SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------
FORM 11-K
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1996
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 0-18886
A. HS Resources, Inc. Employee Investment 401(k) Plan
and
HS Resources, Inc. Profit Sharing Plan
B. HS Resources, Inc.
One Maritime Plaza, 15th Floor
San Francisco, CA 94111
<PAGE>
HS RESOURCES, INC. EMPLOYEE
INVESTMENT 401(k) PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
-2-
<PAGE>
HS RESOURCES, INC.
EMPLOYEE INVESTMENT 401(k) PLAN
INDEX
<TABLE>
<CAPTION>
<S> <C>
Page(s)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 4
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits with Fund Information
as of December 31, 1996 5
Statement of Net Assets Available for Benefits with Fund Information
as of December 31, 1995 6
Statement of Changes in Net Assets Available for Benefits with Fund
Information for the Year Ended December 31, 1996 7
NOTES TO FINANCIAL STATEMENTS 8-12
SCHEDULE SUPPORTING FINANCIAL STATEMENTS:
Schedule I-Item 27(a)--Schedule of Assets Held for Investment Purposes
as of December 31, 1996 13
</TABLE>
-3-
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
HS Resources, Inc. Employee Investment 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of HS RESOURCES, INC. EMPLOYEE INVESTMENT 401(k) PLAN (the "Plan") as of
December 31, 1996 and 1995, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1996. These financial
statements and the schedule referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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, 1996 and 1995, and the changes in net assets available for benefits
for the year ended December 31, 1996 in conformity with generally accepted
accounting principles.
Our audits were performed 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. The fund information in the statements of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedule and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Denver, Colorado,
June 12, 1997.
-4-
<PAGE>
HS RESOURCES, INC.
EMPLOYEE INVESTMENT 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Participant - Directed
---------------------------------------------------------------------------------
Bal- Cash
Money Conser- anced HSR and Loans
Market GIC vative Value Conserva- Inter- Emerg- Common Cash to
Port- Port Bond Port- tive Value Growth national ing Stock Equiv- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund alents cipants Total
------ ------- ------- ------- --------- -------- -------- -------- -------- -------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments-
Investments
in HS
Resources,
Inc. Master
Trust
(Note 5) $250,364 $46,473 $126,245 $530,248 $669,104 $526,538 $325,563 $230,390 $749,630 $ 643,903 $ 74,994 $ - $4,173,452
Loans to
partici-
pants - - - - - - - - - - - 55,528 55,528
------- ------ ------ ------ ------ ------- ------- ------ ------- ------- ------ ------ ---------
Total
invest-
ments 250,364 46,473 126,245 530,248 669,104 526,538 325,563 230,390 749,630 643,903 74,994 55,528 4,228,980
------- ------ ------- ------ ------ ------- ------- ------ ------- ------- ------ ------ ---------
Receivables-
Employer - - - - - - - - - 457,276 40,000 - 497,276
Other - - - - - - - - - 4,175 71 - 4,246
------ ------ ------ ------ ------ ------- ------- ------ ------- ------- ------ ------ ---------
Total
receiv-
ables - - - - - - - - - 461,451 40,071 - 501,522
------ ------ ------ ------ ------ ------- ------- ------ ------- ------- ------ ------ ---------
NET ASSETS
AVAILABLE
FOR BENEFITS $250,364 $46,473 $126,245 $530,248 $669,104 $526,538 $325,563 $230,390 $749,630 $1,105,354 $115,065 $55,528 $4,730,502
======= ====== ======= ======= ======= ======= ======= ======= ======= ========= ======= ====== =========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
-5-
<PAGE>
HS RESOURCES, INC.
