-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DvWt8kHklZzcCPBorBwRigMYw4RlGR8Bcv6NapudrircCZVrkQ9xfpSzTspaYrDo 2pOwEcXQNeYK7hkaRP5hAg== /in/edgar/work/20000628/0000055458-00-000014/0000055458-00-000014.txt : 20000920 0000055458-00-000014.hdr.sgml : 20000920 ACCESSION NUMBER: 0000055458-00-000014 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KERR MCGEE CORP CENTRAL INDEX KEY: 0000055458 STANDARD INDUSTRIAL CLASSIFICATION: [1311 ] IRS NUMBER: 730311467 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-03939 FILM NUMBER: 663033 BUSINESS ADDRESS: STREET 1: KERR MCGEE CTR STREET 2: 123 ROBERT S KERR CITY: OKLAHOMA CITY STATE: OK ZIP: 73125 BUSINESS PHONE: 4052701313 MAIL ADDRESS: STREET 1: P O BOX 25861 CITY: OKLAHOMA CITY STATE: OK ZIP: 73125 FORMER COMPANY: FORMER CONFORMED NAME: KERR MCGEE OIL INDUSTRIES INC DATE OF NAME CHANGE: 19671227 11-K 1 0001.txt ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the Year Ended December 31, 1999 Commission File Number 1-3939 Kerr-McGee Corporation Employee Stock Ownership Plan (full title of the Plan) Kerr-McGee Corporation Kerr-McGee Center Oklahoma City, Oklahoma 73102 (Name of the issuer of the securities held pursuant to the Plan and address of its principal executive office) REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Kerr-McGee Corporation Benefits Committee: We have audited the accompanying statement of net assets available for benefits of the KERR-McGEE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN (the Plan) as of December 31, 1999 and 1998, and the related statement of changes in net assets available for benefits for the year ended December 31, 1999. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits as of December 31, 1999 and 1998, and the changes in the net assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes as of December 31, 1999, and the supplemental schedule of reportable transactions for the year ended December 31, 1999, are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. (ARTHUR ANDERSEN LLP) ARTHUR ANDERSEN LLP Oklahoma City, Oklahoma, June 23, 2000 KERR-McGEE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS December 31, 1999 (Thousands of dollars)
ASSETS Unallocated Allocated Total ------ ----------- --------- -------- Common stock of Kerr-McGee Corporation $ 85,590 $89,149 $174,739 Short-term investments 331 1,399 1,730 -------- ------- -------- Total investments 85,921 90,548 176,469 Contributions receivable 3,155 - 3,155 Dividends receivable 621 594 1,215 Due from (to) other fund (3,155) 3,155 - Other assets 1 6 7 -------- ------- -------- Total assets 86,543 94,303 180,846 -------- ------- -------- LIABILITIES ----------- Notes payable 132,017 - 132,017 Interest payable 2,179 - 2,179 -------- ------- -------- Total liabilities 134,196 - 134,196 -------- ------- -------- Net assets available for benefits $(47,653) $94,303 $ 46,650 ======== ======= ======== The accompanying notes are an integral part of this statement
KERR-McGEE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS December 31, 1998 (Thousands of dollars)
ASSETS Unallocated Allocated Total ------ ----------- --------- ----- Common stock of Kerr-McGee Corporation $ 35,719 $44,007 $79,726 Short-term investments 424 1,405 1,829 -------- ------- ------- Total investments 36,143 45,412 81,555 Contributions receivable 1,752 - 1,752 Dividends receivable 420 553 973 Due from (to) other fund (1,752) 1,752 - Other assets 2 7 9 -------- ------- ------- Total assets 36,565 47,724 84,289 -------- ------- ------- LIABILITIES ----------- Notes payable 57,650 - 57,650 Interest payable 2,658 - 2,658 -------- ------- ------- Total liabilities 60,308 - 60,308 -------- ------- ------- Net assets available for benefits $(23,743) $47,724 $23,981 ======== ======= ======= The accompanying notes are an integral part of this statement
KERR-McGEE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS For the Year Ended December 31, 1999 (Thousands of dollars)
Unallocated Allocated Total ----------- --------- ------- Company contributions $13,837 $ - $13,837 Dividend income 1,389 2,288 3,677 Interest income 9 58 67 Release of 212,601 shares of common stock for allocation 10,155 10,155 Appreciation of common stock 18,064 38,084 56,148 -------- ------- ------- Total additions 33,299 50,585 83,884 -------- ------- ------- Interest expense 4,579 - 4,579 Distributions to participants - 9,877 9,877 Transfers to (from) other fund (2,287) 2,287 - Release of 212,601 shares of common stock for allocation 10,155 - 10,155 Transfer from affiliated plan 44,762 (8,158) 36,604 -------- ------- ------- Total deductions 57,209 4,006 61,215 -------- ------- ------- Net increase (decrease) (23,910) 46,579 22,669 Net assets available for benefits - Beginning of year (23,743) 47,724 23,981 -------- ------- ------- End of year $(47,653) $94,303 $46,650 ======== ======= ======= The accompanying notes are an integral part of this statement
