the Internal Revenue Code of 1986 and the Trust is exempt from federal income tax under Section 501(a). Subsequent amendments have been adopted, but are not expected to affect the qualified status of the Plan. The Committee is not aware of any activity that would affect the qualified status of the Plan. Note 5--Subsequent Event During April 1994, the Plan signed a $131 million term loan agreement to refinance the outstanding notes payable issued in 1988, which were redeemed on May 16, 1994. The new term loan will be repaid in annual installments of $17.4 million, $25.6 million, $27.5 million, $29.4 million and $31.1 million in the years 1994 through 1998. The Company continues to guarantee the payment of Plan debt. 17 - - - ------------------------------------------------------------------------------ Schedule of Assets Held for Long-Term Stock Savings Plan Investment Purposes Of Phillips Petroleum Company Item 27a EIN 73-0400345, Plan 022 At December 31, 1993 Description of investment Thousands of Dollars Identity of issue, including maturity date, rate of -------------------- borrower, lessor, or interest, collateral, par or Historical Current similar party maturity value Cost Value - - - ---------------------- -------------------------------- ---------- ------- Phillips Petroleum 33,961,553 shares of common Company* stock, $1.25 par value $704,625 984,885 Bankers Trust Company* 7,072,963 units of participation in General Employee Benefit Trust, BT Pyramid Government Securities Cash Fund 7,073 7,073 -------- ------- $711,698 991,958 ======== ======= *Party-in-interest 18 - - - ------------------------------------------------------------------------------ Schedule of Reportable Transactions Long-Term Stock Savings Plan of Item 27d Phillips Petroleum Company EIN 73-0400345, Plan 022 Year Ended December 31, 1993 Thousands of Dollars Total Total ------------------------------- number of number of Gain or Identity of party purchases sales Value (loss) as involved and during the during the Value of of a result of description of asset plan year plan year purchases* sales* transactions - - - --------------------- ---------- ---------- ---------- ------ ------------ Bankers Trust Company General Employee Benefit Trust, BT Pyramid Government Securities Cash Fund 215 279 $59,274 62,323 - *This is also the current value at time of transaction. 19 Exhibit 1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8, File No. 33-50283) pertaining to the Long- Term Stock Savings Plan of Phillips Petroleum Company and in the related Prospectus of our report dated June 22, 1994, with respect to the financial statements and schedules of the Long-Term Stock Savings Plan of Phillips Petroleum Company included in this Annual Report (Form 11-K) for the year ended December 31, 1993. /s/ ERNST & YOUNG ------------- ERNST & YOUNG Tulsa, Oklahoma June 22, 1994 20 EX-99.(C) 4 RETIREMENT SAVINGS PLAN Exhibit 99(c) FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the year ended December 31, 1993 ------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to ----------- ---------- Commission file number 33-28669 --------------------------------- RETIREMENT SAVINGS PLAN OF PHILLIPS PETROLEUM COMPANY SUBSIDIARIES (Full title of the Plan) PHILLIPS PETROLEUM COMPANY (Name of issuer of securities) Bartlesville, Oklahoma 74004 (Address of principal executive office) (Zip code) FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements -------------------- Financial statements of the Retirement Savings Plan of Phillips Petroleum Company Subsidiaries, filed as a part of this annual report, are listed in the accompanying index. (b) Exhibits -------- Exhibit 1 Consent of Ernst & Young. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Retirement Savings Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. RETIREMENT SAVINGS PLAN OF PHILLIPS PETROLEUM COMPANY SUBSIDIARIES /s/ L. F. Francis --------------------------------------- L. F. Francis Member Retirement Savings Plan Committee June 22, 1994 1 - - - ----------------------------------------------------------------- Index To Financial Statements Retirement Savings Plan Of And Schedule Phillips Petroleum Company Subsidiaries Page Report of Independent Auditors ............................. 3 Financial Statements Statement of Net Assets Available for Benefits at December 31, 1993 ................................... 4 Statement of Net Assets Available for Benefits at December 31, 1992 ................................... 5 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1993 ................... 6 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1992 ................... 