EMPLOYEE INVESTMENT 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
Participant - Directed
------------------------------------------------------------------------------------
Bal- Cash
Money Conser- anced HSR and Loans
Market GIC vative Value Conserva- Inter- Emerg- Common Cash to
Port- Port Bond Port- tive Value Growth national ing Stock Equiv- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund alents cipants Total
------ ------- ------- ------- --------- -------- -------- -------- -------- -------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments-
Investments
in HS
Resources,
Inc. Master
Trust
(Note 5) $57,961 $20,428 $147,038 $436,322 $428,756 $270,288 $175,078 $245,085 $489,799 $219,389 $307 $ - $2,490,451
Loans to
partici-
pants - - - - - - - - - - - 12,825 12,825
------- ------ ------ ------- ------ ------- ------- ------ ------- ------- --- ------ ---------
Total
invest-
ments 57,961 20,428 147,038 436,322 428,756 270,288 175,078 245,085 489,799 219,389 307 12,825 2,503,276
------ ------ ------- ------- ------- ------- ------- ------- ------- ------- --- ------ ---------
Receivables-
Employer - - - - - - - - - 192,747 - - 192,747
------ ------ ------ ------ ------ ------- ------- ------ ------- ------- --- ------ ---------
NET ASSETS
AVAILABLE
FOR BENEFITS $57,961 $20,428 $147,038 $436,322 $428,756 $270,288 $175,078 $245,085 $489,799 $412,136 $307 $12,825 $2,696,023
====== ====== ======= ======= ======= ======= ======= ======= ======= ======= === ====== =========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
-6-
<PAGE>
HS RESOURCES, INC.
EMPLOYEE INVESTMENT 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Participant - Directed
-------------------------------------------------------------------------------------
Bal- Cash
Money Conser- anced HSR and Loans
Market GIC vative Value Conserva- Inter- Emerg- Common Cash to
Port- Port Bond Port- tive Value Growth national ing Stock Equiv- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund alents cipants Total
------ ------- ------- ------- --------- -------- -------- -------- -------- -------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO
NET ASSETS
ATTRIBUTED
TO:
Investment
income-
Net invest-
ment income
from HS
Resources,
Inc. Master
Trust
(Note 5) $ 5,624 $ 1,673 $ 2,881 $ 62,033 $119,517 $ 88,038 $ 42,519 $ 12,086 $ 46,666 $ 192,814 $ 371 $ - $ 574,222
Interest on
participant
loans - - - - - - - - - - - 3,181 3,181
CONTRIBUTIONS:
Employer - - - - - - - - - 457,276 40,000 - 497,276
Employee 13,831 16,739 24,533 59,041 68,173 64,829 51,943 46,266 111,514 12,867 - - 469,736
Rollover - - 2,333 24 2,687 39,238 2,831 24 17,298 - 44,446 - 108,881
Other - - - - - - - - - 4,175 71 - 4,246
------- ------ ------- ------- ------- ------- ------- ------ ------- --------- ------- ------ ---------
Total
additions 13,831 16,739 26,866 59,065 70,860 104,067 54,774 46,290 128,812 474,318 84,517 - 1,080,139
------- ------ ------- ------- ------- ------- ------- ------ ------- --------- ------- ------ ---------
DEDUCTIONS
FROM NET
ASSETS
ATTRIBUTED TO:
Distributions
to employees (8,200) (5,538) (27,740) (51,435) (52,333) (30,935) (25,191) (15,983) (16,448) (64,059) (35,981) (83) (333,926)
TRANSFER FROM
RELATED PLAN
(Note 7) 183,514 19,056 8,663 47,742 68,051 97,817 74,507 42,051 146,957 22,505 - - 710,863
------- ------ ------- ------- ------- ------- ------- ------ ------- --------- ------- ------ ---------
NET INCREASE 194,769 31,930 10,670 117,405 206,095 258,987 146,609 84,444 305,987 625,578 48,907 3,098 2,034,479
NET TRANSFERS
BETWEEN FUNDS (2,366) (5,885) (31,463) (23,479) 34,253 (2,737) 3,876 (99,139) (46,156) 67,640 65,851 39,605 -
NET ASSETS
AVAILABLE FOR
BENEFITS:
Beginning of
period 57,961 20,428 147,038 436,322 428,756 270,288 175,078 245,085 489,799 412,136 307 12,825 2,696,023
------- ------ ------- ------- ------- ------- ------- ------- ------- --------- ------- ------ ---------
End of $250,364 $46,473 $126,245 $530,248 $669,104 $526,538 $325,563 $230,390 $749,630 $1,105,354 $115,065 $55,528 $4,730,502
period ======= ====== ======= ======= ======= ======= ======= ======= ======= ========= ======= ====== =========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
-7-
<PAGE>
HS RESOURCES, INC. EMPLOYEE INVESTMENT 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(1) DESCRIPTION OF PLAN
Effective July 1, 1990, HS Resources, Inc. (the "Company") established the HS
Resources, Inc. Employee Investment 401(k) Plan (the "Plan").
