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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, 1999
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 INTERNATIONAL, INC. 401(k) SAVINGS PLAN
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Weatherford International, Inc.
515 Post Oak Boulevard
Suite 600
Houston, TX 77027
<PAGE> 2
WEATHERFORD INTERNATIONAL, INC. 401(k) SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
<TABLE>
<CAPTION>
Page
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<S> <C>
Report of Independent Public Accountants 2
Financial Statements-
Statements of Net Assets Available for Plan Benefits as of
December 31, 1999 and 1998 3
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1999 4
Notes to Financial Statements as of December 31, 1999 and 1998 5
Supplemental Schedules-
Schedule I--Schedule of Assets Held
for Investment Purposes as of December 31, 1999 10
Schedule II--Schedule of Nonexempt Transactions
for the Year Ended December 31, 1999 11
</TABLE>
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Weatherford International, Inc. 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Weatherford International, Inc. 401(k) Savings Plan (the Plan)
as of December 31, 1999 and 1998, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1999. These
financial statements and supplemental schedules referred to below are the
responsibility of the Administrative Committee. Our responsibility is to
express an opinion on these financial statements and supplemental schedules
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 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 Plan benefits as of
December 31, 1999 and 1998, and the changes in net assets available for Plan
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes as of December 31, 1999, included as Schedule I,
and nonexempt transactions for the year ended December 31, 1999, included as
Schedule II, are presented for purposes of additional analysis and are not a
required part of the basic 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. The supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Houston, Texas
June 14, 2000
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WEATHERFORD INTERNATIONAL, INC. 401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
ASSETS:
Investments, at fair value-
Collective trusts-
Merrill Lynch Equity Index Trust $ 21,013,926 $ 11,009,127
Merrill Lynch Retirement Preservation Trust 28,175,373 19,886,319
Stock Index Fund -- 9,841,625
Other 1,755,635 19,197,965
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Total collective trusts 50,944,934 59,935,036
Mutual funds-
Davis New York Venture Fund, Inc. 23,615,542 18,248,691
Merrill Lynch Capital Fund Class A 18,706,883 14,584,851
Other mutual funds 25,562,931 8,917,554
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Total mutual funds 67,885,356 41,751,096
Weatherford International, Inc., common stock 21,342,751 12,372,165
Pooled separate accounts -- 1,015,215
Money market accounts 614,446 --
Cash, interest bearing 307,201 35,602
Participant loans receivable 7,074,060 6,650,420
------------- -------------
Total investments 148,168,748 121,759,534
Receivables-
Participants' contributions 1,024,741 863,419
Company's contribution 4,169 359,674
Loan interest 50,257 --
Due from broker 160,509 --
Accrued income receivable 34,239 23,500
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Total receivables 1,273,915 1,246,593
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Total assets 149,442,663 123,006,127
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LIABILITIES:
Excess contribution refunds payable 616,413 177,343
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NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 148,826,250 $ 122,828,784
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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WEATHERFORD INTERNATIONAL, INC. 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
ADDITIONS:
Investment income-
Net appreciation in fair value of investments-
Collective trusts $ 4,311,609
Mutual funds 6,513,199
Common stock 12,504,494
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23,329,302
Interest and dividend income 6,272,647
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29,601,949
Contributions-
Participants' 12,866,691
Company's 2,479,347
Rollovers 3,815,326
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19,161,364
Transfer from other plans (Note 5) 16,011,787
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Total additions 64,775,100
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DEDUCTIONS:
Benefits paid to participants and beneficiaries 15,533,366
Excess contribution refunds 616,413
Transfer to other plans (Note 6) 22,597,534
Administrative expenses 30,321
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Total deductions 38,777,634
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NET INCREASE 25,997,466
NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year 122,828,784
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NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year $ 148,826,250
=============
</TABLE>
The accompanying notes are an integral part of this financial statement.
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WEATHERFORD INTERNATIONAL, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
1. DESCRIPTION OF THE PLAN:
The following description of the Weatherford International, Inc. 401(k) Savings
Plan (the Plan) provides only general information. Participants should refer to
the Plan document for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan established by the Board of Directors
of Weatherford International, Inc. (Weatherford or the Company).
