Exhibit 99
================================================================================
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, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-12147
THRIFT PLAN OF DELTIC TIMBER CORPORATION
(Full title of the Plan)
DELTIC TIMBER CORPORATION
(Exact name of issuer of securities held pursuant to Plan)
210 East Elm Street, P. O. Box 7200, El Dorado, Arkansas 71731-7200
(Address of principal executive offices) (Zip Code)
================================================================================
Ex. 99-0
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Deltic Timber Corporation:
We have audited the accompanying statements of net assets available for benefits
of the Thrift Plan of Deltic Timber Corporation as of December 31, 2001 and
2000, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2001. 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 Thrift Plan
of Deltic Timber Corporation as of December 31, 2001 and 2000, and the changes
in net assets available for benefits for the year ended December 31, 2001, 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, 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. This supplemental schedule is the
responsibility of the Thrift Plan management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits 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/KPMG LLP
KPMG LLP
Shreveport, Louisiana
June 21, 2002
Ex. 99-1
THRIFT PLAN OF DELTIC TIMBER CORPORATION
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
2001 2000
------------ ------------
Assets
Investments* $ 9,743,479 9,220,428
Liabilities
Forfeitures due to Company 14,250 10,268
------------ ------------
Net assets available for benefits $ 9,729,229 9,210,160
============ ============
*For additional information on Plan investments, see Note 3 - Investments.
See accompanying notes to financial statements.
Ex. 99-2
THRIFT PLAN OF DELTIC TIMBER CORPORATION
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2001
Additions to net assets
Contributions
Employee $ 674,486
Employer 274,549
------------
Total contributions 949,035
------------
Investment income
Interest and dividends 188,550
Net depreciation in fair value of investments (122,081)
------------
Total investment income (loss) 66,469
------------
Total additions to net assets 1,015,504
------------
Deductions from net assets
Distributions of benefits 495,633
Administrative expenses 802
------------
Total deductions from net assets 496,435
------------
Net increase in net assets available for benefits 519,069
Net assets available for benefits
Beginning of year 9,210,160
------------
End of year $ 9,729,229
============
See accompanying notes to financial statements.
Ex. 99-3
THRIFT PLAN OF DELTIC TIMBER CORPORATION
Notes to Financial Statements
December 31, 2001
Note 1 - Description of Plan
General
The Thrift Plan of Deltic Timber Corporation ("the Plan") is a profit
sharing, defined contribution plan covering each employee who is scheduled to
work, or actually does work, 1,000 or more hours per year. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA"). Although it has not expressed any intent to do so, Deltic
Timber Corporation ("Deltic" or the "Company") has the right under the Plan
to amend or terminate the Plan subject to the provisions of ERISA. For a more
complete description of the Plan"s provisions, refer to the Plan document.
The Plan is administered by Deltic's Pension, Investment, and Employee
Benefits Committee ("Plan Administrator"), whose members are appointed by the
Company's Board of Directors. SunTrust Bank ("SunTrust" or the "Trustee"),
Nashville N.A. is the Plan's trustee.
Contributions
Contributions to the Plan include (a) employee tax-deferred,
earnings-reduction contributions, (b) employee after-tax contributions, (c)
Company matching contributions, (d) employee after-tax supplemental
contributions, and (e) rollovers by participants from other qualified plans.
Each year, a participant may contribute, on a combined tax-deferred and/or
after-tax basis, up to eight percent of their annual base earnings. The
Company has voluntarily agreed to make annual contributions to the Plan based
on each participant's contributions and years of participation. The Company
matches 50 percent of employee contributions for the first five years of
participation, 75 percent of employee contributions for the second five years
of participation, and 100 percent of employee contributions thereafter.
However, Company contributions cannot exceed five percent of an employee's
annual base pay. Employee's after-tax supplemental contributions, which are
not matched by the Company, may not exceed 10 percent of their annual base
salary. The Company applies any amounts contributed by the Company that are
forfeited by participants in accordance with provisions of the Plan to reduce
subsequent contributions. Participants direct the investment of their
contributions and company contributions into various investment options
offered by the Plan. The Plan currently offers stock in the Company and eight
mutual funds as investment options for participants.
Throughout various Plan mergers and restatements, the Company has allowed
account balances from a former deductible account to remain in the Plan.
However, after December 31, 1986, participants were not allowed to contribute
to this account.
