PAGE 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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
THRIFT PLAN FOR EMPLOYEES OF
CONOCO INC.
CONOCO INC.
600 NORTH DAIRY ASHFORD ROAD
HOUSTON, TX 77079
================================================================================
PAGE 2
INDEX
-----
<Table>
<Caption>
Page(s)
----------
Report of Independent Accountants .................................... 4
Financial Statements:
Statements of Net Assets Available for Plan
Benefits, as of December 31, 2001 and 2000 ................. 5
Statement of Changes in Net Assets Available
for Plan Benefits, for the Year Ended
December 31, 2001 ........................................... 6
Notes to the Financial Statements ............................... 7-16
Supplemental Schedule *:
Schedule I: Schedule of Assets (Held at End of Year)
at December 31, 2001 ........................................ 17
Exhibit Index ........................................................ 18
</Table>
- ----------
*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.
PAGE 3
Pursuant to the requirements of the Securities and Exchange Act of
1934, Conoco Inc. has duly caused this Annual Report to be signed by the
undersigned hereunto duly authorized.
Thrift Plan for Employees of
Conoco Inc.
June 13, 2002:
By /s/ TOM KNUDSON
---------------------------------------
Tom Knudson
Sr. Vice President of Human Resources,
Information Management, and Corporate
Communications
PAGE 4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants of the Thrift Plan for Employees of Conoco Inc. and the
Employee Benefit Plans Board of Conoco Inc.
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Thrift Plan for Employees of Conoco Inc. (the "Plan") at
December 31, 2001 and 2000, and the changes in net assets available for plan
benefits for the year ended December 31, 2001 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 audits. We
conducted our audits 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 audits provide a reasonable basis for our opinion.
Our audits were 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) 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 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.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
June 11, 2002
PAGE 5
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2001 and 2000
(Dollars in Thousands)
<Table>
<Caption>
2001 2000
---------- ----------
Investments, at Fair Value
(Notes 1, 2 and 4)
Equity ................................... $ 653,043 $ 711,798
Mutual Funds ............................. 581,457 596,625
Common/Collective Trusts ................. 95,407 195,215
Short-Term Investments and Cash .......... 51 4,442
Loans to Participants .................... 31,150 31,804
---------- ----------
1,361,108 1,539,884
Beneficial Interest in the Master Trust ..... 1,652,604 1,627,570
(Note 3)
---------- ----------
Total Investments .................... 3,013,712 3,167,454
Receivables ................................. 9,857 8,255
(Note 1)
---------- ----------
Net Assets Available for Plan Benefits ...... $3,023,569 $3,175,709
========== ==========
</Table>
- ----------
The accompanying notes are an integral part of these financial statements.
PAGE 6
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2001
(Dollars in Thousands)
<Table>
<Caption>
2001
----------
Investment Income (Loss)
Plan Interest in Master Trust Income .......... $ 102,366
Other Interest ................................ 3,747
Dividends ..................................... 30,248
Net Depreciation in Fair Value of
Investments ................................. (188,462)
----------
Total Investment Loss ......................... (52,101)
Contributions
Conoco Inc. Contributions
(net of forfeitures applied of $146) ........ 60,031
Participants .................................. 49,341
Rollovers ..................................... 13,437
----------
Total Contributions ........................... 122,809
Benefits Paid to Participants .................... (222,848)
----------
Net Decrease ..................................... (152,140)
Net Assets Available for Plan Benefits:
Beginning of Year ............................. 3,175,709
----------
End of Year ................................... $3,023,569
==========
</Table>
- ----------
The accompanying notes are an integral part of these financial statements.
PAGE 7
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE THRIFT PLAN:
The following description of the Thrift Plan for Employees of Conoco
Inc. (the "Plan") provides only general information. Members should refer to the
Plan document for the Plan's provisions.
THE PLAN
The Plan is a defined contribution plan which was established in 1952
by Conoco Inc. (the "Company"). The Company is a wholly-owned subsidiary of
Conoco Inc. (a different company having the same name, referred to as "New
Conoco"). The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA) and the Internal Revenue Code (the "Code")
and is a tax-qualified contributory profit sharing plan. The purpose of the Plan
is to encourage employees to save systematically a portion of their current
compensation and to assist them in accumulation of additional financial means
for the time of their retirement. Employees of the Company, including employees
of affiliated companies that have adopted the Plan, 1) who have previously met
the eligibility requirements of the Plan, or 2) who have completed a designated
period of 12 consecutive months during which they complete 1,000 hours or more
of service, or 3) who are regular, full time employees or regular, part-time
employees, are eligible to participate in the Plan.
