11-K 1 h98070e11vk.txt BURLINGTON RESOURCES INC - RETIREMENT SAVINGS PLAN UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 11-K (Mark One) (X) Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2001 Or ( ) Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 for the transition period from ________ to __________ Commission file number_______________________________ A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Burlington Resources Inc. Retirement Savings Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Burlington Resources Inc., 5051 Westheimer, Suite 1400, Houston, Texas 77056 ================================================================================ BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN REPORT ON AUDITS OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2001 AND 2000 AND FOR THE YEAR ENDED DECEMBER 31, 2001 ================================================================================ BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN TABLE OF CONTENTS PAGE ---- Financial Statements Statement of Net Assets Available for Benefits as of December 31, 2001 and 2000 2 Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2001 3 Notes to Financial Statements 4 Report of Independent Accountants 9 Supplemental Schedule Schedule H, Item 4i - Schedule of Assets Held for Investment Purposes as of December 31, 2001 10 Exhibit 23 Consent of Independent Accountants BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, ----------------------------- 2001 2000 ------------ ------------ Investments At fair value Burlington Resources Inc. common stock $ 49,504,267 $ 46,356,730 Registered investment companies 107,857,682 134,590,632 Participants' notes receivable 5,284,896 5,987,605 Cash and cash equivalents 2,624,189 5,888,683 At contract value Unallocated investment contracts 46,262,893 37,586,122 Synthetic investment contracts 16,448,438 19,860,924 ------------ ------------ Total investments 227,982,365 250,270,696 ------------ ------------ Contributions receivable Company 257,831 228,336 Participant 356,829 330,040 ------------ ------------ Net assets available for benefits $228,597,025 $250,829,072 ============ ============
The accompanying notes are an integral part of these financial statements. 2 BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2001 ------------- Investment income Interest income $ 485,180 Dividend income 1,802,138 Net depreciation in the fair value of investments (24,037,787) ------------- Net investment income (21,750,469) ------------- Contributions Company 7,458,724 Participant 10,658,494 ------------- Total contributions 18,117,218 ------------- Total additions (3,633,251) ------------- Participant withdrawals and distributions (18,495,584) Administrative expenses (103,212) ------------- Total deductions (18,598,796) ------------- Net decrease (22,232,047) Net assets available for benefits Beginning of year 250,829,072 ------------- End of year $ 228,597,025 =============
The accompanying notes are an integral part of these financial statements. 3 BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION General The following description of the Burlington Resources Inc. ("BR" or the "Company") Retirement Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan Document for a more complete description of the Plan's provisions. The Plan is a trusteed, defined contribution plan, administered by a committee of BR executives, for participants of the employer companies BR and Burlington Resources Oil & Gas Company LP (formerly known as Burlington Resources Oil & Gas Company), which is a wholly-owned subsidiary of BR. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended. The Plan's assets are held by Charles Schwab Trust Company and individual participant accounts are maintained by Charles Schwab Retirement Plan Services. Investments A participant may direct his or her contributions and account balances among the following investment funds. Company Stock Fund - Invested in common stock of BR. S&P 500 Institutional Index Fund - Invested in a diversified portfolio of common stock and other equity securities. This fund is managed to achieve results similar to those of the overall stock market as measured by the Standard & Poor's 500 Index. International Equity Fund - Invested primarily in the equity securities of companies based outside the United States of America. Balanced Fund - Invested 60% in equity securities, which attempt to mirror the Willshire 5000 Equity Index and 40% in high-quality bonds, which attempt to mirror the Lehman Brothers Aggregate Bond Index. Small-Cap Equity Fund - Invested at least 65% of its total assets in common stock, or other equity securities including preferred stocks, rights and warrants of the second 1,000 largest U.S. corporations. Growth Equity Fund - Invested primarily in common stocks of corporations that the trust advisor believes are undervalued and capable of generating strong earnings growth in the near term. 4 Large Capital Value Fund - Invested primarily in common stocks and other instruments convertible into common stock issued by large corporations. Global Equity Fund - Invested primarily in equity instruments issued by corporations from the U.S. and abroad. Stable Value Fund - Invested primarily in a diversified portfolio of investment contracts offered by major insurance companies and financial institutions. Small Cap Growth Fund - Invested primarily in common stocks of U.S. and foreign companies within the range of capitalizations of companies included