EX-99 4 rsp.txt RSP Exhibit 99(c) FORM 11-K UNITED STATES 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 For the year ended December 31, 2000 ------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------- ---------- Commission file number 33-28669 --------------------------------- RETIREMENT 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 Retirement Savings 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 LLP. 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 /s/ Rand C. Berney --------------------------------- Rand C. Berney Member Retirement Savings Plan Committee June 22, 2001 1 ----------------------------------------------------------------- Index To Financial Statements Retirement Savings Plan Of And Schedules Phillips Petroleum Company Page Report of Independent Auditors ............................. 3 Financial Statements Statement of Net Assets Available for Benefits at December 31, 2000 ................................... 4 Statement of Net Assets Available for Benefits at December 31, 1999 ................................... 5 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2000 ................... 6 Notes to Financial Statements ............................ 7 Supplemental Schedules Schedule of Assets (Held at End of Year) as of December 31, 2000, Schedule H, Line 4i ................. 11 Schedule of Reportable Transactions for the Year Ended December 31, 2000, Schedule H, Line 4j ................. 12 2 ----------------------------------------------------------------- Report Of Independent Auditors The Retirement Savings Plan Committee Retirement Savings Plan of Phillips Petroleum Company We have audited the accompanying statements of net assets available for benefits of the Retirement Savings Plan of Phillips Petroleum Company (Plan) as of December 31, 2000 and 1999, and the related statement of changes in net assets available for benefits for the year ended December 31, 2000. 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 auditing standards generally accepted in the United States. 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 referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2000 and 1999, and the changes in its net assets available for benefits for the year ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December 31, 2000, and reportable transactions for the year then ended, are presented for purposes of additional analysis and are not a required part of the 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. These supplemental schedules are the responsibility of the Committee. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP ERNST & YOUNG LLP Tulsa, Oklahoma June 22, 2001 3 --------------------------------------------------------------------- Statement Of Net Assets Retirement Savings Plan Of Available For Benefits Phillips Petroleum Company At December 31, 2000 Non- Participant Participant Directed Directed -------------------- ----------- Fixed Fixed Investment Stock Investment Total Fund Fund Fund --------------------------------- ----------- Assets Investments Insurance contract $10,855,775 1,118,878 - 9,736,897 Common stock 629,208 - 629,208 - Money market fund 1,746 - 1,746 - --------------------------------------------------------------------- 11,486,729 1,118,878 630,954 9,736,897 Employer Contributions Receivable 34,918 - - 34,918 --------------------------------------------------------------------- Total Assets 11,521,647 1,118,878 630,954 9,771,815 --------------------------------------------------------------------- Net Assets Available for Benefits $11,521,647 1,118,878 630,954 9,771,815 ===================================================================== See Notes to Financial Statements. 4 --------------------------------------------------------------------- Statement Of Net Assets Retirement Savings Plan Of Available For Benefits Phillips Petroleum Company At December 31, 1999 Non- Participant Participant Directed Directed -------------------- ----------- Fixed Fixed Investment Stock Investment Total Fund Fund Fund --------------------------------- ----------- Assets Investments Insurance contract $10,469,116 1,177,032 - 9,292,084 Common stock 508,023 - 508,023 - Money market fund 2,403 - 2,403 - --------------------------------------------------------------------- 10,979,542 1,177,032 510,426 9,292,084 Interest Receivable 14 - 14 - Employer Contributions Receivable 17,160 - - 17,160 --------------------------------------------------------------------- Total Assets 10,996,716 1,177,032 510,440 9,309,244 --------------------------------------------------------------------- Net Assets Available for Benefits $10,996,716 1,177,032 510,440 9,309,244 ===================================================================== See Notes to Financial Statements. 5 --------------------------------------------------------------------- Statement Of Changes In Net Retirement Savings Plan Of Assets Available For Benefits Phillips Petroleum Company Year Ended December 31, 2000 Non- Participant Participant Directed Directed -------------------- ----------- Fixed Fixed Investment Stock Investment Total Fund Fund Fund --------------------------------- ----------- Additions Participating Employer Contributions $ 398,315 - - 398,315 --------------------------------------------------------------------- Investment Income Interest 636,299 70,341 187 565,771 Dividends 14,789 - 14,789 - Net appreciation in fair value of common stock 107,521 - 107,521 - --------------------------------------------------------------------- 758,609 70,341 122,497 565,771 --------------------------------------------------------------------- Total 1,156,924 70,341 122,497 964,086 --------------------------------------------------------------------- Deductions Withdrawals and Distributions 631,993 128,495 1,983 501,515 --------------------------------------------------------------------- Net Change 524,931 (58,154) 120,514 462,571 Net Assets Available for Benefits Beginning of Year 10,996,716 1,177,032 510,440 9,309,244 --------------------------------------------------------------------- End of Year $11,521,647 1,118,878 630,954 9,771,815 ===================================================================== See Notes to Financial Statements. 6 ----------------------------------------------------------------- Notes To Financial Statements Retirement Savings Plan Of Phillips Petroleum Company Note 1--Plan Description The following description of the Retirement Savings Plan of Phillips Petroleum Company (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 (Phillips or the Company) for any domestic subsidiary or division that the Company approves for participation in the Plan and that has adopted and become a party to the Plan for the current participation of their active employees (Participating Employer). For the years ending December 31, 2000 and 1999, Phillips Driscopipe (with respect to hourly employees only), was the only Participating Employer. Effective January 1, 2001, Phillips Driscopipe ceased to be a Participating Employer, following its contribution to Chevron Phillips Chemical Company on July 1, 2000. The Plan currently has no Participating Employers. Other subsidiaries or divisions having present or former employees holding interests in the Plan are Catalyst Resources, Inc., Drilling Specialties Company, Phillips Coal Company, and Phillips Uranium Corporation. 