SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 29, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-3551
EQUITABLE RESOURCES, INC. EMPLOYEE SAVINGS PLAN
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(Full title of the Plan and address of the Plan,
if different from that of the issuer named below)
EQUITABLE RESOURCES, INC.
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One Oxford Centre, Suite 3300, 301 Grant Street,
Pittsburgh, Pennsylvania 15219
(Name of issuer of the securities held pursuant to the
Plan and the address of principal executive office)
CONTENTS
Page
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REPORT OF INDEPENDENT AUDITORS 2
FINANCIAL STATEMENTS
Statements of net assets available for benefits 3
Statements of changes in net assets available for benefits 4
Notes to financial statements 5 - 9
SUPPLEMENTARY INFORMATION
Schedule H:
Line 4i-Schedule of Assets (Held at End of Year) 10
Schedule H:
Line 4j-Schedule of Reportable Transactions 11
SIGNATURE 12
INDEX TO EXHIBITS 13 - 14
1
REPORT OF INDEPENDENT AUDITORS
Benefits Administration Committee
Equitable Resources, Inc. Employee Savings Plan
We have audited the accompanying statements of net assets available for
benefits of the Equitable Resources, Inc. Employee Savings Plan as of December
29, 2001 and 2000, and the related statements of changes in net assets available
for 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. 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 29, 2001 and 2000, and the changes in its net assets
available for 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
financial statements taken as a whole. The accompanying supplemental schedules
of assets held at end of year as of December 29, 2001 and reportable
transactions for the year then ended are presented for purposes of additional
analysis and are not a required part of the 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. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Ernst & Young LLP
-----------------------------------
Pittsburgh, Pennsylvania
June 17, 2002
2
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 29
2001 2000
-------------------------------------
Investments, at fair value:
Mutual funds $37,808,067 $43,450,311
Common/collective trusts 8,244,883 6,555,538
Employer Stock Fund 11,487,206 11,088,854
Participant loans 500,857 523,157
-------------------------------------
Net assets available for benefits $58,041,013 $61,617,860
=====================================
SEE ACCOMPANYING NOTES.
3
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 29
2001 2000
------------------------------------
Additions:
Investment income:
Interest and dividends $ 1,829,019 $ 4,156,573
Interest on participant loans 41,591 43,970
------------------------------------
Total investment income 1,870,610 4,200,543
Net depreciation in fair value of investments (6,723,085) (1,530,681)
Contributions:
Matching 2,799,149 2,731,321
Contract 4,643,815 7,046,631
------------------------------------
Total contributions 7,442,964 9,777,952
------------------------------------
Total additions 2,590,489 12,447,814
Deductions:
Withdrawals by participants 6,087,256 18,009,109
Expenses 1,970 9,557
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Total deductions 6,089,226 18,018,666
Transfers from other plans - 1,566,832
Transfers from affiliated plan (79,385) 155,139
Other 1,275 (4,359)
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Net decrease in net assets available for benefits (3,576,847) (3,853,240)
Net assets available for benefits:
At beginning of year 61,617,860 65,471,100
------------------------------------
At end of year $ 58,041,013 $ 61,617,860
====================================
SEE ACCOMPANYING NOTES.
4
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED
DECEMBER 29, 2001
1. DESCRIPTION OF PLAN
The following description of the Equitable Resources, Inc. Employee
Savings Plan (Plan) provides only general information. Participants
should refer to the summary plan description for a more complete
description of the Plan's provisions.
GENERAL
The Plan is a defined contribution profit sharing and savings plan, with
a 401(k) salary reduction feature, implemented on September 1, 1985, by
Equitable Resources, Inc. and certain subsidiaries (the Company or
Companies) (unless the represented employee's collective bargaining
agreement specifically provides for participation).
All regular, full-time, non-union employees of the Companies are eligible
to participate in the Plan on his or her first day of employment. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
During February 2000, Equitable Production Company acquired the
Appalachian production assets of Statoil. As such, employees of Statoil
became participants in the Plan and transferred in approximately $1.6
million of assets.
CONTRIBUTIONS
Participants can elect to contribute between 1% and 15% of eligible
earnings to the Plan, subject to Internal Revenue Code (IRC) limitations.
These contributions are referred to as contract contributions.