Effective January 1, 1999, a separate savings plan, the Thrift Plan for
Retail Employees of Conoco Inc. (the "Retail Plan"), was created for Conoco
retail employees. Retail employees eligible to participate in the Retail Plan
are not eligible to participate in the Plan.
Prior to October 1, 2001, an eligible participant could authorize the
Company to make a payroll deduction under the Plan ranging from 1% to 19% of
monthly compensation. Effective October 1, 2001, the upper limit of the range
was increased to 38% of monthly compensation. The amount deducted can be
deposited into a before-tax or after-tax account or some combination thereof.
Participants' monthly deductions up to 6% are called basic deposits. The Company
will contribute an amount equal to 100% of the participant's monthly basic
deposits. Effective March 1, 2000, the Company began making a 1% additional
contribution and a 4% discretionary contribution to the Plan in the amount of
the monthly compensation in the month preceding the month in which such
contribution is made of all employees eligible to participate in the Plan in the
month preceding the month in which the contribution is made. The amount of the
discretionary contribution is set once a year and remains in effect for twelve
consecutive months. Effective March 1, 2001, the Company increased its
discretionary contribution to the Plan from 4% to 5%. The Company approved the
5% discretionary contribution again, effective March 1, 2002. The Trustee
acquires units of the Conoco Common Stock Fund with these additional and
discretionary contributions. Units of the Conoco Common Stock Fund so acquired
may be sold at any time at the election of a participant and the proceeds
invested in any of the other available investment options. Subject to certain
limitations, certain participants are eligible to make supplemental deposits,
either as lump sum deposits or deposits in the form of monthly deductions in
excess of 6% of monthly compensation. Due to the application of Internal Revenue
Code discrimination testing requirements, only "non-highly compensated"
participants are currently eligible to make cash lump sum supplemental deposits.
PAGE 8
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Prior to October 1, 2001, a participant with less than five years of
participation credit or service who withdrew any basic deposits would forfeit a
portion of related Company contributions in accordance with the specific Plan
provisions. Also, prior to October 1, 2001, Company contributions would be
suspended for six months if a vested participant made an in-service withdrawal
of any earnings in the before-tax or after-tax accounts, or basic deposits or
Company contributions contributed during the last 24 months. Employee deposits
and matching Company contributions will be suspended for up to 12 months if a
participant withdraws any before-tax contribution prior to age 59-1/2. The 12
month period was reduced to 6 months for periods extending after December 31,
2001. In certain circumstances such a withdrawal may also preclude a participant
from making any before-tax contributions in the year following the withdrawal.
Effective October 1, 2001, immediate vesting was approved and implemented.
Any vested participant who separates from service, including one who
retires, may elect to make a full account withdrawal at any time. Required
minimum distributions commence in April following the year in which a former
participant reaches age 70-1/2.
Participants may borrow up to one-half of their nonforfeitable account
balance subject to certain minimum and maximum loan limitations. The loans are
executed by promissory notes and have a minimum term of 12 months and a maximum
term of 60 months, except for qualified residential loans that have a maximum
term of 120 months. Effective October 1, 2001, the 120-month term for qualified
residential loans was increased to 240 months. The loans bore an interest rate
equal to the average rate charged by selected major banks to prime customers for
secured loans. Effective October 1, 2001, the method of determining rate of
interest on a loan was changed to using prime interest rate, as published on the
first business day of the month in which the loan application is received, plus
one percent. The loans are repaid over the term in monthly installments of
principal and interest by payroll deduction. A participant also has the right to
repay the loan in full at any time without penalty.
ADMINISTRATION
The assets of the Plan are held in two trusts, one of which holds the
assets which comprise the Stable Value Fund (known as the "Master Trust"), and
the other of which holds the remaining assets of the Plan. The designated
trustee of the Master Trust is State Street Bank and Trust Company; the
designated trustee of the remaining assets of the Plan is JPMorgan Chase Bank
(the "Trustees"). The administration of the Plan is vested in the Employee
Benefit Plans Board. The Board of Directors of Conoco Inc. or its delegate may
designate three or more persons to serve on the Employee Benefit Plans Board,
which has the authority to prescribe regulations for the administration of the
Plan, review all claims for benefits under the Plan, and enter into agreements
regarding the administration of the Plan. The Employee Benefit Plans Board also
has the responsibility for directing the Trustee of the Master Trust to enter
into contracts with insurance companies, banks, and other investment
organizations to provide investments giving a stable rate of return to the
Stable Value Fund.
