U.S. SECURITIES AND EXCHANGE
COMMISSION WASHINGTON, D.C.
20549
FORM 40-F
[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF
THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004 Commission File Number: 333-121627
HARVEST ENERGY TRUST
(Exact name of Registrant as specified in its charter)
Alberta, Canada 1311 N/A
(PROVINCE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
Suite 2100
330 Fifth Avenue, S.W.
Calgary, Alberta, Canada T2P 0L4
(403) 265-1178
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
CT Corporation System
111 Eighth Avenue
New York, New York 10011
(212) 894-8940
(NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER
INCLUDING AREA CODES OF AGENT FOR SERVICE)
Securities registered or to be registered pursuant to Section 12(b) of the Act
None.
Securities registered or to be registered pursuant to Section 12(g) of the Act
None.
Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act
7 7/8% Senior Notes Due 2011
For annual reports, indicate by check mark the information filed with this Form:
[X] Annual information form [X] Audited annual financial statements
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:
41,788,500 Trust Units
Indicate by check mark whether the Registrant by filing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
(the "Exchange Act"). If "Yes" is marked, indicate the filing number assigned to
the Registrant in connection with such Rule.
Yes [X] FILE NO. 82-34779 No [_]
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the Registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days.
Yes [X] No [_]
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DOCUMENTS INCLUDED IN THIS FORM
The following documents are attached as exhibits, and numbered as
indicated:
Exhibit Number Description
99.1 Renewal Annual Information Form of the Registrant for the year
ended December 31, 2004.
99.2 Consolidated Financial Statements of the Registrant for the
fiscal year ended December 31, 2004, including the report of the
independent auditors with respect thereto and the reconciliation
of differences between Canadian and United States generally
accepted accounting principles (Note 20).
99.3 Management's Discussion and Analysis of the financial condition
and results of operations of the Registrant for the fiscal year
ended December 31, 2004.
99.4 CEO Certification pursuant to rule 13a-14(a) of the Exchange Act.
99.5 CFO Certification pursuant to rule 13a-14(a) of the Exchange Act.
99.6 CEO Certification pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.7 CFO Certification pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.8 Comments by Auditors for U.S. Readers on Canada U.S. Reporting
Difference
99.9 Consent of KPMG LLP.
99.10 Consent of McDaniel & Associates Consultants Ltd.
99.11 Consent of Gilbert Laustsen Jung Associates Ltd.
99.12 Consent of Paddock Lindstrom Associates Ltd.
FORWARD-LOOKING STATEMENTS
This annual report on Form 40-F contains or incorporates by reference
forward-looking statements relating to future events or future performance
including forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. In some cases, forward-looking
statements can be identified by terminology such as "may", "will", "should",
"expects", "projects", "plans", "anticipates" and similar expressions. These
statements represent management's expectations or beliefs concerning, among
other things, future operating results and various components thereof or the
economic performance of the Registrant. Undue reliance should not be placed on
these forward-looking statements which are based upon management's assumptions
and are subject to known and unknown risks and uncertainties which may cause
actual performance and financial results in future periods to differ materially
from any projections of future performance or results expressed or implied by
such forward-looking statements. Accordingly, readers are cautioned that events
or circumstances could cause results to differ materially from those predicted.
For a description of some of these risks, uncertainties, events and
circumstances, readers should review the disclosure under the heading "Risk
Factors" in the Registrant's Annual Information Form for the year ended December
31, 2004, which is attached as Exhibit 99.1 to this Annual Report on Form 40-F
and is incorporated by reference herein. The Registrant undertakes no obligation
to update publicly or revise any forward-looking statements contained herein and
such statements are expressly qualified by the cautionary statement.
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ANNUAL INFORMATION FORM, CONSOLIDATED AUDITED ANNUAL FINANCIAL
STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS
A. ANNUAL INFORMATION FORM
The Registrant's Annual Information Form for the year ended December
31, 2004 is attached as Exhibit 99.1 to this Annual Report on Form 40-F and is
incorporated by reference herein.
B. CONSOLIDATED AUDITED ANNUAL FINANCIAL STATEMENTS
The Registrant's consolidated audited financial statements, including
the report of independent chartered accountants with respect thereto, and the
reconciliation of differences between Canadian and United States generally
accepted accounting principles, are attached as Exhibit 99.2 to this Annual
Report on Form 40-F and are incorporated by reference herein.
C. MANAGEMENT'S DISCUSSION AND ANALYSIS
The Registrant's Management's Discussion and Analysis for the fiscal
year ended December 31, 2004 is attached as Exhibit 99.3 to this Annual Report
on Form 40-F and is incorporated by reference herein.
