FORM 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the 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 333-98681
CONOCOPHILLIPS SAVINGS PLAN
(FORMERLY THE LONG-TERM STOCK SAVINGS PLAN
OF PHILLIPS PETROLEUM COMPANY)
(Full title of the Plan)
CONOCOPHILLIPS
(Name of issuer of securities)
600 NORTH DAIRY ASHFORD
HOUSTON, TEXAS 77079
(Address of principal executive office) (Zip code)
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Financial statements of the ConocoPhillips Savings Plan (formerly the Long-Term
Stock Savings Plan of Phillips Petroleum Company), filed as part of this annual
report, are listed in the accompanying index.
(b) Exhibits
Exhibit 23 Consent of Independent Auditors.
Exhibit 99 Certifications Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
ConocoPhillips Savings Plan Committee has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
CONOCOPHILLIPS
SAVINGS PLAN
/s/ J. W. Sheets
-------------------------------
J. W. Sheets
Plan Financial Administrator
June 25, 2003
1
INDEX TO FINANCIAL STATEMENTS CONOCOPHILLIPS SAVINGS PLAN
AND SCHEDULES (FORMERLY THE LONG-TERM
STOCK SAVINGS PLAN OF
PHILLIPS PETROLEUM COMPANY)
Page
Report of Independent Auditors ..................................... 3
Financial Statements
Statement of Net Assets Available for Benefits
at December 31, 2002 and 2001 ................................. 4
Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 2002 ................. 5
Notes to Financial Statements ................................... 6
Supplemental Schedules *
Schedule of Assets (Held at End of Year) as of
December 31, 2002, Schedule H, Line 4i ........................ 15
Schedule of Reportable Transactions for the Year Ended
December 31, 2002, Schedule H, Line 4j ........................ 18
Schedule of Nonexempt Transactions for the Year Ended
December 31, 2002, Schedule G, Part III ....................... 19
Exhibit Index ..................................................... 20
- ---------------
* Other supplemental schedules required by Section 2520.103-10 of the Department
of Labor Rules and Regulations for Reporting and Disclosure under ERISA have
been omitted because they are not applicable.
2
REPORT OF INDEPENDENT AUDITORS
The ConocoPhillips Savings Plan Committee
ConocoPhillips Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the ConocoPhillips Savings Plan (formerly the Long-Term Stock Savings Plan of
Phillips Petroleum Company) (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 ConocoPhillips Savings Plan Committee (Committee). 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 the Committee, 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 at
December 31, 2002 and 2001, and the changes in its net assets available for
benefits for the year ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed 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 31, 2002, reportable transactions for the
year then ended, and nonexempt 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 Committee. 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
ERNST & YOUNG LLP
Houston, Texas
June 25, 2003
3
STATEMENT OF NET ASSETS CONOCOPHILLIPS SAVINGS PLAN
AVAILABLE FOR BENEFITS (FORMERLY THE LONG-TERM STOCK SAVINGS
PLAN OF PHILLIPS PETROLEUM COMPANY)
Thousands of Dollars
------------------------
At December 31 2002 2001
------------------------
ASSETS
Investments
ConocoPhillips common stock $ 1,727,514 1,396,473
Insurance contract 15 -
Loans to Plan participants 24,050 -
Credit Suisse Warburg Pincus Value II 5,273 -
American Express Fixed Income Fund 40,161 -
Vanguard Funds:
Prime Money Market Fund 110,224 1,095
500 Index Fund 175,374 -
Asset Allocation Fund 1,062 -
Balanced Index Fund 11,157 -
Explorer Fund 1,708 -
Extended Market Index Fund 13,525 -
Federal Money Market Fund 27,987 -
Growth Index Fund 2,645 -
Inflation-Protected Securities Fund 7,726 -
International Growth Fund 10,452 -
LifeStrategy Conservative Growth Fund 811 -
LifeStrategy Growth Fund 996 -
LifeStrategy Income Fund 2,120 -
LifeStrategy Moderate Growth Fund 992 -
Long-Term Treasury Fund 15,466 -
Mid-Cap Index Fund 5,361 -
Morgan Growth Fund 1,148 -
PRIMECAP Fund 90,499 -
Small-Cap Growth Index Fund 2,042 -
Small-Cap Value Index Fund 5,159 -
Total Bond Market Index Fund 68,312 -
Total International Stock Index Fund 4,837 -
Total Stock Market Index Fund 3,114 -
Value Index Fund 1,531 -
Wellington Fund 45,303 -
Windsor II Fund 6,396 -
- --------------------------------------------------------------------------------
2,412,960 1,397,568
- --------------------------------------------------------------------------------
Company Contributions Receivable
Before-tax deposits - 195
Interest Receivable 5 4
- --------------------------------------------------------------------------------
Total Assets 2,412,965 1,397,767
- --------------------------------------------------------------------------------
LIABILITIES
Securities Acquisition Loans 298,850 321,850
Interest Payable 378 570
Administrative Expenses Payable - 45
- --------------------------------------------------------------------------------
Total Liabilities 299,228 322,465
- --------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 2,113,737 1,075,302
================================================================================
See Notes to Financial Statements.
