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, 1997
|_| 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. Profit Sharing Plan
and
HS Resources, Inc. Employee Investment 401(k) Plan
B. HS Resources, Inc.
One Maritime Plaza, 15th Floor
San Francisco, CA 94111
<PAGE>
HS RESOURCES, INC. PROFIT-SHARING PLAN
FINANCIAL STATEMENTS AND SCHEDULE
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
-2-
<PAGE>
HS RESOURCES, INC.
PROFIT-SHARING PLAN
INDEX
PAGE(S)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 4
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits with Fund Information
as of December 31, 1997 5
Statement of Net Assets Available for Benefits with Fund Information
as of December 31, 1996 6
Statement of Changes in Net Assets Available for Benefits with Fund
Information for the Year Ended December 31, 1997 7
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE 8-13
SCHEDULE SUPPORTING FINANCIAL STATEMENTS:
Schedule I-Item 27(a)--Schedule of Assets Held for Investment Purposes
as of December 31, 1997 14
-3-
<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, 1997
and 1996, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1997. 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, 1997 and 1996 and the changes in net assets available for benefits
for the year ended December 31, 1997 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 22, 1998.
-4-
<PAGE>
HS RESOURCES, INC.
PROFIT-SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Participant-Directed
----------------------------------------------------------------------------------------
Bal- Cash
Money Conser- anced Con- HSR and Loans
Market GIC vative Value serva- Inter- Emerg- Common Cash to
Port- Port- Bond Port- tive Value Growth national ing Stock Equiva- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund lents 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) $31,108 $10,080 $15,006 $36,664 $94,187 $147,058 $50,551 $22,669 $91,843 $159,623 $3,891 $ - $662,680
Loans to
participants - - - - - - - - - - - 11,364 11,364
------ ------ ------ ------ ------ ------- ------ ------ ------ ------- ----- ------ -------
Total
investments 31,108 10,080 15,006 36,664 94,187 147,058 50,551 22,669 91,843 159,623 3,891 11,364 674,044
------ ------ ------ ------ ------ ------- ------ ------ ------ ------- ----- ------ -------
NET ASSETS
AVAILABLE
FOR
BENEFITS $31,108 $10,080 $15,006 $36,664 $94,187 $147,058 $50,551 $22,669 $91,843 $159,623 $3,891 $11,364 $674,044
====== ====== ====== ====== ====== ======= ====== ====== ====== ======= ===== ====== =======
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
-5-
<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 Equiva- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund lents 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
====== ===== ====== ====== ====== ====== ====== ====== ======= ======= ===== ====== =======
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
-6-
<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, 1997
<TABLE>
<CAPTION>
Participant-Directed
------------------------------------------------------------------------------------
Bal- Cash
Money Conser- anced Con- HSR and Loans
Market GIC vative Value serva- Inter- Emerg- Common Cash to
Port- Port- Bond Port- tive Value Growth national ing Stock Equiva- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund lents 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
(loss) from
HS Resources,
Inc. Master
Trust
(Note 5) $ 1,509 $ 558 $ 769 $ 5,780 $ 30,541 $ 35,864 $ 9,264 $ 2,483 $ 19,150 $(35,506) $ 849 $ - $ 71,261
Interest on
participant
loans - - - - - - - - - - - 1,547 1,547
------ ------ ------ ------ ------- ------- ------ ------- ------- ------- ----- ------ --------
Total additions
(deductions) 1,509 558 769 5,780 30,541 35,864 9,264 2,483 19,150 (35,506) 849 1,547 72,808
------ ------ ------ ------ ------- ------- ------ ------- ------- ------- ----- ------ --------
DEDUCTIONS FROM
NET ASSETS
ATTRIBUTED
TO:
Distributions
to employees (14) - (1,642) (6,328) (38,904) - (1,955) (18,283) (33,548) (3,274) (175) - (104,123)
------ ------ ------ ------ ------- ------- ------ ------- ------- ------- ----- ------ --------
NET INCREASE
(DECREASE) 1,495 558 (873) (548) (8,363) 35,864 7,309 (15,800) (14,398) (38,780) 674 1,547 (31,315)
NET TRANSFERS
BETWEEN FUNDS 410 551 2,481 1,372 3,463 17,710 356 2,583 (26,825) (1,121) (253) (727) -
NET ASSETS
AVAILABLE FOR
BENEFITS:
Beginning 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
------ ------ ------ ------ ------- ------- ------ ------- ------- ------- ----- ------ --------
End of period $31,108 $10,080 $15,006 $36,664 $94,187 $147,058 $50,551 $22,669 $91,843 $159,623 $3,891 $11,364 $674,044
====== ====== ====== ====== ====== ======= ====== ====== ====== ======= ===== ====== =======
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
-7-
<PAGE>
HS RESOURCES, INC.
PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
DECEMBER 31, 1997 AND 1996
(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,
1997. 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.
-8-
<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 investment direction of their funds, with fourteen days advance
written notice to the Plan Administrator.
-9-
<PAGE>
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:
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, 1997 were
approximately $2,400, which will be reallocated to participants in 1998.
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 immaterial for the years ended December 31, 1997 and 1996. 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.
-10-
<PAGE>
(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 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. The average yield
for the year ended December 31, 1997 was 6.65%. The crediting interest rate as
of December 31, 1997 and 1996 was 6.65%. 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. Participants would be fully vested in their accounts upon
termination of the Plan.
-11-
<PAGE>
(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, 1997 and 1996, the Plan's
interest in the net assets of the Master Trust was approximately 11% and 14%,
respectively. Investment income or loss, 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)
----------------------------
1997 1996
------------ ------------
Investments at fair value:
Cash and cash equivalents $ 24,856 $ 78,464
Pooled trusts 4,776,472 3,946,376
Employer stock 1,083,841 843,427
--------- ---------
$5,885,169 $4,868,267
Net investment income for the Master Trust is as follows:
Year Ended
December 31,
1997
(unaudited)
-------------
Interest income $ 1,014
Income from pooled trusts 935,713
Loss from employer stock (53,947)
-------
$882,780
=======
(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 transactions. Fees
paid by the Master Trust for the investment management services amounted to
$64,500 for the year ended December 31, 1997. Certain Plan investments are also
shares of the Company stock.
-12-
<PAGE>
(7) RISKS AND UNCERTAINTIES
The Plan provides for various investments in pooled accounts and Company common
stock. Investments, in general, are exposed to various risks, such as interest
rate, credit and overall market volatility risk. Due to the level of risk
associated with certain investments, including the Company's common stock, it is
reasonably possible that changes in the value of investments will occur in the
near term and that such changes could materially affect participants' account
balances and the amounts reported in the statement of changes in net assets
available for benefits.
-13-
<PAGE>
SCHEDULE I
HS RESOURCES, INC.
PROFIT-SHARING PLAN
ITEM 27(a)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (a)
AS OF DECEMBER 31, 1997
Identity of Party Involved/ Historical Current
Description of Investments Cost Value
- ----------------------------------------------------- ---------- -------
Loans to participants (interest rates ranging from
8.75% to 10.75%) $11,364 $11,364
====== ======
(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.
-14-
<PAGE>
HS RESOURCES, INC. EMPLOYEE
INVESTMENT 401(k) PLAN
FINANCIAL STATEMENTS AND SCHEDULE
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
-15-
<PAGE>
HS RESOURCES, INC.
EMPLOYEE INVESTMENT 401(k) PLAN
INDEX
PAGE(S)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 17
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits
with Fund Information as of December 31, 1997 18
Statement of Net Assets Available for Benefits
with Fund Information as of December 31, 1996 19
Statement of Changes in Net Assets Available for
Benefits with Fund Information for the Year
Ended December 31, 1997 20
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE 21-25
SCHEDULE SUPPORTING FINANCIAL STATEMENTS:
Schedule I-Item 27(a)--Schedule of Assets Held for
Investment Purposes as of December 31, 1997 26
-16-
<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, 1997 and 1996, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1997. 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, 1997 and 1996, and the changes in net assets available for benefits
for the year ended December 31, 1997 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 22, 1998.