in the Lipper, Inc. Small Cap category. Participants' Notes Receivable The Plan may make loans to actively employed participants of up to 50% of their account balance (excluding any Individual Retirement Account balance), subject to a minimum loan of $1,000 and a maximum loan of $50,000. The $50,000 limit is reduced by the participant's highest outstanding loan balance during the prior one-year period. Interest on loans accrues at 1% above the Wall Street Journal published prime rate, which is determined at the time the loan is taken, and remains fixed for the term of the loan. The repayment period may be from one to five years. Repayments are made through payroll deductions and are reinvested in Plan funds according to the borrowing participant's current investment elections. Loan balances due from terminated participants may be deemed distributed to the participants at the time his or her account balance is liquidated. During 2001, $395,149 of such distributions are included in participant withdrawals and distributions in the accompanying financial statements. Contributions A participant may elect to make regular semi-monthly pre-tax and/or after-tax contributions from 1% to 13% of his or her total eligible compensation. Pre-tax contributions are subject to an IRS limitation of $10,500. The Company matches up to 6% of total eligible compensation for a participant with less than 10 years of service and up to 8% of total eligible compensation for a participant with 10 or more years of service. In addition, a participant may make an approved rollover contribution from another qualified employee benefit plan. All regular Company and participant contributions are paid to the Plan's trustee semi-monthly, and allocated among the investment options consistent with participant investment elections. Vesting Participant accounts are 100% vested and nonforfeitable at all times. Participant Withdrawals and Distributions The Plan provides for several different types of withdrawals by participants. Participants may take in-service withdrawals of certain funds depending on their source. Upon the separation 5 from service, a participant's account balance may be distributed in a lump sum. A participant whose account balance exceeds $5,000 may elect a deferred distribution or installment payments over a period ending not later than April 1 of the year following the calendar year in which the participant attains age 70-1/2. Termination of the Plan While the Board of Directors of BR has not expressed any intention to do so, they may at any time terminate the Plan. Upon termination, the Plan's assets will be distributed to the participants on the basis of their account balances existing at the date of termination. Income Taxes The Plan has received a determination letter dated June 12, 2000, from the Internal Revenue Service advising that the Plan constitutes a qualified plan under Section 401(a) of the Internal Revenue Code and is therefore exempt from income taxes. 2. ACCOUNTING POLICIES Principles of Reporting In accordance with generally accepted accounting principles ("GAAP"), the accounting records of the Plan are maintained on the accrual basis except for participant withdrawals and distributions, which are reported when paid. Amounts for benefit claims that have been processed and approved for payment prior to December 31, but not paid as of that date are reported on Form 5500 as withdrawals. No such unpaid claims exist at December 31, 2001 or 2000. The preparation of the Plan's financial statements in conformity with GAAP requires certain estimates and assumptions. Actual results could differ from estimates. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in their value, it is at least reasonably possible that changes in the near term could materially affect the amounts reported in the Statement of Net Assets Available for Benefits. Investments The Plan's investments, except for its investment contracts, are stated at fair value. Investment contracts, which are fully benefit responsive, are stated at contract value. Fair value for investments other than participants' notes receivable is determined by quoted market prices. Participants' notes receivable are carried at original loan principal balance, less principal repayments which approximates fair value. Net appreciation (depreciation) in the fair value of the Plan investments, which consists of net realized and unrealized appreciation (depreciation), is presented in the Statement of Changes in Net Assets Available for Benefits. This appreciation (depreciation) is allocated to participants based upon their proportionate share of assets in each investment fund. 6 Cash and Cash Equivalents All short-term investments purchased with a maturity of three months or less are considered cash equivalents. Cash equivalents are stated at fair value. Dividend and Interest Income Dividend and interest income from investments are recorded as earned and allocated to participants based upon their proportionate share of assets in each investment fund. Administrative Expenses Certain administrative expenses and professional fees incurred by the Plan are paid by BR, including record keeping and trust fees. 3. NET DEPRECIATION IN THE FAIR VALUE OF INVESTMENTS Following is a summary of the components of the net depreciation in the fair value of investments.
Year Ended December 31, 2001 ------------- BR common stock $ (9,139,361) Registered investment companies (14,898,426) ------------- Total net depreciation $ (24,037,787) =============