The following description of the Plan provides only general information.
Participants and all others should refer to the Plan Agreement for a more
complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering all employees of the Company
who have completed one year of service consisting of at least 1,000 hours of
service. The Plan was established under the provisions of Section 401(a) of the
Internal Revenue Code ("IRC"), which includes a qualified deferred arrangement
as described in Section 401(k) of the IRC, for the benefit of eligible employees
of the Company. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Benefits under the Plan are
not guaranteed by the Pension Benefit Guaranty Corporation.
CONTRIBUTIONS
Participants can contribute on a pre-tax basis, as permitted by Section 401(k)
of the IRC, an amount from 1% to 10% of their compensation as defined by the
Plan, limited by the requirements of the IRC. Employees may contribute rollover
contributions from another qualified plan. Participants may also contribute
after-tax amounts from 1% to 5% of compensation to the Plan.
Each Plan year, the Company may in its sole discretion, contribute a matching
contribution. Participants must be continuously employed from the first day to
the last day of the Plan year to be eligible to receive matching contributions.
For the Plan year ended December 31, 1996, the Company matched 100% of
employee's elective deferrals up to 10% of compensation.
Each Plan year, the Company may, at its discretion, contribute an additional
qualified nonelective contribution ("QNEC") to the Plan. Allocations of QNECs
are made in the proportion that a participant's compensation bears to the
compensation of the eligible non-highly compensated participants for the portion
of the Plan year in which they were participants. The Company did not make a
QNEC for the Plan year ended December 31, 1996.
-8-
<PAGE>
The annual additions under the Plan and all other plans sponsored by the Company
are limited to the lesser of 25% of eligible compensation or $30,000. Annual
additions are defined by the IRC.
PARTICIPANT ACCOUNTS
Participant accounts are credited with participant elective contributions,
matching Company contributions, QNEC contributions and Plan earnings or losses.
INVESTMENT OPTIONS
Participants are offered ten investment options in which they may invest as
follows:
o Money Market Portfolio--Seeks to provide liquidity, stability of principal
and current income by investing in U.S. government securities, certificates
of deposits, bankers acceptances, and commercial paper.
o GIC Portfolio--Seeks to provide stability of principal, liquidity, and
current income by investing in a wide range of guaranteed investment and
bank investment contracts.
o Conservative Bond Fund--Seeks to preserve capital, maintain market
liquidity and achieve a total return in excess of investment benchmarks
without assuming undue risk by investing in a diversified range of bonds
and other fixed-income securities.
o Balanced Value Portfolio--Seeks long-term capital growth through investment
in both stocks and bonds.
o Conservative Equity--Seeks long-term capital growth and income through
investment in value-oriented, income producing stocks.
o Value Equity--Seeks long-term capital growth and income through investment
in value-orientated stocks.
o Growth Value--Seeks long-term capital growth through investment in stocks.
o International Equity--Seeks capital growth through investment in securities
of foreign (non-U.S.) companies in maturing and emerging economies.
o Emerging Growth--Seeks investment in stocks of companies that have the
potential for above-average growth.
o HSR Common Stock Fund--Investment in the common stock, $.001 par value, of
HS Resources, Inc.
-9-
<PAGE>
Participants may invest their accounts in one or more of the above funds in
whole percent increments. On the first day of any calendar month, participants
may change the distribution of their funds, with fourteen days' written notice
to the Plan Administrator.
VESTING
Participants are immediately fully vested in their elective contributions,
Company matching contributions and QNECs to the Plan.
PAYMENTS OF BENEFITS
A participant's entire interest in the Plan is payable upon attaining normal
retirement age (age 65), death or becoming disabled, as defined. Upon
termination of service, a participant's vested interest in the Plan is payable.
Participant benefits are payable in a lump sum, installments or a combination
thereof. In addition, hardship distributions are permitted if certain criteria
are met.
Benefits for retired and/or terminated employees who had not received their full
payment for their vested benefits, but had requested payment prior to yearend,
were approximately $109,300 for the year ended December 31, 1996. Amounts for
the year ended December 31, 1995 were immaterial. These amounts are included as
a component of net assets available for plan benefits in the accompanying
financial statements. These vested benefits will be distributed in accordance
with the Plan Agreement.