4
STATEMENT OF CHANGES IN NET CONOCOPHILLIPS SAVINGS PLAN
ASSETS AVAILABLE FOR BENEFITS (FORMERLY THE LONG-TERM
STOCK SAVINGS PLAN OF
PHILLIPS PETROLEUM COMPANY)
Thousands
Year Ended December 31, 2002 of Dollars
-----------
ADDITIONS
Company Contributions
Funds for debt service $ 2,364
Basic allocation requirements 40,479
Participant Contributions 8,571
- -----------------------------------------------------------------
51,414
- -----------------------------------------------------------------
Investment Income
Dividends and interest 32,909
- -----------------------------------------------------------------
32,909
- -----------------------------------------------------------------
Other Additions
Asset transfer in from Thrift Plan 941,249
Asset transfer in from TOSCO CAP Plan 376,010
- -----------------------------------------------------------------
1,317,259
- -----------------------------------------------------------------
Total 1,401,582
- -----------------------------------------------------------------
DEDUCTIONS
Distributions to participants
or their beneficiaries 90,371
Net depreciation in fair value
of common stock 265,778
Interest expense 6,933
Administrative expense 65
- -----------------------------------------------------------------
Total 363,147
- -----------------------------------------------------------------
NET CHANGE 1,038,435
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of Year 1,075,302
- -----------------------------------------------------------------
End of Year $ 2,113,737
=================================================================
See Notes to Financial Statements.
5
NOTES TO FINANCIAL STATEMENTS CONOCOPHILLIPS SAVINGS PLAN
(FORMERLY THE LONG-TERM
STOCK SAVINGS PLAN OF
PHILLIPS PETROLEUM COMPANY)
NOTE 1--PLAN DESCRIPTION
The following description of the ConocoPhillips Savings Plan (CPSP) (Plan) is
subject to and qualified by the more complete information appearing in the Plan
document. This Plan was formerly known as the Long-Term Stock Savings Plan of
Phillips Petroleum Company (LTSSP); the name was changed at the close of
business on December 31, 2002, along with the formal merger of the Thrift Plan
of Phillips Petroleum Company (Thrift Plan) into the CPSP. The Thrift Plan
became the Thrift Feature of the CPSP and the LTSSP became the Stock Savings
Feature. At the same time, accounts in the Tosco Corporation Capital
Accumulation Plan (CAP) were transferred to CPSP.
On March 12, 2002, stockholders of Phillips Petroleum Company and Conoco Inc.
(Conoco) approved a merger of the two companies to form ConocoPhillips. The
merger was finalized on August 30, 2002. Under the terms of the merger
agreement, each outstanding share of Phillips Petroleum Company common stock,
including all those held by the Thrift Plan and the LTSSP, was automatically
converted into one share of the new ConocoPhillips common stock (Company Stock).
The following description of the Stock Savings Feature is subject to and
qualified by the more complete information appearing in the Plan document.
When the LTSSP (the Stock Savings Feature) became effective July 1, 1988, it was
a defined contribution stock bonus plan available to certain employees of
ConocoPhillips Company (formerly Phillips Petroleum Company) and participating
subsidiaries (Company). Generally, any person on the U.S. direct dollar payroll
of the Company was eligible to participate, except non-managerial retail
marketing outlet employees and certain other employee classifications, including
persons who were employees of Tosco Corporation prior to its acquisition by the
Company.
