1
Exhibit 99.1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition PERIOD FROM to
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Commission File No. 1-10053
A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM
THAT OF THE ISSUER NAMED BELOW:
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
ORYX ENERGY COMPANY
00000 XXXX XXXX
XXXXXX, XX 00000-5067
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2
SIGNATURE
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan Administrator has duly caused this annual report to be signed by
the undersigned, thereunto duly authorized.
Oryx Energy Company
Capital Accumulation Plan
By: /s/ XXXXXXX X. XXXXXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxxxxx
PLAN ADMINISTRATOR
Date: May 30, 1997
3
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
INDEX
Page
----
Report of Independent Accountants
Balance Sheet as of December 31, 1996 F-1
Balance Sheet as of December 31, 1995 F-2
Statement of Income and Changes in Plan Equity for the Year Ended December 31, 1996 F-3
Statement of Income and Changes in Plan Equity for the Year Ended December 31, 1995 F-4
Statement of Income and Changes in Plan Equity for the Year Ended December 31, 1994 F-5
Notes to Financial Statements F-6
Schedules:
Schedules I, II and III have been omitted because the required information
is shown in the financial statements or notes thereto.
Eligibility:
a. Consent of Independent Accountants
4
[XXXXXXX & XXXXXXX L.L.P. LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator of the Oryx Energy Company
Capital Accumulation Plan:
We have audited the accompanying balance sheets of the Oryx Energy Company
Capital Accumulation Plan as of December 31, 1996 and 1995 and the related
statements of income and changes in plan equity for each of the three years in
the period ended December 31, 1996. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Oryx Energy Company
Capital Accumulation Plan as of December 31, 1996 and 1995 and the results of
its operations for each of the three years in the period ended December 31,
1996 in conformity with generally accepted accounting principles.
/s/ XXXXXXX & XXXXXXX L.L.P.
Dallas, Texas
May 30, 1997
5
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
BALANCE SHEET
DECEMBER 31, 1996
(THOUSANDS OF DOLLARS)
Participant Directed
------------------------------------------------------------------------
Vanguard Vanguard
Vanguard U.S. Vanguard International
Balanced Vanguard Growth Explorer Growth
ASSETS Index Fund Windsor II Portfolio Fund Portfolio
------------ ------------ ------------ ------------ ------------
Investments, at Market Value
(Notes 1 and 2):
Participation in:
Short-term investment fund (cost
approximates market value) $ -- $ -- $ -- $ -- $ --
Registered investment funds
(cost $50,007) 13,288 23,484 10,460 5,355 6,020
Capital preservation fund
(cost $53,299) -- -- -- -- --
Oryx Energy Company common stock
fund participant directed
(631,333 shares; cost $8,724) -- -- -- -- --
Oryx Energy Company common stock
fund nonparticipant directed
(344,411 shares; cost $5,070) -- -- -- -- --
Oryx Energy Company leveraged ESOP
common stock fund (2,465,000
shares; cost $94,601)
(Note 4) -- -- -- -- --
Participant loans -- -- -- -- --
------------ ------------ ------------ ------------ ------------
TOTAL ASSETS $ 13,288 $ 23,484 $ 10,460 $ 5,355 $ 6,020
============ ============ ============ ============ ============
LIABILITIES AND PLAN EQUITY
Withdrawals and Other Benefits Payable $ 40 $ 109 $ 60 $ 16 $ 6
ESOP Note Payable (Note 4) -- -- -- -- --
Plan Equity (Deficit) 13,248 23,375 10,400 5,339 6,014
------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES AND PLAN EQUITY $ 13,288 $ 23,484 $ 10,460 $ 5,355 6,020
============ ============ ============ ============ ============
Non-Participant
Participant Directed Directed
------------------------------------ -----------------------
Stable Oryx Oryx
Value Participant Stock Stock LESOP
ASSETS Fund Loans Fund Fund Fund Total
---------- ---------- ---------- ---------- ---------- ----------
Investments, at Market Value
(Notes 1 and 2):
Participation in:
Short-term investment fund (cost
approximates market value) $ -- $ -- $ -- $ -- $ -- $ --
Registered investment funds
(cost $50,007) -- -- -- -- -- 58,607
Capital preservation fund
(cost $53,299) 53,299 -- -- -- -- 53,299
Oryx Energy Company common stock
fund participant directed
(631,333 shares; cost $8,724) -- -- 15,734 -- -- 15,734
Oryx Energy Company common stock
fund nonparticipant directed
(344,411 shares; cost $5,070) -- -- -- 8,524 -- 8,524
Oryx Energy Company leveraged ESOP
common stock fund (2,465,000
shares; cost $94,601)