The Company's Board of Directors appointed a committee (the Administrative
Committee) to administer the Plan. At December 31, 1998, Massachusetts Fidelity
Trust Company, Merrill Lynch Trust Company (Merrill Lynch), Kemper Service
Company, Nationwide Life Insurance Company and General American Life Insurance
Company were the asset custodians of the Plan's assets. Effective December 31,
1998, Merrill Lynch was named the sole asset custodian and trustee of the Plan.
During 1999, Plan assets were liquidated and participant account balances were
transferred to Merrill Lynch and invested in similar investment funds offered
by Merrill Lynch, as determined by the Administrative Committee. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended (ERISA).
Eligibility
All employees other than employees who are subject to collective bargaining
agreements, employees who are nonresident aliens and receive no U.S.-source
income from the Company and employees who are members of other retirement plans
sponsored by the Company or one of its subsidiaries outside the United States
are eligible to participate in the Plan on their dates of hire but are not
eligible to participate for purposes of the Company's matching or discretionary
contributions until the employee has completed one year of continuous service.
Contributions
An eligible employee may elect to contribute, by payroll deductions, 1 percent
to 16 percent of his base earnings to the Plan on a pretax basis subject to
certain limitations. An employee may also elect to contribute up to 16 percent
of base after-tax earnings subject to certain limitations. The combination of
employee contributions cannot exceed 16 percent of base earnings. In addition,
participants may contribute amounts representing distributions from other
qualified plans.
The Company shall make matching contributions of $.50 per every $1.00 of
participant pretax contributions, up to a maximum of 3 percent of the
participant's compensation, as defined in the Plan. The Company, solely at the
discretion of the Board of Directors, may make additional discretionary
contributions. There were no discretionary contributions made for the year
ended December 31, 1999.
Participant Accounts
Each participant's account is credited with the participant's and the Company's
matching contributions, an allocation of the Company's discretionary
contribution, if applicable, and Plan earnings thereon. Earnings are allocated
by fund based on the ratio of the participant's account invested in a
particular fund to all participants' investments in that fund.
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Participant Loans
Participants may borrow from their vested account balances a minimum of $1,000
up to a maximum equal to the lesser of $50,000 or one half of the present value
of the participant's vested account balance. Loan maturity dates range from one
year to five years except when the loan is used to purchase a participant's
principal residence. The loans are fully secured by a pledge of the
participant's vested account balance and bear interest at the prime rate as
reported in the Wall Street Journal or at a rate determined by the
Administrative Committee.
Vesting
Participants are immediately vested in their elective deferral account and
actual earnings thereon. Prior to December 31, 1999, vesting in the Company's
matching and discretionary contribution portion of their accounts, plus actual
earnings thereon, was based on years of continuous service. The vesting schedule
was as follows:
<TABLE>
<CAPTION>
Years of
Credited Service Percent Vested
---------------- --------------
<S> <C> <C>
Less than 1 0%
1 but less than 2 20
2 but less than 3 40
3 but less than 4 60
4 but less than 5 80
5 or more 100
</TABLE>
Effective December 31, 1999, the Plan was amended to provide 100 percent
vesting on the participant's Company match and discretionary contribution
accounts.
Forfeitures
Forfeitures of nonvested balances of terminated employees are available to
offset future Company contributions. Forfeitures available to reduce future
Company contributions at December 31, 1999 and 1998, were $130,477 and
$470,453, respectively.
Expenses of the Plan
During 1999, administrative fees incurred by the Plan were paid by the Company,
except for participant loan fees which were paid from the account of the
participant requesting the loan.
Withdrawals and Terminations
A participant may withdraw the value of his after-tax contributions to the Plan
at any time and for any reason during the year, with a minimum withdrawal of
$500. The participant's pretax contributions and Company contributions will be
available to a participant who has attained age 59-1/2 or in the event of
severe and immediate financial hardship. Withdrawals based on financial
hardship result in a suspension of employee contributions for 12 months.
In the event of normal retirement, total and permanent disability or death
while actively employed, the full value of the participant's account balance,
including nonvested interests in such accounts, will be distributed to the
participant or his beneficiaries. Upon termination of employment, the
participant's pretax and Company contributions will be available for
withdrawal. If the participant's account balance is less than $5,000, the
participant is paid a lump-sum payment as soon as practicable after his
termination date. Written consent from the participant or beneficiary is
required if the vested balance is greater than $5,000.
