As filed with the Securities and Exchange Commission on June 26, 2002
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
/ 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 No. 333-39249
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive officer:
Pioneer Natural Resources Company
5205 North O'Connor Blvd., Suite 1400
Irving, Texas 75039
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
Financial Statements and Supplemental Schedule
As of December 31, 2001 and 2000 and for the year ended December 31, 2001
With Report of Independent Auditor
2
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
AS OF DECEMBER 31, 2001 AND 2000 AND
FOR THE YEAR ENDED DECEMBER 31, 2001
Table of Contents
Page
Report of Independent Auditor.................................... 4
Statements of Net Assets Available for Benefits as of
December 31, 2001 and 2000................................... 5
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 2001.......................... 6
Notes to Financial Statements.................................... 7
Schedule H; Line 4i - Schedule of Assets (Held At End of
Year) as of December 31, 2001................................. 12
Signatures....................................................... 13
Index to Exhibits................................................ 14
3
Report of Independent Auditor
To the Participants and the Plan Administrator
of Pioneer Natural Resources USA, Inc. 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of Pioneer Natural Resources USA, Inc. 401(k) Plan (the "Plan") as of December
31, 2001 and 2000, and the related statement of changes in net assets available
for benefits for the year ended December 31, 2001. 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 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 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 of 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.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2001, is presented for the purpose of
additional analysis and is not a required part of the 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 our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
Ernst & Young LLP
Fort Worth, Texas
June 4, 2002
4
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
Statements of Net Assets Available for Benefits
December 31,
--------------------------
2001 2000
----------- -----------
Investments at fair value:
Vanguard Primecap Fund........................ $17,759,069 $21,148,244
Vanguard Prime Money Market Fund.............. 10,618,942 12,394,091
Vanguard 500 Index Fund....................... 8,538,931 9,400,834
Vanguard Windsor II Fund...................... 7,489,819 6,525,824
Vanguard - ST Corporate Fund.................. 3,482,011 3,112,481
Vanguard Total Bond Market Index Fund......... 875,098 220,638
Vanguard International Growth Fund............ 746,402 1,028,195
Vanguard Asset Allocation Fund................ 201,309 122,262
Vanguard Explorer Fund........................ 6,653 -
Sarofim Equity Fund........................... 11,325,152 12,688,210
Pioneer Natural Resources Stock Fund ......... 4,199,189 5,326,283
---------- ----------
65,242,575 71,967,062
Participants' loans............................. 1,359,059 1,220,876
---------- ----------
66,601,634 73,187,938
Participant contributions receivable............ 112,610 -
Unallocated administrative expenses............. (9,525) -
---------- ----------
Net assets available for benefits............. $66,704,719 $73,187,938
========== ==========
See accompanying notes to financial statements.
5
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
Statement of Changes in Net Assets Available for Benefits
For the year ended December 31, 2001
Additions to net assets attributed to:
Investment income:
Interest and dividend income........................ $ 1,413,151
Employee contributions................................. 3,100,872
Rollovers.............................................. 70,908
----------
Total additions..................................... 4,584,931
----------
Deductions from net assets attributed to:
Net depreciation in fair value of investments.......... 6,201,703
Distributions to participants.......................... 4,808,482
Fees................................................... 57,965
----------
Total deductions.................................... 11,068,150
----------
Net decrease............................................. (6,483,219)
Net assets available for benefits:
Beginning of year...................................... 73,187,938
----------
End of year............................................ $66,704,719
==========
See accompanying notes to financial statements.
6
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
Note 1. Description of Plan
The following description of the Pioneer Natural Resources USA, Inc.
401(k) Plan (the "Plan") provides only general information. Participants should
refer to the Summary Plan Description for a complete description of the Plan, a
copy of which is available to each participant from the Pioneer Natural
Resources USA, Inc. 401(k) Plan Committee (the "Plan Administrator"). The Plan
is subject to the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA").