Brokerage fees, transfer taxes, investment fees and other expenses
incident to the purchase and sale of securities and investments in the Stable
Value Fund, DuPont Stock, Conoco Stock Fund, Mutual Funds, Common/Collective
Trusts, and Blended Funds shall be included in the cost of such securities or
investments, or deducted from the sales proceeds, as the case may be. All
PAGE 9
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
costs related to the management and administration of the Stable Value Fund
investments (such as fees paid to investment managers, fees for wrapper
contracts, custodial and Trustee expenses) are paid out of the assets of the
Stable Value Fund. All administrative expenses not specified in the preceding
two sentences shall be paid out of rebates of record keeping costs and other
discounts in connection with investment vehicles available in the Plan. If such
rebates or other discounts are paid to the Plan, any excess remaining after the
reasonable administration expenses of the Plan have been paid shall be allocated
to the accounts of all participants in the Plan who have an employee account
balance greater than zero on an allocation date designated by the Plan
Administrator. The balance of any administrative expenses not paid as described
above shall be paid ratably by the Company and its affiliated companies
participating in the Plan.
While the Company has not expressed any intent to terminate the Plan,
it is free to do so at any time. In the event the Plan is terminated, all
affected participants become vested and the distribution of all account balances
will be made based upon the valuation of the participant's account on the
termination date.
INVESTMENT FUNDS
The following investment funds have been established for the investment
of employee deposits and Company contributions. Effective August 6, 1999,
purchases of DuPont common stock are not allowed. The investment funds are
described below:
Stable Value Fund
- -----------------
The Stable Value Fund is held by the Master Trust and is comprised of fixed
income securities and investments under agreement with one or more financial
institutions, including insurance companies, banks and other investment entities
which provide for a predetermined or stable rate of return and are held at
contract value.
DuPont Stock
- ------------
Common Stock of E. I. du Pont de Nemours and Company.
Conoco Stock Fund
- -----------------
Common Stock of New Conoco.
Loan Fund
- ---------
Participant loans - amounts transferred at the direction of a participant from
other investment funds of the participant that are loaned to that participant.
PAGE 10
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Mutual Funds
- ------------
American Century Income & Growth - seeks to provide dividend growth, current
income & capital appreciation by investing in common stocks.
American Century Equity Growth - seeks capital appreciation by investing in a
portfolio of common stocks.
American Century International Growth - seeks capital growth, invests in a
diversified international portfolio of stocks.
American Century Vista - seeks capital growth, invests in stocks considered to
have above average appreciation prospects.
American Century Strategic Allocation: Conservative - an asset allocation fund
that seeks lower risk with lower potential return.
American Century Strategic Allocation: Moderate - an asset allocation fund
that seeks moderate return while assuming moderate risk.
American Century Strategic Allocation: Aggressive - an asset allocation fund
that seeks higher return with higher potential risk.
American Funds ICA - seeks to provide long-term growth of capital and income,
placing greater emphasis on future dividends than on current income.
PIMCO Total Return - seeks to maximize total return through a portfolio of
intermediate-term investment grade bonds.
Nations International Value - seeks long-term capital appreciation by investing
primarily in equity securities of foreign issuers.
Fidelity Equity Income - seeks reasonable income and potential for capital
appreciation.
Fidelity Low-Priced Stock Fund - seeks capital appreciation.
Fidelity Magellan Fund - seeks capital appreciation.
Goldman Sachs Capital Growth - seeks long-term capital appreciation.
Franklin Small-Mid Cap Growth Fund Class A - seeks long-term capital growth.
Janus Mercury Fund - seeks long-term growth of capital.
PAGE 11
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Common/Collective Trusts:
- ------------------------
Barclays Global Investors Equity Index - seeks to track the holdings and total
return of the S&P 500 Index.
Barclays Global Investors U.S. Debt Index - seeks to track the holdings and
total return of the Lehman Brothers Aggregate Bond Index.
Blended Funds:
- -------------
Small Company Fund - equal blend of Fidelity Low-Priced Stock Fund and
Franklin Small-Mid Cap Growth Fund seeks long-term capital growth.
International Fund - equal blend of American Century International Growth Fund
and Nations International Value Fund seeks long-term capital growth.
Participants may allocate their employee deposits and matching Company
contributions and may reallocate the amounts in their accounts among all funds,
except the DuPont Stock and Loan Fund, at their discretion.
