As filed with the Securities and Exchange Commission on June 20, 2000
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, 1999
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 Boulevard
1400 Williams Square West
Irving, Texas 75039
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
Financial Statements and Supplemental Schedule
As of December 31, 1999 and 1998 and for the year ended December 31, 1999
With Report of Independent Auditors
2
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PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
AS OF DECEMBER 31, 1999 AND 1998 AND
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
Table of Contents
Page
Report of Independent Auditors........................................ 4
Statements of Net Assets Available for Benefits as of December
31, 1999 and 1998................................................... 5
Statement of Changes in Net Assets Available for Benefits for
the year ended December 31, 1999.................................... 6
Notes to Financial Statements......................................... 7
Schedule H; Line 4i - Schedule of Assets Held for Investment
Purposes at End of Year as of December 31, 1999..................... 12
Signatures............................................................ 13
Index to Exhibits..................................................... 14
3
<PAGE>
Report of Independent Auditors
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 as of December 31, 1999 and
1998, and the related statement of changes in net assets available for benefits
for the year ended December 31 1999. 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, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, 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 for investment purposes at end of year as of December 31, 1999, 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 20, 2000
4
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PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
Statements of Net Assets Available for Benefits
December 31,
-------------------------
1999 1998
----------- -----------
Investments at fair value:
Vanguard Prime Money Market Fund................ $13,079,816 $ 9,022,294
Vanguard - ST Corporate Fund.................... 3,468,610 5,014,181
Vanguard 500 Index Fund......................... 8,798,844 6,061,044
Vanguard Primecap Fund.......................... 17,456,153 7,667,874
Vanguard Windsor II Fund........................ 6,327,893 8,482,733
Vanguard International Growth Fund.............. 773,868 503,275
Sarofim Equity Fund............................. 19,943,740 35,779,402
Pioneer Natural Resources Stock Fund ........... 2,191,408 1,148,565
---------- ----------
72,040,332 73,679,368
Investments at Contract Value:
Pioneer Natural Resources Stable Value Fund..... - 2,276,593
Participants' loans................................ 1,359,021 1,657,912
---------- ----------
Net assets available for benefits............... $73,399,353 $77,613,873
========== ==========
See accompanying notes to financial statements.
5
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PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
Statement of Changes in Net Assets Available for Benefits
For the year ended December 31, 1999
Additions to net assets attributed to:
Interest and dividend income........................... $ 3,077,977
Employee contributions................................. 2,779,130
Rollovers.............................................. 381,697
Net appreciation in fair value of investments.......... 4,187,162
-----------
Total additions...................................... 10,425,966
-----------
Deductions from net assets attributed to:
Distributions to participants.......................... 14,506,072
Fees................................................... 134,414
-----------
Total deductions..................................... 14,640,486
-----------
Net decrease.............................................. (4,214,520)
Net assets available for benefits:
Beginning of year...................................... 77,613,873
-----------
End of year............................................ $ 73,399,353
===========
See accompanying notes to financial statements.
6
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 1. Description of Plan
The following brief 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 (the "Company"). Regular
full-time employees and part-time employees are eligible to participate on the
first day of the month following their date of hire.
Contributions
Participants may contribute 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.
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
Participants were able to allocate their contributions among the
following investment options during the Plan year ended December 31, 1999:
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 - ST Corporate Fund - Seeks to provide a high level of
current income by investing in short- term, investment-grade
corporate bonds with average maturities of two to three years.
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 unmanaged Standard & Poor's 500
Composite Stock Price Index, a widely recognized benchmark of
United States stock market performance.
7
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PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 1. Description of Plan (continued)
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.
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 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 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.
o Pioneer Natural Resources Stable Value Fund - Seeks to provide
a high level of income and a stable unit value of $1 in most
cases.
o 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.
Effective January 1, 2000, the Plan has made available to participants
the following two new fund investment options:
o Vanguard Total Bond Market Index Fund - Seeks to generate a
high level of interest income by investing in high-credit
quality, corporate and treasury securities.
o Vanguard Asset Allocation Fund - Seeks to maximize total return
by investing in common stocks, bonds and money market
instruments.
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.
Participants are immediately vested in their voluntary contributions
currently being made into the Plan, plus the actual Plan earnings thereon.
Certain participant account balances that were merged into the Plan from
predecessor plans retained the vesting schedules provided for in the predecessor
plans' documents. During 1999, the Plan was amended to fully vest participant
account balances credited from the predecessor Parker & Parsley Retirement
Savings Plan and the Mesa Profit Sharing Plan. Vesting in the Matching Plan is
based upon years of continuous service. A participant is fully vested in the
Matching Plan after four years of service.
8
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 1. Description of Plan (continued)
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 to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of the
Plan's termination, 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 on the accrual
basis of accounting.
Investment Valuation
Investments are valued at fair value as determined by Vanguard Fiduciary
Trust Company (the "Trustee"). Fair value is 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;
2) Investments in money market funds are valued at cost, which
approximates fair value,
3) Investments in guaranteed investment contracts with insurance
companies are valued at contract value, which approximates fair
value (see Note 3 below); and,
4) Participant loans receivable are valued at their unpaid principal
balance, which approximates fair value.
5) Investments in the Vanguard Prime Money Market Fund are valued at
cost, which approximates fair value.