General
The Plan is a defined contribution plan established under the Internal
Revenue Code (the "Code") Section 401 on January 1, 1990 covering all employees
of Pioneer Natural Resources USA, Inc. (the "Employer"), a wholly-owned
subsidiary of Pioneer Natural Resources Company. Regular full-time employees and
part-time employees are eligible to participate in the Plan on the first day of
the month following their date of hire. The Plan assets are held in a trust and
certain administrative functions such as maintenance of account balances and
allocation of earnings are performed by Vanguard Fiduciary Trust Company, the
trustee of the trust (the "Trustee").
Contributions
Participants may contribute to the Plan an amount of not less than two
percent nor more than 12 percent of their annual salary. An Employer match is
contributed in cash to the Pioneer Natural Resources USA, Inc. Matching Plan
("Matching Plan") at an amount equal to 200 percent of the first five percent of
basic compensation contributed by a participant to the Plan. On December 31,
2001, participant contributions amounting to $112,610 were in transit to the
Trustee and have been recorded as participant contributions receivable in the
accompanying Statement of Net Assets Available for Benefits as of December 1,
2001. See Note 7 for information regarding the merger of the Plan and the
Matching Plan effective January 1, 2002.
Participant Accounts
Each participant's account is credited with the participant's
contributions and an allocation of Plan earnings. Plan earnings are allocated to
each participant's account by fund in proportion to their fund balance relative
to the total fund balance.
Participants may borrow from their accounts a minimum of $1,000 up to a
maximum of $50,000, or 50 percent of their account's vested balances, whichever
amount is less. The loans are secured by the balance in the participant's
account. Participant loans bear interest at an annual rate equal to the prime
borrowing rate at the inception of the loan plus one percent. Loan principal and
interest is paid ratably through payroll deductions.
Investment Options
During the Plan year ended December 31, 2001, participants were able to
allocate their contributions among the following registered investment company
funds and the Pioneer Natural Resources Stock Fund:
Registered Investment Company Funds:
o Vanguard Primecap Fund - Seeks long-term growth of capital by
investing in stocks of companies with above-average prospects for
continued earnings growth, strong industry positions and skilled
management teams.
7
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
Note 1. Description of Plan (continued)
o Vanguard Prime Money Market Fund - Seeks to provide high income
and a stable share price of $1 by investing in short-term, high
quality money market instruments issued by financial institutions,
non-financial corporations, the United States government and
United States federal agencies.
o Vanguard 500 Index Fund - Seeks to provide long-term growth of
capital and income from dividends by holding all of the 500 stocks
that make up the Standard & Poor's 500 Composite Stock Price
Index, a widely recognized benchmark of United States stock market
performance.
o Vanguard Windsor II Fund - Seeks to provide long-term growth of
capital and a reasonable level of income from dividends by
investing in a diversified group of undervalued or out-of-favor
stocks of large capitalization companies. The stocks generally
sell at prices below the overall market average compared to their
dividend income and future return potential.
o Vanguard - ST Corporate Fund - Seeks to provide a high level of
income while maintaining a high degree of stability of principal
by investing in short-term bonds, including high quality corporate
and United States Treasury securities.
o Vanguard Total Bond Market Index Fund - Seeks to generate a high
level of interest income by investing in high-credit quality,
corporate and United States Treasury securities.
o Vanguard International Growth Fund - Seeks to provide long-term
growth of capital by investing in stocks of companies based
outside the United States. Stocks are selected from more than 15
countries.
o Vanguard Asset Allocation Fund - Seeks to maximize total return by
investing in common stocks, bonds and money market instruments.
o Vanguard Explorer Fund - Seeks long-term growth of capital by
investing in a diversified group of small-company stocks with
prospects for above-average growth.
o Sarofim Equity Fund - Seeks to provide high growth of capital by
investing in a broadly diversified portfolio of large companies.
Income is a secondary goal.
Pioneer Natural Resources Stock Fund - The Pioneer Natural Resources
Stock Fund is designed to provide long-term growth of capital through
increases in the value of the common stock of the Company. Dividends, if
any, are reinvested to purchase more shares.
Vesting
As is described in more detail in "Contributions" above, participants'
contributions and Plan earnings are maintained in the Plan. Employer
contributions are maintained in the Matching Plan, together with the earnings of
the Matching Plan.
