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, 2003
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., 717 Texas Ave., Suite 2100, Houston, Texas 77002
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2003 AND 2002
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
INDEX
DECEMBER 31, 2003
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PAGE(s)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM...........................................................1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits...................................................................2
Statement of Changes in Net Assets Available for Benefits.........................................................3
Notes to Financial Statements...................................................................................4-9
SUPPLEMENTAL SCHEDULE
* Schedule H, Item 4i - Schedule of Assets (Held at End of Year)..............................................10-11
* Other schedules required by Section 29 CFR 2520.103-10 of the Department of Labor Rules
and Regulations for Reporting and Disclosure under ERISA have been omitted because they
are not applicable.
Exhibit
23..........................................................................................................
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Administrator of
Burlington Resources Inc. Retirement Savings Plan
In our opinion, the accompanying statements 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, 2003 and 2002, and the changes in its net assets available for benefits for
the year ended December 31, 2003, 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 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, 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 of Assets (Held
at End of Year) as of December 31, 2003, 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.
Houston, Texas
June 25, 2004
1
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
2003 2002
------------- -------------
INVESTMENTS
At fair value
Burlington Resources Inc. common stock $ 22,946,112 $ 35,252,470
Registered investment companies 141,188,816 86,785,378
Common collective trust 871,401 --
Participants' notes receivable 5,579,062 5,228,238
Cash and cash equivalents 3,845,691 2,806,164
At contract value
Unallocated investment contracts 4,798,286 8,149,147
Synthetic investment contracts 83,647,868 75,947,699
------------- -------------
Total investments 262,877,236 214,169,096
------------- -------------
RECEIVABLES
Company contributions -- 249,394
Participant contributions -- 364,739
Accrued interest 35,823 --
------------- -------------
Total receivables 35,823 614,133
------------- -------------
Total assets 262,913,059 214,783,229
OTHER LIABILITIES
Excess contributions payable (169,039) --
------------- -------------
Net assets available for benefits $ 262,744,020 $ 214,783,229
============= =============
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, 2003
--------------------------------------------------------------------------------
INVESTMENT INCOME
Interest income $ 328,048
Dividend income 1,599,479
Net appreciation in the fair value of investments 38,057,715
Net appreciation in the contract value of investments 3,866,370
-------------
Net investment income 43,851,612
-------------
CONTRIBUTIONS
Company 7,890,423
Participant 10,937,465
Rollover 582,542
-------------
Total contributions 19,410,430
-------------
Total additions 63,262,042
-------------
Participant withdrawals and distributions (15,198,495)
Administrative expenses (102,756)
-------------
Total deductions (15,301,251)
-------------
Net increase 47,960,791
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 214,783,229
-------------
End of year $ 262,744,020
=============
The accompanying notes are an integral part of these financial statements.
3
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
-------------------------------------------------------------------------------
1. PLAN DESCRIPTION
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.
GENERAL
The Plan is a trusteed, defined contribution plan, administered by a
committee of BR corporate executives, for participants of the employer
companies BR and Burlington Resources Oil & Gas Company LP (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 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 in equity securities, which attempt to mirror the Willshire
5000 Equity Index and in high-quality bonds, which attempt to mirror the
Lehman Brothers Aggregate Bond Index.
SMALL-CAP EQUITY FUND
Invested in common stocks, 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.
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.
4
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
-------------------------------------------------------------------------------
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.
PASSIVE BOND MARKET INDEX FUND
Invested primarily in government, corporate, mortgage-backed and
asset-backed securities representative of the broad domestic bond
market, which attempt to mirror the Lehman Brothers Aggregate Bond
Index.
ELIGIBILITY
All employees are eligible to participate in the Plan beginning the
first day of the month following full time employment, or upon
completion of 1,000 hours of service.
PARTICIPANT ACCOUNTS
A separate account is maintained for each participant that reflects the
participant's contributions and the participant's share of Company
contributions and Plan investment income (loss) net of (or in addition
to) withdrawals. Each participant can authorize the transfer of account
balances among funds or change investment options for future
contributions.
Appreciation (depreciation) is allocated to participants based upon
their proportionate share of assets in each investment fund.
PARTICIPANTS' NOTES RECEIVABLE
The Plan may make loans to actively employed participants of up to 50%
of their account balance (excluding any remaining Individual Retirement
Account balance that was entered into prior to 1998), 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.
Interest rates ranged from 5.00% to 10.50% for loans outstanding as of
December 31, 2003. The repayment period may be from 12 to 60 months.
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 are deemed
distributed to the participants during the quarter following the quarter
in which the last loan payment was made unless the participant elects
full loan repayment. During 2003, $165,798 of such distributions are
included in participant withdrawals and distributions in the
accompanying financial statements.
