1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 16(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 1-7792
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
TAX-ADVANTAGED SAVINGS PLAN OF POGO PRODUCING COMPANY
B. Name of issuer of the securities held pursuant to the plan of the
address of its principal executive office:
POGO PRODUCING COMPANY
5 GREENWAY PLAZA, SUITE 2700
HOUSTON, TEXAS 77046
2
Item 4. (a) Financial Statements and Schedule prepared in accordance with the
financial reporting requirements of ERISA.
TAX-ADVANTAGED SAVINGS PLAN OF
POGO PRODUCING COMPANY
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2000
TOGETHER WITH AUDITORS' REPORT
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Board,
Tax-Advantaged Savings Plan
of Pogo Producing Company:
We have audited the accompanying statements of net assets available for plan
benefits of the Tax-Advantaged Savings Plan of Pogo Producing Company (the Plan)
as of December 31, 2000 and 1999, and the related statements of changes in net
assets available for plan benefits for the years then ended. These financial
statements and the supplemental schedules referred to below are the
responsibility of the administrative board of the Plan. Our responsibility is to
express an opinion on these financial statements and supplemental schedules
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits as of December
31, 2000 and 1999, and the changes in its net assets available for plan benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
at end of year as of December 31, 2000, and reportable transactions for the year
then ended are presented for purposes of additional analysis and are not a
required part of the basic financial statements but are 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 supplemental schedules 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.
/s/ ARTHUR ANDERSEN LLP
Houston, Texas
May 31, 2001
4
TAX-ADVANTAGED SAVINGS PLAN OF
POGO PRODUCING COMPANY
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2000 AND 1999
2000 1999
------------ ------------
INVESTMENTS, at quoted market value $ 19,027,802 $ 15,850,448
CONTRIBUTIONS RECEIVABLE:
Participant 54,130 51,605
Company 37,743 35,421
CASH 1,000 1,000
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 19,120,675 $ 15,938,474
============ ============
The accompanying notes are an integral part of these financial statements.
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TAX-ADVANTAGED SAVINGS PLAN OF
POGO PRODUCING COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999
------------ ------------
INTEREST/DIVIDEND INCOME $ 551,899 $ 550,291
------------ ------------
NET APPRECIATION IN MARKET VALUE OF INVESTMENTS 3,876,133 3,801,276
------------ ------------
CONTRIBUTIONS:
Participant 1,013,833 949,616
Company 810,492 744,905
------------ ------------
Total contributions 1,824,325 1,694,521
------------ ------------
WITHDRAWALS AND TERMINATIONS (3,070,156) (916,508)
------------ ------------
INCREASE IN NET ASSETS AVAILABLE FOR
PLAN BENEFITS 3,182,201 5,129,580
NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year 15,938,474 10,808,894
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year $ 19,120,675 $ 15,938,474
============ ============
The accompanying notes are an integral part of these financial statements.
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TAX-ADVANTAGED SAVINGS PLAN OF
POGO PRODUCING COMPANY
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN:
General
Pogo Producing Company (Pogo) adopted the Employees Stock Purchase Plan
effective January 1, 1978, as amended July 10, 1981. On January 1, 1985, the
Employees Stock Purchase Plan was amended and renamed the Tax-Advantaged Savings
Plan (the Plan). Any salaried employee of Pogo is eligible to be a participant
of the Plan on the first day of the calendar quarter following employment.
John O. McCoy, Jr., an officer of Pogo, serves as trustee of the Plan. The Plan
is administered by an administrative board appointed by Pogo's board of
directors. The members of the administrative board receive no compensation for
their services, and all expenses of the Plan, including brokerage commissions,
are paid by Pogo.
Investments
The investment options include Pogo common stock, the Prime Portfolio Money
Market Fund, the Investment-Grade Corporate Portfolio Bond Fund, the Vanguard
Wellington Income Fund, the Vanguard Index Trust - 500 Portfolio and the
Vanguard PrimeCap Fund.
