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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO ___________
COMMISSION FILE NUMBER 1-13086
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WEATHERFORD ENTERRA, INC.
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
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Weatherford International, Inc.
515 Post Oak Boulevard
Suite 600
Houston, TX 77027
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of
Weatherford Enterra, Inc. Amended and
Restated Employee Stock Purchase Plan:
We have audited the accompanying statements of net assets of the Weatherford
Enterra, Inc. Amended and Restated Employee Stock Purchase Plan as of December
31, 1998 and 1997, and the related statements of changes in net assets for each
of the three years ended December 31, 1998. These financial statements are the
responsibility of the Plan's Administrative Committee. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 Plan's Administrative 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 of the Weatherford Enterra, Inc. Amended
and Restated Employee Stock Purchase Plan as of December 31, 1998 and 1997, and
the changes in net assets for each of the three years ended December 31, 1998,
in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Houston, Texas
February 26, 1999
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WEATHERFORD ENTERRA, INC.
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF NET ASSETS
AS OF DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
ASSETS:
Common Stock of Weatherford International, Inc., at quoted market
value, 18,785 shares at $19.375 per share (cost $552,075) $363,959 $ --
Common Stock of Weatherford Enterra, Inc., at quoted market value,
21,478 shares at $43.75 per share (cost $684,295) -- 939,663
Contributions receivable-
Company 24,493 15,565
Participants 49,392 31,226
-------- --------
73,885 46,791
-------- --------
Cash and cash equivalents 1,957 2,732
-------- --------
Total assets 439,801 989,186
-------- --------
NET ASSETS $439,801 $989,186
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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WEATHERFORD ENTERRA, INC.
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE THREE YEARS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
REALIZED NET GAIN (LOSS) ON THE SALE OR
DISTRIBUTION OF COMMON STOCK $ (44,418) $ 51,932 $ 90,037
CHANGES IN UNREALIZED APPRECIATION
(DEPRECIATION) OF COMMON STOCK (443,484) 142,544 (42,225)
CONTRIBUTIONS:
Company 127,627 162,379 88,386
Participants 257,345 325,095 205,159
INTEREST INCOME 256 234 152
WITHDRAWALS BY PARTICIPANTS:
Common Stock, at market value (445,359) (263,437) (243,636)
Cash (1,352) (409) (249)
--------- --------- ---------
INCREASE (DECREASE) IN NET ASSETS (549,385) 418,338 97,624
NET ASSETS:
Beginning of year 989,186 570,848 473,224
--------- --------- ---------
End of year $ 439,801 $ 989,186 $ 570,848
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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WEATHERFORD ENTERRA, INC.
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
Basis of Accounting
The accompanying financial statements of the Weatherford Enterra, Inc. Amended
and Restated Employee Stock Purchase Plan (the Plan) have been prepared on the
accrual basis of accounting. The Plan's investment in the common stock, $1.00
par value (the Common Stock) of Weatherford International, Inc. (the Company),
formerly Weatherford Enterra, Inc., as of December 31, 1998 and 1997, is
reported at quoted market value (see Note 2).
Participant Accounts
Chase Bank of Texas, N.A. (formerly Texas Commerce Bank, N.A.), trustee for the
Plan (the Trustee), maintains a separate account for each participating
employee. The Trustee allocates to each account the number of shares of the
Common Stock purchased with contributions credited to such account. The Plan
included 345 and 265 participants as of December 31, 1998 and 1997,
respectively.
Common Stock Valuation
The Common Stock is reflected in the accompanying financial statements at
quoted market value, as listed on the New York Stock Exchange (NYSE) (see Note
2). The changes in the difference between the quoted market value and the cost
of shares not withdrawn are reported as changes in unrealized appreciation
(depreciation) in the statements of changes in net assets (see Note 4).
Realized net gain (loss) on the sale or distribution of Common Stock are
reported based on actual cost (see Note 3).
Risks and Uncertainties
The Plan provides for investment in cash and cash equivalents and common stock.
Investment securities, in general, are exposed to various risks, such as
interest rate, credit and overall market volatility risk. Due to the level of
risk associated with certain investment securities, it is reasonably possible
that changes in the values of investment securities will occur in the near term
and that such changes could materially affect the amounts reported in the
statement of net assets and participant's account balances.
Expenses
The expenses of the Plan, except transfer taxes and other expenses paid by
participating employees on withdrawals, are paid by the Company. With respect
to purchases of Common Stock on the open market, if any, brokerage fees are
paid by the Company.
2. PROVISIONS OF THE PLAN:
General
The Plan was established for the purpose of affording eligible employees of the
Company and its subsidiaries an opportunity to regularly and systematically
invest in the Company's Common Stock.
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On May 27, 1998, EVI, Inc., merged with Weatherford Enterra, Inc., and changed
its name to EVI Weatherford, Inc., and traded on the NYSE under the symbol
"EVI" until September 21, 1998. Under the terms of the merger agreement,
Weatherford Enterra, Inc., stockholders received 0.95 of a newly issued share
of EVI Weatherford, Inc., common stock for each share of Weatherford Enterra,
Inc., common stock. Accordingly, all shares held by the Plan were exchanged for
0.95 shares of EVI Weatherford, Inc., common stock.
