SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 

FORM 11-K

 

 

ý

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

 

 

 

 

 

 

For the year ended December 31, 2003

 

 

 

 

 

 

o

TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

 

 

 

 

 

 

Commission file number 1-3551

 

 

EQUITABLE RESOURCES, INC. SAVINGS AND PROTECTION PLAN

(Full title of the Plan and address of the Plan,
if different from that of the issuer named below)

 

EQUITABLE RESOURCES, INC.

 

One Oxford Centre, Suite 3300, 301 Grant Street
Pittsburgh, Pennsylvania  15219

(Name of issuer of the securities held pursuant to the
Plan and the address of principal executive office)

 

 



 

CONTENTS

 

Report of independent registered public accounting firm

 

 

 

Financial statements

 

 

 

Statements of net assets available for benefits

 

Statements of changes in net assets available for benefits

 

Notes to financial statements

 

 

 

Supplementary information

 

 

 

Schedule H:

 

Line 4i–Schedule of Assets (Held at End of Year)

 

Line 4j–Schedule of Reportable Transactions

 

 

 

Signature

 

 

 

Index to Exhibits

 

 

1



 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Benefits Administration Committee

Equitable Resources, Inc. Savings and Protection Plan

 

We have audited the accompanying statements of net assets available for benefits of the Equitable Resources, Inc. Savings and Protection Plan as of December 31, 2003 and 2002, and the related statements of changes in net assets available for benefits for the years then ended. 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 the standards of the Public Company Accounting Oversight Board (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 as of December 31, 2003 and 2002, and the changes in its net assets available for benefits for the years then ended in conformity with U.S. generally accepted accounting principles.

 

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, 2003 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 Plan’s management. 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

 

Pittsburgh, Pennsylvania

June 17, 2004

 

2



 

EQUITABLE RESOURCES, INC.

SAVINGS AND PROTECTION PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

 

 

 

December 31

 

 

 

2003

 

2002

 

 

 

 

 

 

 

Investments, at fair value:

 

 

 

 

 

Mutual funds

 

$

8,479,372

 

$

6,659,370

 

Common/collective trusts

 

3,205,236

 

3,104,251

 

Employer Stock Fund

 

1,142,546

 

1,048,082

 

Participant loans

 

409,316

 

442,902

 

Net assets available for benefits

 

$

13,236,470

 

$

11,254,605

 

 

See accompanying notes

 

3



 

EQUITABLE RESOURCES, INC.

SAVINGS AND PROTECTION PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

 

 

 

 

Year ended December 31

 

 

 

2003

 

2002

 

 

 

 

 

 

 

Additions:

 

 

 

 

 

Investment income:

 

 

 

 

 

Interest and dividends

 

$

274,916

 

$

263,924

 

Interest on participant loans

 

28,074

 

38,028

 

Total investment income

 

302,990

 

301,952

 

 

 

 

 

 

 

Net appreciation (depreciation) in fair value of investments

 

1,620,424

 

(1,602,522

)

Contributions:

 

 

 

 

 

Matching

 

123,231

 

122,248

 

Contract

 

879,266

 

981,489

 

Total contributions

 

1,002,497

 

1,103,737

 

Transfers from affiliated plan

 

70,953

 

 

Other

 

3,361

 

 

Total additions

 

3,000,225

 

(196,833

)

 

 

 

 

 

 

Deductions:

 

 

 

 

 

Withdrawals by participants

 

1,017,189

 

878,756

 

Other

 

1,171

 

1,614

 

Transfers to affiliated plan

 

 

20,597

 

Total deductions

 

1,018,360

 

900,967

 

 

 

 

 

 

 

Net increase in net assets available for benefits

 

1,981,865

 

(1,097,800

)

 

 

 

 

 

 

Net assets available for benefits:

 

 

 

 

 

At beginning of year

 

11,254,605

 

12,352,405

 

At end of year

 

$

13,236,470

 

$

11,254,605

 

 

See accompanying notes

 

4



 

EQUITABLE RESOURCES, INC.

SAVINGS AND PROTECTION PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED

DECEMBER 31, 2003

 

1.                                       Description of Plan

 

The following description of the Equitable Resources, Inc. Savings and Protection Plan (Plan) provides only general information. Participants should refer to the summary plan description for a more complete description of the Plan’s provisions.

 

General

 

The Plan is a defined contribution profit sharing and savings plan, with a 401(k) salary reduction feature, implemented on September 1, 1987, by Equitable Resources, Inc. and certain subsidiaries (the Company or Companies).

 

All regular, full-time employees of the Companies who are covered by a collective bargaining agreement are eligible to participate. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

 

Contributions

 

Participants can elect to contribute between 1% and 15% of eligible earnings to the Plan, subject to Internal Revenue Code limitations. These contributions are referred to as contract contributions. Matching contributions are subject to the respective collective bargaining agreements. Prior to January 1, 1999, the matching contribution followed the participant’s contract contribution. Effective January 1, 1999, the matching contribution will be invested in the Employer Stock Fund until the participant is 100% vested. After the participant is 100% vested, the matching contribution will follow the participant’s contract investment election(s).