Contributions
Each participant may contribute up to 10 percent of his compensation to the
Plan. In accordance with provisions of the Internal Revenue Code of 1986, as
amended (the IRC), each participant's contributions are subject to certain
limitations. This limitation was $10,500 for 2000 and $10,000 for 1999. Pogo
contributes an amount equal to each participant's contribution, limited to a
maximum of 6 percent of the participant's eligible compensation. Each
participant's account is credited with his or her contribution, the
company-matching contribution and an allocation of Plan earnings. Allocations of
earnings are based on the proportion that each participant's account balance
bears to the total of all participant account balances. Matching funds
contributed to the Plan by Pogo are invested only in Pogo common stock.
Distributions and Withdrawals
Participants are entitled to receive the portion of the Plan equity which
represents their individual contribution. The Plan allows participants to be
fully vested in the portion of the Plan which is represented by Pogo
contributions after two full years of employment with the company.
In the event of death, retirement, disability or termination after vesting, a
participant is entitled to all of his portion of the Plan equity applicable to
Pogo's contributions.
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Forfeitures
A participant terminated for reasons other than death, retirement or disability
forfeits the unvested portion of his Plan equity attributable to Pogo's
contribution, and such forfeiture is held in suspense for one year. If the
participant returns to employment prior to incurring a one-year break in
service, his unvested share of Pogo matching contributions is not forfeited. If
the participant is not reemployed prior to incurring a one-year break in
service, his unvested share of Pogo matching contributions is forfeited and used
to reduce future contributions by Pogo. At December 31, 2000, there were 560
shares of Pogo's common stock forfeited and held in suspense.
Termination of the Plan
The Plan may be terminated, amended or modified by Pogo's board of directors at
any time. In the event the Plan is terminated, all participants become vested
and entitled to receive the Plan equity attributable to all contributions made
for the participants by Pogo.
2. SUMMARY OF ACCOUNTING POLICIES:
Basis of Accounting
The records of the Plan are maintained on the cash basis of accounting and are
adjusted to the accrual basis for financial reporting purposes.
Quoted market prices as of the last trading day of the Plan year have been used
to determine the market value of Plan investments.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to use estimates and
assumptions that affect the accompanying financial statements and disclosures.
Actual results could differ from those estimates.
3. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
The following is a reconciliation of net assets available for Plan benefits from
the financial statements to the Form 5500:
December 31
----------------------------
2000 1999
------------ ------------
Net assets available for Plan benefits per the financial statements $ 19,120,675 $ 15,938,474
Less- Amounts allocated to withdrawing participants, December 31, 2000
and 1999 (382,088) (10,082)
------------ ------------
Net assets available for Plan benefits per the Form 5500 $ 18,738,587 $ 15,928,392
============ ============
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The following is a reconciliation of withdrawals and terminations from the
financial statements to the Form 5500:
December 31
----------------------------
2000 1999
------------ ------------
Withdrawals and terminations per the financial statements $ 3,070,156 $ 916,508
Add- Amounts allocated to withdrawing participants, December 31,
2000 and 1999 382,088 10,082
Less- Amounts allocated to withdrawing participants, December 31,
1999 and 1998 (10,082) (5,733)
------------ ------------
Withdrawals and terminations per the Form 5500 $ 3,442,162 $ 920,857
============ ============
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
withdrawals that have been processed and approved for payment prior to December
31 but not yet paid as of that date.