KERR-McGEE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 (1) PLAN DESCRIPTION The Kerr-McGee Corporation Employee Stock Ownership Plan (the Plan) was established in September 1989, as permitted by Internal Revenue Code Section 4975(e). The Plan, a leveraged employee stock ownership plan, invests only in the common stock of Kerr-McGee Corporation (the Company). The Plan covers all employees of the Company and its subsidiaries who make salary deferrals to the Kerr-McGee Savings Investment Plan (the SIP). Effective January 1, 1990, participant contributions to the SIP are matched by Company contributions to the Plan. These participant contributions are matched dollar-for-dollar by the Company, up to 6% of the participants' salaries as defined under the Plan. Although the Plan and the SIP are separate plans, matching contributions to the Plan are contingent upon participants' contributions to the SIP. Participants are not permitted to make contributions under the terms of the Plan. Due to the merger of Kerr-McGee Corporation and Oryx Energy Company, the Oryx Capital Accumulation Plan (CAP plan) was merged into the Plan and the SIP during 1999. Net liabilities merged into the Plan totaled $36,604,000. Net assets merged into the SIP totaled $132,264,000. Future benefits of the CAP plan will be paid from the Plan and the SIP. The Company may direct State Street Bank and Trust Company (the Trustee) to enter into acquisition loans for the purpose of acquiring Company stock for the benefit of participants. Pursuant to that authority, the Trustee and the Company entered into a Stock Purchase Agreement as of September 12, 1989. Under this agreement, the Plan purchased 2,680,965 shares of the Company's common stock at $46.625 per share on November 29, 1989, the market value on that date. To finance the purchase, the Plan incurred indebtedness to a group of institutional investors in the aggregate principal amount of $125,000,000 (see Note 4). Company stock acquired with the proceeds of the initial loan is held in a suspense account. The Company's matching contributions and dividends paid on the common stock held in the loan suspense account are used to repay the loan. Stock is released from the loan suspense account as the principal and interest are paid. The stock is then allocated to participants' accounts at market value as the company matches contributions made to the SIP by participants. Dividends paid on the common stock held in participants' accounts are also used to repay the loan. Stock with a market value equal to the amount of the dividend is allocated to the participants' accounts. If the value of shares of Company stock released from the loan suspense account is not sufficient to make the required matching and dividend allocations to participants' accounts, the Company will contribute additional shares of common stock or cash which may be used to purchase shares or to make additional payments on the loan. All stock released from the loan suspense account within the year must be allocated to participants' accounts by year end. If the number of shares released is more than the required matching and dividend allocation, the excess will be allocated to participants. The Plan provides for vesting of participants on the basis of 100% for employer contributions made after 1998 and on the basis of 20% for each completed year of vesting service for contributions made prior to 1999. Vesting service is completed years of Company service reduced in certain limited situations as defined by the Plan. Company contributions are fully vested in the event of retirement, death or disability. A participant will receive a distribution of his vested interest in his account only upon termination of employment. In the event of death or permanent disability, a participant is deemed to be fully vested in their share of Company contributions. No other withdrawals are permitted. When certain terminations of participation in the Plan occur, the nonvested portion of the participant's account, as defined by the