(Note 4) -- -- -- -- 61,035 61,035
Participant loans -- 5,445 -- -- -- 5,445
---------- ---------- ---------- ---------- ---------- ----------
TOTAL ASSETS $ 53,299 $ 5,445 $ 15,734 $ 8,524 $ 61,035 $ 202,644
========== ========== ========== ========== ========== ==========
LIABILITIES AND PLAN EQUITY
Withdrawals and Other Benefits Payable $ 168 $ -- $ 100 $ -- $ 27 $ 526
ESOP Note Payable (Note 4) -- -- -- -- 99,092 99,092
Plan Equity (Deficit) 53,131 5,445 15,634 8,524 (38,084) 103,026
---------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES AND PLAN EQUITY $ 53,299 $ 5,445 $ 15,734 $ 8,524 $ 61,035 $ 202,644
========== ========== ========== ========== ========== ==========
(See Accompanying Notes)
F-1
6
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
BALANCE SHEET
DECEMBER 31, 1995
(THOUSANDS OF DOLLARS)
Participant Directed
------------------------------------------------------------------------
Vanguard Vanguard
Vanguard U.S. Vanguard International
Balanced Vanguard Growth Explorer Growth
ASSETS Index Fund Windsor II Portfolio Fund Portfolio
------------ ------------ ------------ ------------ ------------
Investments, at Market Value
(Notes 1 and 2):
Participation in:
Short-term investment fund (cost
approximates market value) $ -- $ -- $ -- $ -- $ --
Registered investment funds
(cost $41,910) 13,284 18,239 5,989 4,968 5,347
Capital preservation fund
(cost $57,533) -- -- -- -- --
Oryx Energy Company common
stock fund, participant directed
(758,412 shares; cost $13,464) -- -- -- -- --
Oryx Energy Company common
stock fund, non-participant directed
(213,251 shares; cost $2,688) -- -- -- -- --
Oryx Energy Company leveraged ESOP
common stock fund (2,516,789
shares; cost $96,408) (Note 4) -- -- -- -- --
Participant loans -- -- -- -- --
Cash and receivables -- -- -- -- --
------------ ------------ ------------ ------------ ------------
TOTAL ASSETS $ 13,284 $ 18,239 $ 5,989 $ 4,968 $ 5,347
============ ============ ============ ============ ============
LIABILITIES AND PLAN EQUITY
Withdrawals and Other Benefits Payable $ 276 $ 430 $ 35 $ 84 $ 130
ESOP Note Payable (Note 4) -- -- -- -- --
Plan Equity (Deficit) 13,008 17,809 5,954 4,884 5,217
------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES AND PLAN EQUITY $ 13,284 $ 18,239 $ 5,989 $ 4,968 $ 5,347
============ ============ ============ ============ ============
Non-Participant
Participant Directed Directed
------------------------------------ -----------------------
Stable Oryx Oryx
Value Participant Stock Stock LESOP
ASSETS Fund Loans Fund Fund Fund Total
---------- ---------- ---------- ---------- ---------- ----------
Investments, at Market Value
(Notes 1 and 2):
Participation in:
Short-term investment fund (cost
approximates market value) $ -- $ 4 $ -- $ -- $ -- $ 4
Registered investment funds
(cost $41,910) -- -- -- -- -- 47,827
Capital preservation fund
(cost $57,533) 57,533 -- -- -- -- 57,533
Oryx Energy Company common
stock fund, participant directed
(758,412 shares; cost $13,464) -- -- 10,144 -- -- 10,144
Oryx Energy Company common
stock fund, non-participant directed
(213,251 shares; cost $2,688) -- -- -- 2,852 -- 2,852
Oryx Energy Company leveraged ESOP
common stock fund (2,516,789
shares; cost $96,408) (Note 4) -- -- -- -- 33,662 33,662
Participant loans -- 5,402 -- -- -- 5,402
Cash and receivables 27 -- -- -- -- 27
---------- ---------- ---------- ---------- ---------- ----------
TOTAL ASSETS $ 57,560 $ 5,406 $ 10,144 $ 2,852 $ 33,662 $ 157,451
========== ========== ========== ========== ========== ==========
LIABILITIES AND PLAN EQUITY
Withdrawals and Other Benefits Payable $ 1,108 $ -- $ 153 $ -- $ 100 $ 2,316
ESOP Note Payable (Note 4) -- -- -- -- 99,092 99,092
Plan Equity (Deficit) 56,452 5,406 9,991 2,852 (65,530) 56,043
---------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES AND PLAN EQUITY $ 57,560 $ 5,406 $ 10,144 $ 2,852 $ 33,662 $ 157,451
========== ========== ========== ========== ========== ==========
(See Accompanying Notes)
F-2
7
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1996
(THOUSANDS OF DOLLARS)
Participant Directed
---------------------------------------------------------------------
Vanguard Vanguard
Vanguard U.S. Vanguard International
Balanced Vanguard Growth Explorer Growth
ASSETS Index Fund Windsor II Portfolio Fund Portfolio
---------- ---------- ---------- ---------- ------------
Additions (Deductions):
Employee contributions $ 483 $ 1,025 $ 487 $ 374 $ 391
Employer contributions -- -- -- -- --
Interfund transfers (465) 2,009 2,552 166 386
Dividend income 589 1,654 755 300 259
Interest income -- -- -- -- --
Other receipts
(disbursements) -- -- -- -- --
Realized gain (loss) on
