<PAGE> 1
PAGE 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
THRIFT PLAN FOR EMPLOYEES OF
CONOCO INC.
(FULL TITLE OF THE PLAN)
CONOCO INC.
600 NORTH DAIRY ASHFORD ROAD
HOUSTON, TX 77079
(NAME AND ADDRESS OF PRINCIPAL EXECUTIVE OFFICE OF ISSUER)
================================================================================
<PAGE> 2
PAGE 2
INDEX
-----
<TABLE>
<CAPTION>
Page(s)
-------
<S> <C>
Report of Independent Accountants ........................................ 4
Financial Statements:
Statements of Net Assets Available for Plan
Benefits, as of December 31, 1999 and 1998 ..................... 5
Statement of Changes in Net Assets Available
for Plan Benefits, for the Year Ended
December 31, 1999 ............................................... 6
Notes to the Financial Statements ................................... 7-17
Supplemental Schedule:
Schedule I: Schedule of Assets Held for Investment
Purposes at December 31, 1999 ...................................18-20
</TABLE>
EXHIBITS
--------
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C> <C>
23 Consent of Independent Accountants 21
</TABLE>
--------------------
*Other supplemental schedules required by Section 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.
<PAGE> 3
PAGE 3
Pursuant to the requirements of the Securities and Exchange Act of
1934, Conoco Inc. has duly caused this Annual Report to be signed by the
undersigned hereunto duly authorized.
Thrift Plan for Employees of
Conoco Inc.
May 31, 2000:
By
--------------------------------------
Steve Theede
Vice President of Human Resources
<PAGE> 4
PAGE 4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants of the Thrift Plan for Employees of Conoco Inc. and the
Employee Benefit Plans Board of Conoco Inc.
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Thrift Plan for Employees of Conoco Inc. (the "Plan") at
December 31, 1999 and 1998, and the changes in net assets available for plan
benefits for the year ended December 31, 1999 in conformity with accounting
principles generally accepted in the United States. 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, 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 the opinion expressed
above.
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
for investment purposes 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.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
May 30, 2000
<PAGE> 5
PAGE 5
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1998 and 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total All Funds
-------------------------
1998 1999
---------- ----------
<S> <C> <C>
Investments, at Fair Value
(Notes 1, 2 and 3)
Equity ........................................ $ 708,034 $ 887,577
Mutual Funds .................................. 397,411 597,240
Common/Collective Trusts ...................... 206,757 224,418
Short-Term Investments and Cash ............... 33,424 40,337
Loans to participants principal balance ....... 35,727 33,765
---------- ----------
1,381,353 1,783,337
Investments, at contract value
Stable Value Fund ............................. 1,691,162 1,714,845
---------- ----------
Total Investments ......................... 3,072,515 3,498,182
Receivables due from Conoco Inc. ................. 6,475 6,105
---------- ----------
Net Assets Available for Plan Benefits ........... $3,078,990 $3,504,287
========== ==========
</TABLE>
------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
PAGE 6
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total All Funds
---------------
1999
-----------
<S> <C>
Investment income
Interest ............................................... $ 121,688
Dividends .............................................. 66,041
Net appreciation in fair value of
investments .......................................... 402,644
-----------
Total investment income .............................. 590,373
Contributions
Conoco Inc. contributions
(net of forfeitures applied of $2) ................... 25,242
Participants ........................................... 44,791
Rollovers .............................................. 70,982
-----------
731,388
-----------
Withdrawals ............................................... (293,600)
Affiliated company transfers (out) ........................ (12,491)
-----------
(306,091)
-----------
Net increase .............................................. 425,297
Net assets available for plan benefits:
Beginning of year ...................................... 3,078,990
-----------
End of year ............................................ $ 3,504,287
===========
</TABLE>
--------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
PAGE 7
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE THRIFT PLAN:
The following description of the Thrift Plan for Employees of Conoco
Inc. (the "Plan") provides only general information. Members should refer to the
Plan document for the Plan's provisions.
