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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[ X ] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the fiscal year ended December 31, 2000
OR
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
Commission File Number: 1-13515
Full title of the plan and name of issuer of the securities held
pursuant to the plan and the address of its principal executive office:
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
FOREST OIL CORPORATION
1600 Broadway
Suite 2200
Denver, Colorado 80202
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Exhibits.
23. Consent of Independent Auditors to incorporation by reference in Form S-8.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrative Committee of the Retirement Savings Plan of Forest Oil
Corporation has duly caused this annual report to be signed by the undersigned
hereunto duly authorized.
RETIREMENT SAVINGS PLAN OF
FOREST OIL CORPORATION
Dated: June 29, 2001 By: /s/ Joan C. Sonnen
-------------------------------------
Joan C. Sonnen, Member of the
Administrative Committee of
the Retirement Savings Plan of
Forest Oil Corporation
RETIREMENT SAVINGS PLAN OF
FOREST OIL CORPORATION
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2000 AND 1999
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
TABLE OF CONTENTS
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INDEPENDENT AUDITORS' REPORT..................................................................... 1
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS -
December 31, 2000 and 1999.................................................................. 2
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS -
Years Ended December 31, 2000 and 1999...................................................... 3
NOTES TO FINANCIAL STATEMENTS - December 31, 2000 and 1999....................................... 4
SUPPLEMENTAL SCHEDULE
---------------------
Schedule of Assets (Held at End of Year) - December 31, 2000................................ 10
INDEPENDENT AUDITORS' REPORT
THE PARTICIPANTS AND ADMINISTRATIVE COMMITTEE
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION:
We have audited the accompanying statements of net assets available for plan
benefits of the Retirement Savings Plan of Forest Oil Corporation (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 are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 of the
Retirement Savings Plan of Forest Oil Corporation as of December 31, 2000 and
1999, and the changes in net assets for the years then ended in conformity
with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes as of December 31, 2000 is presented for
purposes 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 supplemental
schedule has been subjected to the auditing procedures applied in the audit
of the basic financial statements as of December 31, 2000 and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
KPMG LLP
Denver, Colorado
June 27, 2001
1
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2000 AND 1999
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2000 1999
---- ----
ASSETS:
Investments, at fair value:
Forest Oil Corporation Common Stock $ 1,611,216 1,543,479
Pooled Funds - Stable Asset Fund 1,572,295 1,820,363
Participant directed mutual funds 16,761,164 17,676,443
---------- ----------
19,944,675 21,040,285
Loans to participants 300,778 266,414
Cash and short-term investments 79,491 16,652
---------- ----------
Total assets 20,324,944 21,323,351
LIABILITIES:
Stock purchase payables 6,375 7,034
---------- ----------
Total liabilities 6,375 7,034
---------- ----------
Net assets available for plan benefits,
including distributions payable to
participants of $283,084 in 2000 and
$45,618 in 1999. $ 20,318,569 21,316,317
========== ==========
See accompanying notes to financial statements.
2
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
-------------------------------------------------------------------------------------------------------------------
2000 1999
---- ----
Additions:
Contributions:
Company $ 579,751 538,987
Participants 1,047,504 1,020,661
Dividend and interest income 2,414,181 1,436,930
---------- ----------
4,041,436 2,996,578
Net appreciation (depreciation) in fair value of
investments, including realized and unrealized
gains and losses (2,934,004) 3,526,348
Deductions -
Distributions to participants 2,105,180 1,365,612
Increase (decrease) in net assets available for
plan benefits (997,748) 5,157,314
---------- ----------
Net assets available for plan benefits at beginning of year 21,316,317 16,159,003
---------- ----------
Net assets available for plan benefits at end of year $ 20,318,569 21,316,317
========== ==========
See accompanying notes to financial statements.
3
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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(1) DESCRIPTION OF THE PLAN
The Retirement Savings Plan of Forest Oil Corporation (the Plan) is a
defined contribution plan sponsored by Forest Oil Corporation and certain
of its affiliates (the Company) which includes a cash or deferred
compensation arrangement under Section 401(k) of the Internal Revenue
Code. The Plan is available to any employee of Forest Oil Corporation and
any employee of its affiliates (except for certain employees who were
employed by the former Forcenergy Inc) that have adopted the Plan.
Investment options available to participants during the years ended
December 31, 2000 and 1999 are as follows:
Forest Oil Corporation Common Stock Common stock of Forest Oil Corporation
Stable Asset Fund Collective trust consisting of
guaranteed insurance contracts
Janus Fund Mutual fund consisting primarily of
common stocks and similar equity
securities
Harbor International Fund Mutual fund consisting of non-U.S.
equity securities
Dodge & Cox Balanced Fund Mutual fund consisting primarily of
common stocks and bonds
Heartland Value Fund Mutual fund consisting primarily of
equity securities with market
capitalizations of less than
$300,000,000
Pimco Total Return Fund Mutual fund consisting of fixed
income securities with a
portfolio duration of three to
six years
Chesapeake Institutional Fund Mutual fund consisting primarily of
common and preferred stocks and
convertible securities of medium
and large capitalization companies
Vanguard S&P 500 Index Fund Mutual fund consisting primarily of
common stocks in the same
proportion as the S&P 500 Index.