investments (Note 5) 750 1,332 744 337 329
Unrealized appreciation of
investments (Note 5) 392 1,480 312 31 238
Withdrawals and other
benefit payments (1,507) (1,930) (402) (752) (805)
Administrative expense
(Note 2) (2) (4) (2) (1) (1)
---------- ---------- ---------- ---------- ------------
Net Additions (Deductions) 240 5,566 4,446 455 797
Plan Equity (Deficit),
January 1, 1996 13,008 17,809 5,954 4,884 5,217
---------- ---------- ---------- ---------- ------------
Plan Equity (Deficit),
December 31, 1996 $ 13,248 $ 23,375 $ 10,400 $ 5,339 $ 6,014
========== ========== ========== ========== ============
Non-Participant
Participant Directed Directed
------------------------------------ ----------------------
Stable Oryx Oryx
Value Participant Stock Stock LESOP
ASSETS Fund Loans Fund Fund Fund Total
--------- ---------- --------- --------- --------- ---------
Additions (Deductions):
Employee contributions $ 1,274 $ -- $ 157 $ -- $ -- $ 4,191
Employer contributions -- -- -- 2,550 -- 2,550
Interfund transfers (2,111) (317) (1,512) (246) (462) --
Dividend income -- -- 13 -- -- 3,570
Interest income 3,526 360 -- -- -- 3,886
Other receipts
(disbursements) 6 (4) -- -- -- 2
Realized gain (loss) on
investments (Note 5) -- -- (2,474) 248 (985) 281
Unrealized appreciation of
investments (Note 5) -- -- 10,230 3,291 29,155 45,129
Withdrawals and other
benefit payments (5,965) -- (750) (171) (262) (12,544)
Administrative expense
(Note 2) (51) -- (21) -- -- (82)
--------- ---------- --------- --------- --------- ---------
Net Additions (Deductions) (3,321) 39 5,643 5,672 27,446 46,983
Plan Equity (Deficit),
January 1, 1996 56,452 5,406 9,991 2,852 (65,530) 56,043
--------- ---------- --------- --------- --------- ---------
Plan Equity (Deficit),
December 31, 1996 $ 53,131 $ 5,445 $ 15,634 $ 8,524 $ (38,084) $ 103,026
========= ========== ========= ========= ========= =========
(See Accompanying Notes)
F-3
8
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1995
(THOUSANDS OF DOLLARS)
Participant Directed
-----------------------------------------------------------------
Vanguard Vanguard
Vanguard U.S. Vanguard International
Balanced Vanguard Growth Explorer Growth
ASSETS Index Fund Windsor II Portfolio Fund Portfolio
---------- ---------- --------- --------- ------------
Additions (Deductions):
Employee contributions $ 560 $ 977 $ 333 $ 349 $ 445
Employer contributions -- -- -- -- --
Interfund transfers (7) 2,148 1,840 630 (1,154)
Dividend income 502 1,044 241 380 142
Interest income -- -- -- -- --
Other receipts
(disbursements) 1 1 -- -- --
Realized gain (loss) on
investments (Note 5) 194 318 195 83 73
Unrealized appreciation
of investments (Note 5) 2,260 3,296 893 441 509
Withdrawals and other
benefit payments (1,417) (1,934) (524) (289) (808)
Administrative expense
(Note 2) (2) (2) (1) (1) (1)
--------- --------- --------- --------- ------------
Net Additions (Deductions) 2,091 5,848 2,977 1,593 (794)
Plan Equity (Deficit),
January 1, 1995 10,917 11,961 2,977 3,291 6,011
--------- --------- --------- --------- ------------
Plan Equity (Deficit),
December 31, 1995 $ 13,008 $ 17,809 $ 5,954 $ 4,884 $ 5,217
========= ========= ========= ========= ============
Non-Participant
Participant Directed Directed
------------------------------------ ----------------------
Stable Oryx Oryx
Value Participant Stock Stock LESOP
ASSETS Fund Loans Fund Fund Fund Total
--------- ---------- --------- --------- --------- ---------
Additions (Deductions):
Employee contributions $ 1,815 $ -- $ 158 $ -- $ -- $ 4,637
Employer contributions -- -- -- 2,805 -- 2,805
Interfund transfers (1,596) (473) (655) (4) (729) --
Dividend income -- -- -- -- -- 2,309
Interest income 4,355 343 10 -- 3 4,711
Other receipts
(disbursements) 5 -- 28 (5) -- 30
Realized gain (loss) on
investments (Note 5) -- -- (1,965) 14 (2,884) (3,972)
Unrealized appreciation
of investments (Note 5) -- -- 3,430 163 6,784 17,776
Withdrawals and other
benefit payments (9,275) (217) (1,162) (121) (652) (16,399)
Administrative expense
(Note 2) (46) -- (12) -- -- (65)
--------- ---------- --------- --------- --------- ---------
Net Additions (Deductions) (4,742) (347) (168) 2,852 2,522 11,832
Plan Equity (Deficit),
January 1, 1995 61,194 5,753 10,159 -- (68,052) 44,211
--------- ---------- --------- --------- --------- ---------
Plan Equity (Deficit),
December 31, 1995 $ 56,452 $ 5,406 $ 9,991 $ 2,852 $ (65,530) $ 56,043
========= ========== ========= ========= ========= =========
(See Accompanying Notes)
F-4
9
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1994
(THOUSANDS OF DOLLARS)
Vanguard Vanguard Vanguard
Fund A/ Balanced Vanguard U.S. Growth Explorer