7 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1991 ................... 8 Notes to Financial Statements ............................ 9 Supplemental Schedule Schedule of Assets Held for Investment Purposes at December 31, 1993 ...................................... 12 2 - - - ------------------------------------------------------------------ Report Of Independent Auditors The Retirement Savings Plan Committee Retirement Savings Plan of Phillips Petroleum Company Subsidiaries We have audited the financial statements of the Retirement Savings Plan of Phillips Petroleum Company Subsidiaries (Plan) listed in the accompanying index to financial statements and schedule. These financial statements are the responsibility of the Retirement Savings Plan Committee (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 the Committee, 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 listed in the accompanying index to financial statements and schedule present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1993 and 1992, and the changes in net assets available for plan benefits for each of the three years in the period ended December 31, 1993, 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 accompanying supplemental schedule of assets held for investment purposes as of December 31, 1993, is presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the basic financial statements. The supplemental schedule has been subjected to the auditing procedures applied in our audit of the 1993 financial statements and, in our opinion, is fairly stated in all material respects in relation to the 1993 basic financial statements taken as a whole. /s/ ERNST & YOUNG ------------- ERNST & YOUNG Tulsa, Oklahoma June 22, 1994 3 - - - -------------------------------------------------------------------- Statement Of Net Assets Retirement Savings Plan Of Available For Benefits Phillips Petroleum Company Subsidiaries At December 31, 1993 Fixed Temporary Investment Stock Investment Total Fund Fund Fund -------------------------------------------- Assets Investments Insurance contract $11,502,213 11,502,213 - - Common stock 538,994 - 538,994 - Money market fund 15,186 - 6,185 9,001 - - - -------------------------------------------------------------------- 12,056,393 11,502,213 545,179 9,001 Cash 201 - 100 101 Interest Receivable 32 - 15 17 Employee Deposits Receivable 9,229 - - 9,229 Employer Contributions Receivable 22,809 22,809 - - Interfund Receivable (Payable) - 17,467 881 (18,348) - - - -------------------------------------------------------------------- Total Assets 12,088,664 11,542,489 546,175 - Liabilities Cash Distributions Payable 202,891 202,891 - - - - - -------------------------------------------------------------------- Net Assets Available for Benefits $11,885,773 11,339,598 546,175 - ==================================================================== Number of Units 3,296,259 148,835 Unit Values $3.4401 3.6697 - - - -------------------------------------------------------------------- See Notes to Financial Statements. 4 - - - -------------------------------------------------------------------- Statement Of Net Assets Retirement Savings Plan Of Available For Benefits Phillips Petroleum Company Subsidiaries At December 31, 1992 Fixed Temporary Investment Stock Investment Total Fund Fund Fund -------------------------------------------- Assets Investments Insurance contract $10,833,871 10,833,871 - - Common stock 445,240 - 445,240 - Money market fund 19,023 - 10,357 8,666 - - - -------------------------------------------------------------------- 11,298,134 10,833,871 455,597 8,666 Cash 201 - 100 101 Interest Receivable 45 - 27 18 Employee Deposits Receivable 8,603 - - 8,603 Employer Contributions Receivable 21,530 21,530 - - Interfund Receivable (Payable) - 16,988 400 (17,388) - - - -------------------------------------------------------------------- Total Assets 11,328,513 10,872,389 456,124 - Liabilities Cash Distributions Payable 49,304 49,304 - - - - - -------------------------------------------------------------------- Net Assets Available for Benefits $11,279,209 10,823,085 456,124 - ==================================================================== Number of Units 3,390,305 147,975 Unit Values $3.1924 3.0824 - - - -------------------------------------------------------------------- See Notes to Financial Statements. 