THE PLAN
The Plan is a defined contribution plan which was established in 1952
by Conoco Inc. (the "Company"), which became a wholly owned subsidiary of E. I.
du Pont de Nemours and Company (DuPont) in 1981. On August 7, 1999, Conoco Inc.
became a fully independent company through an exchange offer in which DuPont
stockholders were given an opportunity to exchange DuPont common stock for
Conoco Class B common stock at a ratio of 1:2.95. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and
the Internal Revenue Code (the "Code").
The purpose of the Plan is to encourage employees to save
systematically a portion of their current compensation and to assist them to
accumulate additional financial means for the time of their retirement. The Plan
is a tax-qualified, contributory profit sharing plan. Employees of the Company,
including employees of affiliated companies that have adopted the Plan, who have
previously met the eligibility requirements of the Plan or who have completed a
designated period of 12 consecutive months during which they complete 1,000
hours or more of service; who are regular, full time employees or regular,
part-time employees; are eligible to participate in the Plan.
Effective January 1, 1999 a separate savings plan, the Thrift Plan for
Retail Employees of Conoco Inc. (the "Retail Plan") was created for Conoco
retail employees. Retail employees eligible to participate in the Retail Plan
are not eligible to participate in the Plan.
An eligible participant may authorize the Company to make a payroll
deduction under the Plan ranging from 1% to 19% of monthly compensation. The
amount deducted can be deposited into a before-tax or after-tax account or some
combination thereof. Participants' monthly deductions up to 6% are called basic
deposits. The Company will contribute an amount equal to 100% of the
participant's monthly basic deposits. Subject to certain limitations, certain
participants are eligible to make supplemental deposits, either as lump sum
deposits or deposits in the form of monthly deductions in excess of 6% of
monthly compensation. Due to the application of Internal Revenue Code
discrimination testing requirements, only "non-highly compensated" participants
are currently eligible to make cash lump sum supplemental deposits.
<PAGE> 8
PAGE 8
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
A participant with less than five years of participation credit or
service who withdraws any basic deposits will forfeit a portion of related
Company contributions in accordance with the specific Plan provisions. Company
contributions will be suspended for six months if a vested participant makes an
in-service withdrawal of any earnings in the before-tax or after-tax accounts,
or basic deposits or Company contributions contributed during the last 24
months. Employee deposits and matching Company contributions will be suspended
for up to 12 months if a participant withdraws any before-tax contribution prior
to age 59-1/2. In certain circumstances such a withdrawal may also preclude a
participant from making any before-tax contributions in the year following the
withdrawal.
Any vested participant who separates from service, including one who
retires, may elect to make a full account withdrawal at any time. Required
minimum distributions commence in April following the year in which a former
participant reaches age 70-1/2.
Participants may borrow up to one-half of their nonforfeitable account
balance subject to certain minimum and maximum loan limitations. The loans are
executed by promissory notes and have a minimum term of 12 months and a maximum
term of 60 months, except for qualified residential loans that have a maximum
term of 120 months. The loans bear an interest rate equal to the average rate
charged by selected major banks to prime customers for secured loans. The loans
are repaid over the term in monthly installments of principal and interest by
payroll deduction. A participant also has the right to repay the loan in full at
any time without penalty.
ADMINISTRATION
The designated trustee of all the funds is Merrill Lynch Trust Company
of America (Merrill Lynch). The administration of the Plan is vested in the
Employee Benefit Plans Board. The Board of Directors of Conoco Inc. or its
delegate may designate three or more persons to serve on the Employee Benefit
Plans Board, which has the authority to prescribe regulations for the
administration of the Plan, review all claims for benefits under the Plan and
enter into agreements with one or more entities, including, but not limited to
insurance companies, banks, and other investment organizations, to provide a
stable rate of return to the Stable Value Fund.