Fund B Index Fund Windsor II Portfolio Fund
-------- ---------- ---------- ----------- ---------
Additions (Deductions):
Assets transferred
in (out) $(24,136) $ 14,121 $ 12,486 $ 2,947 $ 2,861
Employee contributions -- 566 1,040 300 346
Employer contributions -- -- -- -- --
Interfund transfers -- (1,424) (66) 96 343
Dividend income -- 446 736 35 177
Interest income -- -- -- -- --
Other receipts
(disbursements) -- (3) -- -- --
Realized gain (loss) on
investments (Note 5) -- (126) (27) 8 (11)
Unrealized appreciation
(depreciation) of
investments (Note 5) -- (512) (822) 74 (131)
Withdrawals and other
benefit payments -- (2,150) (1,384) (482) (293)
Interest expense (Note 4) -- -- -- -- --
Administrative expense
(Note 2) -- (1) (2) (1) (1)
-------- ---------- --------- ---------- ---------
Net Additions (Deductions) (24,136) 10,917 11,961 2,977 3,291
Plan Equity (Deficit),
January 1, 1994 24,136 -- -- -- --
-------- ---------- --------- ---------- ---------
Plan Equity (Deficit),
December 31, 1994 $ -- $ 10,917 $ 11,961 $ 2,977 $ 3,291
======== ========== ========= ========== =========
Vanguard
International Stable Oryx
Growth Value Participant Stock LESOP
Portfolio Fund Loans Fund Fund Total
------------- -------- ----------- -------- -------- --------
Additions (Deductions):
Assets transferred
in (out) $ 4,935 $(11,530) $ -- $ (1,684) $ -- $ --
Employee contributions 549 2,048 -- 171 -- 5,020
Employer contributions -- -- -- -- 11,194 11,194
Interfund transfers 1,252 257 849 (983) (324) --
Dividend income 79 -- -- -- -- 1,473
Interest income -- 4,829 329 2 3 5,163
Other receipts
(disbursements) -- (14) (20) 8 -- (29)
Realized gain (loss) on
investments (Note 5) 21 -- -- (7,466) (2,045) (9,646)
Unrealized appreciation
(depreciation) of
investments (Note 5) (91) -- -- 2,249 (12,271) (11,504)
Withdrawals and other
benefit payments (733) (12,623) (473) (2,826) (988) (21,952)
Interest expense (Note 4) -- -- -- -- (8,563) (8,563)
Administrative expense
(Note 2) (1) (33) -- (16) -- (55)
------------ -------- -------- -------- -------- --------
Net Additions (Deductions) 6,011 (17,066) 685 (10,545) (12,994) (28,899)
Plan Equity (Deficit),
January 1, 1994 -- 78,260 5,068 20,704 (55,058) 73,110
------------ -------- -------- -------- -------- --------
Plan Equity (Deficit),
December 31, 1994 $ 6,011 $ 61,194 $ 5,753 $ 10,159 $(68,052) $ 44,211
============ ======== ======== ======== ======== ========
(See Accompanying Notes)
F-5
10
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
1. GENERAL DESCRIPTION:
The Oryx Energy Company Capital Accumulation Plan (Plan) is a combined
stock bonus and employee stock ownership plan (ESOP) sponsored by Oryx
Energy Company (Oryx Energy or Company) which became effective on November
1, 1988. The Plan provides an individual account for each participant.
Amounts disbursed to participants or conversions between funds are based
solely upon amounts contributed to each participant's account adjusted to
reflect any withdrawals and distributions, investment earnings
attributable to such fund balances and appreciation or depreciation of the
market value of the fund.
This summary of information about the Plan is qualified in its entirety by
reference to the provisions of the Plan, as amended.
Employee Contributions
In general, an employee may instruct the employer to contribute to the
Plan up to five percent, in whole percentages, of base pay (Earnings) on
either a pre-tax basis or post-tax basis. Earnings exclude such payments
as bonuses, overtime and premium payments. An employee may also elect to
make additional contributions of up to 10 percent of Earnings. The
additional contributions may be on either a pre-tax basis, post-tax basis
or any combination thereof. An employee who cannot make pre-tax
contributions of five percent of Earnings due to certain limitations
imposed by the Internal Revenue Code of 1986, as amended (Code), as
described in Note 3, can nonetheless make post-tax contributions up to the
limits imposed by the Plan, subject to the additional Code limitations
described in Note 3.
Employer Contributions
The first five percent of employee contributions are matched by the
Company at 110 percent up to the first $50,000 of employee Earnings and at
100 percent thereafter (Employer Contributions). From time to time, the
Company also contributes additional amounts when necessary to meet the
loan repayment requirements on the ESOP Notes described in Note 4.
Vesting Rights
Participants are immediately 100 percent vested in their account balances
derived from Company contributions, employee contributions and any amounts
rolled-over to the Plan from another eligible retirement plan.
Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA). F-
F-6
11
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Participant Investment Programs
Employee contributions and certain employer contributions are invested by
the trustee as directed by participants. Participants make investment
elections to have their contributions invested in any combination of the
seven funds listed below in increments of one percent. In addition,
participants may convert past investments into any of the seven funds by
making fund transfers. These fund conversions may be made in one percent
increments. A portion of each fund is maintained in short-term investments
for administration of the fund. Effective January 1, 1994, Vanguard
Fiduciary Trust Company (Vanguard) replaced Bankers Trust Company as the
trustee for investment activity. In connection with this change, Funds A
and B were replaced by five mutual funds offered by Vanguard. Funds C, D,
ESOP and L remained essentially unchanged, but were renamed. Additionally,
Fund D and Fund ESOP were merged into the Oryx Stock Fund.
As of January 1, 1994, participants had the option of investing their
contributions in any of the following funds:
Vanguard Balanced Index Fund: Employs two investment strategies--balancing
and indexing--in seeking to provide both current income and the potential
for capital growth. The fund attempts to replicate, with respect to 60
percent of its net assets, the performance of the Wilshire 5000 Index, a
broad-based barometer of the U.S. stock market. With respect to the
remaining 40 percent of its net assets, the fund attempts to replicate the
performance of the Xxxxxx Brothers Aggregate Bond Index, a recognized
benchmark of the U.S. bond market.
Vanguard Windsor II: Pursues a growth and income strategy that emphasizes
stocks with price-earnings ratios lower than the market and dividend
yields higher than the market. The fund's advisors employ both fundamental
and quantitative analysis to identify stocks for purchase.
Vanguard U.S. Growth Portfolio: Invests in stocks of seasoned companies
based in the U.S. The portfolio emphasizes growth companies with strong
market positions, reasonable financial strength and relatively low
sensitivity to changing economic conditions.
Vanguard Explorer Fund: Invests in the stock of small or unseasoned
companies--generally with a market value between $75 million and $200
million--that are deemed to offer favorable prospects for growth.
Vanguard International Growth Portfolio: Invests in non-U.S. equity
securities selected for long-term capital appreciation potential. The
portfolio tends to be widely diversified geographically, with assets
invested in as many as 30 foreign stock markets.
Stable Value Fund (Formerly Fund C): Seeks to provide relatively stable
returns, current income and preservation of principal by investing in high
credit-quality instruments. The fund holds investment contracts issued by
insurance companies (GICs), investment contracts backed by U.S. Government
obligations and high credit-quality corporate bonds (including mutual
funds that invest in such obligations).
F-7
12
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
As of December 31, 1996 the Stable Value Fund was comprised of the
following:
Effective
Annual Percent of
Interest Investment
Rate Fund Value at Last
(Net of December 31, Maturity
Company Expenses) 1996 Date
------- ------------- --------------- --------
Insurance/Bank Contracts
---------------------------------------------
Xxxx Xxxxxxx 6.05% 9.31% 6/30/00
American International Life Assurance
Company of New York 5.36% 8.23 7/31/98
Bankers Trust Company - FNMA 7.81% 1.90 6/25/97
Hartford Life Insurance Company 6.60% 6.55 12/1/97
Xxxxxx Guarantee Trust Company 5.91% 20.14 *
New York Life Insurance Company 7.92% 5.57 3/31/98
The Prudential Insurance Company of America 9.42% 9.54 8/15/97
Deutsche Bank 6.33% 9.47 6/30/00
Rabobank 5.85% 9.64 3/31/99
-----------
80.35
Other
---------------------------------------------
VCI Money Market Prime 5.19% 19.65 *
-----------
100.00%
===========
* At any time, either party may terminate the agreement by giving written
notice.
Oryx Stock Fund: Invests in Oryx Energy Company common stock, par value $1
per share (Oryx Common Stock). Cash contributions directed for investment
in this fund are used by Vanguard, as trustee, to purchase Oryx Common
Stock on securities exchanges and from Oryx Energy, individual
stockholders, the trustee of the Oryx Energy Company Retirement Plan or
any other bona fide offeror of such Oryx Common Stock, at the lowest price
obtainable at the time.
Investment of Employer Contributions
Effective January 1, 1995, Employer Contributions may be made in the form
of shares of Company stock. These Employer Contributions are made to the
Oryx Stock Fund and are reported as non-participant directed.
All Employer Contributions made in cash (Cash Contributions) are invested
in the LESOP Fund (formerly Fund L), a fund primarily invested in Oryx
Common Stock and held in trust by State Street Bank and Trust Company.
Cash Contributions are made in such amounts as are necessary to fund
quarterly loan payments on the ESOP Notes (no amounts due in 1996 and
1995, see Note 4). These Cash Contributions, along with any dividends paid
on the shares acquired with the loan proceeds, are used by the Plan to
repay the principal and interest on the original $110 million ESOP loan.
As loan payments are made, shares held in the unallocated account are
released and allocated (or credited) to individual employee accounts. The
number of shares released after each loan payment is based on the ratio of
the current loan payment to the sum of all future loan payments. The
shares released are allocated proportionally to individual employee
accounts based on the amount of each employee's Employer Contribution
relative to total Employer Contributions. Participants also receive an
allocation of shares representing any dividends due on shares held in
their accounts.
Employer Contributions made in the form of Company stock are included in
the Non-Participant Directed Oryx Stock Fund. During 1996 and 1995, all
Employer Contributions were made in the form of Company stock. During
1994, all Employer Contributions were made in cash.
