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, 2001
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 name 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
Item 4.(a) Financial Statements and Schedules prepared in accordance with the
financial reporting requirements of ERISA.
TAX-ADVANTAGED SAVINGS
PLAN OF POGO PRODUCING
COMPANY
Financial Statements and Supplemental
Schedule
December 31, 2001 and 2000
TAX-ADVANTAGED SAVINGS PLAN OF POGO PRODUCING COMPANY
TABLE OF CONTENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
PAGE
Reports of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for Benefits
December 31, 2001 and 2000 2
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2001 3
Notes to Financial Statements 4-8
Supplemental Schedule:
Schedule of Assets (Held at End of Year)
December 31, 2001 9
ALL OTHER SCHEDULES REQUIRED BY SECTION 2520.103-10 OF THE DEPARTMENT OF
LABOR'S RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE UNDER ERISA HAVE
BEEN OMITTED BECAUSE THEY ARE NOT APPLICABLE OR THE INFORMATION REQUIRED IS
DISCLOSED IN THE FINANCIAL STATEMENTS AND NOTES THERETO.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Executive Committee of
Tax-Advantaged Savings Plan of Pogo Producing Company
In our opinion, the accompanying statement of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of Tax-Advantaged Savings Plan of Pogo Producing Company (the Plan) at December
31, 2001 and the changes in net assets available for benefits for the year then
ended in conformity with accounting principles generally accepted in the United
States of America. 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 audit. We conducted our audit of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion. The financial statements
of the Plan as of December 31, 2000 and for the year then ended were audited by
other auditors whose report, dated May 31, 2001, expressed an unqualified
opinion on those statements.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held at end of year as of December 31, 2001 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 supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
June 26, 2002
Houston, Texas
This report is a copy of a report previously issued by Arthur Andersen LLP on
the Plan's statements of net assets available for plan benefits as of
December 31, 2000 and 1999 and the related statements of changes in net
assets available for plan benefits for the year then ended. Such report has
not been reissued by Arthur Andersen LLP in connection with the Company's
current Form 11-K filing. Note that only the statement of net assets
available for plan benefits as of December 31, 2000 covered by the report
below is included in the accompanying financial statements.
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
TAX-ADVANTAGED SAVINGS PLAN OF POGO PRODUCING COMPANY
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
2001 2000
Investments, at quoted market value $18,469,374 $19,027,802
Contributions receivable:
Participant 73,442 54,130
Company 51,327 37,743
Cash 1,000 1,000
----------- -----------
Net assets available for benefits $18,595,143 $19,120,675
=========== ===========
The accompanying notes are an integral part of these financial
statements.
- 2 -
TAX-ADVANTAGED SAVINGS PLAN OF POGO PRODUCING COMPANY
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2001
--------------------------------------------------------------------------------
2001
Interest/dividend income $ 297,030
Net depreciation in market value
of investments (2,452,552)
Other (5,044)
Contributions:
Participant 1,275,005
Company 1,013,669
-----------
Total contributions 2,288,674
Benefits paid (653,640)
-----------
Decrease in net assets available for plan benefits (525,532)
Net assets available for plan benefits:
Beginning of year 19,120,675
-----------
End of year $18,595,143
===========
The accompanying notes are an integral part of these financial
statements.
- 3 -
TAX-ADVANTAGED SAVINGS PLAN OF POGO PRODUCING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
1. DESCRIPTION OF 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 full-time active employee of Pogo is eligible
to be a participant of the Plan on the first day of the calendar quarter
following employment.
John 0. 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.
All such investments are stated at market value based on quoted market
prices.
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 2001 and 2000. 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 by investment are based on the proportion that each
participant's account balance bears to the total of all participant account
balances in that investment. Matching funds contributed to the Plan by
Pogo are invested only in Pogo common stock.
VESTING
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 represented by Pogo contributions
after two full years
- 4 -
TAX-ADVANTAGED SAVINGS PLAN OF POGO PRODUCING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
of employment with the company. Participants are immediately fully vested
in their own contributions.
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.
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, 2001, there were no shares of Pogo's common stock forfeited
and held in suspense. At December 31, 2000, there were 560 shares of Pogo
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 by Pogo on behalf of the participants.
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, except
for benefits which are reported on the cash basis.
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 of America requires
management to use estimates and assumptions that affect the accompanying
financial statements and disclosures. Actual results could differ from
those estimates.