On September 21, 1998, the stockholders of EVI Weatherford, Inc., approved a
name change for the combined company to Weatherford International, Inc.
Weatherford International, Inc., is listed on the NYSE under the symbol "WFT."
Administration
The Plan is administered by a committee (the Administrative Committee) of not
less than three persons appointed from time to time by the board of directors
of the Company.
Eligibility
Subject to certain restrictions imposed by foreign countries, in which the
Company maintains offices, every full-time non-U.S. employee and every
full-time U.S. employee not eligible for the Company's 401(k) savings plan are
eligible to participate in the Plan on the first day of active service with the
Company. Prior to July 1, 1996, these employees became eligible to participate
after completing one year of active continuous service.
Effective January 1, 1998, commensurate with the introduction of a separate
retirement savings plan, employees of the Company's Canadian services and
manufacturing operations are no longer eligible to participate in the Plan.
Participant contributions of such employees accounted for approximately 22
percent and 21.5 percent to the Plan in 1997 and 1996, respectively.
Participant Contributions
An eligible employee may contribute by payroll deductions 2 percent to 6
percent of base salary, but in no event less that $20 per month or more than a
maximum dollar amount determined from time to time, in advance, by the
Administrative Committee.
Company Contributions
Through June 30, 1996, the Company contributed an amount equal to 33.33 percent
of each participant's contribution. Effective July 1, 1996, this percentage was
changed to 50 percent. Participants vest immediately in both their
contributions to the Plan and all Company contributions made on their behalf.
The Trustee and Purchases of Common Stock
The Trustee maintains custody of the Plan's assets and uses the participants'
payroll deductions, the Company's contributions and cash dividends received to
purchase Common Stock. The Company has not declared or paid any dividends on
its Common Stock since 1984. The Common Stock may be purchased on the open
market or from the Company by the Trustee at a price equal to the closing price
of the Common Stock on the NYSE.
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Withdrawals and Termination of Employment
Participating employees may withdraw part or all of the whole shares of Common
Stock in their accounts as of March 31 of any calendar year after giving
written notice prior to March 1. Cash in lieu of fractional shares and any
other credits will also be paid to the withdrawing employee. On termination of
employment, a distribution will be made to the employee, or, in the case of
death, to the persons entitled thereto, of all shares of Common Stock and cash
adjustments as described above.
Federal Income Tax Consequences
The Plan is not qualified under Section 401 (a) of the Internal Revenue Code of
1986, as amended. Subject to differing tax consequences imposed by foreign
countries in which the Company maintains offices, amounts contributed by an
employee to the Plan through payroll deductions and amounts contributed by the
Company are treated as part of the employee's salary or wages, which are
subject to withholding taxes and are taxed, with the rest of the employee's
compensation, as ordinary income. The Plan is not subject to the provisions of
the Employee Retirement Income Security Act of 1974.
Amendment, Suspension and Termination
Although the Company has not expressed an intent to do so, it has the right to
suspend or terminate any or all provisions of the Plan at any time, except that
no such action shall be taken which will, in the Administrative Committee's
judgment, retroactively adversely affect the rights of participants.
3. REALIZED NET GAIN (LOSS):
The following table sets forth the realized net gain (loss) calculated on the
sale or distribution of Common Stock:
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Sale or distribution of Common Stock at market $ 477,795 $ 263,785 $ 243,885
Less-Sale or distribution of Common Stock at cost 522,213 211,853 153,848
--------- --------- ---------
Realized net gain (loss) $ (44,418) $ 51,932 $ 90,037
========= ========= =========
</TABLE>
4. CHANGES IN UNREALIZED
APPRECIATION (DEPRECIATION):
The changes in unrealized appreciation (depreciation) of Common Stock are as
follows:
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Unrealized appreciation (depreciation) at end of year $(188,116) $ 255,368 $ 112,824
Less- Unrealized appreciation at beginning of year 255,368 112,824 155,049
--------- --------- ---------
Changes in unrealized appreciation (depreciation) $(443,484) $ 142,544 $ (42,225)
========= ========= =========
</TABLE>
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SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
WEATHERFORD ENTERRA, INC. AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
March 29, 1999 /s/ JON R. NICHOLSON
- ---------------------------- -------------------------------
Date Jon R. Nicholson
Vice President-Human Resources
for Weatherford International,
Inc., and Administrative
Committee Member
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INDEX TO EXHIBIT
<TABLE>
<CAPTION>
Exhibit
Number DESCRIPTION
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<S> <C>
10.1 Weatherford Enterra, Inc. Amended and Restated Employee Stock
Purchase Plan (incorporated by reference to Exhibit 4.19 to the
Company's Registration Statement on Form S-8 (Reg. No. 333-53633))
23.1 Consent of Independent Public Accountants
</TABLE>
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated February 26, 1999, included in this Annual Report
on Form 11-K for the year ended December 31, 1998, into the previously filed
Form S-8 Registration Statement of Weatherford International, Inc., File No.
333-53633.
ARTHUR ANDERSEN LLP
Houston, Texas
March 29, 1999