Vesting
A participant is vested in Company contributions after (1) completion of five
years of service, (2) retirement on or after age 65, (3) death, (4) total and
permanent disability, or (5) discontinuance of the Plan. In the event of Plan
termination, participants will become 100 percent vested in Company
contributions. A nonvested participant forfeits Company contributions upon
termination of employment.
Ex. 99-4
THRIFT PLAN OF DELTIC TIMBER CORPORATION
Notes to Financial Statements
December 31, 2001
Withdrawals
A participant may withdraw employee after-tax contributions or Company
contributions, if vested, at a minimum of $250, or any higher multiple of 10
percent of the participant's account balance up to 50 percent for a partial
withdrawal, or 100 percent for a total withdrawal. If a partial withdrawal is
taken, Company contributions will be suspended for six months and another
withdrawal cannot be made for 24 months. If a total withdrawal is taken,
Company contributions will be suspended for 12 months. Employee contributions
may continue without interruption after a partial or total withdrawal.
A participant may withdraw employee tax-deferred contributions or rollovers
from other qualified plans under IRS hardship provisions only. "Hardship" is
an immediate and heavy financial need in one of the following areas: (1)
large medical expenses not covered by insurance for the employee or family,
(2) purchase of a principal residence (not regular mortgage payments), (3)
preventing foreclosure or eviction from employee's principal residence, (4)
tuition and related education fees for the next 12 months of post-secondary
education for employee or family, or (5) other events as may be determined by
the IRS. If a hardship withdrawal is taken, participation in all accounts is
suspended for 12 months. Company contributions are forfeited only upon
termination of employment.
An after-tax supplemental withdrawal must be the greater of $250 or 10
percent of the participant's account balance and may not be made prior to 12
months from a previous withdrawal.
Withdrawals from the deductible account (account for participant's
contributions made prior to January 1, 1987 under a previous plan) are
subject to the same withdrawal requirements as after-tax supplemental
withdrawals.
Any Company contributions, employee tax-deferred contributions, contributions
to a deductible account, or account earnings withdrawn from the Plan may be
subject to a 10 percent penalty tax under the Tax Reform Act of 1986 if the
participant is not 59" years old, or permanently disabled, or has died.
Upon retirement, disability, or death of a participant, the participant or
his/her spouse, if the designated beneficiary, has the option to receive
settlement in a lump sum or installment payments not to exceed 20 years or
actuarial life if less than 20 years.
Administrative Expenses
Most administrative expenses are paid by the Company.
Ex. 99-5
THRIFT PLAN OF DELTIC TIMBER CORPORATION
Notes to Financial Statements
December 31, 2001
Note 2 - Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements of the Plan have been prepared on the
accrual basis of accounting and present the net assets available for benefits
and changes in those net assets.
The investments and changes in the net assets available for benefits have
been determined by the Trustee and reported to the Plan Administrator based
on quoted market values. Purchases and sales of securities are recorded on a
trade-date basis.
The financial statements of the Plan are compiled using information received
from SunTrust. The information includes listings of investments and cash
receipts and disbursements of the Plan, together with all other transactions,
which affect Plan investments. Such information has been certified as
complete and accurate by the Trustee. The Trustee has been granted
discretionary authority concerning the purchase and sale of investments in
the trust fund.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of net assets available for benefits and changes therein. Actual results
could differ from those estimates.
Note 3 - Investments
During 2001, the Plan's investments, including gains and losses on
investments bought and sold, as well as held during the year, appreciated
(depreciated) in value by $122,081, as follows:
Mutual funds $ (613,185)
Equity securities 491,104
------------
$ (122,081)
============
Ex. 99-6
THRIFT PLAN OF DELTIC TIMBER CORPORATION
Notes to Financial Statements
December 31, 2001
The following table represents the fair value of individual investments that
exceeded 5% of the Plan's net assets at December 31, 2001 and 2000:
2001 2000
------------ ------------
Mutual funds
American Century Income and Growth Fund $ 586,449 558,509
Putnam New Opportunities Fund 968,484 1,279,436
STI Classic Capital Appreciation Fund 1,663,624 1,746,359
SunTrust Stable Asset Fund 2,387,322 1,932,880
STI Classic Balanced Fund 528,429 -
Other* 1,078,663 1,347,251
------------ ------------
7,212,971 6,864,435
------------ ------------
Equity securities
Deltic Timber Corporation common stock 1,584,683 1,640,755
Murphy Oil Corporation common stock 945,825 715,238
------------ ------------
2,530,508 2,355,993
------------ ------------
Total investments $ 9,743,479 9,220,428
============ ============
*Individually less than 5%.