Prior to January 1, 1999, the Company matched 50% of the first 6% of
participants' contract contributions. Effective January 1, 1999, the
Company will match a percentage of the first 6% of the participants'
contract contributions based on years of service for participants in the
NORESCO and Equitable Services divisions as follows:
Years of Service Matching Contribution Percentage
---------------- --------------------------------
Less than one year 50%
More than one year and less than
three years 75%
More than three years 100%
All other participants will receive a match of 50% of the first 6% of
their contract contributions.
In addition, Equitable Production Company and Equitable Headquarters
participants receive a performance contribution which is determined on an
annual basis at the discretion of the Company. During 2001 and 2000, the
amount of the performance contribution was 6% of eligible compensation.
5
1. DESCRIPTION OF PLAN (Continued)
CONTRIBUTIONS (Continued)
In addition, effective January 1, 1999, the matching contribution shall
be invested in the Employer Stock Fund until the participant is 100%
vested. After the participant is 100% vested, the matching contribution
will follow the participant's contract investment election(s).
ROLLOVER CONTRIBUTIONS
Participants are allowed to make rollover contributions (contributions
transferred to the Plan from other qualified retirement plans), subject
to certain requirements.
VESTING
Participants are 100% vested in the value of contract contributions made,
and any rollover contributions.
If employment is terminated for any reason other than retirement, death,
or total and permanent disability, a participant is entitled to receive
the vested value of any employer contributions.
Matching contributions vest in accordance with the following schedule:
Years of Continuous Service Vested Interest
--------------------------- ---------------
One year 33%
Two years 66%
Three years 100%
6
1. DESCRIPTION OF PLAN (Continued)
VESTING (Continued)
Amounts forfeited by participants upon termination are used to reduce the
amount of the Company's future employer contributions to the Plan. In
2001 and 2000, forfeitures of approximately $94,300 and $165,000,
respectively, were used to offset contributions.
Upon retirement, death, total and permanent disability or termination of
the Plan, a participant is entitled to receive the full value of any
employer contributions, regardless of years of continuous service.
WITHDRAWALS BY PARTICIPANTS
Payments to participants can be made as follows: a lump-sum distribution,
a direct rollover, if applicable, or, in the case of a distribution on
account of retirement or total and permanent disability, equal periodic
payments over the lesser of: a) the life expectancy of the participant
and beneficiary or b) twenty (20) years.
LOANS TO PARTICIPANTS
A participant may borrow money from the Plan in amounts up to the lesser
of $50,000 or 50% of the vested balance of a participant's account.
ADMINISTRATIVE EXPENSES
The plan sponsor pays administrative expenses associated with the Plan
except for investment management fees which are paid by the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Short-term investments are valued at cost, which approximates market. The
Employer Stock Fund consisting of Equitable Resources, Inc. common stock
(Company common stock) is valued at market price as quoted on the New
York Stock Exchange. The contracts included in the Putnam Stable Value
Fund are valued at face value, which approximates market. Other
investments are valued at market. There were 336,967 and 166,125 shares
of Company common stock as of December 29, 2001 and 2000, respectively.
7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
3. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, the interests of all affected participants will become
fully vested.
4. INVESTMENTS
The Plan's investments (including investments purchased, sold, as well as
held during the year) appreciated (depreciated) in fair value as
determined by quoted market prices as follows:
NET CHANGES IN FAIR VALUE
DECEMBER 29
2001 2000
--------------------------------------
Investments at fair value as determined by quoted market prices:
Registered investment companies $(7,021,270) $(7,225,745)
Common/collective trusts (18,351) (11,819)
Company stock 316,536 5,706,883
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$(6,723,085) $(1,530,681)
======================================
Investments that represent 5% or more of fair value of the Plan's net
assets are as follows:
DECEMBER 29
2001 2000
--------------------------------------
The George Putnam Fund of Boston $4,707,117 $5,081,927
The Putnam Fund for Growth and Income 8,179,778 9,083,363
Putnam Voyager Fund 13,274,981 17,744,574
Putnam International Growth Fund 3,891,517 4,891,608
Putnam Stable Value Fund 7,619,253 6,328,090
Employer Stock Fund* 11,487,206 11,088,854
*Nonparticipant-directed
8
4. INVESTMENTS (Continued)
Information about the net asset and significant components of the changes
in net assets related to the nonparticipant-directed investment is as
follows:
YEAR ENDED DECEMBER 29
2001 2000
-------------------------------------
Net asset:
Employer Stock Fund $11,487,206 $11,088,854
-------------------------------------
Changes in net assets:
Dividend income $210,281 $201,171
Net appreciation in fair value of investments 316,536 5,706,883
Employer contributions 1,003,841 1,011,391
Employee contributions 353,719 202,590
Withdrawals by participants (834,293) (1,147,772)
Expenses (221) (974)
Transfers to funds (553,567) (872,985)
Other (97,944) (79,329)
-------------------------------------
$ 398,352 $ 5,020,975
=====================================
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue
Service dated July 13, 1999, stating that the Plan is qualified under
Section 401(a) of the Internal Revenue Code (the Code) and, therefore,
the related trust is exempt from taxation. Once qualified, the Plan is
required to operate in conformity with the Code to maintain its
qualification. The Plan has been amended since the date of the
determination letter. The Plan Administrator believes the Plan is being
operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is
tax-exempt.