4. INVESTMENTS:
The following table details investments that exceed 5 percent of the Plan's net
assets:
December 31
---------------------------
2000 1999
------------ ------------
Pogo common stock-
Participant-directed $ 2,818,335 $ 2,310,016
Nonparticipant-directed 7,974,874 5,541,755
Prime Portfolio Money Market Fund 1,140,155 834,624
Vanguard Wellington Income Fund 1,167,317 1,284,933
Vanguard Index Trust - 500 Portfolio 1,426,585 1,615,198
Vanguard PrimeCap Fund 4,100,411 3,814,396
Other 400,125 449,526
------------ ------------
$ 19,027,802 $ 15,850,448
============ ============
During 2000 and 1999, the Plan's investments appreciated in value by $3,876,133
and $3,801,276, respectively, as follows:
2000 1999
------------ ------------
Common stock $ 4,120,757 $ 2,827,947
Common/collective trusts 18,207 (66,573)
Registered investment companies (262,831) 1,039,902
------------ ------------
$ 3,876,133 $ 3,801,276
============ ============
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5. NONPARTICIPANT-DIRECTED INVESTMENTS:
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments is as follows:
December 31
-----------------------
2000 1999
---------- ----------
Net assets-
Pogo common stock, at quoted market value $7,974,874 $5,541,755
Company contributions receivable 37,743 35,421
---------- ----------
$8,012,617 $5,577,176
========== ==========
Year Ended December 31
----------------------------
2000 1999
------------ ------------
Changes in net assets-
Interest/dividend income $ 32,385 $ 31,990
Net appreciation in market value of investments 2,925,372 1,986,334
Company contributions 810,492 744,905
Withdrawals and terminations (1,332,808) (393,224)
------------ ------------
$ 2,435,441 $ 2,370,005
============ ============
6. RELATED-PARTY TRANSACTIONS:
Certain Plan investments are shares of common/collective trusts and registered
investment companies managed by The Vanguard Group (Vanguard). Vanguard is the
custodian as defined by the Plan and, therefore, these transactions qualify as
party-in-interest transactions.
7. FEDERAL INCOME TAXES:
The Plan obtained its latest determination letter on February 25, 1996, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the IRC. The administrative board
believes that the Plan is currently designed and being operated in compliance
with the applicable requirements of the IRC. Therefore, the administrative board
believes that the Plan was qualified and the related trust was tax-exempt as of
December 31, 2000 and 1999.
8. RISKS AND UNCERTAINTIES:
The Plan provides for investments in Pogo common stock, common/collective trusts
and various registered investment companies. Investment securities, 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 investment
securities, it is reasonably possible that significant changes in the values of
investment securities will occur in the near term.
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SCHEDULE I
TAX-ADVANTAGED SAVINGS PLAN OF
POGO PRODUCING COMPANY
SCHEDULE OF ASSETS HELD AT END OF YEAR
AS OF DECEMBER 31, 2000
Number of Current
Identity of Issue Description of Investment Shares/Units Cost Value
----------------- ------------------------- ------------ ---- -------
Pogo Producing Company(a) Pogo nonparticipant-directed
common stock 256,221 $ 4,291,702 $ 7,974,874
Pogo Producing Company(a) Pogo participant-directed common
stock 90,549 (b) 2,818,335
The Vanguard Group(a) Prime Portfolio Money Market Fund 1,140,155 (b) 1,140,155
The Vanguard Group(a) Investment-Grade Corporate
Portfolio Bond Fund 47,352 (b) 400,125
The Vanguard Group(a) Vanguard Wellington Income Fund 41,379 (b) 1,167,317
The Vanguard Group(a) Vanguard Index Trust - 500
Portfolio 11,707 (b) 1,426,585
The Vanguard Group(a) Vanguard PrimeCap Fund 67,910 (b) 4,100,411
-------------
$ 19,027,802
=============
(a)Indicates a party in interest.
(b)Cost omitted for participant-directed investments.
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SCHEDULE II
TAX-ADVANTAGED SAVINGS PLAN OF
POGO PRODUCING COMPANY
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
Current Value Net
Purchase Selling Cost of of Asset on Gain
Identity of Party Involved Description of Asset Price Price Asset Transaction Date (Loss)
-------------------------- -------------------- -------- ------- ------- ---------------- ------
Pogo Producing Company Pogo common stock $ 840,555 $ -- $840,555 $ 840,555 $ --
Pogo Producing Company Pogo common stock -- 1,348,901 848,112 1,348,901 500,789
NOTE: This schedule is a listing of a series of purchase and sale transactions,
involving the same security which exceeded 5% of the Plan assets as of
January 1, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
TAX-ADVANTAGED SAVINGS OF
POGO PRODUCING COMPANY
/s/ JOHN O. MCCOY, JR.
--------------------------------------
By: John O. McCoy, Jr.
Member of the Administrative Board
Date: June 26, 2001
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
23.1 -- Consent of Arthur Andersen LLP