PARTICIPANT LOANS
In accordance with the Plan Agreement, participants may borrow funds from the
Plan. Borrowings cannot exceed the lesser of $50,000 or 50% of the participant's
vested account. Loans are secured by the participant's account and bear an
interest rate of prime plus 2% on the date the loan is approved. Such loans are
evidenced by promissory notes.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared using the accrual
method of accounting. The preparation of the financial statements in conformity
with generally accepted accounting principles requires the Plan's management to
use estimates and assumptions that affect the financial statements and
disclosures. Actual results could differ from these estimates.
INVESTMENT VALUATION
The Plan's investments are stated at fair value which is determined by
PaineWebber Trust Company (the "Trustee") based on current market prices. The
GIC Portfolio is a pooled trust which invests in guaranteed investment
contracts. The contracts are carried in the pooled trust funds audited financial
statements at cost plus accrued income, which approximates fair market value.
The investment in the pooled trust fund in the accompanying financial statements
is valued at the Plan's proportionate interest in the fund as of the financial
statement date. This portfolio was determined to be fully benefit responsive.
The crediting interest rate changes daily. Participant loans are valued at
cost, which approximates fair value.
-10-
<PAGE>
Purchases and sales of securities are recorded on a trade date basis.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
PLAN EXPENSES
The Plan pays all investment management fees (see Note 6). The Company pays all
other costs and expenses of maintaining the Plan.
(3) INCOME TAXES
The Internal Revenue Service ("IRS") has determined and informed the Company by
a letter dated March 28, 1991, that the Plan and related trust are designed in
accordance with the applicable sections of the IRC. The Plan has been amended
since receiving the determination letter. However, the Plan Administrator
believes that the Plan is currently designed and being operated in compliance
with the applicable requirements of the IRC. Therefore, the Plan Administrator
believes that the Plan was qualified and the related trust was tax-exempt as of
the financial statement dates.
(4) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan and dispose of the net assets in accordance with the
provisions of ERISA.
(5) INTEREST IN HS RESOURCES, INC. MASTER TRUST
Most of the Plan's investments are in the HS Resources, Inc. Master Trust
("Master Trust") which was established for the investment of assets of the Plan
and the HS Resources, Inc. Profit-Sharing Plan. Each participating plan has an
undivided interest in the Master Trust. The assets of the Master Trust are held
by the Trustee. At December 31, 1996 and 1995, the Plan's interest in the net
assets of the Master Trust was approximately 86% and 77%, respectively.
Investment income, net of expenses, relating to the Master Trust is allocated to
the individual plans based upon average monthly balances invested by each plan.
The following table presents the fair values of investments for the Master
Trust:
December 31,
(Unaudited)
-----------------------------
1996 1995
----------- ----------
Investments at fair value:
Cash and cash equivalents $ 78,464 $ 793
Pooled trusts 3,946,376 2,838,728
Employer stock 843,427 291,534
--------- ---------
$4,868,267 $3,131,055
========= =========
-11-
<PAGE>
Investment income for the Master Trust is as follows:
Year Ending
December 31,
1996
(Unaudited)
-------------
Interest income $ 2,159
Income from pooled trusts 447,809
Income from employer stock 241,246
-------
$691,214
=======
(6) RELATED PARTY TRANSACTIONS
Certain Plan investments are units of pooled trust funds managed by the Trustee.
Therefore, these transactions qualify as party-in-interest. Fees paid by the
Master Trust for the investment management services amounted to approximately
$49,000 for the year ended December 31, 1996. Certain Plan investments are also
shares of the Company stock.
In addition, one of the named fiduciaries of the Plan was formerly related to
the account manager of the Master Trust, who received total commissions of
$11,360 for the year ending December 31, 1996.
(7) MERGER
Based on a unanimous written consent of the Board of Directors of HSRTW, Inc.
and HS Resources, Inc., on June 17, 1996, the Company acquired all of the stock
of the Tide West Oil Company ("Tide West") and all contributions to the Tide
West Oil Company 401(k) Plan ("Tide West Plan") ceased. Participants of the Tide
West Plan were transferred into the Plan effective August 30, 1996. Amounts
transferred into the Plan are shown in the accompanying statement of changes in
net assets available for benefits as Transfers from Related Plan. All
participants were fully vested and their hire date with Tide West is considered
to be their hire date with the Company.