4. INVESTMENTS Investments that comprised 5% or more of the net assets available for benefits follow.
December 31, ----------------------------- 2001 2000 ------------ ------------ BR common stock $ 49,504,267 $ 46,356,730 Janus Worldwide Fund $ 18,365,059 $ 29,553,641 Vanguard Institutional Index Fund $ 43,591,919 $ 52,444,999 Schwab Small-Cap Index Fund $ 16,822,336 $ 17,681,087 Vanguard Balanced Index Fund * $ 13,581,882
* Item does not meet 5% threshold as of December 31, 2001. 7 5. INVESTMENT CONTRACTS The fair value of investment contracts as of December 31, 2001 and 2000 was approximately $64,500,000 and $58,100,000, respectively. Fair value was determined using a discounted cash flow analysis assuming market rates for similar contracts. The average yield for these investment contracts during 2001 and 2000 was 5.82% and 6.50%, respectively. The crediting interest rates ranged from 2.44% to 8.75% and 5.13% to 7.50% at December 31, 2001 and 2000, respectively. 8 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of Burlington Resources Inc. Retirement Savings Plan In our opinion, the accompanying statement of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of Burlington Resources Inc. Retirement Savings Plan (the "Plan") at December 31, 2001 and 2000, and the changes in its net assets available for benefits for the year ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. 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 of these statements in accordance with auditing standards generally accepted in the United States of America which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule listed in the accompanying table of contents on Page 1 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is 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. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ PricewaterhouseCoopers LLP Houston, Texas June 20, 2002 9 SUPPLEMENTAL SCHEDULE BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 2001
(e) CURRENT VALUE/ (a) (b)(c) FAIR VALUE ------------- Unallocated Investment Contracts John Hancock Mutual Life Insurance Company #7216, 5.24%, matures 6/20/02 $ 289,665 #7354-1, 3.87%, matures 8/1/02 2,514,663 #7474, 8.18%, no maturity date 5,343,992 Continental Assurance Company #630-05573, 5.61%, matures 12/17/12 1,664,377 #25708-101, 5.97%, no maturity date 4,088,586 J.P. Morgan Chase Bank #401725-G, 5.85%, no maturity date 3,828,559 Bank of America NT & SA #99-043, 5.87%, no maturity date 2,627,546 BMA #1335, 5.75%, matures 11/17/03 1,785,909 State Street Bank & Trust #99007, 5.21%, matures 12/17/12 4,710,086 Monumental Life Ins. Co. #00214FR, 6.98%, matures 10/30/03 1,623,197 UBS AG #5002, 2.44%, no maturity date 2,738,388 Prudential - Cap MAC Inc. #10041-211, 6.61%, matures 6/14/02 1,765,398 Prudential - Cap MAC Insd #10041-212, 5.97%, 1/18/05 1,163,450 Sun America Life Ins. Co. #4887, 7.44%, matures 1/2/04 482,777 Aetna Life Insurance & Annuity Company #14680, 5.46%, matures 12/25/12 4,979,660 Caisse des Depots (CDC) #1810-01, 4.19%, no maturity date 4,036,584 GE Life & Annuity Asr Co. #3528, 5.50%, 3/29/04 1,042,692 Metropolitan Life Insurance #25811, 6.02%, 2/17/04 1,577,364 ------------- Total unallocated investment contracts $ 46,262,893 -------------
10 BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 2001
(e) CURRENT VALUE/ (a) (b)(c) FAIR VALUE ------------- Synthetic investment contracts Monumental Life Ins. Co. #00085TR Citibank Credit Card MT $ 2,112,502 Citibank Credit Card MT 1,047,166 Federal Home Loan Mortgage Co., 5.75%, matures 4/08 2,292,706 Federal National Mortgage Co., 5.13%, matures 2/04 United States Treasury, 5.875%, matures 11/04 2,132,430 United States Treasury, 6.625% matures 5/07 1,661,222 Monumental Life Ins. Co. Wrapper (341,742) Chase Manhattan Bank, #401725-T Fannie Mae Whole Loan, 7.00%, matures 7/05 2,016,725 Ford Auto Owners Trust 1,569,225 Fannie Mae Whole Loan, 6.625%, matures 9/09 543,816 Fannie Mae Whole Loan, 5.125%, matures 2/04 526,712 United States Dollars 12,513 Chase Manhattan Bank Wrapper (78,288) UBS AG, #5040 Fannie Mae Whole Loan, 7.0%, matures 7/05 1,120,403 Federal Home Loan Mtg. Co. 1,008,272 Fannie Mae Whole Loan 958,841 United States Dollars 53,460 UBS AG Wrapper (187,525) ------------- Total synthetic investment contracts 16,448,438 ------------- Total investment contracts $ 62,711,331 -------------
11 BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 2001
(e) CURRENT VALUE/ (a) (b)(c) FAIR VALUE ------------- Registered investment companies Janus Worldwide Fund $ 18,365,059 MFS Massachusetts Investors A Trust 2,152,259 Vanguard Balanced Index Fund 9,557,933 Waddell & Reed Small Cap Growth Fund 1,589,668 Montag and Caldwell Growth Fund 8,635,343 * Schwab Small-Cap Index Fund 16,822,336 Vanguard Institutional Index Fund 43,591,919 Vanguard International Growth Fund 7,143,165 ------------- Total investment companies 107,857,682 Cash and cash equivalents 2,624,189 * Burlington Resources Inc. common stock 49,504,267 Participants' notes receivable, 5.38% to 8.75% 5,284,896 ------------- Total investments $ 227,982,365 =============
* Denotes investment issued by a party-in-interest to the Plan. 12 The Retirement Savings Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the person who administers the employee benefit plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Retirement Savings Plan ------------------------------------ Date June 28, 2002 /s/ William Usher -------------------- ------------------------------------ William Usher Vice President Human Resources & Administration EXHIBIT INDEX 23 Consent of Independent Accountants