Plan, represents a forfeiture. However, if the participant is re-employed and fulfills certain requirements, as defined in the Plan, the participant's account will be reinstated. Forfeitures may be used to reduce employer matching contributions for the plan year, to pay administrative expenses relating to the Plan, or to restore amounts previously forfeited by participants who have been re-employed. Forfeitures used during the year and unused forfeitures at year-end 1999 and 1998 were not significant. Distributions to participants are paid in a single sum consisting of shares of stock or cash, at the election of the participant. Distributions are recorded at the approximate market value as of the date of distribution. Terminating participants with more than $5,000 in the Plan may defer distribution until age 70 1/2. Investments relating to these participants remain in the Trust until the terminated participant requests distribution. Participants who defer distribution continue to share in earnings and losses of the Plan. The Plan is administered by the Kerr-McGee Corporation Benefits Committee (the Committee), which is appointed by the Board of Directors of the Company. Accounting and administration for the Plan are provided by the Company at no cost to the Plan. In addition, all expenses of the Trust are borne by the Company except for expenses that may be paid from any forfeitures of ESOP accounts arising under the Plan. During 1999, the Company paid $78,000 of administrative and trust expenses on behalf of the Plan. The Company intends to continue the Plan indefinitely, but reserves the right to alter, amend, modify, revoke or terminate the Plan at any time upon the direction of the Company's Board of Directors. If the Plan is terminated for any reason, the interest of all participants will be fully vested, and the Committee will direct that the participants' account balances be distributed as soon as practical. The Company has no continuing liability under the Plan after the final disposition of the assets of the Plan. (2) SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The financial statements of the Plan are prepared under the accrual method of accounting in accordance with accounting principles generally accepted in the United States. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates. Investment Valuations and Income Recognition - The Plan's investments are stated at fair value, and the Company stock is valued at its quoted market price. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Payment of Benefits - Distributions to terminating and withdrawing participants are recorded when paid. (3) INVESTMENTS The Plan's investment in the Company's common stock at December 31, 1999 and 1998, was as follows: (Dollars in thousands) Unallocated Allocated Total ----------- --------- --------- 1999 ---- Number of Shares 1,380,484 1,306,301 2,686,785 Cost $103,107 $56,590 $159,697 Market $ 85,590 $89,149 $174,739 1998 ---- Number of Shares 933,827 1,150,514 2,084,341 Cost $ 43,541 $53,674 $ 97,215 Market $ 35,719 $44,007 $ 79,726 (4) NOTES PAYABLE On November 29, 1989, the Plan borrowed $125,000,000 from a group of institutional investors for the purpose of acquiring the Company's common stock. This borrowing consisted of Series A notes in the amount of $74,000,000 and Series B notes in the amount of $51,000,000. The Company has guaranteed the Plan's indebtedness. In June 1996, the Plan issued a $24,500,000 note, which bears interest at a fixed rate of 6.85%, to the Company (the Sponsor note) and used the funds to prepay a portion of the 9.47% fixed-rate Series A notes. The remaining balance of the Series A notes was paid on July 1, 1996, as scheduled. Scheduled principal payments on the Sponsor note began in January 1997 and continue through January 2003. A prepayment of $1,300,000 was made in December 1996. Principal payments on the 9.61% fixed-rate Series B notes began in July 1998 and continue through January 2005. On August 1, 1989, the Oryx CAP Plan borrowed $110 million by privately placing ESOP notes. As discussed in Note 1, the CAP plan was merged into the Plan and SIP during 1999. The borrowing consisted of Series A notes, Series B notes and Series C notes with interest rates ranging from 8.35% to 8.70%. Scheduled principal payments on the Series A notes continue through July 2006. Principal payments on the Series B notes begin in August 2005 and continue through July 2008. Principal payments on the Series C notes begin