Brokerage fees, transfer taxes, investment fees and other expenses
incident to the purchase and sale of securities and investments in the Stable
Value Fund, DuPont Common Stock Fund, Conoco Class A Common Stock Fund, Conoco
Class B Common Stock Fund, Merrill Lynch Mutual and Index Funds, Asset
Allocation Portfolios, and Mutual Funds shall be included in the cost of such
securities or investments, or deducted from the sales proceeds, as the case may
be. All administrative expenses not specified in the preceding sentence
<PAGE> 9
PAGE 9
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
shall be paid out of rebates of record keeping costs and other discounts in
connection with investment vehicles available in the Plan. If such rebates or
other discounts are paid to the Plan, any excess remaining after the reasonable
administration expenses of the Plan have been paid shall be allocated to the
accounts of all participants in the Plan who have an employee account balance
greater than zero on an allocation date designated by the Plan Administrator.
The balance of any administrative expenses not paid as described above, shall be
paid ratably by the Company and its affiliated companies participating in the
Plan.
While the Company has not expressed any intent to terminate the Plan,
it is free to do so at any time. In the event the Plan is terminated, all
participants become vested and the distribution of all account balances will be
made based upon the valuation of the participant's account on the termination
date.
INVESTMENT FUNDS
The following investment funds have been established for the investment
of employee deposits and Company contributions. Effective August 6, 1999,
purchases of DuPont common stock and Conoco Class A common stock are not allowed
with either fund transfers, future deposits, contributions or income, including
dividends. However, participants are able to purchase Conoco Class B common
stock which was added as an investment option to the Plan on August 16, 1999.
The holders of Class A common stock and Class B common stock generally have
identical rights, except that the holders of Class A common stock are entitled
to one vote per share while holders of Class B common stock are entitled to five
votes per share on matters to be voted on by stockholders. The investment funds
are described below:
Stable Value Fund
-----------------
Investments under agreement with one or more financial institutions, including
insurance companies, banks and other investment entities which provide for a
predetermined or stable rate of return and are held at contract value.
DuPont Common Stock Fund
------------------------
Common Stock of E. I. du Pont de Nemours and Company.
Conoco Class A Common Stock Fund
--------------------------------
Class A Common Stock of the Company.
<PAGE> 10
PAGE 10
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Conoco Class B Common Stock Fund
--------------------------------
Class B Common Stock of the Company.
Loan Fund
---------
Participant loans - amounts transferred from other funds that are loaned to
participants.
Merrill Lynch Funds
-------------------
A total of seven Merrill Lynch investment options are offered, each with its own
investment objective:
Mutual Funds:
Merrill Lynch Global Holdings - seeks highest total investment return
consistent with prudent risk through global diversification.
Merrill Lynch Capital Fund - seeks highest total investment return consistent
with prudent risk.
Merrill Lynch Basic Value Fund - seeks capital appreciation and income.
Merrill Lynch Growth A - seeks growth of capital and income.
Index Funds:
Merrill Lynch Small Company Stock Index - seeks to track the holdings and total
return of the Russell 2000 Index.
Merrill Lynch International Stock Index - seeks to track the holdings and total
return of the Morgan Stanley Capital International EAFE (Europe,
Australia, and Far East) Index.
Merrill Lynch Equity Index Tier 6 - seeks to track the holdings and total return
of the Standard & Poor's 500 Composite Stock Price Index (S&P 500
Index).
Mutual Funds
------------
In addition to the four Merrill Lynch mutual funds listed above, seventeen other
mutual funds are offered as investment options. Each of the mutual funds has its
own investment objective and varying degrees of risk. The list of mutual funds
available is:
AIM Constellation A - seeks aggressive capital growth.
AIM Value A - seeks long-term capital growth.
Fidelity Fund - seeks long-term capital growth.
Fidelity Equity-Income - seeks reasonable income and potential for capital
appreciation.
<PAGE> 11
PAGE 11
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Fidelity Growth & Income - seeks high total return.
Fidelity Low-Priced Stock - seeks capital appreciation.
Fidelity Magellan Fund - seeks capital appreciation.