Employees enrolled in the Plan may elect to defer from 1% to 15% of their
compensation, subject to defined limits, on a pre-tax basis as a contribution
to the Plan (Deferred Compensation Contribution). Each month, the Company
contributes an amount equal to the Deferred Compensation Contribution made by
each participant, limited to 5% of the participant's compensation (Company
Matching Contribution). At the sole discretion of the Executive Committee of
the Forest Oil Corporation Board of Directors, the Company Matching
4
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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(1) DESCRIPTION OF THE PLAN (CONTINUED)
Contributions may be made in cash, in shares of Forest Oil Corporation
Common Stock, or in any combination of cash and shares of Forest Oil
Corporation Common Stock. No stock was contributed during the
plan years ended December 31, 2000 and 1999.
Participants are fully vested in their own contributions at all times.
Company matching contributions made to a participant's account vest
pursuant to a graduated schedule whereby full vesting occurs upon the
completion of five years of service. Nonvested Company matching and
profit-sharing contributions are subject to forfeiture under certain
conditions and forfeited balances are available to reduce succeeding
Company matching contributions to the Plan. The Company did not use any
forfeitures in 2000 to reduce Company matching contributions. There were
$34,575 of forfeitures used to reduce matching contributions in 1999.
Expenses associated with the administration and investment activities of
the Plan are paid by the Company.
The Company maintains the right to terminate or amend the Plan at any
time. In the event of a termination or partial termination of the Plan,
or complete discontinuance of contributions to the Plan, the balances
of the affected participants as of the date of the termination or
discontinuance shall become fully vested and nonforfeitable. The total
amount in each participant's accounts shall be distributed as the
Administrative Committee shall direct, to the participant or for the
participant's benefit, or shall continue to be held in trust for the
participant's benefit.
The foregoing description of the Plan provides only general information.
Participants should refer to the Summary Plan Description for a more
complete description of the Plan's provisions. Copies of the Summary Plan
Description are available from the Administrative Committee of the Plan.
5
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared on the accrual
basis of accounting.
In the course of preparing the financial statements of the Plan,
management of the Plan makes various assumptions and estimates to
determine the reported amounts of assets, liabilities and changes in net
assets available for plan benefits, and in the disclosures of commitments
and contingencies. Changes in these assumptions and estimates will occur
as a result of the passage of time and the occurrence of future events
and, accordingly, actual results could differ significantly from amounts
estimated.
VALUATION OF INVESTMENTS
For financial reporting purposes, investments are recorded at fair value
based on quoted market prices or, in the case of the Stable Asset Fund,
based on the contract values of the underlying guaranteed investment
contracts. Purchases and sales of securities are recorded on the trade
date. Gains or losses on sales of investments are based on the difference
between sales proceeds and the cost of the investment determined on an
average unit cost basis.
Investments in the Stable Asset Fund are based on contract value because
the contracts are fully benefit-responsive. As such, participants may
direct the withdrawal or transfer of all or a portion of their
investments at contract value. The fair value of the investments in the
Stable Asset Fund is estimated to be approximately equal to the contract
value at December 31, 2000 and 1999. The crediting interest rate was
approximately 6.22% and 6.33% as of December 31, 2000 and 1999,
respectively.
Investments in the Stable Asset Fund, the Janus Fund, the Harbor
International Fund, the Dodge & Cox Balanced Fund, the Heartland Value
Fund, the Pimco Total Return Fund, the Chesapeake Institutional Fund and
the Vanguard S&P 500 Index Fund are represented by units. The total value
of each fund at any given time consists of the market value of the
investments held in the fund, including any income retained on such
investments. The average unit value for each fund is computed by dividing
the number of units outstanding into the total value of the fund.
6
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
LOANS TO PARTICIPANTS
Pursuant to the terms of the Plan, loans may be made to the extent of 50%
of a participant's vested interest in all accounts, limited to $50,000.
Each loan is evidenced by a promissory note. Interest is fixed throughout
the maximum 60-month term of each loan at 1% per annum over the J.P.
Morgan Chase & Co. Inc. prime rate in effect at the end of the month
preceding inception of the loan. Loans outstanding as of December 31,
2000 and 1999 bore interest at rates ranging from 8.75% to 10.5% and
8.75% to 10%, respectively. All outstanding loans must be repaid in full
within 90 days following a participant's termination of employment. In
the event of default, the participant is deemed to have made a
withdrawal of the unpaid principal balance.
RECLASSIFICATIONS
Certain 1999 balances have been reclassified to confirm to the 2000
presentation.