RECEIVABLES
Receivables are comprised of employee deposits of $4,269 and $3,716,
Company contributions of $5,400 and $4,330, and loan interest payments of $188
and $209, which are amounts due as of December 31, 2001 and 2000, respectively.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION AND INCOME RECOGNITION
The accompanying financial statements are prepared on the accrual basis
of accounting. The Plan's investments are stated at fair value, except for the
Stable Value Fund guaranteed investment contracts (GICs), separate account GICs
(SAGICs), and synthetic guaranteed investment contracts (SYNs), which are stated
at contract value. The Stable Value Fund GICs, SAGICs, and SYNs are fully
benefit responsive and thus, are stated at cost plus accrued interest, using the
contracted interest rates applied to the daily account balances. Mutual Funds
and Blended Funds are valued at quoted market prices that represent the net
asset value of shares held by the Plan at year-end. Common/Collective Trust
Funds are stated at the fair value of all underlying assets as reported by the
applicable custodian. Loans to participants, short-term investments, and cash
are valued at cost that approximates fair value. DuPont common stock and Conoco
common stock are valued at their quoted market prices at year-end. Benefits are
recorded when paid.
PAGE 12
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
The purchase of shares of Conoco common stock may be made in the open
market or from the Company if it shall have made treasury or authorized but
unissued shares available for such purchases, in which event the purchase price
shall be the closing price of such stock as reported on the New York Stock
Exchange - Composite Transactions on the last day preceding the date of such
purchase from the Company.
Effective August 7, 1999, dividends from all stock funds are invested
according to the participants' most recent investment direction. Dividend income
is recorded on the ex-dividend date and interest income is recorded when earned.
Realized gains and losses on the sale of the DuPont Stock and Conoco Stock Fund
investment securities are based on daily average cost of the securities sold for
each fund respectively. Purchases and sales are recorded on a trade date basis.
Investment securities are exposed to various risks, such as interest
rate, market, and credit. 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.
USE OF 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
in the financial statements. Actual results could differ from those estimates.
NOTE 3 - MASTER TRUST (STABLE VALUE FUND)
The Stable Value Fund option provided by the Plan is also available to
participants in the Thrift Plan for Retail Employees of Conoco Inc. (the Retail
Plan), sponsored by Conoco Inc.; each plan's beneficial interest in the
commingled Master Trust funds is based on that plan's proportionate share of the
value of the total net assets in the Master Trust. Investment income for each
plan is calculated using this same basis. The Plan's proportionate share of
Master Trust net assets and investment income was approximately 99.9% as of
December 31, 2001 and 2000.
The Stable Value Fund consists of GICs, SAGICs, SYNs, and short-term
investments and cash.
The crediting interest rates ranged from 4.80% to 8.31% and 5.56% to
8.31% for the years ended December 31, 2001 and 2000, respectively. The fund's
blended rate of return for the year was 6.53% in 2001 and 6.73% in 2000.
PAGE 13
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
The crediting rates for most SAGIC and SYN contracts are reset
quarterly and are based on the market value of the underlying portfolio of
assets backing these contracts. Inputs used to determine the crediting rate
include each contract's portfolio market value, current yield-to-maturity,
duration (i.e., the present value of the weighted average life), and market
value relative to contract value. All contracts have a guaranteed rate of 0% or
higher.
The Master Trust (Stable Value Fund) values as of December 31, 2001 and
2000 are as follows:
<Table>
<Caption>
12/31/01 12/31/00
----------- -----------
At Contract Value, which approximates fair value:
- -------------------------------------------------
GICs $ 149,599 $ 114,047
SAGICs 267,572 286,234
SYNs 1,176,027 1,157,912
At Fair Value:
- --------------
Short-term investments and cash 61,082 71,105
----------- -----------
$ 1,654,280 $ 1,629,298
=========== ===========
</Table>
The contract values of synthetic guaranteed investment contracts
include ($41,991) and ($11,911) at December 31, 2001 and 2000 related to wrapper
contracts which guarantee the contract value of the synthetic guaranteed
investment contracts for participant initiated withdrawal events.
Investment income for the Master Trust for the year ended December 31,
2001 is composed of Stable Value Fund gains and interest income in the amount of
$102,475.