There were no loans in default as of December 31, 2003 and 2002.
5
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
-------------------------------------------------------------------------------
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 via regular payroll deduction. Pre-tax contributions are
subject to an Internal Revenue Service ("IRS") limitation of $12,000 for
the 2003 plan year ($11,000 for 2002). Under the IRS' Catch-up
Contribution provision, participants who are at least age 50 by the plan
year-end may contribute each year on a pre-tax basis an additional
amount, which was limited to $2,000 for the 2003 plan year. The Company
matches 100% of employee contributions 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 employer benefit plan,
subject to IRS rules. All regular Company and participant contributions
are paid to the Plan's trustee semi-monthly, and allocated among the
investment options consistent with the participants' investment
elections.
EXCESS CONTRIBUTIONS PAYABLE
After-tax contributions for certain participants were refunded in order
to comply with Section 401(m) of the Internal Revenue Code (the "Code")
or the actual contribution percentage test. These amounts were refunded
subsequent to December 31, 2003 but prior to March 15, 2004.
VESTING
Participant accounts are 100% vested and nonforfeitable at all times.
PARTICIPANT WITHDRAWALS AND DISTRIBUTIONS
Withdrawals are permitted in the event of termination of employment,
retirement, permanent disability, and death, as defined by the Plan. The
Plan provides for limited in-service withdrawals by participants from
certain funds depending on their source. Upon separation from service, a
participant's account balance is either distributed as a lump sum or
deferred until age 70-1/2, at which time funds are to be distributed in
a lump sum. A participant whose account balance exceeds $5,000 may elect
to defer distribution until age 70-1/2 but no later.
TERMINATION OF THE PLAN
While the Board of Directors of BR has not expressed any intention to do
so, it 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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The Plan's financial statements are presented on the accrual basis of
accounting. Withdrawal from the Plan and distributions to participants
or their beneficiaries are recorded 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. Unpaid claims in the amount of $36,368 exist at December
31, 2003. No such unpaid claims exist at December 31, 2002.
6
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
-------------------------------------------------------------------------------
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
accounting principles generally accepted in the United States of America
requires Plan management to make significant estimates and assumptions
that affect the reported amounts of net assets available for benefits at
the date of the financial statements and the changes in net assets
available for benefits during the reporting period and, when applicable,
disclosures of contingent assets and liabilities at the date of the
financial statements. Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
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.
INCOME TAXES
The Plan is intended to be a qualified plan pursuant to Section 401(a)
of the Code. The Plan received a favorable tax determination letter
dated October 25, 2002, from the IRS advising that the Plan, as
designed, was in compliance with the applicable requirements of the
Code, and is therefore exempt from income taxes. There have been no
amendments to the Plan since that date. The Plan administrator believes
that the Plan is designed and is currently being operated in compliance
with the applicable requirements of the Code.
VALUATION OF 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 values for investments other than
participants' notes receivable and cash are determined by quoted market
prices. Participants' notes receivable are carried at original loan
principal balance, less principal repayments, which approximates fair
value. Cash is stated at account value. Investment transactions are
recorded on a trade date basis.
CASH AND CASH EQUIVALENTS
All short-term investments purchased with an original maturity of three
months or less are considered cash equivalents. Cash equivalents are
stated at fair value.
INVESTMENT INCOME
Investment income includes the net appreciation or depreciation in the
fair value of the Plan's fair value investments, consisting of realized
and unrealized gains and losses. Investment income also includes
interest income related to the Plan's guaranteed investment contracts,
which is included in the net appreciation in the contract value of
investment. 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. BR paid approximately $131,000 and $242,000 for the
years ended December 31, 2003 and 2002, respectively.
7
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
-------------------------------------------------------------------------------
3. NET APPRECIATION IN INVESTMENTS ACCOUNTED FOR AT FAIR VALUE AND
CONTRACT VALUE
Following is a summary of the components of the net appreciation in the
Plan's fair value and contract value investments for the year ended
December 31, 2003.
Net appreciation in investments accounted for at fair value
BR common stock $ 8,097,427
Registered investment companies 29,952,487
Common collective trust 7,801
-----------
Total net appreciation in investments accounted for at fair value 38,057,715
Total net appreciation in investments accounted for at contract value 3,866,370
-----------
Total net appreciation $41,924,085
===========
4. INVESTMENTS
Investments that comprised 5% or more of the net assets available for
benefits for the years ended December 31, 2003 and 2002 are as follows:
2003 2002
----------- -----------
BR common stock $22,946,112 $35,252,470
Janus Worldwide Fund* 7,486,823 12,057,556
Vanguard Institutional Index Fund 44,334,655 32,624,803
Dodge & Cox Stock Fund** 17,078,959 3,171,758
Rice Hall James Micro Cap Fund** 26,684,533 2,373,630
Vanguard Balanced Index Institutional Fund** 13,488,619 9,707,185
Vanguard International Growth Adm Fund** 14,458,372 6,489,878
Primco Fixed Income Fund*** 88,446,154 84,096,846
* Item does not meet 5% threshold as of December 31, 2003. The Janus
Worldwide Fund was removed from the investment portfolio as of
December 31, 2003.