F-8
13
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Investment of Fund Earnings
Generally, earnings from dividends and interest on each of the funds are
retained by the trustee and reinvested in the same fund. Participants may
elect to receive any dividends on certain Oryx Common Stock held in the
Oryx Stock Fund from Employer Contributions made prior to August 1, 1989.
Participant Loans
Participants may obtain loans from their account balances in any of the
Vanguard Funds and/or the Participant Directed Oryx Stock Fund of the
Plan. Participant loans are administered in accordance with the provisions
of Code Section 72(p) and Department of Labor (DOL) Regulation Section
2550.408b-1. The loan amount may be up to 50 percent of a participant's
available balance, subject to a maximum of $50,000. The loan bears
interest based on the prime rate in effect on the first day of the month
in which the loan is applied for plus one percent. Personal loans may have
a term of up to five years and residential loans up to 15 years. Both the
principal and interest portions of loan repayments are reinvested in the
participant's accounts in accordance with his current investment
elections. Defaults on loan repayments are treated as distributions.
Investment Program Participants
There were 1,414, 1,440 and 1,654 participants at December 31, 1996, 1995
and 1994, respectively, who participated in one or more of the funds.
Participant accounts in each of the funds at December 31 were as follows:
1996 1995 1994
------ ------ ------
Balanced Index Fund 652 691 772
Windsor II 831 788 809
U.S. Growth Portfolio 586 491 441
Explorer Fund 487 473 469
International Growth Portfolio 573 570 684
Stable Value Fund 995 1,109 1,277
LESOP Fund 839 895 1,247
Oryx Stock Fund 1,167 1,248 1,176
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Plan utilizes the accrual basis of accounting and has a fiscal year
end of December 31.
Investments
The valuation of the Plan's investments in all funds is based on the
market value of the assets held in the funds. The Plan's relative interest
in the investment funds underlying the Vanguard Funds is determined on a
unit-method basis. The valuation of the Vanguard Funds is based on the
closing market price of the assets which comprise the funds on the last
business day of the plan year. Investments in the Stable Value Fund are
carried at contract value (which equals original cost plus accrued
interest less any distributions). The valuation of common stock in the
Oryx Stock Fund and the LESOP Fund is based on the closing market price as
reported on the New York Stock Exchange on the last business day of the
plan year. Purchases and sales of securities are reflected on the
trade-date basis. Dividend income is recognized on the ex-dividend date.
F-9
14
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Gains and losses on disposition of investments are determined using
historical average cost. The DOL requires realized and unrealized gains
and losses to be determined using the investment value at the beginning of
the plan year (referred to as the "current value method") rather than the
historical cost basis. Accordingly, the realized gain on investments and
unrealized appreciation of assets as reported on the Form 5500 Annual
Return/Report of Employee Benefit Plan of $5,030,000 and $40,380,000,
respectively, are different than those reported on the Statements of
Income and Changes in Plan Equity, of $281,000 and $45,129,000,
respectively.
Financial Instruments
Statement of Financial Accounting Standards No. 107, "Disclosures About
Fair Value of Financial Instruments," requires disclosures about fair
value for all financial instruments in the Plan. All instruments, other
than the investment contracts in the Stable Value Fund, are reported at
fair value and require no additional disclosure. The fair values of
investment contracts in the Stable Value Fund as of December 31, 1996 and
1995 are approximately $53,811,000 and $57,897,000, respectively. Fair
values were determined using a discounted cash flow analysis assuming
market rates for similar contracts. However, the fair value disclosed is
not that which would be realized due to restrictions on early redemption
or sale of the contracts. The value of the ESOP note cannot be estimated
because it is a special purpose loan made on non-standard terms which
would have no value if transferred or exchanged. Participant loans are
carried at original loan amounts less principal reductions. Such loan
amounts approximate fair value.
Administrative Expenses
All expenses related to the purchase and sale of securities are paid out
of the respective assets of such funds. All administrative expenses
related to the LESOP Fund are paid by the Company. All other expenses
(other than those paid by the Company) incurred in administering the Plan
are generally charged, on a pro rata basis, to each of the respective
funds.
Statement Presentation
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Risks and Uncertainties
The Plan provides for various investment options in combinations of GICs
and mutual funds. Investments of this nature are exposed to various risks,
such as interest rate, market and credit risks. Due to the level of risk
associated with these types of securities, it is at least reasonably
possible that changes in the values of investment securities will occur in
the near term and that such changes could materially affect participants'
account balances and the amounts reported in the statement of net assets
available for plan benefits.
F-10
15
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. CERTAIN FEDERAL TAX MATTERS:
Tax Status of the Plan
The Internal Revenue Service (IRS) issued the most recent favorable
determination letter on May 28, 1994 stating that the Plan constitutes a
qualified plan under Sections 401(a), 401(k) and 501(a) of the Code and
that the Plan qualifies as an ESOP under Section 4975(e)(7). As such, the
assets and investment gains of the Plan are exempt from Federal income tax
under Section 501(a) of the Code. The Company is entitled to a current
deduction on its consolidated Federal income tax return for its
contributions to the Plan on behalf of employees. A request for the
issuance of a new determination letter, covering 1996 and 1995 amendments,
will be submitted to the IRS by September 15, 1997.