Vanguard Fiduciary Trust Company was the Plan Trustee. Plan investments were
held by the Trustee in the Temporary Fund (prior to May 1, 2001), Fund TD (also
known as the Employee Stock Fund), Fund TE (also known as the Employer Stock
Fund) and Fund TF (also known as the EP Stock Fund). Temporary Fund investments
consisted of specified short-term securities in the Vanguard Prime Money Market
6
Fund. Funds TD, TE, and TF were invested primarily in the common stock of the
Company.
Fund TE consisted of ConocoPhillips stock (formerly Phillips Petroleum Company
stock), purchased with the proceeds of the loans described in Note 3 (Leveraged
Shares), with certain Company contributions, or with certain dividends received
from the Company; or ConocoPhillips stock contributed by the Company. The
Leveraged Shares were allocated to Fund TE or Fund TF accounts of eligible
participants in one of three types of stock allocations: semiannual basic
allocations, dividend replacement allocations and supplemental allocations. The
number of shares allocated on June 30, 2002, and again on December 31, 2002, was
4,255 shares for each 100 employees eligible to make deposits as of January 1,
2002. Beginning June 30, 2003, the number of shares to be allocated semiannually
on each allocation date will be 4,349 shares for each 100 employees eligible to
make deposits. After 2005 and through the allocation date following the date the
second loan is repaid, the number of shares to be allocated semiannually on each
basic allocation date will be 3,962 shares for each 100 eligible employees. In
late 1995, the Company extended the terms of the second loan to the year 2015.
Without the extension, allocations of stock to employees would have been
completed in 2005 or before. The extension required additional shares of
ConocoPhillips stock to be delivered to the Plan. The Plan was eligible to
receive shares from the Company's Compensation and Benefits Trust (CBT). In
2002, the Company used the CBT to contribute 771,479 shares of stock to the
Plan. The fair value of the shares was $40.5 million.
A participant's semiannual basic allocation was based on the ratio of the
participant's Fund TD deposits to all eligible participants' deposits for the
allocation period. If the Company did not elect to make a special contribution
and if eligible dividends from participants' Fund TE or Fund TF accounts were
used to make loan payments, participants received a dividend replacement
allocation. The Plan used $15.6 million in dividends on allocated shares to make
loan payments and allocated 291,138 shares in dividend replacement allocations
to participants' Fund TE and Fund TF accounts in 2002. A supplemental allocation
could be made each year-end if all shares released for allocation, based on loan
payment provisions, had not been allocated.
The Company made contributions to the Plan which, when aggregated with certain
Plan dividends from Fund TE, certain dividends from Fund TF, and certain
interest earnings from Fund TE, equaled the amount necessary to enable the Plan
to make its regularly scheduled payments of principal and interest due on its
loan. The Company could also elect to make contributions to the Plan, as an
alternative to using the dividends from shares in Fund TF or from shares in Fund
TE. Finally, the Company could make contributions to the Plan in the amount
necessary to bring the number of shares of
7
stock released for allocation up to the level required to complete the basic
allocation by contributing cash or by contributing ConocoPhillips common stock.
Eligible employees could elect to have their salaries reduced and before-tax
deposits made by the Company on their behalf equal to 1 percent of pay, as
defined by the Plan. The deposits were credited directly to employees' accounts
as soon as practicable, generally the night of each payday. The interest of
participants in each fund was represented by shares allocated to them. Assets of
the Employee Stock Ownership Plan of Phillips Petroleum Company (ESOP) and the
Payroll Stock Ownership Plan of Phillips Petroleum Company (PAYSOP), which were
merged into the Plan on July 1, 1988, were held in Fund TF.
