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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________________ TO _______________________
COMMISSION FILE NUMBER 1-10537
A. Full title of plan and the address of the plan,
if different from that of the issuer named below:
NUEVO ENERGY COMPANY
401(k) RETIREMENT PLAN
B. Name of the issuer of the securities held pursuant
to the plan and the address of its executive office:
NUEVO ENERGY COMPANY
1021 MAIN, SUITE 2100
HOUSTON, TEXAS 77002
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NUEVO ENERGY COMPANY 401(k) RETIREMENT PLAN
TABLE OF CONTENTS
PAGE
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Report of Independent Certified Accountants ........................................................ 2
Financial Statements
Statements of Net Assets Available for Benefits
as of December 31, 2002 and 2001 .............................................................. 3
Statement of Changes in Net Assets Available
for Benefits for the year end December 31,2002 ................................................ 4
Notes to the Financial Statements ............................................................. 5
1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Trustees of
Nuevo Energy Company
401(k) Retirement Plan
We have audited the accompanying statement of net assets available for
benefits of Nuevo Energy Company 401(k) Retirement Plan (the "Plan") as of
December 31, 2002 and 2001, and the related statement of changes in net assets
available for benefits for the year ended December 31, 2002. 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 benefits of the
Plan as of December 31, 2002 and 2001, and the changes in net assets available
for benefits for the year ended December 31, 2002 in conformity with accounting
principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule H, line
4i - Schedule of Assets (Held at End of Year) as of December 31, 2002 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. This 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/ Melton & Melton, L.L.P.
Houston, Texas
June 27, 2003
2
NUEVO ENERGY COMPANY 401(k) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 AND 2001
ASSETS
2002 2001
------------ ------------
INVESTMENTS $ 8,143,075 $ 7,363,770
------------ ------------
RECEIVABLES:
Employer contributions 2,011,868 126,774
Participant contributions -- 33,528
Other 8,253 --
------------ ------------
Total receivables 2,020,121 160,302
------------ ------------
Total assets $ 10,163,196 $ 7,524,072
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LIABILITIES
OTHER LIABILITIES $ -- $ 1,099
------------ ------------
Total liabilities -- 1,099
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Net assets available for benefits $ 10,163,196 $ 7,522,973
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(See Notes to Financial Statements)
3
NUEVO ENERGY COMPANY 401(k) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2002
ADDITIONS TO NET ASSETS:
Contributions:
Participant $ 1,683,697
Rollovers 1,278,340
Employer 2,592,418
------------
Total contributions 5,554,455
Interest and dividend income 73,453
------------
Total additions 5,627,908
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DEDUCTIONS FROM NET ASSETS:
Benefit payments 1,522,812
Net depreciation in fair value of investments 1,462,359
Administrative expense 2,514
------------
Total deductions 2,987,685
------------
Change in net assets 2,640,223
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 7,522,973
------------
End of year $ 10,163,196
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(See Notes to Financial Statements)
4
NUEVO ENERGY COMPANY 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
NOTE 1 - DESCRIPTION OF THE PLAN
The following description of the Nuevo Energy Company 401(k) Retirement
Plan (the "Plan") provides only general information. Participants 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 Nuevo Energy Company (the "Company") except those who are covered by a
collective bargaining agreement, or are classified as a summer or seasonal
employee. Employees are eligible to participate on the first day of each month
coinciding with or next following the date on which they become an employee. The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
CONTRIBUTIONS
Participants may elect to make salary deferral contributions
to the Plan of up to 12% of their compensation, subject to certain limitations.
The Company may make a discretionary matching contribution. For the Plan year
ended December 31, 2002, the Company elected to match 50% of each participant's
contribution up to 6% of compensation. The Company may also make a discretionary
profit sharing contribution and a discretionary non-elective contribution to be
determined each plan year. The profit sharing contribution is allocated to each
eligible employee who is employed on the last day of the contribution period and
has completed 1,000 hours of service. For the Plan year ended December 31, 2002,
the Company elected a profit sharing contribution to contribute a certain
percentage based on company profits as defined in the Company compensation
program. The profit sharing contribution is invested in Nuevo Energy Company
common stock until the participant becomes fully vested, at which time they can
transfer their contribution amount into any investment option provided under the
plan. The Plan is participant directed and participants may change their
contribution rates monthly and investment options at any time.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution and allocations of (a) the Company's contribution and, (b) Plan
earnings, and charged with any applicable administrative expenses. Allocations
are based on participant earnings or account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be provided from the
participant's vested account.