(8) PLAN AMENDMENT
The Plan was amended effective July 1, 1996 to include Tide West as an
affiliated employer of the Plan.
-12-
<PAGE>
SCHEDULE I
HS RESOURCES, INC.
EMPLOYEE INVESTMENT 401(K) PLAN
ITEM 27(a)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (a)
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Identity of Party Involved/ Historical Current
Description of Investments Cost Value
- ------------------------------------------------------------------------------ ---------- ---------
<S> <C> <C>
Loans to participants (interest rates ranging from 8% to 11%) $55,528 $55,528
====== ======
</TABLE>
(a) All investments in the Master Trust are properly excluded from this
schedule.
The accompanying notes to financial statements
are an integral part of this schedule.
-13-
<PAGE>
HS RESOURCES, INC. PROFIT-SHARING PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
-14-
<PAGE>
HS RESOURCES, INC.
PROFIT-SHARING PLAN
INDEX
<TABLE>
<CAPTION>
PAGE(S)
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 16
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits with Fund Information
as of December 31, 1996 17
Statement of Net Assets Available for Benefits with Fund Information
as of December 31, 1995 18
Statement of Changes in Net Assets Available for Benefits with Fund
Information for the Year Ended December 31, 1996 19
NOTES TO FINANCIAL STATEMENTS 20-24
SCHEDULE SUPPORTING FINANCIAL STATEMENTS:
Schedule I-Item 27(a)--Schedule of Assets Held for Investment Purposes
as of December 31, 1996 25
</TABLE>
-15-
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
HS Resources, Inc. Profit-Sharing Plan:
We have audited the accompanying statements of net assets available for benefits
of HS RESOURCES, INC. PROFIT-SHARING PLAN (the "Plan") as of December 31, 1996
and 1995, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1996. These financial statements
and the schedule referred to below are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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, 1996 and 1995 and the changes in net assets available for
benefits for the year ended December 31, 1996 in conformity with generally
accepted accounting principles.
Our audits were performed 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. The fund information in the statements of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedule and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Denver, Colorado,
June 12, 1997.
-16-
<PAGE>
HS RESOURCES, INC.
PROFIT-SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Participant - Directed
-------------------------------------------------------------------------------------
Bal- Cash
Money Conser- anced HSR and Loans
Market GIC vative Value Conserva- Inter- Emerg- Common Cash to
Port- Port Bond Port- tive Value Growth national ing Stock Equiv- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund alents cipants Total
------ ------- ------- ------- --------- -------- -------- -------- -------- -------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments-
Investments
in HS
Resources, Inc.
Master Trust
(Note 5) $29,203 $8,971 $13,398 $35,840 $99,087 $93,484 $42,886 $35,886 $133,066 $199,524 $3,470 $ - $694,815
Loans to
Participants - - - - - - - - - - - 10,544 10,544
------ ----- ------ ------ ------ ------ ------ ------ ------- ------- ----- ------ -------
Total
investments 29,203 8,971 13,398 35,840 99,087 93,484 42,886 35,886 133,066 199,524 3,470 10,544 705,359
------ ----- ------ ------ ------ ------ ------ ------ ------- ------- ----- ------ -------
NET ASSETS
AVAILABLE FOR
BENEFITS: $29,203 $8,971 $13,398 $35,840 $99,087 $93,484 $42,886 $35,886 $133,066 $199,524 $3,470 $10,544 $705,359
====== ===== ====== ====== ====== ====== ====== ====== ======= ======== ====== ====== =======
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
-17-
<PAGE>
HS RESOURCES, INC.
PROFIT-SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
Participant - Directed
-------------------------------------------------------------------------------------
Bal- Cash
Money Conser- anced HSR and Loans
Market GIC vative Value Conserva- Inter- Emerg- Common Cash to
Port- Port Bond Port- tive Value Growth national ing Stock Equiv- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund alents cipants Total
------ ------- ------- ------- --------- -------- -------- -------- -------- -------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments-
Investments
in HS
Resources, Inc.