Participants were always vested in their deposits and amounts credited to their
accounts. Total withdrawals from Funds TD, TE and TF could be made upon the
occurrence of specified events, including the attainment of age 59 1/2 (after
December 31, 1998, for Funds TF and TE) or severance of employment. Partial
withdrawals were permitted in cases of specified financial hardship and certain
other cases, including special partial withdrawal provisions for participants
age 55 and over. For a participant who retired or became totally disabled,
unless a request for withdrawal was made as of any earlier date, distribution
generally was deferred to a date not later than the first valuation date in
October of the year age 69 is attained. If the participant died, distribution to
a surviving spouse beneficiary was deferred to the first valuation date in
October in the year in which the participant would have attained age 69.
Effective January 1, 2003, the age at which distributions were deferred to was
changed to 70 1/2. This deferral was revocable by the participant or the
surviving spouse. Distributions to non-spouse beneficiaries could be deferred
approximately five years. A participant could elect a direct rollover of the
taxable portion of most distributions to an Individual Retirement Account or
another tax-qualified plan.
The Plan is administered by the ConocoPhillips Savings Plan Committee, a Plan
Financial Administrator, and a Plan Benefits Administrator. Members of the
Committee are appointed by the Board of Directors of ConocoPhillips Company. The
Plan Financial Administrator and the Plan Benefits Administrator are the persons
who occupy, respectively, the ConocoPhillips positions of Treasurer and
Compensation and Benefits Manager. Members of the Committee and the Plan
Administrators serve without compensation, but are reimbursed by the Company for
necessary expenditures incurred in the discharge of their duties. Administrative
expenses of the Plan are paid by the Trustee from assets of the Plan to the
extent allowable by law, unless paid by the Company. In 2002, reimbursement of
administrative expenses paid to ConocoPhillips from Fund TF totaled $64,910.
8
Some provisions of the new CPSP include many of the provisions of the Thrift
Plan, LTSSP, some provisions of the CAP, as well as new provisions, effective
January 1, 2003, which have been added to the CPSP that were not a part of the
original Thrift Plan, LTSSP, or CAP.
A recap of the new provisions follows:
Thrift Feature: Deposits of up to 30 percent of pay on a before-tax basis, an
after-tax basis, or a combination of both, may be made and the Company will
contribute $1 for each $1 deposited by the participant up to 1.25 percent of
pay. Participants have a choice of 27 investment funds in which to invest their
deposits.
Stock Savings Feature: Deposits of 1 percent of pay on a before-tax basis can be
made. Participants will receive semiannual allocations of Company Stock as of
June 30 and December 31 of each year, based on their deposits relative to total
deposits to the Stock Savings Feature during an allocation period.
Effective January 1, 2003, heritage Conoco employees became eligible to
participate in the Stock Savings Feature. They are not eligible to participate
in the Thrift Feature.
Catch-up Deposits: Participants are eligible to make catch-up deposits to the
Thrift Feature beginning in the year the participant attains age 50. The
participant is allowed to elect catch-up deposits to be deducted as a dollar
amount from each paycheck up to the applicable dollar limit, as defined by the
Plan, for such plan year. An annual election is required to make catch-up
deposits.
Installment Payments: A terminated employee or a beneficiary who is the
surviving spouse of a participant is eligible to elect a distribution based on a
fixed-dollar amount or life-expectancy installment payments.
Dividend Pass Through: Effective January 1, 2003, a participant can make an
election to receive cash dividends from the Company Stock Fund on a portion of
his account invested in Company Stock. The distribution of these dividends will
be made on each dividend payment date. Offering the participant the opportunity
to receive cash dividends allows the Company to take a tax deduction for those
dividends.
Forms of Payment: Generally, distributions from participant accounts invested in
Company Stock may be made in cash, Company Stock, or a combination of both.
Distributions from all other funds in the Thrift Feature are made in cash. An
election to make an eligible rollover distribution is also available.
9
Loans: Active or terminated employees or a beneficiary who is the surviving
spouse of a participant can request a loan from their account in the CPSP. The
minimum loan is $1,000. Generally, the maximum loan is the lesser of $50,000 or
one-half of the value of the account. For those eligible for loans, three
outstanding loans are available at any one time, one of which may be a home loan
for a term of up to 240 months.