5 - - - ---------------------------------------------------------------------- Statement Of Changes In Net Retirement Savings Plan Of Assets Available For Benefits Phillips Petroleum Company Subsidiaries Year Ended December 31, 1993 Fixed Temporary Investment Stock Investment Total Fund Fund Fund -------------------------------------------- Additions Contributions and Deposits Participating Employer contributions $ 529,518 529,518 - - Employee deposits 109,001 - - 109,001 - - - ---------------------------------------------------------------------- 638,519 529,518 - 109,001 - - - ---------------------------------------------------------------------- Investment Income Interest 814,891 814,493 211 187 Dividends 20,364 - 20,364 - Net appreciation 66,240 - 66,240 - - - - ---------------------------------------------------------------------- 901,495 814,493 86,815 187 - - - ---------------------------------------------------------------------- Total Additions 1,540,014 1,344,011 86,815 109,188 - - - ---------------------------------------------------------------------- Deductions Cash Withdrawals and Distributions 927,850 927,850 - - Forfeitures 5,600 5,600 - - - - - ---------------------------------------------------------------------- Total Deductions 933,450 933,450 - - - - - ---------------------------------------------------------------------- Allocation of Deposits and Earnings - 105,952 3,236 (109,188) - - - ---------------------------------------------------------------------- Net Increase 606,564 516,513 90,051 - Net Assets Available for Benefits Beginning of Year 11,279,209 10,823,085 456,124 - - - - ---------------------------------------------------------------------- End of Year $11,885,773 11,339,598 546,175 - ====================================================================== See Notes to Financial Statements. 6 - - - ---------------------------------------------------------------------- Statement Of Changes In Net Retirement Savings Plan Of Assets Available For Benefits Phillips Petroleum Company Subsidiaries Year Ended December 31, 1992 Fixed Temporary Investment Stock Investment Total Fund Fund Fund -------------------------------------------- Additions Contributions and Deposits Participating Employer contributions $ 250,828 250,828 - - Employee deposits 110,645 - - 110,645 - - - ---------------------------------------------------------------------- 361,473 250,828 - 110,645 - - - ---------------------------------------------------------------------- Investment Income Interest 842,893 842,385 265 243 Dividends 19,609 - 19,609 - Net appreciation 18,935 - 18,935 - - - - ---------------------------------------------------------------------- 881,437 842,385 38,809 243 - - - ---------------------------------------------------------------------- Total Additions 1,242,910 1,093,213 38,809 110,888 - - - ---------------------------------------------------------------------- Deductions Cash Withdrawals and Distributions 402,225 402,225 - - Forfeitures 9,560 9,560 - - - - - ---------------------------------------------------------------------- Total Deductions 411,785 411,785 - - - - - ---------------------------------------------------------------------- Allocation of Deposits and Earnings - 107,125 3,763 (110,888) - - - ---------------------------------------------------------------------- Interfund Transfers - 5,773 (5,773) - - - - ---------------------------------------------------------------------- Net Increase 831,125 794,326 36,799 - Net Assets Available for Benefits Beginning of Year 10,448,084 10,028,759 419,325 - - - - ---------------------------------------------------------------------- End of Year $11,279,209 10,823,085 456,124 - ====================================================================== See Notes to Financial Statements. 7 - - - ---------------------------------------------------------------------- Statement Of Changes In Net Retirement Savings Plan Of Assets Available For Benefits Phillips Petroleum Company Subsidiaries Year Ended December 31, 1991 Fixed Temporary Investment Stock Investment Total Fund Fund Fund -------------------------------------------- Additions Contributions and Deposits Participating Employer contributions $ 252,358 252,358 - - Employee deposits 108,816 - - 108,816 - - - ---------------------------------------------------------------------- 361,174 252,358 - 108,816 - - - ---------------------------------------------------------------------- Investment Income Interest 847,187 846,267 520 400 Dividends 19,092 - 19,092 - Net depreciation (37,876) - (37,876) - - - - ---------------------------------------------------------------------- 828,403 846,267 (18,264) 400 - - - ---------------------------------------------------------------------- Total Additions (Deductions) 1,189,577 1,098,625 (18,264) 109,216 - - - ---------------------------------------------------------------------- Deductions Cash Withdrawals and Distributions 366,288 366,288 - - Forfeitures 3,591 3,591 - - - - - ---------------------------------------------------------------------- Total Deductions 369,879 369,879 - - - - - ---------------------------------------------------------------------- Allocation of Deposits and Earnings - 101,915 7,301 (109,216) - - - ---------------------------------------------------------------------- Interfund Transfers - 19,710 (19,710) - - - - ---------------------------------------------------------------------- Net Increase (Decrease) 819,698 850,371 (30,673) - Net Assets Available for Benefits Beginning of Year 9,628,386 9,178,388 449,998 - - - - ---------------------------------------------------------------------- End of Year $10,448,084 10,028,759 419,325 - ====================================================================== See Notes to Financial Statements. 8 - - - ----------------------------------------------------------------- Notes To Financial Statements Retirement Savings Plan Of Phillips Petroleum Company Subsidiaries Note 1--Plan Description The following description of the Retirement Savings Plan of Phillips Petroleum Company Subsidiaries (Plan) is subject to and qualified by the more complete information appearing in the Plan document. The Plan is a defined contribution plan sponsored by Phillips Petroleum Company (Company) for any subsidiary which the Company approves for participation in the Plan and which has adopted and become a party to the Plan for the current participation of their active employees (Participating Employer). For the three-year period ending December 31, 1993, Phillips Driscopipe, Inc. (with respect to hourly employees only) was the only Participating Employer. Other subsidiaries having present or former employees holding interests in the Plan are Catalyst Resources, Inc. (sold March 30, 1994), Drilling Specialties Company, Phillips Coal Company and Phillips Uranium Corporation (now liquidated). Generally, an employee of a Participating Employer becomes a participant after completing a six-month period of service of 500 or more hours. Participation in the Plan by each eligible employee is mandatory. Although not required to do so, a participant may make deposits, in whole percentages, ranging from 1 to 10 percent of his regular monthly earnings. A participant may elect to change his deposit rate once each six months. Phillips Driscopipe, Inc. contributes an amount equal to 5 percent of a participant's regular monthly earnings. Deposits and contributions are placed in a Trust fund which is administered by the WestStar Bank, N.A., Bartlesville, Oklahoma (Trustee). The Trust fund consists of the Stock Fund, the Fixed Investment Fund and the Temporary Investment Fund. Investments for each fund are as follows: Stock Fund (common stock of the Company); Fixed Investment Fund (an insurance contract with The Travelers Insurance Company under which Travelers guarantees repayment of the principal paid to it and a minimum effective rate of interest thereon) and Temporary Investment Fund (specified short-term securities). The interest of participants in each fund is represented by units allocated to them. Unit values reflected in the accompanying statements are based on aggregate fund values and aggregate units. Participant deposits are placed first in the Temporary Investment Fund for about 30 days. Deposits and earnings thereon are then paid into the Stock Fund or the Fixed Investment Fund as directed by the participant. Participants may direct that their deposits 9 be invested entirely in either the Stock Fund or Fixed Investment Fund or allocated between them in multiples of 10 percent. No investment directions may be made with respect to Participating Employer contributions, all of which are invested only in the Fixed Investment Fund. Investment directions may be changed once each year. The Plan allows limited transfers between the Stock Fund and the Fixed Investment Fund. A participant's interest in his own deposits is vested at all times. His interest in Participating Employer contributions becomes fully vested on the earliest of the following dates: (a) upon attainment of age 65 or upon his normal retirement; (b) upon completing five years of vesting service; (c) upon his death; (d) upon becoming totally disabled; (e) upon being laid off for lack of work; (f) upon termination or partial termination of the Plan or discontinuance of Participating Employer contributions; or (g) upon certain other events. Partial vesting takes place in one year increments, with complete vesting after five years of vesting service. A participant who has made deposits may withdraw any amount attributable to those deposits. Withdrawals of deposits may be made only once each six months. Suspensions