Master Trust
(Note 5) $37,259 $8,898 $14,771 $49,358 $98,249 $82,338 $36,630 $83,816 $156,654 $72,145 $486 $ - $640,604
Loans to
Participants - - - - - - - - - - - 19,427 19,427
------ ----- ------ ------ ------ ------ ------ ------ ------- ------ --- ------ -------
Total
investments 37,259 8,898 14,771 49,358 98,249 82,338 36,630 83,816 156,654 72,145 486 19,427 660,031
------ ----- ------ ------ ------ ------ ------ ------ ------- ------ --- ------ -------
NET ASSETS
AVAILABLE FOR
BENEFITS: $37,259 $8,898 $14,771 $49,358 $98,249 $82,338 $36,630 $83,816 $156,654 $72,145 $486 $19,427 $660,031
====== ===== ====== ====== ====== ====== ====== ====== ======= ====== === ====== =======
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
-18-
<PAGE>
HS RESOURCES, INC.
PROFIT-SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Participant - Directed
-------------------------------------------------------------------------------------
Bal- Cash
Money Conser- anced HSR and Loans
Market GIC vative Value Conserva- Inter- Emerg- Common Cash to
Port- Port Bond Port- tive Value Growth national ing Stock Equiv- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund alents cipants Total
------ ------- ------- ------- --------- -------- -------- -------- -------- -------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO
NET ASSETS
ATTRIBUTED
TO:
Investment
income-
Net invest-
ment income
from HS
Resources,
Inc. Master
Trust
(Note 5) $ 1,193 $ 478 $ 301 $ 4,848 $ 21,144 $ 17,108 $ 6,288 $ 3,166 $ 12,246 $ 48,432 $ 1,788 $ - $116,992
Interest on
participant
loans - - - - - - - - - - - 1,407 1,407
------ ------ ------ ------ ------ ------- ------ ------ ------ ------- ------ ----- -------
Total
additions 1,193 478 301 4,848 21,144 17,108 6,288 3,166 12,246 48,432 1,788 1,407 118,399
DEDUCTIONS FROM
NET ASSETS
ATTRIBUTED TO:
Distributions
to employees (1,250) (123) (473) (17,718) (21,458) (7,913) (1,761) - (2,098) (8,650) (11,627) - (73,071)
------ ------ ------- ------- ------- ------- ------- ------ ------- ------- ------ ----- -------
NET INCREASE (57) 355 (172) (12,870) (314) 9,195 4,527 3,166 10,148 39,782 (9,839) 1,407 45,328
(DECREASE)
NET TRANSFERS
BETWEEN FUNDS (7,999) (282) (1,201) (648) 1,152 1,951 1,729 (51,096) (33,736) 87,597 12,823 (10,290) -
NET ASSETS
AVAILABLE FOR
BENEFITS:
Beginning of
period 37,259 8,898 14,771 49,358 98,249 82,338 36,630 83,816 156,654 72,145 486 19,427 660,031
------ ----- ------ ------ ------ ------ ------ ------ ------- ------- ------ ------ -------
End of
period $29,203 $8,971 $13,398 $35,840 $99,087 $93,484 $42,886 $35,886 $133,066 $199,524 $ 3,470 $10,544 $705,359
====== ===== ====== ====== ====== ====== ====== ====== ======= ======= ====== ====== =======
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
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<PAGE>
HS RESOURCES, INC.
PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(1) DESCRIPTION OF PLAN
Effective June 30, 1989, HS Resources, Inc. (the "Company") established the HS
Resources, Inc. Employee Investment Plan, which was amended and restated
effective as of that date, and renamed the HS Resources, Inc. Profit-Sharing
Plan (the "Plan"). The following description of the Plan provides only general
information. Participants and all others should refer to the Plan Agreement for
a more complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering all employees of the Company
who have completed one year of service consisting of at least 1,000 hours of
service. The Plan was established under the provisions of Section 401(a) of the
Internal Revenue Code ("IRC") for the benefit of eligible employees of the
Company. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). Benefits under the Plan are not
guaranteed by the Pension Benefit Guaranty Corporation.
CONTRIBUTIONS
The Company may make a discretionary profit-sharing contribution each year to
the Plan. The profit-sharing contribution is allocated to each participant's
account based on an allocation formula, as defined in the Plan Agreement. There
was no Company profit-sharing contribution for the Plan year ended December 31,
1996. Participants must be employed from the first day to the last day of a Plan
year in order to be eligible to receive a contribution. Total annual additions
under the Plan and all other plans sponsored by the Company are limited to the
lesser of 25% of eligible compensation or $30,000. Annual additions are defined
by the IRC.