Note 4 - Income Tax Status
The Plan meets the necessary requirements of the Tax Reform Act of 1986 as
documented in Section 401(a) of the Internal Revenue Code, and accordingly,
the related Trust is exempt from taxation under the provisions of Section
501(a) of the Internal Revenue Code. The Internal Revenue Service has
determined and informed the Company by a letter dated January 28, 2002, that
the Plan is designed in accordance with applicable sections of the Internal
Revenue Code. Until such time as cash or shares are withdrawn from the Plan
by a participant or a participant's beneficiary, no income tax is payable by
the participant/beneficiary on: contributions made by the Company on the
participant's behalf, allotments made by the participant pursuant to the
Economic Recovery Tax Act of 1981, or any amounts added to the participant's
accounts representing his/her proportional share of the investment income of
the Trust.
Note 5 - Related Party Transactions
Certain Plan investments are invested in funds advised by affiliates of
SunTrust. SunTrust is the Trustee of the Plan; therefore, these transactions
qualify as party-in-interest transactions. The Company is the sponsor of the
Plan, and is considered a party-in-interest.
Ex. 99-7
THRIFT PLAN OF DELTIC TIMBER CORPORATION
Notes to Financial Statements
December 31, 2001
Note 6 - Concentration of Investments
As of December 31, 2001 and 2000, 16% and 18%, respectively of net assets
available for benefits were invested in Deltic Timber Corporation common
stock. Substantially all the remaining net assets available for benefits were
invested in mutual funds managed by SunTrust Bank.
Note 7 - Subsequent Event
Effective January 1, 2002, the plan was amended to change the maximum
allowable vesting period from five years to three years.
Ex. 99-8
THRIFT PLAN OF DELTIC TIMBER CORPORATION
Schedule H, Line 4i
Schedule of Assets (Held at End of Year)*
December 31, 2001
Description of Current
Identity of Issuer Investment Value
- -------------------------------------------- --------------------- ------------
Equity securities
Deltic Timber Corporation common stock 57,850.380 shares $ 1,584,683
Murphy Oil Corporation common stock 11,254.461 shares 945,825
Mutual funds
American Century Income and Growth Fund 21,458.052 shares 586,449
Putnam New Opportunities Fund 23,633.101 shares 968,484
STI Classic Balanced Fund 41,872.370 shares 528,429
STI Classic Capital Appreciation Fund 126,511.364 shares 1,663,624
STI Classic Small Cap Growth Stock Fund 18,004.626 shares 320,663
Vanguard 500 Index Fund 3,736.613 shares 395,670
SunTrust Stable Asset Fund 76,947.868 shares 2,387,322
STI Classic U.S. Government Securities
Money Market Fund 34,872.953 shares 362,330
------------ ------------
416,141.788 shares $ 9,743,479
============ ============
*The above data is based on information which has been certified as accurate and
complete by the Trustee, SunTrust. SunTrust manages various investment funds
and, accordingly, is a party-in-interest. Additionally, Deltic Timber
Corporation, as sponsor of the Plan, is considered a party-in-interest.
Information on cost of the investments is excluded as all investments are
participant directed.
Ex. 99-9
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Pension, Investment, and Employee Benefits Committee has duly caused this Annual
Report to be signed on its behalf by the undersigned hereunto duly authorized.
THRIFT PLAN OF DELTIC
TIMBER CORPORATION
Dated: June 28, 2002 By: /s/Clefton D. Vaughan
------------------------- --------------------------------------
Clefton D. Vaughan, Vice President
of Finance and Administration and
Chairman of Pension, Investment,
and Employee Benefits Committee,
Deltic Timber Corporation
Ex. 99-10
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Deltic Timber Corporation:
We consent to incorporation by reference in the Registration Statement (No.
333-76294) on Form S-8 of Deltic Timber Corporation of our report dated June 21,
2002, relating to the statements of net assets available for benefits of the
Thrift Plan of Deltic Timber Corporation as of December 31, 2001 and 2000, and
the related statement of changes in net assets available for benefits for the
year ended December 31, 2001, which report appears in the December 31, 2001
annual report on Form 11-K of the Thrift Plan of Deltic Timber Corporation.
/s/KPMG LLP
KPMG LLP
Shreveport, Louisiana
June 21, 2002
Ex. 99-11