Expanded Investment Fund Line-up: The Thrift Feature of CPSP also includes the
following new funds, bringing the total number to 28, --CAP Fixed Income Fund
and Vanguard Retirement Savings Trust Fund. The CAP Fixed Income Fund will be a
blended fund consisting of Vanguard Retirement Savings Trust and American
Express Trust Income Fund III. No new deposits will be allowed to the American
Express Trust Income Fund III. Beginning January 1, 2003, and continuing each
month through April 2003, a portion of the American Express Trust Income Fund
III was invested in the Vanguard Retirement Savings Trust. In April 2003, the
entire remaining CAP Fixed Income Fund balance was transferred to the Vanguard
Retirement Savings Trust.
Share Accounting Method for Company Stock: Effective January 1, 2003, the CPSP
changed to a share accounting method for Company Stock versus the unit
accounting method used, prior to that date. Any shares purchased or sold on any
business day will be valued at the Participant Transaction Price, which is
calculated using a weighted-average price of the ConocoPhillips stock traded on
that business day and any carryover impact from the previous trading day.
Trust Agreements: On January 1, 2003, ConocoPhillips entered into both a Trust
Agreement and a Master Trust Agreement with Vanguard Fiduciary Trust Company, as
Trustee. Together, these trust agreements provide for the administration of the
Trust fund by the Trustee or any Successor Trustee. The Master Trust Agreement
provides for the administration by the Trustee of each Investment Fund in the
Trust Fund that consists primarily of ConocoPhillips stock in both the Stock
Savings Feature and the Thrift Feature.
The Plan pays all reasonable expenses necessary for the operation of the Plan,
unless such expenses are paid by the Company.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Plan's financial statements are presented on the accrual basis of
accounting. Distributions to participants or their beneficiaries are recorded
when paid.
10
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes
and schedules. Actual results could differ from those estimates.
NOTE 3--SECURITIES ACQUISITION LOANS
The Plan borrowed $250 million (Loan 1) and $400 million (Loan 2) in 1988 and
1990, respectively, and purchased 14,336,918 and 14,159,292 shares of common
stock from Phillips Petroleum Company, respectively. The shares are held in a
Fund TE suspense account until allocated to eligible participants based on the
provisions of the Plan. At December 31, 2002 and 2001, the market value of
unallocated shares was $373 million and $505 million, respectively. These were
also the amounts of total assets that were not allocated to participants at
December 31, 2002 and 2001.
Loan 1 was fully repaid in June 1998 and all leveraged shares associated with
Loan 1 have been allocated to participant accounts.
Loan 2 was amended late in 1995 to extend its term from 15 to 25 years,
requiring repayment in annual installments beginning in 2005, through the year
2015. Due to loan prepayments, the first required payment is currently scheduled
to be in 2008.
Any participating bank in the syndicate of lenders may cease to participate on
December 5, 2004, by giving not less than 180 days prior notice to the Plan and
ConocoPhillips. Also, each bank participating in the loan has the optional
right, if the current Directors of ConocoPhillips or their approved successors
cease to be a majority of the Board of Directors, and upon not less than 90 days
notice, to cease to participate in the loan. Under the above conditions, such
banks' rights and obligations under the loan agreement must be purchased by
ConocoPhillips if not transferred to another bank of ConocoPhillips' choice.
The outstanding balance of Loan 2 at December 31, 2002, was $299 million. Loan 2
prepayments totaled $23 million in 2002. Loan 2 provides for variable interest
rates. The rates were 1.69 percent and 2.36 percent at December 31, 2002 and
2001, respectively.
Loan 2 is guaranteed by ConocoPhillips. It is being repaid through contributions
made by the Company; dividends on certain allocated and unallocated shares, and
earnings on the short-term investment of dividends. Loan 2's carrying amount
approximates fair value.
11
NOTE 4--INVESTMENTS
Company Stock is valued at fair value, using the New York Stock Exchange closing
quoted market price. Insurance contracts are valued pursuant to their terms; the
contract value, which approximates fair value, represents fund deposits plus
interest credited, less distributions. Shares of mutual funds are valued at the
net asset value of shares held by the Plan at year-end. Participant loans are
valued at cost, which approximates fair value.
Investment securities are exposed to various risks, such as interest rate,
market, and credit risk. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes in risks
in the near term could materially affect the amounts reported in the Statement
of Net Assets Available for Benefits.