Limits on Employee Contributions
The IRS imposed limitation on employee pre-tax contributions is $9,500 for
1996 and is subject to upward adjustment for any increases in the cost of
living as determined under IRS regulations. The pre-tax contributions, the
combined post-tax contributions and Employer Contributions allocated to
participants who come within the classification of Highly Compensated
Employees (HCEs) as defined in the Code may not exceed certain technical
limits under Sections 401(k) and 401(m) of the Code. Generally, the
allowable percentage of such contributions for the HCEs is dependent upon
the percentage of contributions made by all other employees. These
limitations may have the effect of reducing the level of contributions
initially selected by HCEs. Total Company and employee contributions may
also be limited by Section 415 of the Code.
Tax Effects Upon Participants
The Federal income tax consequences analysis which follows includes
relevant provisions of the Tax Reform Act of 1986. Under existing income
tax law, qualification of the Plan has the following Federal income tax
consequences, in general:
(a) A participant will not be subject to tax on Employer Contributions,
pre-tax contributions or additional employer contributions
contributed to the Plan for his benefit, or earnings thereon, until
such time as such amounts are distributed to him. Pre-tax
contributions are subject to Social Security tax and are included as
earnings to determine the participant's Social Security benefit.
Pre-tax contributions are also used to determine the participant's
benefit under any qualified retirement plans sponsored by the
Company.
(b) Lump sum distributions of Employer Contributions, pre-tax
contributions, including earnings thereon, and earnings on post-tax
contributions (exclusive of any net unrealized appreciation described
below) consisting of cash or Oryx Common Stock, upon a participant's
retirement, death, termination of employment or the occurrence of one
of several other qualifying events will be subject to income tax and
possibly the additional 10 percent Federal tax described in paragraph
(c). Certain large distributions may be partially subject to an
additional Federal tax. Distributions may be eligible for ten-year or
five-year forward averaging and/or limited capital gains treatment on
pre-1974 contributions, which could significantly reduce the tax on
the distributions. Unless otherwise elected, net realized
appreciation on Oryx Common Stock distributed as part of a lump sum
distribution will not be taxed upon distribution, but will be taxable
when the recipient subsequently disposes of the Oryx Common Stock. A
lump sum distribution or a portion thereof, excluding post-tax
contributions, may be rolled over into an eligible retirement plan
(including
F-11
16
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
individual retirement plans), thereby deferring taxation on the
portion rolled over until distribution from the eligible retirement
plan. At such time, the distribution will be taxed at ordinary income
tax rates if it is from an individual retirement plan, or possibly,
in accordance with the special tax provisions discussed above if it
is from an eligible retirement plan other than an individual
retirement plan.
If any portion of a payment to a participant is an eligible rollover
distribution, the Plan is required by law to withhold 20 percent of
that amount and remit it to the IRS as income tax withholding. The
mandatory 20 percent withholding may be avoided if the eligible
rollover distribution is paid directly from the Plan to an individual
retirement plan or another eligible retirement plan.
(c) In-service Plan asset (cash or Oryx Common Stock) withdrawals of
pre-1987 post-tax contributions are not subject to income tax.
Withdrawals of post-1986 post-tax contributions will be deemed to be
withdrawals of both post-1986 post-tax contributions and earnings
thereon with the latter subject to income tax. Such in-service
withdrawals of Employer Contributions and other employer
contributions, including earnings thereon and earnings on post-tax
contributions, will also be subject to income tax when withdrawn.
Taxable amounts will be taxed at ordinary income tax rates. In
addition, with limited exceptions, taxable withdrawals will be
subject to an additional 10 percent Federal tax if received before
age 59-1/2, death, early retirement before age 55 or disability.
Certain large distributions may be partially subject to an additional
Federal tax. Unless the participant elects otherwise, net unrealized
appreciation will be subsequently taxed as described in paragraph
(b).
Oryx Stock Fund dividend distributions paid to participants, if any,
in accordance with Code Section 404(k) are subject to income tax at
ordinary income tax rates but are not subject to the additional 10
percent Federal tax. Pre-tax contributions, or earnings thereon,
cannot be withdrawn until retirement, death, termination of
employment or the occurrence of one of several other qualifying
events.
(d) If a distribution consists of an annuity, the annuity generally will
not be taxable at the time of distribution, but amounts received
under such annuity will be taxed at ordinary income tax rates when
received to the extent such amounts are not deemed to be a return of
the participant's own post-tax contributions. If one of the
exceptions described in paragraph (c) does not apply and generally if
the payments are not substantially equal, the taxable amounts would
also be subject to the additional 10 percent Federal tax. If the
annuity forms part of a lump sum distribution, it will affect the tax
payable on the distribution.
4. ESOP NOTES:
On August 1, 1989, the Company borrowed $110 million by privately placing
ESOP Notes. The interest rates on the ESOP Notes range from 8.35 percent
to 8.70 percent. The Company made an inside loan to the Plan equal to the
proceeds from the issuance of the ESOP Notes for the purpose of acquiring
Oryx Common Stock. The terms of the inside loan were substantially similar
to the terms of the ESOP notes of the Company. In December 1989, the Plan
completed the purchase of 2,864,805 shares at an average price of $38.40.