-17
<PAGE>
HS RESOURCES, INC.
EMPLOYEE INVESTMENT 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Participant-Directed
-------------------------------------------------------------------------------------------
Bal- Cash
Money Conser- anced Con- HSR and Loans
Market GIC vative Value serva- Inter- Emerg- Common Cash to
Port- Port- Bond Port- tive Value Growth national ing Stock Equiva- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund lents 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) $280,208 $88,405 $159,420 $524,244 $870,893 $1,005,830 $484,303 $147,527 $716,476 $ 924,218 $20,965 $ - $5,222,489
Loans to
partici-
pants - - - - - - - - - - - 149,838 149,838
------- ------ ------- ------- ------- --------- ------- ------- ------- --------- ------ ------- ---------
Total
invest-
ments 280,208 88,405 159,420 524,244 870,893 1,005,830 484,303 147,527 716,476 924,218 20,965 149,838 5,372,327
------- ------ ------- ------- ------- --------- ------- ------- ------- --------- ------ ------- ---------
Receiva-
bles-
Employee - - - - 167 167 167 - 167 - - - 668
Employer - - - - - - - - - 589,498 40,000 - 629,498
Other- - - - - - - - - - 4,175 71 - 4,246
------- ------ ------- ------- ------- --------- ------- ------- ------- --------- ------ ------- ---------
Total
receiv-
ables - - - - 167 167 167 - 167 593,673 40,071 - 634,412
------- ------ ------- ------- ------- --------- ------- ------- ------- --------- ------ ------- ---------
NET ASSETS
AVAILABLE
FOR
BENEFITS $280,208 $88,405 $159,420 $524,244 $871,060 $1,005,997 $484,470 $147,527 $716,643 $1,517,891 $61,036 $149,838 $6,006,739
======= ====== ======= ======= ======= ========= ======= ======= ======= ========= ====== ======= =========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
-18-
<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 Con- HSR and Loans
Market GIC vative Value serva- Inter- Emerg- Common Cash to
Port- Port- Bond Port- tive Value Growth national ing Stock Equiva- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund lents 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
======= ====== ======= ======= ======= ======= ======= ======= ======= ========= ======= ====== =========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
-19-
<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, 1997
<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 Equiva- Parti-
folio folio Fund folio Equity Equity Value Equity Growth Fund lents 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
(loss) from
HS Resources,
Inc. Master
Trust
(Note
5) $ 13,104 $ 4,268 $ 8,322 $ 96,784 $250,256 $ 233,548 $ 85,783 $ 6,160 $131,570 $ (18,441)$ 165 $ - $ 811,519
Interest
on
partici-
pant
loans - - - - - - - - - - - 9,266 9,266
CONTRIBU-
TIONS:
Employee 17,698 29,525 36,915 68,603 81,414 107,842 72,649 41,732 115,269 20,019 - - 591,666
Employer - - - - - - - - - 549,498 - - 549,498
Rollover - 594 - 5,499 5,671 32,748 24,669 - 15,160 2,550 - - 86,891
------- ------ ------- ------- ------- --------- ------- ------- ------- --------- ------- ------- ---------
Total
addi-
tions 30,802 34,387 45,237 170,886 337,341 374,138 183,101 47,892 261,999 553,626 165 9,266 2,048,840
------- ------ ------- ------- ------- --------- ------- ------- ------- ------- ------- ------ --------
DEDUCTIONS
FROM NET
ASSETS
ATTRIBUTED TO:
Distri-
butions
to em-
ployees (8,235) (1,595) (12,575)(213,738)(223,353) (22,366) (31,039) (92,401) (86,028) (78,717) (151) (2,405) (772,603)
------- ------ ------- ------- ------- --------- ------- ------- ------- --------- ------- ------- ---------
NET INCREASE
(DE-
CREASE) 22,567 32,792 32,662 (42,852) 113,988 351,772 152,062 (44,509) 175,971 474,909 14 6,861 1,276,237
NET TRANSFERS
BETWEEN
FUNDS 7,277 9,140 513 36,848 87,968 127,687 6,845 (38,354)(208,958) (62,372) (54,043) 87,449 -
NET ASSETS
AVAILABLE
FOR
BENEFITS:
Beginning
of
period 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
------- ------ ------- ------- ------- --------- ------- ------- ------- --------- ------- ------- ---------
End of
period $280,208 $88,405 $159,420 $524,244 $871,060 $1,005,997 $484,470 $147,527 $716,643 $1,517,891 $ 61,036 $149,838 $6,006,739
======= ====== ======= ======= ======= ========= ======= ======= ======= ========= ======= ======= =========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
-20-
<PAGE>
HS RESOURCES, INC. EMPLOYEE INVESTMENT 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
DECEMBER 31, 1997 AND 1996
(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, at 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, 1997, the Company matched 100% of
employees' elective deferrals up to 10% of compensation.