NOTE 5--NON-PARTICIPANT-DIRECTED INVESTMENTS
The ConocoPhillips common stock in Fund TE and the Loan 2 Suspense Account of
the Stock Savings Feature, as well as the ConocoPhillips Stock Fund included in
the Thrift Feature, are the only non-participant-directed investments in the
Plan. Information about the net assets and the significant components of the
changes in net assets relating to the non-participant-directed investments are
as follows:
Thousands of Dollars
At December 31 2002 2001
---------------------
Net Assets:
ConocoPhillips common stock $1,154,478 817,427
===============================================================================
Changes in Net Assets during Year
Ended December 31, 2002:
Company contributions $ 2,364
Dividends and interest 27,111
Other income 5
Interfund transfers 40,479
Asset transfers in 547,516
Net depreciation in fair value
of investments (219,185)
Interest expense (7,125)
Distributions (54,114)
- -------------------------------------------------------------------------------
$ 337,051
===============================================================================
12
NOTE 6--ASSET TRANSFERS IN
At the close of business on December 31, 2002, approximately $941 million of
assets from the Thrift Plan of Phillips Petroleum Company and $376 million of
assets from the Tosco Corporation Capital Accumulation Plan were transferred
into the Plan, as a result of the merger discussed in Note 1.
NOTE 7--TAX STATUS
The Internal Revenue Service (IRS) determined on July 3, 2002, that the Plan is
qualified under Section 401(a) of the Internal Revenue Code of 1986 and that the
Trust is exempt from federal income tax under Section 501(a). Subsequent
amendments have been adopted, but are not expected to affect the qualified
status of the Plan. The Committee is not aware of any activity that would affect
the qualified status of the Plan.
NOTE 8--PARTY-IN-INTEREST TRANSACTIONS
The majority of the Plan's assets are invested in Company Stock. Because
ConocoPhillips is the parent of the Company, these transactions qualify as
party-in-interest transactions. In addition, certain investments of the Plan are
in shares of mutual funds managed by Vanguard. Because Vanguard is the Plan's
trustee, these transactions also qualify as party-in-interest transactions.
NOTE 9--PLAN TERMINATION
In the event of termination of the Plan, participants and beneficiaries of
deceased participants will be vested with respect to, and will receive, within a
reasonable time, any funds in their accounts as of the date of the termination.
Unallocated assets leveraged to Loan II would be allocated pursuant to
applicable legal and contractual requirements.
13
NOTE 10--RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits as of
December 31, 2002 and 2001, as reflected in these financial statements, to the
amounts reflected in the Plan's Form 5500:
Thousands of Dollars
-----------------------
2002 2001
-----------------------
Net assets available for benefits as reported in the
financial statements $ 2,113,737 1,075,302
Less: Amounts allocated to withdrawing participants
at December 31, 2002 (16) -
- --------------------------------------------------------------------------------
Net assets available for benefits as reported in the
Form 5500 $ 2,113,721 1,075,302
================================================================================
The following is a reconciliation of distributions to participants for the year
ended December 31, 2002, as reflected in these financial statements to the
amount reflected in the Plan's Form 5500:
Thousands of
Dollars
------------
Distributions to participants as reported in the
financial statements $ 90,371
Add: Amount allocated to withdrawing participants at December
31, 2002 16
- -------------------------------------------------------------------------------
Distributions to participants as reported in the Form 5500 $ 90,387
===============================================================================