This Oryx Common Stock is held by the Plan (LESOP Fund) in an unallocated
suspense account. Employer Contributions have been made to the Plan, in
cash, to fund quarterly loan repayments on the inside loan. Shares are
released from the suspense account as the loan is repaid and are allocated
to eligible participants. No participant contributions will be required or
permitted in paying off the loan.
F-12
17
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
During 1994, Standard & Poor's downgraded the Company's debt rating.
Subsequently, the holders of the ESOP Notes exercised their rights to
require the Company to repay the notes in full at par (plus a make whole
premium).
At December 31, 1996 and 1995, there were 2,139,234 shares of Oryx Common
Stock with a market value of $52,946,041 and $28,612,254, respectively,
held in the unallocated suspense account. LESOP Fund interest and any
dividend income are used for debt service. Interest expense incurred by
the Plan on debt with the Company was nil in 1996 and 1995 and $8,563,522
in 1994, respectively. In accordance with a resolution of the Company's
Compensation Committee of the Board of Directors, principal and interest
payments on the inside note were suspended for 1996 and 1995. Accordingly,
the Plan did not accrue interest expense related to the ESOP note during
such periods.
In March 1996, the Company received a private letter ruling from the IRS
regarding certain items related to the Plan. In response to the IRS
suggestions contained in the private letter ruling, the Compensation
Committee determined that the Company would resume making Employer
Contributions in cash in 1997. Those contributions will be used by the
Plan to fund loan repayments on the inside note on a monthly basis.
5. SUPPLEMENTAL FUND INFORMATION:
Realized Gain (Loss) on Investments
The realized gain (loss) on investments for each of the three years in the
period ended December 31, 1996, were as follows:
1996 1995
---------------------------------- ----------------------------------
Average Net Realized Average Net Realized
Fund Proceeds Cost Gain (Loss) Proceeds Cost Gain (Loss)
---------------------------- -------- ------- ------------ -------- ------- -------------
(Thousands of Dollars)
Balanced Index Fund $ 4,810 $ 4,059 $ 751 $ 2,885 $ 2,691 $ 194
Windsor II 7,288 5,956 1,332 3,523 3,205 318
U.S. Growth Portfolio 3,949 3,205 744 1,204 1,009 195
Explorer Fund 3,517 3,180 337 1,294 1,211 83
International Growth 2,967 2,638 329 2,716 2,643 73
Portfolio
LESOP Fund 723 1,708 (985) 15,976 18,860 (2,884)
Oryx Stock Fund 16,873 19,100 (2,227) 4,796 6,747 (1,951)
------------ ---------
Total realized gain (loss) $ 281 $ (3,972)
============ =========
1994
------------------------------------
Average Net Realized
Fund Proceeds Cost Gain (Loss)
---------------------------- -------- ------- ------------
(Thousands of Dollars)
Balanced Index Fund $ 4,370 $ 4,496 $ (126)
Windsor II 3,121 3,148 (27)
U.S. Growth Portfolio 994 986 8
Explorer Fund 899 910 (11)
International Growth 1,684 1,663 21
Portfolio
LESOP Fund 7,407 9,452 (2,045)
Oryx Stock Fund 8,533 15,999 (7,466)
--------
Total realized loss $ (9,646)
========
F-13
18
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Unrealized Appreciation (Depreciation) of Investments
The changes in unrealized appreciation (depreciation) of investments for
each of the three years in the period ended December 31, 1996, were as
follows:
1996 1995 1994
-------- -------- --------
(Thousands of Dollars)
Beginning of Year $(59,986) $(77,762) $(66,258)
Unrealized Appreciation (Depreciation) for Year 45,129 17,776 (11,504)
-------- -------- --------
End of Year $(14,857) $(59,986) $(77,762)
======== ======== ========
Net Asset Value Per Unit
The December 31, 1996 net asset value for mutual fund investments was:
Net Asset
Fund Units Value Per Unit
---------------------------- ------------ ---------------
Balanced Index Fund 951,720 $ 13.96
Windsor II 980,910 23.94
U.S. Growth Portfolio 438,078 23.88
Explorer Fund 99,172 54.00
International Growth Portfolio 365,380 16.48
6. PLAN AMENDMENTS:
Effective January 1, 1997, Company matching contributions will be based on
several factors, including participant contributions, the market value of
Oryx common stock and a new LESOP share release schedule (the schedule of
shares released under the LESOP loan agreement from the unallocated
suspense account--Note 4).
Participants will receive the greater of:
o The number of shares equal to a 110%-100% match, priced at the market
value or,
o The pro rata number of shares scheduled to be released from the
LESOP.
F-14
19
EXHIBIT a
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
the Oryx Energy Company Capital Accumulation Plan on Form S-8 (Registration No.
33-24918) of our report dated May 30, 1997 included in this Form 11K, on our
audits of the financial statements of the Oryx Energy Company Capital
Accumulation Plan as of December 31, 1996 and 1995 and for each of the three
years in the period ended December 31, 1996.
/s/ XXXXXXX & XXXXXXX L.L.P.
Dallas, Texas
May 30, 1997