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. Each month the Participating Employer or the Company contributes an amount equal to 5 percent of each participant's regular monthly earnings. A participant can make after-tax deposits, in whole percentages, ranging from 1 to 10 percent of his regular monthly earnings. Participants can elect to change their deposit rates once each six months. Effective January 1, 1996, the hourly employees of Phillips Driscopipe were no longer permitted to make deposits under this Plan. However, the Participating Employer or the Company continued to make contributions to this Plan on their behalf. Plan assets consist of the Stock Fund, the Fixed Investment Fund and the Temporary Investment Fund. Investments for each fund are: Stock Fund (common stock of the Company and the Vanguard Prime Money Market Fund); Fixed Investment Fund (an insurance contract with Travelers Insurance Company (Travelers) 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--currently, this Fund is inactive). The Trustee for all Plan assets is Vanguard 7 Fiduciary Trust Company (Vanguard), P.O. Box 2900, Valley Forge, Pennsylvania 19482-2900. The interests of participants in each fund are represented by units allocated to them. If a Participating Employer allowed participant deposits into the Plan, those deposits would be placed first in the Temporary Investment Fund and remain there until the valuation date on or about the 20th day of the following month. Deposits and earnings thereon would be paid into the Stock Fund or the Fixed Investment Fund as directed by the participant. No investment directions may be made with respect to Participating Employer contributions, all of which are invested only in the Fixed Investment Fund. 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, and his interest in Participating Employer contributions becomes fully vested on the earliest of the following dates: (a) upon attainment of age 65 or upon normal retirement; (b) upon completing five years of vesting service; (c) upon death; (d) upon becoming totally and permanently 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 in Participating Employer contributions 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 employee deposits for 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. Forfeitures are used to reduce employer contributions. A participant who retires generally may postpone distribution until no later than the first valuation date in October of the year age 69 is attained. Distributions from the Fixed Investment Fund are made 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. 8 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 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. The Plan Financial Administrator has the responsibility to manage and control the assets of the Plan in accordance with the terms of the Plan. 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 paid by the Company. Note 2--Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes and schedules. Actual results could differ from those estimates and assumptions. Note 3--Investments Common stock of the Company is valued at the closing quoted market price on the valuation date. The value of the insurance contract is recorded at contract value, which approximates fair value, and represents contributions, plus interest credited, less distributions. The money market fund is valued at the current redemption price determined by the Trustee. Note 4--Tax Status The Internal Revenue Service (IRS) determined on December 26, 1995, that the Plan 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. 9 Note 5--Insurance Contract The average yield and crediting interest rate of the Fixed Investment Fund insurance contract was 6.15 percent in 2000 and 6.10 percent in 1999. The crediting interest rate, which is determined by Travelers, is reset annually, with the new rate going into effect on January 1 of each year. There is no contractually guaranteed minimum interest rate and the contract with Travelers does not provide a basis for determining the crediting interest rate. Note 6--Employer Contributions Participating Employer contributions for 2000 are presented in the Statement of Changes in Net Assets Available for Benefits net of forfeitures of $58,974. 10 -------------------------------------------------------------------------------- Schedule of Assets (Held at End of Year) Retirement Savings Plan of Schedule H, Line 4i Phillips Petroleum Company EIN 73-0400345, Plan 010 At December 31, 2000 (a, b) Identity of (c) Description of investment issue, borrower, including maturity date, lessor, or similar rate of interest, collateral, (d)Historical (e) Current party par or maturity value Cost Value -------------------- ------------------------------ ------------- ----------- The Travelers Group Annuity Contract Insurance Company* GR-10462, deposit administration fund $10,855,775 10,855,775 Phillips Petroleum 11,063 shares of common stock, Company* $1.25 par value 210,885 629,208 Vanguard Fiduciary 1,746 units of participation Trust Company* in the Vanguard Prime Money Market Fund, $1.00 par value 1,746 1,746 -------------------------------------------------------------------------------- $11,068,406 11,486,729 ================================================================================ *Party-in-interest 11 ----------------------------------------------------------------- Schedule of Reportable Transactions Retirement Savings Plan of Schedule H, Line 4j Phillips Petroleum Company Series of Transactions in Excess EIN 73-0400345, Plan 010 of 5 Percent of Net Assets Year Ended December 31, 2000 (a, b) Identity of party involved and (c) Value of (d) Value (i) Net gain description of asset purchases* of sales* or (loss) ----------------------- ------------ --------- ------------ The Travelers Insurance Company** $946,348 499,043 - ----------------------------------------------------------------- *This is also the cost of purchases and current value of sales at time of transaction. **Party-in-interest Columns (e) and (f) are not applicable. 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 and in the related Prospectus of our report dated June 22, 2001, with respect to the financial statements and schedules of the Retirement Savings Plan of Phillips Petroleum Company included in this Annual Report (Form 11-K) for the year ended December 31, 2000. /s/ Ernst & Young LLP ERNST & YOUNG LLP Tulsa, Oklahoma June 22, 2001