DISCLOSURE CONTROLS AND PROCEDURES
As of December 31, 2004, an evaluation was carried out under the
supervision of and with the participation of Registrant's management, including
the President and Chief Financial Officer, of the effectiveness of the
Registrant's disclosure controls and procedures (as defined in Rule 13a-15(e)
under the Exchange Act). Based on that evaluation, the President and Chief
Financial Officer concluded that as of the end of the fiscal year, the design
and operation of these disclosure controls and procedures were effective to
ensure that information required to be disclosed by the Registrant in reports it
files or submits under the Exchange Act were (i) recorded, processed, summarized
and reported within the time periods specified in SEC rules and forms and (ii)
accumulated and communicated to the Registrant's management, including its
principal executive officer and principal financial officer, to allow timely
decisions regarding required disclosure.
It should be noted that while the Registrant's principal executive
officer and principal financial officer believe that the Registrant's disclosure
controls and procedures provide a reasonable level of assurance that they are
effective, they do not expect that the Registrant's disclosure controls and
procedures or internal control over financial reporting will prevent all errors
and fraud. A control system, no matter how well conceived or operated, can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
During the period covered by this Annual Report on Form 40-F no changes
occurred in the Registrant's internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
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NOTICES PURSUANT TO REGULATION BTR
None.
CODE OF ETHICS FOR CHIEF EXECUTIVE OFFICER
AND SENIOR FINANCIAL OFFICERS
The Registrant has adopted a Code of Ethics for its President and
senior financial officers. This code applies to the Registrant's President, the
Vice-President, Operations, the Vice President, Geosciences, and the
Vice-President and Chief Financial Officer. It is available in print without
charge to any person who requests it. Such requests may be made by contacting
the Registrant's Investor Relations and Communications Advisor via email at:
INFORMATION@HARVESTENERGY.CA or by phone at (403) 265-1178. All amendments to
the code will be provided to any person who requests them. There were no waivers
or amendments to the Code of Ethics in 2004.
AUDIT COMMITTEE
IDENTIFICATION OF AUDIT COMMITTEE
The following individuals comprise the entire membership of the
Registrant's Audit Committee: John A. Brussa, Verne G. Johnson, and Hector J.
McFadyen.
AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors of the Registrant has determined that Mr. John
A. Brussa, a member and the chairman of the Registrant's audit committee, is an
"audit committee financial expert" (as such term is defined by the rules and
regulations of the Securities and Exchange Commission) and has been designated
as audit committee financial expert for the Audit Committee of the board of the
Registrant. Mr. Brussa is not "independent" as such term is defined by the
Canadian Securities' Administrators' Multilateral Instrument 52-110, nor is he
independent as such term is defined for the purposes of audit committee member
independence under either the rules of the New York Stock Exchange or the
Nasdaq. By May 4, 2005, the date of Harvest's next annual general and special
meeting of unitholders, Mr. Brussa will resign from the audit committee and will
be replaced by an individual that meets both the requirements of the audit
committee, as well as being independent as defined under the rules of the New
York Stock Exchange and Nasdaq.
The Securities and Exchange Commission has indicated that the
designation of a person as an "audit committee financial expert" does not (i)
mean that such person is an "expert" for any purpose, including without
limitation for purposes of Section 11 of the Securities Act of 1933, (ii) impose
on such person any duties, obligations or liability that are greater than the
duties, obligations and liability imposed on such person as a member of the
audit committee and the board of directors in the absence of such designation,
or (iii) affect the duties, obligations or liability of any other member of the
audit committee or the board of directors.
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PRINCIPAL ACCOUNTING FEES AND SERVICES - INDEPENDENT AUDITORS
Fees payable to the Registrant's independent auditor, KPMG LLP, for the
years ended December 31, 2004 and December 31, 2003 totaled $572,419 and
$346,820, respectively, as detailed in the following table. All funds are in
Canadian dollars.
- -----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2004 YEAR ENDED DECEMBER 31, 2003
- -----------------------------------------------------------------------------------------------
AUDIT FEES $ 377,634 $ 238,500
- -----------------------------------------------------------------------------------------------
AUDIT RELATED FEES $ 83,510 $ 42,500
- -----------------------------------------------------------------------------------------------
TAX FEES $ 111,275 $ 65,820
- -----------------------------------------------------------------------------------------------
ALL OTHER FEES $ - $ -
- -----------------------------------------------------------------------------------------------
TOTAL $ 572,419 $ 346,820
- -----------------------------------------------------------------------------------------------
The nature of the services provided by KPMG LLP under each of the categories
indicated in the table is described below.
AUDIT FEES
Audit fees were for professional services rendered by KPMG LLP for the audit of
the Registrant's annual financial statements and review of the Registrant's
quarterly financial statements, as well as services provided in connection with
statutory and regulatory filings or engagements.
AUDIT-RELATED FEES
Audit-related fees were for assurance and related services reasonably related to
the performance of the audit or review of the annual statements and are not
reported under "Audit Fees" above. These services consisted of advice and
guidance on new reporting standards, as well as French translation fees.