(3) INVESTMENTS
The Plan's investments are held in a bank-administered trust fund. During
2000 and 1999, the Plan's investments (depreciated) appreciated in fair
value (including realized and unrealized gains and losses) by
$(2,934,004) and $3,526,348, respectively.
The fair values of individual investments that represent 5% or more of
the Plan's net assets at December 31, 2000 and 1999 are as follows:
2000 1999
---- ----
Forest Oil Corporation Common Stock $ 1,611,216 1,543,479
Stable Asset Fund 1,572,295 1,820,363
Janus Fund 6,933,335 7,778,594
Harbor International Fund 3,020,837 3,579,549
Dodge & Cox Balanced Fund 2,096,757 2,136,415
Heartland Value Fund 1,881,160 1,971,114
Chesapeake Institutional Fund 1,485,720 --
Vanguard S&P 500 Index Fund 1,143,966 --
7
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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(4) RECONCILIATION TO INTERNAL REVENUE SERVICE (IRS) FORM 5500
Distributions payable to terminated employees are shown as a liability on
IRS Form 5500. For financial statement purposes, all net assets of the
Plan are considered to be available for plan benefits; therefore,
distributions payable to participants are not deducted from total assets
to derive net assets available for plan benefits. Correspondingly,
distributions to participants include only actual amounts paid during
each year for financial statement purposes. For purposes of the IRS Form
5500, distributions include amounts payable to terminated participants.
The following is a reconciliation of net assets available for plan
benefits as shown in the financial statements to amounts shown on Form
5500:
December 31,
2000 1999
---- ----
Net assets available for plan benefits as
shown in the financial statements $ 20,318,569 21,316,317
Amounts allocated to withdrawing participants (283,084) (45,618)
------------ ----------
Net assets available for benefits as shown in
Form 5500 $ 20,035,485 21,270,699
============ ==========
The following is a reconciliation of benefits paid to participants as
shown in the financial statements to amounts shown on Form 5500:
Year ended December 31,
2000 1999
---- ----
Benefits paid to participants and forfeitures
as shown in the financial statements $ 2,105,180 1,365,612
Add: Amounts allocated to withdrawing participants
at December 31, 2000 and 1999, respectively 283,084 45,618
Less: Amounts allocated to withdrawing participants
at December 31, 1999 and 1998, respectively (45,618) (240,220)
----------- ---------
Benefits paid to participants as shown in Form 5500 $ 2,342,646 1,171,010
=========== =========
8
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------
(5) FEDERAL INCOME TAXES
The IRS has issued a determination letter dated April 24, 1996 indicating
that the Plan, as amended, and as then designed, was qualified under
Section 401(a) of the Internal Revenue Code (the Code) and that the trust
was therefore exempt from federal income tax under Section 501(a) of the
Code. The Plan has since been amended. The Plan administrator believes
that the Plan is currently designed and being operated in compliance with
the applicable requirements of the Code and that the Plan is qualified
and the related trust continues to be tax-exempt.
(6) FINANCIAL REPORTING
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, ACCOUNTING FOR AND REPORTING OF
CERTAIN DEFINED CONTRIBUTION PLAN INVESTMENTS AND OTHER DISCLOSURE
MATTERS (SOP 99-3). SOP 99-3 simplifies the disclosure for certain
investments and is effective for plan years ending after December 15,
1999, with earlier application encouraged. The Plan adopted SOP 99-3
during the Plan year ended December 31, 1999. Accordingly, information
previously required to be disclosed about participant-directed fund
investment programs is not presented in the Plan's 2000 and 1999
financial statements.
(7) FORFEITED ACCOUNTS
In 2000 and 1999, participants withdrawing from the Plan forfeited
balances of $19,065 and $14,011, respectively. Forfeited amounts are
used to reduce future Company Maturing Contributions.
9
SUPPLEMENTAL SCHEDULE
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2000
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Number of Current
Identity of Issue Shares or Units Value
------------------------------------------------ --------------- ------------
Forest Oil Corporation Common Stock 43,694 $ 1,611,216
Pooled funds - Stable Asset Fund 70,027 1,572,295
Mutual funds:
Janus Fund 208,271 6,933,335
Harbor International Fund 86,088 3,020,837
Dodge & Cox Balanced Fund 33,061 2,096,757
Heartland Value Fund 57,039 1,881,160
Pimco Total Return Fund 19,190 199,389
Chesapeake Institutional Fund 98,588 1,485,720
Vanguard S&P 500 Index Fund 9,388 1,143,966
Money market funds -
State Street Short-Term Investment Funds* 79,491 79,491
Loans to participants, bearing interest at rates
ranging from 8.75% to 10.5% 300,778
-----------
TOTAL INVESTMENTS $20,324,944
===========
All investments are held by State Street Bank, which is a party-in-interest.
See accompanying independent auditors' report.
10
EXHIBIT INDEX
Exhibit 23. Consent of KPMG LLP.