- 5 -
TAX-ADVANTAGED SAVINGS PLAN OF POGO PRODUCING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
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,
-------------------------
2001 2000
Net assets available for Plan benefits per the
financial statements $18,595,143 $19,120,675
Less: Amounts allocated to withdrawing
participants (17,346) (382,088)
----------- -----------
Net assets available for Plan benefits per the
Form 5500 $18,577,797 $18,738,587
=========== ===========
The following is a reconciliation of benefits paid from the financial
statements to the Form 5500:
December 31,
2001
Benefits paid per the financial statements $ 653,640
Add: Amounts allocated to withdrawing participants
at December 31, 2001 17,346
Less: Amounts allocated to withdrawing
participants at December 31, 2000 (382,088)
---------
Benefits paid per the Form 5500 $ 288,898
=========
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.
- 6 -
TAX-ADVANTAGED SAVINGS PLAN OF POGO PRODUCING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
4. INVESTMENTS
The following table details investments at market value. Investments
representing five percent or more of the Plan's net assets in either
year are separately identified by an *.
DECEMBER 31,
-------------------------
2001 2000
Pogo common stock:
Participant-directed $ 2,699,256 * $ 2,818,335 *
Nonparticipant-directed 7,409,914 * 7,974,874 *
Prime Portfolio Money Market Fund 713,331 1,140,155 *
Vanguard Wellington Income Fund 1,516,528 * 1,157,317 *
Vanguard Index Trust - 500 Portfolio 1,805,813 * 1,426,585 *
Vanguard PrimeCap Fund 3,798,195 * 4,100,411 *
Other 526,337 400,125
----------- -----------
$18,469,374 $19,027,802
=========== ===========
During 2001, the Plan's investments depreciated in value by
$2,452,552, as follows:
2001
Common stock $(1,625,769)
Common/collective trusts 17,253
Registered investment companies (844,036)
-----------
$(2,452,552)
===========
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,
-------------------------
2001 2000
Net assets:
Pogo common stock, at quoted market value $ 7,409,914 $ 7,974,874
Company contributions receivable 51,327 37,743
----------- -----------
$ 7,461,241 $ 8,012,617
=========== ===========
- 7 -
TAX-ADVANTAGED SAVINGS PLAN OF POGO PRODUCING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
2001
Changes in net assets:
Interest/dividend income $ 31,816
Net depreciation in market value of
investments (1,224,762)
Company contributions 1,013,669
Benefits paid (372,099)
-----------
$ (551,376)
===========
6. RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of common/collective trusts and
registered investment companies managed by the Vanguard Group (Vanguard)
and shares of Pogo common stock. Vanguard is the Plan's custodian and
Pogo is the Plan's sponsor as defined by the Plan and therefore, these
transactions qualify as party-in-interest transactions that are exempt
from the prohibited transactions rules.
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 was qualified and the
related trust was tax-exempt as of December 31, 2001. The Plan has
requested an update to the determination letter as of February 29, 2002 and
the request is still pending as of June 26, 2002.
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.
- 8 -
TAX-ADVANTAGED SAVINGS PLAN OF POGO PRODUCING COMPANY
SCHEDULE OF ASSETS (HELD AT END OF YEAR)**
DECEMBER 31, 2001
IDENTITY OF ISSUER, BORROWER NUMBER OF CURRENT
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT SHARES/UNITS COST VALUE
* Pogo Producing Company Pogo nonparticipant-directed
common stock 282,068 $6,139,468 $ 7,409,914
* Pogo Producing Company Pogo participant-directed
common stock 102,750 ** 2,699,256
* The Vanguard Group Prime Portfolio Money Market
Fund 713,331 ** 713,331
* The Vanguard Group Investment-Grade Corporate
Portfolio Bond Fund 60,638 ** 526,337
* The Vanguard Group Vanguard Wellington Income
Fund 55,632 ** 1,516,528
* The Vanguard Group Vanguard Index Trust - 500
Portfolio 17,054 ** 1,805,813
* The Vanguard Group Vanguard PrimeCap Fund 73,723 ** 3,798,195
-----------
$18,469,374
===========
* Indicates party-in-interest.
** Cost not required for participant-directed investments.
- 9 -
SIGNATURES
Pursuant to the requirements of the Securities and 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 28, 2002
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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23.1 -- Consent of PricewaterhouseCoopers LLP