of three and six months apply for partial and complete withdrawals, respectively. A participant's interest in the contributions of a Participating Employer becomes available for distribution upon specified events, including separation from service or retirement. Termination of employment will result in forfeiture of Participating Employer contributions if a participant's interest attributable to those Participating Employer contributions is not vested. A participant who retires may elect a special deferral to a date no later than the February valuation date following the year of attainment of age 70 1/2. Distributions from the Fixed Investment Fund are in cash while those from the Stock Fund are in whole shares of the Company's common stock plus cash for fractional shares unless the participant directs that the distribution be wholly or partially in cash. Distribution in the form of an annuity is also available, as set forth in the Plan. In the event of termination of the Plan, participants and beneficiaries of deceased participants will be vested with respect to, and will receive, within a reasonable time, any funds in their accounts as of the date of the termination. The Plan is administered by the Retirement Savings Plan Committee, a Plan Financial Administrator and a Plan Benefits Administrator. The members of the Committee are appointed by the 10 Board of Directors of the Company. The Committee has power to interpret the Plan and the Plan Benefits Administrator has the authority to determine eligibility for benefits. Brokerage fees, commissions, stock transfer taxes and other charges and expenses incurred in connection with the purchase or sale of securities are paid by the Plan. The cost of administering the Plan is shared by the Participating Employers on a mutually agreeable basis. Note 2--Investments Common stock of the Company is valued at the closing quoted market price on the valuation date. The value of the insurance contract represents contributions plus interest credited less distributions. The money market fund is valued at the current redemption price determined by the Trustee. Note 3--Taxes The Internal Revenue Service (IRS) has determined that the Plan, as amended through October 28, 1985, is qualified under Section 401(a) of the Internal Revenue Code of 1986 and the Trust is exempt from federal income tax under Section 501(a). Subsequent amendments have been adopted, but are not expected to affect the qualified status of the Plan. The Committee is not aware of any activity that would affect the qualified status of the Plan. Note 4--Additional Company Contributions In accordance with the Plan document and Treasury regulations, the Company made additional contributions totaling $258,745 to the Plan in 1993 related to Plan years 1987, 1988 and 1989. These contributions were required by retroactive application of new requirements under Internal Revenue Code Section 414(s), which provides rules for nondiscrimination in the definition of plan compensation. The change in the definition of compensation resulted in additional benefits and additional required contributions. 11 - - - ------------------------------------------------------------------------------ Schedule of Assets Held for Retirement Savings Plan Of Investment Purposes Phillips Petroleum Company Item 27a Subsidiaries EIN 73-0400345, Plan 010 At December 31, 1993 Description of investment Thousands of Dollars Identity of issue, including maturity date, rate of ----------------------- borrower, lessor, interest, collateral, par or Historical Current or similar party maturity value Cost Value - - - -------------------- -------------------------------- ----------- ---------- The Travelers Group Annuity Contract GR-10462, Insurance Company* deposit administration fund $11,502,213 11,502,213 Phillips Petroleum 18,586 shares of common stock, Company* $1.25 par value 300,261 538,994 WestStar Bank, N.A.* 15,186 units of participation in the Shearson Treasury Trust Fund, a money market account 15,186 15,186 ----------- ---------- $11,817,660 12,056,393 =========== ========== *Party-in-interest 12 Exhibit 1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8, File No. 33-28669) pertaining to the Retirement Savings Plan of Phillips Petroleum Company Subsidiaries and in the related Prospectus of our report dated June 22, 1994, with respect to the financial statements and schedule of the Retirement Savings Plan of Phillips Petroleum Company Subsidiaries included in this Annual Report (Form 11-K) for the year ended December 31, 1993. /s/ ERNST & YOUNG ------------- ERNST & YOUNG Tulsa, Oklahoma June 22, 1994 13 -----END PRIVACY-ENHANCED MESSAGE-----