 

Rollover Contributions

 

Participants are allowed to make rollover contributions (contributions transferred to the Plan from other qualified retirement plans), subject to certain requirements.

 

Vesting

 

Participants are 100% vested in the value of contract contributions made, and any rollover contributions.

 

5



 

If employment is terminated by the Companies for any reason other than retirement, death or total and permanent disability, a participant is entitled to receive the vested value of any matching contributions, as determined in accordance with the following schedule:

 

Years of Continuous Service

 

Vested Interest

 

 

 

 

 

One year

 

33

%

Two years

 

66

%

Three years

 

100

%

 

Amounts forfeited by participants upon termination will be used to reduce the amount of the Company’s future matching contributions to the Plan.

 

Upon retirement, death or total and permanent disability of the participant or termination of the Plan, a participant is entitled to receive the full value of any matching contributions, regardless of years of continuous service.

 

Withdrawals by Participants

 

Payments to participants are made in one of the following ways, subject to certain limitations:  a single sum payment, a single life annuity with substantially equal monthly installments, a single life or joint and survivor annuity with a minimum guaranteed number of monthly benefits, or substantially equal annual installments payable over a period not to exceed the life expectancy or joint life expectancies of the participant or of the participant and his designated beneficiary.

 

Loans to Participants

 

A participant may borrow money from the Plan in amounts up to the lesser of $50,000, or 50% of the vested balance of a participant’s account.

 

Administrative Expenses

 

The plan sponsor pays administrative expenses associated with the Plan except for investment management fees which are paid by the Plan.

 

6



 

2.                                       Summary of Significant Accounting Policies

 

Basis of Accounting

 

The financial statements of the Plan are prepared under the accrual method of accounting.

 

Investments

 

The Employer Stock Fund consisting of Equitable Resources, Inc. common stock (Company common stock) is valued at market price as quoted on the New York Stock Exchange. There were 26,620 and 29,911 shares of Company common stock at December 31, 2003 and 2002, respectively. Contracts included in the Putnam Stable Value Fund are valued at face value, which approximates market. Other investments are valued at market.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

3.                                       Investments

 

Investments that represent 5% or more of fair value of the Plan’s net assets are as follows:

 

 

 

December 31

 

 

 

2003

 

2002

 

 

 

 

 

 

 

Putnam Stable Value Fund

 

$

2,948,243

 

$

2,874,648

 

The Putnam Fund for Growth & Income

 

2,393,240

 

1,981,495

 

Putnam Voyager Fund

 

2,163,338

 

1,760,876

 

The George Putnam Fund of Boston

 

1,199,846

 

1,111,475

 

Employer Stock Fund*

 

1,142,546

 

1,048,082

 

Pimco Total Return Administrative Fund**

 

735,596

 

 

 


*Nonparticipant-directed

**Presented for comparative purposes.

 

7



 

The Plan’s investments (including investments purchased, sold as well as held during the year)  appreciated (depreciated) in fair value as determined by quoted market prices as follows:

 

 

 

Net Changes in Fair Value for the
Year ended December 31

 

 

 

2003

 

2002

 

Investments at fair value as determined by quoted market prices:

 

 

 

 

 

Registered investment companies

 

$

1,383,976

 

$

(1,609,487

)

Company stock

 

217,846

 

6,904

 

Common/collective trusts

 

18,602

 

61

 

 

 

$

1,620,424

 

$

(1,602,522

)

 

Information about the net assets and significant components of the changes in net assets related to the nonparticipant-directed investment is as follows:

 

 

 

December 31

 

 

 

2003

 

2002

 

 

 

 

 

 

 

Net asset:

 

 

 

 

 

Employer Stock Fund

 

$

1,142,546

 

$

1,048,082

 

 

 

 

 

 

 

Changes in net assets:

 

 

 

 

 

Dividend and interest income

 

$

25,484

 

$

17,989

 

 

 

 

 

 

 

Net appreciation in fair value of investment

 

217,846

 

6,904

 

Employer contributions

 

14,275

 

13,889

 

Employee contributions

 

68,540

 

52,611

 

Withdrawals by participants

 

(186,994

)

(37,923

)

Interfund transfers

 

(44,687

)

85,212

 

Other

 

 

(3,797

)

Net increase

 

$

94,464

 

$

134,885

 

 

4.                                       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 ERISA. In the event of plan termination, the interests of all affected participants will become fully vested.

 

8



 

5.                                       Risks and Uncertainties

 

The Plan invests in various investment securities.  Investment securities are exposed to various risks such as interest rate, market and credit risks.  Due to the level of risk associated with certain investment 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 the participants’ account balances and the amounts reported in the statements of net assets available for benefits.