Franklin Balance Sheet Investment - seeks high total return.
Franklin Custody Growth I - seeks capital appreciation.
Franklin Small Cap Growth I - seeks long-term capital growth.
Hotchkis & Wiley International - seeks current income, long-term growth of
income and growth of capital.
Janus Enterprise - seeks long-term growth of capital.
Janus Mercury - seeks long-term growth of capital.
MFS Research A - seeks long-term growth of capital and future income.
MFS Total Return A - seeks above-average income consistent with prudent
employment of capital, and growth of capital and income.
Templeton Foreign I - seeks long-term growth of capital.
Templeton Growth I - seeks long-term growth of capital.
Asset Allocation Portfolios
---------------------------
Four Asset Allocation Portfolios are offered as investment options for balancing
risk and return:
3-Way Asset Allocation Portfolio - seeks long-term return while controlling
risk.
Conservative Asset Allocation Portfolio - seeks lower risk with lower potential
return.
Moderate Asset Allocation Portfolio - seeks moderate risk and return.
Aggressive Asset Allocation Portfolio - seeks higher return with higher
potential risk.
The Conservative, Moderate and Aggressive Asset Allocation Portfolios
are composed of other investment options which are available in the Plan. These
three asset allocation portfolios have as their components the Stable Value
Fund, Merrill Lynch Small Company Stock Index Trust and the Merrill Lynch Equity
Index Tier 6 Trust. The Moderate and Aggressive portfolios also include the
Merrill Lynch International Stock Index. The percentage of investment in the
Stable Value Fund or the other Merrill Lynch options varies depending on the
risk.
Participants may allocate their employee deposits and matching Company
contributions and may reallocate the amounts in their accounts among all funds,
except the DuPont Common Stock Fund, Conoco Class A Common Stock Fund, and Loan
Fund, at their discretion.
Affiliated company transfers in(out) represent the net movement of
participant account balances among the Plan and other defined contribution
benefit plans of affiliated companies and the Retail Plan.
<PAGE> 12
PAGE 12
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
RECEIVABLES
Receivables are comprised of employee deposits of $3,165 and $3,776,
Company contributions of $2,147 and $2,119, and loan repayments of $1,163 and
$1,035, which are amounts due as of December 31, 1998 and 1999, respectively.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION AND INCOME RECOGNITION
The accompanying financial statements are prepared on the accrual basis
of accounting. The Plan's investments are stated at fair value, except for the
Stable Value Fund, which is stated at contract value. The Stable Value Fund
guaranteed investment contracts, separate account guaranteed investment
contracts and synthetic guaranteed investment contracts are fully benefit
responsive and thus, are stated at cost plus accrued interest, using the
contracted interest rates applied to the daily account balances. Mutual Funds
are valued at quoted market prices that represent the net asset value of shares
held by the Plan at year-end. Common/Collective Trust Funds are stated at the
fair value of all underlying assets as reported by the applicable custodian.
Loans to participants, short-term investments, and cash are valued at cost that
approximates fair value. DuPont common stock, Conoco Class A common stock, and
Conoco Class B common stock are valued at their quoted market prices at
year-end.
The purchase of shares of Conoco Class B common stock may be made in
the open market or from the Company if it shall have made treasury or authorized
but unissued shares available for such purchases, in which event the purchase
price shall be the closing price of such stock as reported on the New York Stock
Exchange - Composite Transactions on the last day preceding the date of such
purchase from the Company.
Effective August 7, 1999 dividends from all stock funds are invested
according to the participants' most recent investment direction. Dividend income
is recorded on the ex-dividend date and interest income is recorded when earned.
Realized gains and losses on the sale of the DuPont Common Stock Fund, Conoco
Class A Common Stock Fund and Conoco Class B Common Stock Fund investment
securities are based on average cost of the securities sold for each fund
respectively. Purchases and sales are recorded on a trade date basis.