8
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
Note 1. Description of Plan (continued)
Participants are immediately vested in their voluntary contributions made
into the Plan, plus the actual Plan earnings thereon. Certain participant
account balances that were merged into the Plan from predecessor plans and
account balances that will be merged into the Plan from the Matching Plan
effective January 1, 2002 (see Note 7, below), retain the vesting schedules
provided for in the predecessor plans' documents. A participant is fully vested
in the Matching Plan after four years of continuous service.
Payments of Benefits
If the total value of the vested portion of the participant's account is
$5,000 or less, payment will be made in one lump sum as soon as administratively
possible. If the total value of the vested portion of the participant's account
exceeds $5,000, payment will occur at age 70-1/2 unless the participant
terminates, retires or becomes disabled prior to age 70-1/2 and consents to an
earlier distribution date by filing a written request to the Plan Administrator
within 90 days prior to the date the participant wishes to receive a
distribution. Except for participant accounts that have a total vested value of
$5,000 or less, distributions to terminated, retired or disabled participants
will be annuities, but may be installments or lump sum payments if so directed
by the participant. A participant's beneficiary will receive the participant's
account balance in the event of a participant's death.
Withdrawal of Benefits
Employees may withdraw their vested assets in the Plan under certain
hardship conditions as defined in the Plan agreement. Terminated participants
may also withdraw their vested assets in the Plan.
Plan Termination
Although it has not expressed any intent to do so, the Employer has the
right under the Plan, subject to the provisions of ERISA to discontinue its
contributions at any time or to terminate the Plan. In the event of the Plan's
termination or the complete discontinuance of Employer contributions to the
Plan, participants will become fully vested in their accounts.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared under the
accrual basis of accounting in accordance with accounting principles generally
accepted in the United States ("GAAP"). Benefit payments made to participants
are recorded upon distribution.
Investment Valuation
Investments are valued at fair value as determined by the Trustee.
Investment fair values are determined as follows:
1. Investments in securities traded on national securities exchanges
are valued at the last reported sales price on the last business day
of the year.
9
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
Note 2. Summary of Significant Accounting Policies (continued)
2. Investments in money market funds are valued at cost, which
approximates fair value.
3. Securities traded on over-the-counter markets and listed securities
for which no sales were reported on that date are valued at the mean
between the last reported bid and asked prices.
4. Investments in restricted securities and other security investments
that do not have an established market are valued at fair value as
determined by the Trustee.
5. Participant loans receivable are valued at their unpaid principal
balance, which approximates fair value.
Security Transactions and Investment Income
Security transactions are accounted for on a trade-date basis. Expenses
incurred with transactions, if any, are added to the purchase price or deducted
from the selling price at the time of the transactions. Dividend income is
recorded on the ex-dividend date. Income from other investments is recorded as
earned on an accrual basis.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires
the Plan's management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.
Note 3. Investments
The Trustee holds the Plan's investments and executes all investment
transactions. All investment information disclosed in the financial statements
and the accompanying schedule, including investments held at December 31, 2001
and 2000, interest and dividend income, and net depreciation in fair value of
investments for the year ended December 31, 2001, was obtained or derived from
information supplied to the Plan Administrator and certified as complete and
accurate by the Trustee.
During 2001, the Plan's investments (including investments purchased,
sold and held during the year) depreciated in fair value as follows:
Registered Investment Company Funds $ 6,170,997
Pioneer Natural Resources Stock Fund 30,706
----------
$ 6,201,703
==========
Note 4. Administrative Expenses
Administrative expenses incurred by the Plan were $57,965 during the year
ended December 31, 2001. The Employer may pay certain expenses incurred in the
establishment and administration of the Plan, including expenses and fees of the
Trustee, but is not obligated to do so. Any Plan expenses not paid by the
Employer are paid from the Plan's earnings or from account forfeitures. In
addition to administrative expenses paid by the Plan, Plan administrative
expenses of $5,690 were paid by the Employer during 2001. Account forfeiture
balances in the Plan were $28,566 and $74,024 as of December 31, 2001 and 2000,
respectively.