14
SCHEDULE OF ASSETS (HELD AT END OF YEAR) CONOCOPHILLIPS SAVINGS PLAN
SCHEDULE H, LINE 4i (FORMERLY THE LONG-TERM
STOCK SAVINGS PLAN OF
PHILLIPS PETROLEUM COMPANY)
EIN 73-0400345, PLAN 022
At December 31, 2002
(c) Thousands of Dollars
(a)(b) Description of investment -----------------------
Identity of issue, including maturity date, (d) (e)
borrower, lessor rate of interest, collateral, Historical Current
or similar party par or maturity value Cost Value
- ------------------- ----------------------------- ---------- ---------
CONOCOPHILLIPS* COMMON STOCK, $0.01 PAR VALUE,
29,300,813 SHARES $1,065,563 1,727,514
TRAVELERS INSURANCE GROUP ANNUITY CONTRACT GR-1966A,
COMPANY DEFERRED SETTLEMENT ACCOUNT ** 15
AMERICAN EXPRESS 40,161,019 UNITS, AMERICAN
EXPRESS TRUST INCOME FUND III ** 40,161
CREDIT SUISSE 500,722 UNITS, WARBURG PINCUS
VALUE II FUND ** 5,273
PARTICIPANTS LOANS TO PLAN PARTICIPANTS
AT 4.5% TO 9.5% ** 24,050
- --------------------------------------------------------------------------------
THE VANGUARD GROUP* 110,223,593 UNITS, VANGUARD
MONEY MARKET PRIME ** 110,224
2,161,119 UNITS, VANGUARD
500 INDEX FUND ** 175,374
58,771 UNITS, VANGUARD
ASSET ALLOCATION FUND ** 1,062
712,930 UNITS, VANGUARD
BALANCED INDEX FUND ** 11,157
37,557 UNITS, VANGUARD
EXPLORER FUND ** 1,708
721,696 UNITS, VANGUARD
EXTENDED MARKET INDEX FUND ** 13,525
27,986,495 UNITS, VANGUARD
FEDERAL MONEY MARKET FUND ** 27,987
132,564 UNITS, VANGUARD
GROWTH INDEX FUND ** 2,645
15
SCHEDULE OF ASSETS (HELD AT END OF YEAR) CONOCOPHILLIPS SAVINGS PLAN
SCHEDULE H, LINE 4i (FORMERLY THE LONG-TERM
STOCK SAVINGS PLAN OF
PHILLIPS PETROLEUM COMPANY)
EIN 73-0400345, PLAN 022
At December 31, 2002
(c) Thousands of Dollars
(a)(b) Description of investment -----------------------
Identity of issue, including maturity date, (d) (e)
borrower, lessor rate of interest, collateral, Historical Current
or similar party par or maturity value Cost Value
- ------------------- ----------------------------- ---------- ---------
THE VANGUARD GROUP* 652,510 UNITS, VANGUARD
INFLATION-PROTECTED SECURITIES ** 7,726
859,582 UNITS, VANGUARD
INTERNATIONAL GROWTH FUND ** 10,452
63,282 UNITS, VANGUARD
LIFESTRATEGY CONSERVATIVE
GROWTH ** 811
69,328 UNITS, VANGUARD
LIFESTRATEGY GROWTH FUND ** 996
172,103 UNITS, VANGUARD
LIFESTRATEGY INCOME FUND ** 2,120
71,500 UNITS, VANGUARD
LIFESTRATEGY MODERATE
GROWTH FUND ** 992
1,315,164 UNITS, VANGUARD
LONG-TERM TREASURY FUND ** 15,466
542,578 UNITS, VANGUARD
MID-CAP INDEX FUND ** 5,361
102,946 UNITS, VANGUARD
MORGAN GROWTH FUND ** 1,148
2,340,879 UNITS, VANGUARD
PRIMECAP FUND ** 90,499
222,678 UNITS, VANGUARD
SMALL-CAP GROWTH INDEX FUND ** 2,042
605,572 UNITS, VANGUARD
SMALL-CAP VALUE INDEX FUND ** 5,159
6,580,287 UNITS, VANGUARD
TOTAL BOND MARKET INDEX FUND ** 68,312
626,615 UNITS, VANGUARD
TOTAL INTERNATIONAL STOCK INDEX ** 4,837
16
SCHEDULE OF ASSETS (HELD AT END OF YEAR) CONOCOPHILLIPS SAVINGS PLAN
SCHEDULE H, LINE 4i (FORMERLY THE LONG-TERM
STOCK SAVINGS PLAN OF
PHILLIPS PETROLEUM COMPANY)
EIN 73-0400345, PLAN 022
At December 31, 2002
(c) Thousands of Dollars
(a)(b) Description of investment -----------------------
Identity of issue, including maturity date, (d) (e)
borrower, lessor rate of interest, collateral, Historical Current
or similar party par or maturity value Cost Value
- ------------------- ----------------------------- ---------- ---------
THE VANGUARD GROUP* 155,147 UNITS, VANGUARD
TOTAL STOCK MARKET INDEX FUND ** 3,114
104,485 UNITS, VANGUARD
VALUE INDEX FUND ** 1,531
1,844,600 UNITS, VANGUARD
WELLINGTON FUND ** 45,303
307,516 UNITS, VANGUARD
WINDSOR II FUND ** 6,396
- --------------------------------------------------------------------------------
** 615,947
- --------------------------------------------------------------------------------
$2,412,960
================================================================================
* Party-in-interest
** Historical cost information is not required for participant-directed
investments.