in August 2008 and continue through July 2011. Debt consisted of the following at year end: (Thousands of dollars) 1999 1998 -------- ------- Sponsor note $ 3,650 $ 8,150 Series B notes 42,750 49,500 Oryx Series A notes 35,584 - Oryx Series B notes 19,318 - Oryx Series C notes 30,715 - -------- ------- $132,017 $57,650 ======== ======= Maturities of debt due after December 31, 1999, are $14,267,000 in 2000, $16,750,000 in 2001, $15,762,000 in 2002, $14,722,000 in 2003, $9,962,000 in 2004 and $60,554,000 thereafter. (5) TAX STATUS The Plan is a qualified plan under provisions of Section 401(a) of the Internal Revenue Code (the Code) and is exempt from Federal income taxes under provisions of Section 501(a) of the Code. The Plan's latest determination letter is dated November 5, 1999. Company contributions and income earned thereon are not taxed until the receipt of a distribution pursuant to the terms of the Plan. Federal income taxes applicable to participants or their beneficiaries upon distribution are prescribed by the Code. (6) CONTRIBUTIONS The Company's 1999 contributions to the Plan totaled $13,837,000. In addition, the Company paid $3,677,000 in dividends on the Company's stock held in the Plan. Of the total contributions, $7,460,000 represented the Company's matching contributions for employees' savings in the SIP. (7) SUBSEQUENT EVENTS Effective January 1, 2000, all participants in the Plan have an annual option to diversify up to 25% of their year-end Kerr-McGee stock balance in the Plan into investment options available in the SIP. This option must be exercised by March 31 of each year. The amount diversified will be shown as distributed from the Plan and transferred to the SIP. Participants who are at least age 55 with 10 years of participation in the plan may withdraw their 25% instead of diversifying within the SIP. They have this option for the first six years after meeting the eligibility requirements. Employees who are or become participants on or after January 1, 2000, are 100% vested in all company matching contributions. KERR-McGEE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (Employer Identification Number 73-0311467) (Plan Number 014) DECEMBER 31, 1999 (Thousands of dollars)
(c) (e) (b) Description of investment including maturity date, (d) Current (a)* Identity of issue, borrower, lessor or similar party rate of interest, collateral, par or maturity value Cost Value - ---- ---------------------------------------------------- --------------------------------------------------- -------- -------- * Kerr-McGee Corporation Common stock (2,686,785 shares) $159,697 $174,739 * State Street Bank and Trust Company Short-term investment fund 1,729 1,729 *Party-in-interest
KERR-McGEE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN SCHEDULE H, LINE 4j- SCHEDULE OF REPORTABLE TRANSACTIONS (Employer Identification Number 73-0311467) (Plan Number 014) FOR THE YEAR ENDED DECEMBER 31, 1999 (Thousands of dollars)
(h) (f) Current Expense value (c) (d) (e) incurred (g) of asset on (i) (a) (b) Purchase Selling Lease with Cost of transaction Net gain Identity of party involved Description of asset price price rental transaction asset date or loss -------------------------- -------------------- -------- -------- ------ ----------- -------- ------------- --------- State Street Bank Short-Term Investment Fund $6,922 - - - $6,922 $6,922 - State Street Bank Short-Term Investment Fund - $7,023 - - $7,023 $7,023 - Kerr-McGee Corporation Common Stock $12,553 - - - $12,553 $12,553 - Kerr-McGee Corporation Common Stock - $19,555 - - $19,314 $19,555 $241
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Kerr-McGee Corporation Benefits Committee has duly caused this annual report to be signed by the undersigned thereunto duly authorized. KERR-McGEE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN By (JOHN M. RAUH) -------------------------------------- John M. Rauh Chairman of the Kerr-McGee Corporation Benefits Committee Date: June 28, 2000 EX-23 2 0002.txt CONSENT OF ACCOUNTANT EXHIBIT 23 Consent of Independent Public Accountants As independent public accountants, we hereby consent to the incorporation of our report dated June 23, 2000, included in the Kerr-McGee Corporation Employee Stock Ownership Plan 1999 annual report in this Form 11-K, into the Company's previously filed Form S-8 File No. 333-28235. (ARTHUR ANDERSEN LLP) ARTHUR ANDERSEN LLP Oklahoma City, Oklahoma June 28, 2000 -----END PRIVACY-ENHANCED MESSAGE-----