PARTICIPANT ACCOUNTS
Participant accounts are credited with Company profit-sharing contributions,
allocations of Plan earnings or losses, and allocations of forfeitures.
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<PAGE>
INVESTMENT OPTIONS
Participants are offered ten investment options in which they may invest as
follows:
o Money Market Portfolio--Seeks to provide liquidity, stability of principal
and current income by investing in U.S. government securities, certificates
of deposit, bankers acceptances, and commercial paper.
o GIC Portfolio--Seeks to provide stability of principal, liquidity, and
current income by investing in a wide range of guaranteed investment and
bank investment contracts.
o Conservative Bond Fund--Seeks to preserve capital, maintain market
liquidity and achieve a total return in excess of investment benchmarks
without assuming undue risk by investing in a diversified range of bonds
and other fixed-income securities.
o Balanced Value Portfolio--Seeks long-term capital growth through investment
in both stocks and bonds.
o Conservative Equity--Seeks long-term capital growth and income through
investment in value-oriented, income producing stocks.
o Value Equity--Seeks long-term capital growth and income through investment
in value-orientated stocks.
o Growth Value--Seeks long-term capital growth through investment in stocks.
o International Equity--Seeks capital growth through investment in securities
of foreign (non-U.S.) companies in maturing and emerging economies.
o Emerging Growth--Seeks investment in stocks of companies that have the
potential for above-average growth.
o HSR Common Stock Fund--Investment in the common stock, $.001 par value, of
HS Resources, Inc.
Participants may invest their accounts in one or more of the above funds in
whole percent increments. On the first day of any calendar month, participants
may change the distribution of their funds, with fourteen days' written notice
to the Plan Administrator.
VESTING
Vesting in the Company profit-sharing contribution is based on years of service.
This contribution shall be fully vested and non-forfeitable upon and after
attaining the Plan's normal retirement age (age 65), death, or disability. If
termination occurs for any reason other than these events, the participant vests
as follows:
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<PAGE>
YEARS OF SERVICE VESTED PERCENTAGE
Less than 1 year 0%
1 year 0%
2 years 20%
3 years 40%
4 years 66 2/3%
5 years 100%
FORFEITURES
When certain terminations of participation in the Plan occur, the non-vested
portion of the participant's account represents a forfeiture, as defined by the
Plan. Forfeitures are reallocated among the profit-sharing contribution accounts
of participants at the end of the Plan year in which the forfeiture occurred.
However, if the participant is reemployed within six years and fulfills certain
requirements, as defined by the Plan Agreement, the participant's account will
be restored. Total forfeitures during the Plan year ended December 31, 1996
were approximately $12,800, which will be reallocated to participants in 1997.
PAYMENTS OF BENEFITS
A participant's entire interest in the Plan is payable upon attaining normal
retirement age (age 65), death or becoming disabled, as defined. Upon
termination of service, a participant's vested interest in the Plan is payable.
Participants' benefits are payable in a lump sum, installments or a combination
thereof. In addition, hardship distributions are permitted if certain criteria
are met.
Benefits for retired and/or terminated employees who had not received their full
payment for their vested benefits, but had requested payment prior to yearend
were approximately $2,200 for the year ended December 31, 1996. Amounts
for the year ended December 31, 1995 were immaterial. These amounts are
included as a component of net assets available for plan benefits in the
accompanying financial statements. These vested benefits will be distributed in
accordance with the Plan Agreement.
PARTICIPANT LOANS
In accordance with the Plan Agreement, participants may borrow funds from the
Plan. Borrowings cannot exceed the lesser of $50,000 or 50% of the participant's
vested account. Loans are secured by the participant's account and bear an
interest rate of prime plus 2% on the date the loan is approved. Such loans are
evidenced by promissory notes.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared using the accrual
method of accounting. The preparation of the financial statements in conformity
with generally accepted accounting principles requires the Plan's management to
use estimates and assumptions that affect the
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<PAGE>
financial statements and disclosures. Actual results could differ from these
estimates.