10
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
Note 5. Tax Status of the Plan
The Plan received a determination letter from the Internal Revenue
Service ("IRS") dated January 14, 1999, stating that the Plan is qualified under
Section 401(a) of the Code and, therefore, the related trust is exempt from
taxation. The Plan is required to operate in conformity with the Code to
maintain its qualification. The Plan has been amended and restated subsequent to
the receipt of the determination letter. The Plan has applied for a new
determination letter on February 19, 2002, but has not yet received a response
from the IRS on this application. The Plan Administrator believes the Plan is
being operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is tax
exempt.
Note 6. Related Party Transactions
Certain Plan investments are in shares or units of registered investment
company funds that are managed by the Trustee and the Pioneer Natural Resources
Stock Fund. Plan transactions in registered investment company funds that are
managed by the Trustee and the Pioneer Natural Resources Stock Fund qualify as
party-in-interest transactions.
Note 7. Subsequent Event - Trust Amendment
Effective January 1, 2002, the Pioneer Natural Resources USA, Inc. 401(k)
Trust was amended to allow the merger of the Matching Plan into the Plan. In
connection with the merger, $24,031,142 of Matching Plan assets were transferred
into the Plan on January 1, 2002. No additional benefits will accrue into the
Matching Plan on or after the January 1, 2002 effective date of the merger.
Future matching contributions will be made under the merged plan, which will be
renamed as the Pioneer Natural Resources USA, Inc. 401(k) and Matching Plan (the
"Merged Plans"). Voluntary participant contributions and matching Employer
contributions into the Merged Plans will each continue under the same terms and
vesting attributes as originally provided for under the Plan and the Matching
Plan.
11
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
Schedule H; Line 4i - Schedule of Assets (Held At End of Year)
EIN: 75-2516853
Plan Number: 001
As of December 31, 2001
(c)
Description of
(b) investment including
Identity of issuer, maturity date, rate of (e)
borrower, lessor, interest, collateral, par Current
(a) or similar party or maturity value Value
----- --------------------------------- --------------------------------------- -----------
* Vanguard Fiduciary Trust Company Vanguard Primecap Fund -
344,702 shares $17,759,069
* Vanguard Fiduciary Trust Company Vanguard Prime Money Market Fund -
10,618,942 shares 10,618,942
* Vanguard Fiduciary Trust Company Vanguard 500 Index Fund -
80,640 shares 8,538,931
* Vanguard Fiduciary Trust Company Vanguard Windsor II Fund -
292,685 shares 7,489,819
* Vanguard Fiduciary Trust Company Vanguard - ST Corporate Fund -
321,812 shares 3,482,011
* Vanguard Fiduciary Trust Company Vanguard Total Bond Market Index Fund -
86,302 shares 875,098
* Vanguard Fiduciary Trust Company Vanguard International Growth
Fund - 49,727 shares 746,402
* Vanguard Fiduciary Trust Company Vanguard Asset Allocation Fund -
9,230 shares 201,309
* Vanguard Fiduciary Trust Company Vanguard Explorer Fund - 110 shares 6,653
* Fayez Sarofim & Co. Sarofim Equity Fund - 231,930 shares 11,325,152
* Pioneer Natural Resources Company Pioneer Natural Resources Stock Fund -
605,944 units 4,199,189
* Participants' loans Interest rates range from 7% to 10.5% 1,359,059
----------
$66,601,634
==========
--------------------------
*Party in-interest
Note: Column (d) is not applicable since all investments are participant
directed.
12
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned thereto duly authorized.
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
By: Pioneer Natural Resources USA, Inc. 401(k) Plan
Committee
Date: June 26, 2002 By: /s/ Larry N. Paulsen
------------------------------------------
Larry N. Paulsen
Chairman
Date: June 26, 2002 By: /s/ Richard P. Dealy
------------------------------------------
Richard P. Dealy
Date: June 26, 2002 By: /s/ Kevin Schepel
------------------------------------------
Kevin Schepel
Date: June 26, 2002 By: /s/ David W. Simpson
------------------------------------------
David W. Simpson
Date: June 26, 2002 By: /s/ Susan A. Spratlen
------------------------------------------
Susan A. Spratlen
13
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
INDEX TO EXHIBITS
Exhibit
Number Description Page
------- ----------- ----
23.1 Consent of Ernst & Young LLP 15
14