5
NUEVO ENERGY COMPANY 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2002
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
VESTING/PAYMENT OF BENEFITS
Participants are at all times fully vested in their
contributions and the appreciation or depreciation thereon. Vesting in the
Company contributions portion of their accounts plus earnings thereon is based
on years of continuous service. In the Company matching contribution,
participants vest 20 percent per year after two years of service and are 100
percent vested after six years of service. In the Company profit sharing
contribution, participants vest 33.33 percent per year after one year of service
and are 100 percent vested after three years.
A participant shall be immediately vested upon death,
retirement, or termination of employment due to total and permanent disability.
Normal retirement age under the Plan is age 65. Upon a participant's termination
or retirement, the funds in the participant's account are distributed in a lump
sum payment unless the participant elects an alternate payment method.
PARTICIPANT LOANS
Plan participants may borrow Plan assets up to a maximum of
the lesser of $50,000 or 50 percent of their vested account balance in the Plan
and not less than $1,000. Interest rates on loans are stated at a reasonable
rate. Loans are repaid in level installments through payroll deductions for
periods ranging up to five years and in certain situations may exceed five
years. Loans are secured by the participant's vested account balance to the
extent of the principal amount of the loan plus accrued interest. Participants
may only have one loan outstanding at a time.
FORFEITURES
Forfeitures of nonvested employer contributions shall be used
to pay Plan expenses or reduce employer contributions. The forfeiture balance at
December 31, 2002 and 2001 was $112,725 and $38,015, respectively. Forfeitures
of $70,941 were used to reduce employer contributions during 2002.
TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Company
has the right to discontinue its contributions at any time and to terminate the
Plan. Upon termination, employees would receive benefits based on their account
balance accumulated to the date of termination of the Plan, becoming 100% vested
in all amounts credited to their account.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting records of the Plan are maintained on the cash
basis of accounting; however, the financial statements have been prepared on the
accrual basis of accounting.
6
NUEVO ENERGY COMPANY 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2002
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan are paid by the Company or
the Plan.
INVESTMENTS
Investments in shares of mutual funds are valued at quoted
market prices, which represent the net asset value of shares held by the Plan at
year-end. Investments in shares of common/collective trust funds are stated at
estimated fair value as determined by the trust fund's trustee based on the
underlying investments. The Company stock is valued at its quoted market price.
Participant loans are valued at cost, which approximates fair value.
ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the plan administrator to make estimates and assumptions that affect
the reported amounts and disclosures. Accordingly, actual results could differ
from those estimates.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
NOTE 3 - INCOME TAX STATUS
The Plan has adopted a nonstandardized prototype plan, which obtained
its latest determination letter on December 5, 2001, in which the Internal
Revenue Service stated that the Plan is qualified and the trust established
under the Plan is tax-exempt under the appropriate sections of the Internal
Revenue Code (IRC). The Plan has been amended since receiving the determination
letter. However, the Plan administrator believes that the Plan is designed and
is currently being operated in compliance with the applicable provisions of the
IRC.
NOTE 4 - RELATED-PARTY TRANSACTIONS
Certain Plan investments at December 31, 2002 and 2001 are in Fidelity
mutual funds and portfolios. Fidelity Management Trust Company is the trustee as
defined by the Plan and therefore investments in Fidelity mutual funds and
portfolios, qualify as party-in-interest transactions. The Plan also allows for
investment in the Company's common stock. The Company is the Plan sponsor;
therefore, these transactions qualify as party-in-interest. Loans to
participants also qualify as party-in-interest transactions.
7
NUEVO ENERGY COMPANY 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2002
NOTE 5 - INVESTMENTS
Investments that represent 5% or more of the Plan's net assets at
December 31, 2002 and 2001 are separately identified below, stated at fair
value:
Identity of
Party Involved Description 2002 2001
---------------------------------- ---------------------------------- ----------- -----------
MUTUAL FUNDS:
Fidelity Retirement Money Market Portfolio $ 714,485 $ 440,620
Fidelity Magellan Fund 918,288 635,870
Fidelity Contrafund 1,197,735 970,405
Fidelity Blue Chip Growth Fund 598,232 676,098
NUEVO ENERGY COMMON STOCK FUND:
Nuevo Energy Corporation Common Stock * 2,145,874 2,884,500
* Includes both participant and nonparticipant directed.