INVESTMENT VALUATION
The Plan's investments are stated at fair value which is determined by
PaineWebber Trust Company (the "Trustee") based on current market prices. The
GIC Portfolio is a pooled trust which invests in guaranteed investment
contracts. The contracts are carried in the pooled trust fund's audited
financial statements at cost plus accrued income, which approximates fair market
value. The investment in the pooled trust fund in the accompanying financial
statements is valued at the Plan's proportionate interest in the fund as of
the financial statement date. This portfolio was determined to be fully benefit
responsive. The crediting interest rate changes daily. Participant loans are
valued at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade date basis.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
PLAN EXPENSES
The Plan pays all investment management fees (see Note 6). The Company pays all
other costs and expenses of maintaining the Plan.
(3) INCOME TAXES
The Internal Revenue Service ("IRS") has determined and informed the Company by
a letter dated March 28, 1991, that the Plan and related trust are
designed in accordance with the applicable sections of the IRC. The Plan has
been amended since receiving the determination letter. However, the Plan
Administrator believes that the Plan is currently designed and being operated in
compliance with the applicable requirements of the IRC. Therefore, the Plan
Administrator believes the Plan was qualified and the related trust was
tax-exempt as of the financial statement dates.
(4) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan and dispose of the net assets in accordance with the
provisions of ERISA.
(5) INTEREST IN HS RESOURCES, INC. MASTER TRUST
Most of the Plan's investments are in the HS Resources, Inc. Master Trust
("Master Trust") which was established for the investment of assets of the Plan
and the HS Resources, Inc. Employee Investment 401(k) Plan. Each participating
plan has an undivided interest in the Master Trust. The assets of the Master
Trust are held by the Trustee. At December 31, 1996 and 1995, the Plan's
interest in the net assets of the Master Trust was approximately 14% and 23%,
respectively. Investment income, net of expenses, relating to the Master Trust
is allocated to the individual plans based upon average monthly balances
invested by each plan.
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<PAGE>
The following table presents the fair values of investments for the Master
Trust:
December 31,
(unaudited)
--------------------------
1996 1995
--------- ----------
Investments at fair value:
Cash and cash equivalents $ 78,464 $ 793
Pooled trusts 3,946,376 2,838,728
Employer stock 843,427 291,534
--------- ---------
$4,868,267 $3,131,055
========= =========
Investment income for the Master Trust is as follows:
Year Ended
December 31,
1996
(unaudited)
------------
Interest income $ 2,159
Income from pooled trusts 447,809
Income from employer stock 241,246
-------
$691,214
=======
(6) RELATED PARTY TRANSACTIONS
Certain Plan investments are units of pooled trust funds managed by the Trustee.
Therefore, these transactions qualify as party-in-interest. Fees paid by the
Master Trust for the investment management services amounted to $49,000 for the
year ended December 31, 1996. Certain Plan investments are also shares of the
Company stock.
In addition, one of the named fiduciaries of the Plan was formerly related to
the account manager of the Master Trust, who received total commissions of
$11,360 for the year ended December 31, 1996.
(7) PLAN AMENDMENT
The Plan was amended effective July 1, 1996 to include Tide West, as an
affiliated employer of the Plan.
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<PAGE>
SCHEDULE I
HS RESOURCES, INC.
PROFIT-SHARING PLAN
ITEM 27(a)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (a)
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Identity of Party Involved/ Historical Current
Description of Investments Cost Value
- ------------------------------------------------------------------------------------------------ --------------------
<S> <C> <C>
Loans to participants (interest rates ranging from 8% to 11%) $10,544 $10,544
====== ======
(a) All investments in the Master Trust are properly excluded from this
schedule.
The accompanying notes to financial statements
are an integral part of this schedule.
</TABLE>
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, HS
Resources, Inc. has duly caused this annual report to be signed on its behalf
by the undersigned thereunto duly authorized.
HS RESOURCES, INC. EMPLOYEE INVESTMENT
401(k) PLAN
Date June 27, 1997 By /s/ Annette M. Montoya
-----------------------------------
Name: Annette M. Montoya
Title: Vice President-Accounting/HR/OM
HS RESOURCES, INC. PROFIT SHARING PLAN
Date June 27, 1997 By /s/ Annette M. Montoya
-----------------------------------
Name: Annette M. Montoya
Title: Vice President-Accounting/HR/OM
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
23.1 Consent of Arthur Andersen LLP
-27-
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report, included in this Form 11-K, into the Company's
previously filed Registration Statement File No. 33-91934.
/s/ Arthur Andersen LLP
-----------------------------------------
Denver, Colorado,
June 26, 1997
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