Each Plan year, the Company may, at its discretion, contribute an additional
qualified non-elective 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, 1997.
-21-
<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.
-22-
<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 investment direction of their funds, with fourteen days advance
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 immaterial for the year ended December 31, 1997. Amounts for the year ended
December 31, 1996 were approximately $109,300. 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. The average
-23-
<PAGE>
yield for the year ended December 31, 1997 was 6.65%. The crediting interest
rate as of December 31, 1997 and 1996 was 6.65%. 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 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, 1997 and 1996, the Plan's interest in the net
assets of the Master Trust was approximately 89% and 86%, respectively.
Investment income or loss, net of expenses, relating to the Master Trust is
allocated to the individual plans based upon average monthly balances invested
by each plan.
-24-
<PAGE>
The following table presents the fair values of investments for the Master
Trust:
December 31,
(Unaudited)
---------------------------
1997 1996
------------ ------------
Investments at fair value:
Cash and cash equivalents $ 24,856 $ 78,464
Pooled trusts 4,776,472 3,946,376
Employer stock 1,083,841 843,427
----------- ----------
$5,885,169 $4,868,267
========= =========
Net investment income for the Master Trust is as follows:
Year Ended
December 31,
1997
(Unaudited)
---------------
Interest income $ 1,014
Income from pooled trusts 935,713
Loss from employer stock (53,947)
-------
$882,780
=======
(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 transactions. Fees
paid by the Master Trust for the investment management services amounted to
approximately $64,500 for the year ended December 31, 1997. Certain Plan
investments are also shares of the Company stock.
(7) RISKS AND UNCERTAINTIES
The Plan provides for various investments in pooled accounts and Company common
stock. Investments in general, are subject to various risks, such as interest
rate, credit, and overall market volatility risk. Due to the level of risk
associated with certain investments, including the Company's common stock, it is
reasonably possible that changes in the value of investments will occur in the
near term and that such changes could materially affect participants' account
balances and the amounts reported in the statement of changes in net assets
available for benefits.
-25-
<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, 1997
Identity of Party Involved/ Historical Current
Description of Investments Cost Value
- --------------------------------------- ------------ -----------
Loans to participants (interest rates
ranging from 8.75% to 10.75%) $149,838 $149,838
======= =======
(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.
-26-
<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 26, 1998 By /s/ Annette M. Montoya
-----------------------------------
Name: Annette M. Montoya
Title: Vice President-Accounting/HR/OM
HS RESOURCES, INC. PROFIT SHARING PLAN
Date June 26, 1998 By /s/ Annette M. Montoya
-----------------------------------
Name: Annette M. Montoya
Title: Vice President-Accounting/HR/OM
-27-
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
23.1 Consent of Arthur Andersen LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 22, 1998, included in this Form 11-K for the
year ended December 31, 1997, into the Company's previously filed Registration
Statement File No. 33-91934.
/s/ Arthur Andersen LLP
-----------------------------------------
Denver, Colorado,
June 22, 1998