<PAGE> 13
PAGE 13
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Certain prior-year amounts have been reclassified to conform with
current-year amounts. Reclassification required by Statement of Position 99-3
eliminates the by-fund disclosures previously required by the American Institute
of Certified Public Accountants (AICPA) practice bulletin 12, regarding the
reporting of separate investment fund option information of defined contribution
plans.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan Administrator to make estimates
and assumptions that affect the reported amounts in the financial statements.
Actual results could differ from those estimates.
NOTE 3 - STABLE VALUE FUND
Effective January 1, 1999 the Fixed Income Fund was renamed the Stable
Value Fund. The Stable Value Fund option provided by the Plan is also available
to participants in the Retail Plan, sponsored by Conoco Inc., the Investment
Plan for Salaried Employees of Consol Inc. (the "Consol Plan"), sponsored by
Consol Inc., a corporate joint venture owned equally by DuPont and subsidiaries
of RWE AG of Germany, and Sentinel Transportation Company Thrift Plan (the
"Sentinel Plan") sponsored by Sentinel Transportation Company, a wholly-owned
subsidiary of DuPont. Prior to April 1, 1999, the investments in these funds by
participants in the Plan and Retail, Consol and Sentinel Plans were commingled
for investment purposes; however, the four Plans' assets were accounted for
separately by the trustee. Effective April 1, 1999, the assets of the Stable
Value Fund were split due to DuPont's sale of the majority of its remaining
interest in Consol. A separate portfolio, comprised of the same Stable Value
investments that were held in the former Conoco/Retail/Consol/Sentinel Stable
Value Fund, was established for the Conoco/Retail Stable Value Fund.
The Stable Value Fund consists of guaranteed investment contracts
(GICs), separate account GICs (SAGICs), and synthetic guaranteed investment
contracts (SYNs).
The crediting interest rates ranged from 5.78% to 9.96% and 5.58% to
9.89% for the years ended December 31, 1998 and 1999, respectively. The fund's
blended rate of return for the year was 7.47% in 1998 and 7.02% in 1999.
<PAGE> 14
PAGE 14
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
The crediting rates for most SAGIC and SYN contracts are reset annually
and are based on the market value of the underlying portfolio of assets backing
these contracts. Inputs used to determine the crediting rate include each
contract's portfolio market value, current yield-to-maturity, duration (i.e.,
the present value of the weighted average life), and market value relative to
contract value. All contracts have a guaranteed rate of 0% or higher.
The contract values, which approximate the fair values, of investment
contracts as of December 31, 1998 and 1999 are as follows:
<TABLE>
<CAPTION>
Contract Value
12/31/98 12/31/99
---------- ----------
<S> <C> <C>
Guaranteed Investment Contracts $ 129,741 $ 25,697
Separate Account Guaranteed Investment Contracts 364,651 456,530
Synthetic Guaranteed Investment Contracts 1,202,829 1,240,157
---------- ----------
$1,697,221 $1,722,384
========== ==========
</TABLE>
The total contract values of $1,697,221 and $1,722,384 at December 31, 1998 and
1999 include direct participant investments of $1,691,162 and $1,714,845 and
investments of $6,059 and $7,539 held by the Conservative, Moderate and
Aggressive Allocation Portfolios.
The contract values of synthetic guaranteed investment contracts
include ($45,564) and $38,835 at December 31, 1998 and 1999 related to wrapper
contracts which guarantee the contract value of the synthetic guaranteed
investment contracts for participant initiated withdrawal events.