 

6.                                       Income Tax Status

 

The Plan has received a determination letter from the Internal Revenue Service dated July 8, 2002, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the Internal Revenue Service, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. 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.

 

9



 

SUPPLEMENTARY INFORMATION

 

10



 

EQUITABLE RESOURCES, INC.

SAVINGS AND PROTECTION PLAN

 

Plan No. 206     EIN:  25-0464690

Schedule H, Line 4i–Schedule of Assets (Held at End of Year)

December 31, 2003

 

 

 

 

Identity of Issue, Borrower, Lessor, or
Similar Party

 

Description of Investment Including
Maturity Date, Rate of Interest,
Collateral, Par, or Maturity Value

 

Cost

 

Current
Value

 

 

 

 

 

 

 

 

 

*

 

Putnam Bond Index Fund

 

Common/collective trust

 

(a)

 

$

176,631

 

 

Alger Mid Cap Retirement Fund

 

Mutual fund

 

(a)

 

208,986

 

 

Equitable Life Insurance

 

Mutual fund

 

(a)

 

98

 

 

Lord Abbett Mid Cap Value Fund

 

Mutual fund

 

(a)

 

123,922

 

 

Oppenheimer Developing Markets

 

Mutual fund

 

(a)

 

129,172

 

 

Pimco High Yield Fund

 

Mutual fund

 

(a)

 

86,884

 

 

Pimco Total Return Administrative Fund

 

Mutual fund

 

(a)

 

735,596

 

 

Alger Small Cap Retirement Fund

 

Mutual fund

 

(a)

 

987

 

 

MSIF Small Co. Growth Fund

 

Mutual fund

 

(a)

 

9,368

 

 

Victory Diversified Stock Fund

 

Mutual fund

 

(a)

 

76,306

 

 

Neuberger Berman Genesis Trust

 

Mutual fund

 

(a)

 

270,414

*

 

The George Putnam Fund of Boston

 

Mutual fund

 

(a)

 

1,199,846

*

 

The Putnam Fund for Growth & Income

 

Mutual fund

 

(a)

 

2,393,240

*

 

Putnam Investors Fund

 

Mutual fund

 

(a)

 

7,499

*

 

Putnam Global Equity Fund

 

Mutual fund

 

(a)

 

781

*

 

Putnam Voyager Fund

 

Mutual fund

 

(a)

 

2,163,338

*

 

Putnam Growth Opportunities Fund

 

Mutual fund

 

(a)

 

12,813

*

 

Putnam OTC & Emerging Growth Fund

 

Mutual fund

 

(a)

 

574

*

 

Putnam International Capital Opportunities

 

Mutual fund

 

(a)

 

40,788

*

 

Putnam Asset Allocation–Growth Portfolio

 

Mutual fund

 

(a)

 

191,286

*

 

Putnam Asset Allocation–Balanced Portfolio

 

Mutual fund

 

(a)

 

179,045

*

 

Putnam Asset Allocation–Conservative Portfolio

 

Mutual fund

 

(a)

 

143,625

*

 

Putnam S&P 500 Index Fund

 

Common/collective trust

 

(a)

 

80,362

*

 

Putnam International Growth Fund

 

Mutual fund

 

(a)

 

504,804

*

 

Loan Fund

 

Participant loans–5% to 10.50%**

 

 

409,316

*

 

Equitable Resources Common Stock Fund

 

Employer securities–common shares

 

$

873,206

 

1,142,546

*

 

Putnam Stable Value Fund

 

Common/collective trust

 

(a)

 

2,948,243

 

 

 

 

 

 

 

 

$

13,236,470

 


(a) Cost information not required as per Special Rule for certain participant-directed transactions.

 

*Party-in-interest to the Plan.

**Maturities extend through year 2014.

 

11



 

EQUITABLE RESOURCES, INC.

SAVINGS AND PROTECTION PLAN

 

Plan No. 206     EIN:  25-0464690

Schedule H, Line 4j–Schedule of Reportable Transactions

Year ended December 31, 2003

 

Identity of Party Involved

 

Description of
Investment

 

Purchase
Price

 

Selling
Price

 

Cost of
Asset

 

Current
Value of
Asset on
Transaction
Date

 

Net Gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There were no category (i), (ii), (iii) or (iv) reportable transactions during 2003.

 

12



 

SIGNATURE

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Benefits Administration Committee of the Plan have duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

EQUITABLE RESOURCES, INC.

 

 

SAVINGS AND PROTECTION PLAN

 

 

(Name of Plan)

 

 

 

By

/s/ David J. Smith

 

 

David J. Smith

 

 

Plan Administrator

 

 

June 25, 2004

 

13



 

INDEX TO EXHIBITS

 

Exhibit No.

 

Description

 

Sequential Page No.

 

 

 

 

 

23

 

Consent of Independent Registered Public Accounting Firm

 

14

 

14