TAX FEES
Tax fees were for tax compliance, tax advice and tax planning professional
services. These services consisted of: tax compliance including the review of
tax returns; and tax planning and advisory services relating to common forms of
domestic and international taxation (i.e. income tax, capital tax, goods and
services tax, and valued added tax).
ALL OTHER FEES
In 2004 and 2003, no fees for services were incurred other than those described
above under "Audit Fees," "Audit-Related Fees" and "Tax Fees".
PREAPPROVAL POLICIES AND PROCEDURES
It is within the mandate of the Registrant's Audit Committee to approve
all audit and non-audit related fees. The Audit Committee has pre approved
specifically identified non-audit tax-related services, including tax
compliance; the review of tax returns; and tax planning and advisory services
relating to common forms of domestic and international taxation (i.e. income
tax, capital tax, goods and services tax,
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and valued added tax) up to a pre-determined maximum annual limit of Cdn$25,000.
The Audit Committee will be informed routinely as to the non-audit services
actually provided by the auditor pursuant to this pre-approval process. The
auditors also present the estimate for the annual audit related services to the
Committee for approval prior to undertaking the annual audit of the financial
statements.
OFF-BALANCE SHEET ARRANGEMENTS
The Registrant has no material off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on the Registrant's
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources that
is material to investors. For a discussion of the Registrant's other off-balance
sheet arrangements, please read Note 19 to the Registrant's audited annual
consolidated financial statements for the year ended December 31, 2004 attached
as Exhibit 99.2 to this Annual Report on Form 40-F and incorporated by reference
herein.
CONTRACTUAL OBLIGATIONS
MATURITY
-------------------------------------------------------------------------
LESS THAN
ANNUAL CONTRACTUAL OBLIGATION ($ THOUSANDS) TOTAL 1 YEAR YEARS 1 - 3 YEARS 4 - 5 AFTER 5 YEARS
- -----------------------------------------------------------------------------------------------------------------------
Short and long-term debt 376,019 75,519 -- -- 300,500
Interest on short and long-term debt 163,024 25,997 70,993 47,329 18,705
Interest on convertible debentures 10,008 2,176 6,527 1,305 --
Operating and premise leases 7,094 400 4,304 2,390 --
Transportation and storage commitments 99 35 39 25 --
Capital commitments 700 700 -- -- --
Asset retirement obligations 334,803 -- 729 3,648 330,426
- -----------------------------------------------------------------------------------------------------------------------
Total 891,747 104,827 82,592 54,697 649,631
- -----------------------------------------------------------------------------------------------------------------------
UNDERTAKING
The Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the securities registered pursuant to Form 40-F; the securities in
relation to which the obligation to file an annual report on Form 40-F arises;
or transactions in said securities.
CONSENT TO SERVICE OF PROCESS
The Registrant has previously filed a Form F-X in connection with the
class of securities in relation to which the obligation to file this report
arises. Any change to the name or address of the agent for service of process of
the Registrant shall be communicated promptly to
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the Commission by an amendment to the Form F-X referencing the file number of
the relevant registration statement.
Any change to the name or address of the agent for service of process
of the registrant shall be communicated promptly to the Securities and Exchange
Commission by an amendment to the Form F-X referencing the file number of the
relevant registration statement.
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EXHIBITS
The following exhibits are filed as part of this report.
Exhibit Number Description
99.1 Renewal Annual Information Form of the Registrant for the year
ended December 31, 2004.
99.2 Consolidated Financial Statements of the Registrant for the
fiscal year ended December 31, 2004, including the report of the
independent auditors with respect thereto and the reconciliation
of differences between Canadian and United States generally
accepted accounting principles (Note 20).
99.3 Management's Discussion and Analysis of the financial condition
and results of operations of the Registrant for the fiscal year
ended December 31, 2004.
99.4 CEO Certification pursuant to rule 13a-14(a) of the Exchange Act.
99.5 CFO Certification pursuant to rule 13a-14(a) of the Exchange Act.
99.6 CEO Certification pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.7 CFO Certification pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.8 Comments by Auditors for U.S. Readers on Canada U.S. Reporting
Difference
99.9 Consent of KPMG LLP.
99.10 Consent of McDaniel & Associates Consultants Ltd.
99.11 Consent of Gilbert Laustsen Jung Associates Ltd.
99.12 Consent of Paddock Lindstrom Associates Ltd.
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SIGNATURE
Pursuant to the requirements of the Exchange Act, the Registrant
certifies that it meets all of the requirements for filing on Form 40-F and has
duly caused this Annual Report on Form 40-F to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Calgary, Province of
Alberta, Canada.
Dated: March 30, 2005
HARVEST ENERGY TRUST
By: /s/ David J. Rain
-----------------------------
Name: David J. Rain
Title: Vice-President and
Chief Financial Officer