During 2002, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated in
value as follows:
Mutual Funds $ (742,996)
Common Stock (719,363)
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$ (1,462,359)
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NOTE 6 - NONPARTICIPANT DIRECTED INVESTMENTS
The Nuevo Energy Company Common Stock Fund includes both participant
and nonparticipant directed amounts which cannot be separately determined.
Therefore, for purposes of this disclosure, the stock fund is considered
nonparticipant directed. Information about the net assets and the significant
components of the changes in net assets is as follows:
2002 2001
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Net Assets:
Investments:
Common stock $ 2,145,874 $ 2,884,500
Interest bearing cash 123,105 177,254
Noninterest bearing cash 10,596 12,906
Other receivable 8,253 --
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$ 2,287,828 $ 3,074,660
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8
NUEVO ENERGY COMPANY 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2002
NOTE 6 - NONPARTICIPANT DIRECTED INVESTMENTS (CONTINUED)
Year Ended
December 31, 2002
-----------------
Changes in Net Assets:
Employer contributions $ 159,250
Employee contributions 273,739
Interest and dividends 284
Net depreciation in fair value
of investments (719,363)
Benefit payments (345,166)
Administrative expenses (25)
Interfund transfers (155,551)
-----------------
$ (786,832)
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NOTE 7 - RISKS AND UNCERTAINTIES
The Plan provides for various investments. In general, such investments
are exposed to various risks such as significant world events, interest rate,
credit and overall market volatility risks. Due to the level of risk associated
with certain investment securities, it is reasonably possible that changes in
the value of investments will occur in the near term and that such changes could
materially affect the amounts reported in the statement of net assets available
for benefits.
9
NUEVO ENERGY COMPANY 401(k) RETIREMENT PLAN
EIN # 76-0304436 PLAN #001
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2002
(c)
DESCRIPTION OF
(b) INVESTMENT INCLUDING
IDENTITY OF MATURITY DATE, RATE OF (e)
ISSUE, BORROWER, INTEREST, COLLATERAL, (d) CURRENT
(a) LESSOR, OR SIMILAR PARTY PAR, OR MATURITY VALUE COST VALUE
--- ------------------------ --------------------------------- --------- -----------
COMMON COLLECTIVE TRUST:
* Fidelity Managed Income Portfolio ** $ 197,113
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MUTUAL FUNDS:
* Fidelity Retirement Money Market Portfolio ** 714,485
* Fidelity Puritan Fund ** 429,913
* Fidelity Magellan Fund ** 918,288
* Fidelity Contrafund ** 1,197,735
* Fidelity Equity-Income Fund ** 485,127
* Fidelity Intermediate Bond Fund ** 412,202
* Fidelity Blue Chip Growth Fund ** 598,232
* Fidelity Worldwide Fund ** 394,635
* Fidelity Spartan U.S. Equity Index Fund ** 331,409
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5,482,026
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NUEVO ENERGY COMPANY STOCK FUND:
* Nuevo Energy Company Common Stock (193,322 shares) 3,134,891 2,145,874
Interest Bearing Cash 123,105 123,105
Non-Interest Bearing Cash 10,596 10,596
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2,279,575
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* PARTICIPANT LOANS 6% - 9% -- 184,361
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$ 8,143,075
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* A party-in-interest as defined by ERISA.
** Cost omitted for participant directed investments.
10
SIGNATURES
The Plan, Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan Administrator has duly caused this annual report to be signed on its
behalf by the undersigned, thereunto duly authorized.
NUEVO ENERGY COMPANY
(Registrant)
Date: June 14, 2003 By: /s/ James L. Payne
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James L. Payne
Chairman, President and
Chief Executive Officer
Date: June 14, 2003 By: /s/ Janet F. Clark
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Janet F. Clark
Senior Vice President and
Chief Financial Officer
11
EXHIBIT INDEX
Exhibit Index Description
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23.1 Independent Auditors Consent
99.1 Certification of Chief Executive Officer of
Nuevo Energy Company
99.2 Certification of Chief Financial Officer of
Nuevo Energy Company
12