NOTE 4 - INVESTMENTS
The Plan presents in the Statement of Changes in Net Assets Available
for Plan Benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
<PAGE> 15
PAGE 15
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Net appreciation for the year ended December 31, 1999 is as follows:
<TABLE>
<CAPTION>
Investments Net Appreciation
----------- ----------------
<S> <C>
Equity $274,595
Mutual Funds 94,032
Common/Collective Trusts 34,017
--------
Total Net Appreciation $402,644
========
</TABLE>
The following individual investments represent more than 5% of the net
assets available for plan benefits as of December 31, 1998 and 1999:
<TABLE>
<CAPTION>
Current Value Current Value
12/31/98 12/31/99
------------- -------------
<S> <C> <C>
DuPont Common Stock Fund $676,304 $667,682
Fidelity Magellan Fund 180,762 217,083
Deutsche Bank (5.85%, SYN) 156,806 (a) 141,056 (a)
Prudential Insurance Co. (8.58%, SAGIC) 265,081 185,086
</TABLE>
(a) - includes wrapper value
NOTE 5 - INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated August 7, 1995 that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections of the
Code. The Plan has been amended since receiving the determination letter.
However, the Plan Administrator and the Plan's tax counsel believe that the Plan
is currently designed and being operated in compliance with the applicable
requirements of the Code.
<PAGE> 16
PAGE 16
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
NOTE 6 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan
benefits per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1998 1999
----------- -----------
<S> <C> <C>
Net assets available for plan benefits per
the financial statements $ 3,078,990 $ 3,504,287
Less: Amounts allocated to withdrawing
participants (1,193) (493)
----------- -----------
Net assets available for plan benefits per
the Form 5500: $ 3,077,797 $ 3,503,794
=========== ===========
</TABLE>
The following is a reconciliation of plan benefits paid to participants
per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year Ended December 31,
1998 1999
--------- ---------
<S> <C> <C>
Plan benefits paid to participants per the
financial statements $ 259,794 $ 293,600
Add: Amounts allocated to withdrawing
participants at December 31, 1998 and 1999 1,193 493
Less: Amounts allocated to withdrawing
participants at December 31, 1997 and 1998 (115) (1,193)
--------- ---------
Plan benefits paid to participants per the Form 5500 $ 260,872 $ 292,900
========= =========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
plan benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
<PAGE> 17
PAGE 17
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
NOTE 7 - RELATED PARTY TRANSACTION
Certain Plan investments are shares of mutual funds managed by the
Trustee. Therefore, transactions in these investments qualify as
party-in-interest transactions that are exempt from the prohibited transaction
rules.
NOTE 8 - SUBSEQUENT EVENTS
Effective March 1, 2000, the Company shall make a monthly contribution
to the Trustee of 1 percent and at its discretion, an additional monthly
contribution of up to 5 percent of the monthly compensation in the month
preceding the month in which such contribution is made of all employees eligible
to participate in the Plan in the month preceding the month in which the
contribution is made. The percentage of the discretionary contribution shall be
set once a year and remain in effect for twelve consecutive months. These
monthly contributions shall be made to the Conoco Class B Common Stock Fund.
<PAGE> 18
PAGE 18
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
SCHEDULE I
ITEM 27A-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Description Current Value
----------- -------------
<S> <C>
Aetna Life Insurance Co. - 9.89%, 6/1/00 (GIC) ........ $ 13,249
John Hancock - 6.01%, 12/31/99 (SAGIC) ................ 53,976
Metropolitan Life Insurance Co. - 7.37%, No
Maturity Date (SAGIC) ....................... 107,074
Prudential Insurance Co. - 8.58%, 7/1/01 (SAGIC) ...... 185,086
Travelers Insurance Co. - 9.66%, 6/1/00 (GIC) ........ 12,448
Trans America - 7.00%, 12/31/00 (SAGIC) .............. 110,394
----------
482,227
----------
Aetna Life Insurance Co. - 6.61%, No Maturity Date
(SYN), DuPont Pension Fund Investment ........ 145,710
Bankers Trust Co. - 5.94%, 12/01/02 (SYN),
Brundage, Story and Rose ..................... 108,388
Bankers Trust Co. - 7.38%, No Maturity Date (SYN),
Pacific Investment Management Co. ............ 89,205