9
SUPPLEMENTARY INFORMATION
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
PLAN 202 EIN: 25-0464690
SCHEDULE H, LINE 4i-SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 29, 2001
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST CURRENT VALUE
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* Putnam Bond Index Fund Common/collective trust (a) $ 228,326
Alger Mid Cap Retirement Fund Mutual fund (a) 544,575
Pimco Total Return Administrative Fund Mutual fund (a) 317,379
Alger Small Cap Retirement Fund Mutual fund (a) 61,683
Neuberger Berman Genesis Trust Mutual fund (a) 747,664
Pending Account Noninterest-bearing cash (a) 78,516
* The George Putnam Fund of Boston Mutual fund (a) 4,707,117
* The Putnam Fund for Growth and Income Mutual fund (a) 8,179,778
* Putnam Investors Fund Mutual fund (a) 59,632
* Putnam Income Fund Mutual fund (a) 1,313,091
* Putnam Global Growth Fund Mutual fund (a) 42,488
* Putnam Vista Fund Mutual fund (a) 267,173
* Putnam Voyager Fund Mutual fund (a) 13,274,981
* Putnam Growth Opportunities Fund Mutual fund (a) 207,329
* Putnam OTC and Emerging Growth Fund Mutual fund (a) 117,571
* Putnam Asset Allocation-Growth Portfolio Mutual fund (a) 2,100,399
* Putnam Asset Allocation-Balanced Portfolio Mutual fund (a) 1,326,035
* Putnam Asset Allocation-Conservative Portfolio Mutual fund (a) 451,333
* Putnam S&P 500 Index Fund Common/collective trust (a) 397,304
* Putnam International Growth Fund Mutual fund (a) 3,891,517
* Putnam Balanced Fund Mutual fund (a) 119,806
* Loan Fund Participant loans-6% to 10.50% 500,857
* Equitable Resources Common Stock Fund Employer securities-common shares $7,416,180 11,487,206
* Putnam Stable Value Fund Common/collective trust (a) 7,619,253
---------------
$58,041,013
===============
(a) Cost information not required as per Special Rule for certain
participant-directed transactions.
*Party-in-interest to the Plan.
10
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
PLAN 202 EIN: 25-0464690
SCHEDULE H, LINE 4j-SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 29, 2001
CURRENT
VALUE OF
ASSET ON
PURCHASE SELLING COST OF TRANSACTION
IDENTITY OF PARTY INVOLVED DESCRIPTION OF INVESTMENT PRICE PRICE ASSET DATE NET GAIN
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CATEGORY (iii)-SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
Equitable Resources, Inc. Employer Stock Fund $4,130,985 $ - $4,130,985 $4,130,985 $ -
Equitable Resources, Inc. Employer Stock Fund - 4,049,170 2,584,512 4,049,170 1,464,658
There were no category (i), (ii) or (iv) reportable transactions during 2001.
11
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the members of the Benefits Administration Committee of the Plan have duly
caused this Annual Report to be signed on its behalf by the undersigned hereunto
duly authorized.
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
(Name of Plan)
By /s/ David L. Porges
---------------------------------------
David L. Porges
Executive Vice President and
Chief Financial Officer
June 28, 2002
12
EXHIBIT INDEX
Exhibit No. Description Sequential Page No.
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23 Consent of Independent Auditors 14
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