NOTE 4 - INVESTMENTS
The Plan presents in the Statement of Changes in Net Assets Available
for Plan Benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
PAGE 14
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Net depreciation for the year ended December 31, 2001 is as follows:
<Table>
<Caption>
Investments Net Depreciation
----------- ----------------
Equity $ (57,673)
Mutual Funds (30,109)
Common/Collective Trusts (100,680)
----------
Total Net Depreciation $ (188,462)
==========
</Table>
The following individual investments represent more than 5% of the net
assets available for plan benefits as of December 31, 2001 and 2000:
<Table>
<Caption>
Current Value Current Value
12/31/01 12/31/00
-------------- --------------
DuPont Stock $ 325,002 $ 414,086
Fidelity Magellan Fund 159,121 190,252
Conoco Stock Fund 328,041 297,712
Beneficial Interest in the Master Trust 1,652,604 1,627,570
</Table>
NOTE 5 - INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated August 7, 1995 that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections of the
Code. The Plan has been amended since receiving the determination letter.
However, the Plan Administrator and the Plan's tax counsel believe that the Plan
is currently designed and being operated in compliance with the applicable
requirements of the Code. On February 28, 2002, an application for determination
as to the qualification of the Plan, as amended to that date, was submitted to
the Internal Revenue Service.
PAGE 15
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
NOTE 6 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan
benefits per the financial statements to the Form 5500:
<Table>
<Caption>
December 31,
2001 2000
----------- -----------
Net assets available for plan benefits per
the financial statements $ 3,023,569 $ 3,175,709
Less: Amounts allocated to withdrawing
participants 0 (1,293)
----------- -----------
Net assets available for plan benefits per
the Form 5500: $ 3,023,569 $ 3,174,416
=========== ===========
</Table>
The following is a reconciliation of plan benefits paid to participants
per the financial statements to the Form 5500:
<Table>
<Caption>
Year Ended December 31,
2001
----
Plan benefits paid to participants per the
financial statements $ 222,848
Add: Amounts allocated to withdrawing
participants at December 31, 2001 0
Less: Amounts allocated to withdrawing
participants at December 31, 2000 (1,293)
---------
Plan benefits paid to participants per the Form 5500 $ 221,555
=========
</Table>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
plan benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
PAGE 16
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
NOTE 7 - RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds and asset
allocation funds managed by affiliates of the Trustees. Therefore, transactions
in these investments qualify as party-in-interest transactions that are exempt
from the prohibited transaction rules. Other Plan investments are shares of
Conoco Common Stock. Transactions in these investments also qualify as
party-in-interest transactions that are exempt from the prohibited transaction
rules. Still other Plan investments are made in the form of loans to Plan
participants. Transactions in these investments also qualify as
party-in-interest transactions that are exempt from the prohibited transaction
rules.
NOTE 8 - SUBSEQUENT EVENTS
On November 18, 2001, the Company and Phillips Petroleum Company
(Phillips) announced that Phillips and the Company had entered into a definitive
merger agreement. The Company's shareholders approved the proposed merger on
March 12, 2002; Phillips' shareholders have also voted their approval.
Regulatory approval is anticipated during the third quarter of 2002.
PAGE 17
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
SCHEDULE I
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2001
(Dollars in Thousands)
<Table>
<Caption>
Description Current Value
----------- ---------------
Beneficial interest in the Master Trust .................... 1,652,604
* Conoco Stock Fund ........................................ 328,041
DuPont Stock ............................................. 325,002
* American Century Strategic Alloc - Conservative .......... 4,633
* American Century Strategic Alloc - Moderate .............. 82,049
* American Century Strategic Alloc - Aggressive ............ 3,273
* American Century Income and Growth ....................... 11,134
* American Century Equity Growth ........................... 53,237
* American Century International Growth .................... 1,076
* American Century Vista ................................... 1,014
Fidelity Low-Priced Stock Fund ........................... 41,765
Franklin Small-Mid Cap Growth Fund Class A ............... 68,694
PIMCO Total Return ....................................... 6,754
Janus Mercury Fund ....................................... 72,321
Barclays Global Investors Equity Index ................... 92,928
Barclays Global Investors U.S. Debt Index ................ 2,479
American Funds ICA ....................................... 16,334
Nations International Value .............................. 19,224
Goldman Sachs Capital Growth ............................. 10,786
Small Company Fund ....................................... 6,244
International Fund ....................................... 11,388
Fidelity Magellan Fund ................................... 159,121
Fidelity Equity Income ................................... 12,410
* Loan Fund (6.00% - 10.80%) ............................... 31,150
* Short Term Investments and Cash, JPMorgan Chase
Bank .............................................. 51
---------------
Total Investment Portfolio ............... $ 3,013,712
===============
</Table>
- ----------
* Party-in-interest to the Plan.
PAGE 18
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
EXHIBIT INDEX
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
23 Consent of Independent Accountants
</Table>