CDC Capital Inc. - 6.95%, 10/1/02 (SYN), CDC
Capital Inc. ................................. 86,658
Citibank - 7.42%, 8/31/01 (SYN), Merrill Lynch
Institutional Fund Management ................ 29,132
Deutsche Bank - 5.58%, No Maturity Date (SYN),
Pacific Investment Management Co. ............ 137,261
Deutsche Bank - 6.68%, No Maturity Date (SYN),
Wellington Trust Co. ......................... 116,874
J. P. Morgan - 5.76%, No Maturity Date (SYN),
Western Asset Management Co. ................. 115,044
Peoples Security Life - 6.52%, No Maturity Date
(SYN), J. P. Morgan Investment Management .... 98,153
Providian Capital Management - 6.96%, 1/1/04 (SYN),
Loomis Sayles & Co. .......................... 142,405
Union Bank of Switzerland - 6.72%, No Maturity Date
(SYN), Aeltus Investment Management .......... 132,492
Net Wrapper Value ..................................... 38,835
----------
1,240,157
----------
</TABLE>
-----------------------
Continued next page
<PAGE> 19
PAGE 19
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
SCHEDULE I
ITEM 27A-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
(Continued)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Description Current Value
----------- -------------
<S> <C>
Total GIC, SAGIC and SYN (a) .................. 1,722,384
Less: Stable Value Contracts held by
Asset Allocation Portfolios (b) ..... (7,539)
----------
1,714,845
----------
* Conoco Class A Common Stock Fund ............................. 46,785
* Conoco Class B Common Stock Fund ............................. 173,110
* DuPont Common Stock Fund ..................................... 667,682
* Aggressive Asset Allocation Portfolio (b) ................... 1,840
* Conservative Asset Allocation Portfolio (b) ................. 4,452
* Moderate Asset Allocation Portfolio (b) ..................... 8,159
Barclays 3-Way Asset Allocation Fund ......................... 72,180
* Merrill Lynch Small Company Stock Index Tier 2 ............... 5,299
* Merrill Lynch Equity Index Tier 6 ........................... 126,486
* Merrill Lynch International Stock Index Tier 2 ............... 6,002
Fidelity Low-Priced Stock .................................... 8,992
Franklin Small Cap Growth I .................................. 23,024
Janus Enterprise ............................................. 46,793
Janus Mercury ................................................ 106,682
Hotchkis & Wiley International ............................... 10,549
MFS Total Return A ........................................... 1,657
* Merrill Lynch Global Holdings ................................ 17,158
Templeton Growth I ........................................... 5,256
AIM Value A .................................................. 17,735
Fidelity Growth & Income ..................................... 26,763
* Merrill Lynch Growth A ....................................... 4,828
</TABLE>
--------------------
* Party in interest to the Plan.
(a) GIC = Guaranteed Investment Contract; SAGIC = Separate Account GIC;
SYN = Synthetic Guaranteed Investment GIC
(b) The Conservative, Moderate and Aggressive Asset Allocation Portfolios
hold investments in Stable Value Fund Contracts of $3,110, $4,063
and $366, respectively, totaling $7,539.
<PAGE> 20
PAGE 20
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
SCHEDULE I
ITEM 27A-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
(Continued)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Description Current Value
----------- -------------
<S> <C>
AIM Equity Constellation A ......................... 4,579
Franklin Balance Sheet Investment .................. 3,358
Templeton Foreign I ................................ 11,246
Fidelity Magellan Fund ............................. 217,083
Fidelity Fund ...................................... 22,420
Fidelity Equity-Income ............................. 7,952
Franklin Custody Growth I .......................... 2,002
MFS Research A ..................................... 5,114
* Merrill Lynch Capital Fund A ....................... 22,538
* Merrill Lynch Basic Value Fund A ................... 31,511
Loan Fund (7.50% - 8.50%) ......................... 33,765
Short Term Investments and Cash, Merrill Lynch
Trust Company of America ..................... 40,337
----------
Total Investment Portfolio $3,498,182
==========
</TABLE>
--------------------
* Party in interest to the Plan.
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
23 Consent of Independent Accountants
</TABLE>