** Item does not meet 5% threshold as of December 31, 2002.
*** Guaranteed investment contracts.
5. INVESTMENT CONTRACTS
The fair value of investment contracts as of December 31, 2003 and 2002,
was approximately $95,500,000 and $88,700,000, 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 2003 and 2002 was 4.31% and 5.22%, respectively. The
crediting interest rates ranged from 1.01% to 7.80% and 1.43% to 7.65%
at December 31, 2003 and 2002, respectively. Crediting rate resets are
applied to specific investment contracts as determined at the date of
purchase. There are no minimum crediting interest rates applicable to
the investment contracts as of December 31, 2003.
8
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
-------------------------------------------------------------------------------
6. PARTY-IN-INTEREST TRANSACTIONS
The Plan invests in shares of BR common stock, which qualify as
party-in-interest transactions. These party-in-interests transactions
are permissible under provisions of ERISA. BR pays the costs of
administering the Plan.
9
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
-------------------------------------------------------------------------------
CURRENT
VALUE/
FAIR VALUE
-------------
Unallocated Investment Contracts
Prudential - Cap MAC Insd
#10041-212, 5.97%, matures January 18, 2005 $1,306,513
Sun America Life Ins. Co.
#4887, 7.80%, matures January 2, 2004 558,237
GE Life & Annuity Asr Co.
#3528, 5.50%, matures March 29, 2004 1,160,542
Metropolitan Life Insurance
#25811, 6.02%, matures February 17, 2004 1,772,994
----------
Total Unallocated Investment Contracts 4,798,286
==========
Synthetic Investment Contracts
Monumental Life Ins. Co. #00085TR
United States Treasury, 2.375%, matures August 2006 4,057,131
United States Treasury, 3.375%, matures December 2008 1,008,443
United States Dollars 48,697
Monumental Life Ins. Co. Wrapper (511,053)
Metropolitan Life Insurance
#28538, 3.52%, no maturity date 11,092,339
Metropolitan Life Insurance Wrapper (213,221)
John Hancock Mutual Life Insurance Company
#7474, 5.74%, no maturity date 3,649,702
John Hancock Mutual Life Insurance Company Wrapper (218,676)
Bank of America NT & SA
#03-091, 4.23%, no maturity date 16,511,677
Bank of America Wrapper (420,244)
UBS AG
#5194, 4.52%, no maturity date 16,975,815
UBS AG Wrapper (667,911)
ING Life Insurance and Annuity Co.
#60096, 5.93%, no maturity date 15,467,140
ING Life Insurance and Annuity Co. Wrapper (585,346)
Rabobank Nederland
#BRS 100201, 3.88%, no maturity date 17,967,791
Rabobank Nederland Wrapper (514,416)
------------
Total Synthetic Investment Contracts 83,647,868
------------
Total Investment Contracts $ 88,446,154
============
10
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
-------------------------------------------------------------------------------
Registered Investment Companies
Janus Worldwide Fund $ 7,486,823
Vanguard Balanced Index Institutional Fund 13,488,619
Ivy Small Cap Growth Y Fund 8,825,532
ABN AMRO/Montag and Caldwell Growth N Fund 8,831,323
Vanguard Institutional Index Fund 44,334,655
Vanguard International Growth Adm Fund 14,458,372
Rice Hall James Micro Cap Fund 26,684,533
Dodge & Cox Stock Fund 17,078,959
------------
Total registered investment companies 141,188,816
Common collective trust - SSgA Passive Bond Market Index Fund 871,401
Cash and cash equivalents 3,845,691
Burlington Resources Inc. common stock* 22,946,112
Participants' notes receivable, at interest rates ranging from 5.00% to 10.50%* 5,579,062
------------
Total investments $262,877,236
============
* Denotes investment issued by a party-in-interest to the Plan.
11
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, 2004 /s/ STEVEN J. SHAPIRO
------------------------ --------------------------------------
Steven J. Shapiro
On behalf of Burlington Resources Inc.
Benefits Committee, the Administrator
of the Plan
12
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
23 Consent of Independent Registered Public Accounting Firm
13