17
SCHEDULE OF REPORTABLE TRANSACTIONS CONOCOPHILLIPS SAVINGS PLAN
SCHEDULE H, LINE 4j (FORMERLY THE LONG-TERM
SERIES OF TRANSACTIONS IN EXCESS STOCK SAVINGS PLAN OF
OF 5 PERCENT OF NET ASSETS PHILLIPS PETROLEUM COMPANY)
(CATEGORY iii) EIN 73-0400345, PLAN 022
Year Ended December 31, 2002
Thousands of Dollars
---------------------------------------------------------------
(a, b) Identity (h)Current
of party value of
involved and asset on (i) Net
description (c) Value of (d) Value (g)Historical transaction gain
of asset purchases of sales cost of asset date or (loss)
- --------------- ------------ ---------- ------------- ----------- ---------
ConocoPhillips*
Common stock $ 47,206 47,206
$54,121 23,843 54,121 30,278
- --------------------------------------------------------------------------------
* Party-in-interest
Columns (e) and (f) are not applicable.
There were no category (i), (ii) and (iv) reportable transactions during 2002.
18
SCHEDULE OF NONEXEMPT TRANSACTIONS CONOCOPHILLIPS SAVINGS PLAN
SCHEDULE G, PART III (FORMERLY THE LONG-TERM
STOCK SAVINGS PLAN OF
PHILLIPS PETROLEUM COMPANY)
EIN 73-0400345, PLAN 022
Year Ended December 31, 2002
(c)
Description of
(b) transactions, including
(a) Relationship to plan, maturity date, rate of
Identity of employer or other interest, collateral,
party involved party-in-interest par or maturity value
- -------------- ----------------- ------------------------
ConocoPhillips Employer/Plan Sponsor On a May 24, 2002, there
Company was a delay in the
transfer of employee
deposits to Vanguard,
totaling $133,741.30.
The related earnings of
$855.62 were deposited
into the Plan in August
2002.
Columns (d) through (j) are not applicable.
19
Exhibit Index ConocoPhillips Savings Plan
(formerly the Long-Term
Stock Savings Plan of
Phillips Petroleum Company)
EIN 73-0400345, Plan 022
Exhibit
Number Description
- ------ -----------
23 Consent of Independent Auditors.
99 Certifications Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
20
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8, File No. 333-98681) pertaining to the ConocoPhillips Savings Plan (formerly
the Long-Term Stock Savings Plan of Phillips Petroleum Company) of our report
dated June 25, 2003, with respect to the financial statements and schedules of
the ConocoPhillips Savings Plan included in this Annual Report (Form 11-K) for
the year ended December 31, 2002.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Houston, Texas
June 25, 2003
Exhibit 99
CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of the ConocoPhillips Savings Plan
(formerly the Long-Term Stock Savings Plan of Phillips Petroleum Company) (the
Plan) on Form 11-K for the period ending December 31, 2002, as filed with the
U.S. Securities and Exchange Commission on the date hereof (the Report), each of
the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the net assets available for benefits
and the changes in net assets available for benefits of the
Plan.
Date: June 25, 2003
/s/ Harvey L. Black, Jr.
---------------------------------------
Harvey L. Black, Jr.
Plan Benefits Administrator
/s/ J. W. Sheets
---------------------------------------
J. W. Sheets
Plan Financial Administrator
A signed original of this written statement required by Section 906 has been
provided to ConocoPhillips and will be retained by ConocoPhillips and furnished
to the Securities and Exchange Commission or its staff upon request.