9
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 2. Summary of Significant Accounting Policies (continued)
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 generally
accepted accounting principles requires the Plan Administrator to make estimates
that affect the reported amounts of net assets available for benefits at the
date of the financial statements and the reported changes in net assets
available for benefits during the reporting periods. Actual results could differ
from those estimates.
Note 3. Investments
The Pioneer Natural Resources Stable Value Fund was comprised of
investment contracts issued by insurance companies as well as a money market
account that was used as a holding account as the contracts matured. Each
contract earned a guaranteed annual interest rate for a specific period of time
and earned interest as credited by the insurer. During 1999, the Pioneer Natural
Resources Stable Value Fund was liquidated upon the maturity of its investment
which provided a 1999 guaranteed annual rate of 7.7 percent and an average
annual credited yield of 6.9 percent. During 1998, the guaranteed annual rates
on investment contracts issued by insurance companies ranged from 5.9 percent to
7.7 percent and the average annual credit yields ranged from 5.9 percent to 7.4
percent. As of December 31, 1998, the contracts are stated at contract value
which approximates fair value.
During 1999, the Plan's investments (including investments bought, sold
and held during the year) appreciated in fair value as follows:
Pioneer Natural Resources Stock Fund........... $ 46,324
Registered Investment Companies................ 4,140,838
---------
$4,187,162
=========
Note 4. Administrative Expenses
Administrative expenses paid by the Plan were $134,414 during the year
ended December 31, 1999. 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 account forfeitures. In addition
to administrative expenses paid by the Plan, Plan administrative expenses of
$111,595 and $23,295 were paid from account forfeitures and the Employer,
respectively, during 1999. Account forfeiture balances in the Plan were $115,052
and $207,899 as of December 31, 1999 and 1998, respectively.
10
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 5. Tax Status of the Plan
The Plan received a determination letter from the Internal Revenue
Service 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 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 shares of registered investment companies
managed by Vanguard Fiduciary Trust Company. Vanguard Fiduciary Trust Company is
the Trustee as defined by the Plan and, therefore, these transactions qualify as
party-in-interest.
Note 7. Reconciliation of Financial Statements to Forms 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
December 31,
-------------------------
1999 1998
----------- -----------
Net assets available for benefits per the
accompanying financial statements............... $73,399,353 $77,613,873
Amounts allocated to withdrawing participants...... - (84,710)
---------- ----------
Net assets available for benefits per the
Form 5500....................................... $73,399,353 $77,529,163
========== ==========
The following is a reconciliation of distributions to participants during the
year ended December 31, 1999, per the financial statements to the Plan's Form
5500:
Distributions to participants per the
accompanying financial statements............... $14,506,072
Less: Amounts allocated to withdrawing
participants at beginning of year............... (84,710)
----------
Distributions to participants per the Form 5500.... $14,421,362
==========
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment prior
to December 31, but not yet paid as of that date.
11
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PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
Schedule H; Line 4i - Schedule of Assets Held
for Investment Purposes at End of Year
EIN: 75-2516853
Plan Number: 001
As of December 31, 1999
<TABLE>
(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
----- -------------------------------- ------------------------------------- -----------
<S> <C> <C> <C>
* Vanguard Fiduciary Trust Company Vanguard Prime Money Market Fund -
13,079,816 shares $13,079,816
* Vanguard Fiduciary Trust Company Vanguard - ST Corporate Fund -
329,403 shares 3,468,610
* Vanguard Fiduciary Trust Company Vanguard 500 Index Fund -
65,018 shares 8,798,844
* Vanguard Fiduciary Trust Company Vanguard Primecap Fund -
281,233 shares 17,456,153
* Vanguard Fiduciary Trust Company Vanguard Windsor II Fund -
253,420 shares 6,327,893
* Vanguard Fiduciary Trust Company Vanguard International Growth
Fund - 34,409 shares 773,868
Fayez Sarofim & Co. Sarofim Equity Fund - 383,977 shares 19,943,740
* Pioneer Natural Resources Company Pioneer Natural Resources Stock Fund -
678,454 units 2,191,408
* Participants' loans 1,359,021
----------
$73,399,353
==========
---------------------------
*Party in-interest
Note: Column D is not applicable.
</TABLE>
12
<PAGE>
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 20, 2000 By: /s/ Larry N. Paulsen
--------------------------------------
Larry N. Paulsen
Chairman
Date: June 20, 2000 By: /s/ Rich Dealy
--------------------------------------
Rich Dealy
Date: June 20, 2000 By: /s/ John V. Peters
--------------------------------------
John V. Peters
Date: June 20, 2000 By: /s/ Kevin Schepel
--------------------------------------
Kevin Schepel
Date: June 20, 2000 By: /s/ David W. Simpson
--------------------------------------
David W. Simpson
13
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INDEX TO EXHIBITS
Exhibit
Number Description Page
------- ----------- ------
23.1 Consent of Ernst & Young LLP
14
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-39249) pertaining to the Pioneer Natural Resources USA, Inc. 401(k)
Plan of our report dated May 8, 2000, with respect to the financial statements
and schedule of the Pioneer Natural Resources USA, Inc. 401(k) Plan included in
this Annual Report on Form 11-K as of December 31, 1999 and 1998 and for the
year ended December 31, 1999.
Ernst & Young LLP
Fort Worth, Texas
June 20, 2000
15
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