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Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
Basis of Accounting
The accompanying financial statements are prepared and presented in accordance
with the accrual method of accounting. Benefits are recorded when paid.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires the Administrative
Committee to use estimates and assumptions that affect the accompanying
financial statements and disclosures. Actual results could differ from those
estimates.
Valuation of Investments
The fair value of the investments in the collective trusts and pooled separate
accounts is based on the market value of their underlying assets, as determined
by the investment issuer. Investments in mutual funds and common stock are
reported at fair market value based on quoted market prices. Participant loans
receivable are stated at cost, which approximates fair value. Investment income
is recorded when earned.
The Merrill Lynch Retirement Preservation Trust is a collective trust fund
investing primarily in guaranteed investment contracts (GICs), synthetic GICs
and U.S. Government securities. The GICs are fully benefit-responsive and are
recorded at contract value, which approximates fair value. Contract value is
determined based on contributions made under the contract plus interest earned
at the contract's rate less funds used to pay investment fees and withdrawals.
The effective yield of the collective trust fund was 6.43 percent for the year
ended December 31, 1999.
The Consulting Group Capital Markets Funds Stable Value Investments Fund, a
collective trust which is fully benefit-responsive, is valued at contract value,
which approximates fair value. The fund invests primarily in annuity contracts
issued by various life insurance companies. The effective yield for the
collective trust was 6.0 percent for the year ended December 31, 1999.
Adoption of Statement of Position 99-3
The Accounting Standards Executive Committee issued American Institute of
Certified Public Accountants Statement of Position (SOP) 99-3, "Accounting for
and Reporting of Certain Defined Contribution Plan Investments and Other
Disclosure Matters," which eliminates the requirement for a defined
contribution plan to disclose participant-directed investment programs. During
1999, the Plan adopted SOP 99-3 and, as such, the 1998 financial statements
have been reclassified to eliminate the participant-directed fund investment
program disclosures.
3. RISKS AND UNCERTAINTIES:
The Plan provides for various investments in collective trusts, mutual funds
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.
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4. TAX STATUS:
The Plan obtained its latest determination letter on April 19, 2000, in which
the Internal Revenue Service (IRS) stated that the Plan, as then designed, was
in compliance with the applicable requirements of the Internal Revenue Code of
1986, as amended (the Code). The Plan has been amended since receiving the
determination letter. The Administrative Committee believes that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Code. Therefore, the Administrative Committee believes that
the Plan was qualified and the related trust was tax-exempt as of December 31,
1999 and 1998.
5. TRANSFERS FROM OTHER PLANS:
On December 31, 1999, account balances of employees of Dailey International
Inc. and Williams Tool Company, Inc., subsidiaries of Weatherford, who had
previously participated in the Dailey Retirement Plan and the Williams Tool
Company, Inc. 401(k) Profit Sharing Plan, respectively, were merged into the
Plan. In conjunction with the mergers, the Plan received approximately
$10,877,000 from the merged plans. The asset custodians of the merged plans
continued to hold the investments of the merged plans at December 31, 1999.
Subsequent to December 31, 1999, the assets of the merged plans were liquidated
and invested in similar investment funds offered by the Plan as directed by the
Administrative Committee.
On November 1, 1999, account balances of certain prior employees of Clearwater,
Inc., who are currently employed by Weatherford, were transferred into the Plan
and invested as directed by the employees. In conjunction with the transfer,
the Plan received approximately $256,000 from the Clearwater, Inc. 401(k)
Retirement Plan.
On October 1, 1999, the account balances of certain prior employees of
National-Oilwell, LP, who are currently employed by Weatherford, were
transferred to the Plan and invested in similar investment funds offered by the
Plan as directed by the Administrative Committee. In conjunction with the
transfer, the Plan received approximately $950,000 from the National-Oilwell
Retirement and Thrift Plan.
On October 1, 1999, account balances of employees of Weatherford Global
Compression Services, LP, a subsidiary of the Company, who previously
participated in the Global Compression Services, Inc. 401(k) Savings Plan, were
liquidated and merged into the Plan and invested in similar investment funds
offered by the Plan as directed by the Administrative Committee. In conjunction
with the merger, the Plan received approximately $3,740,000 from the Global
Compression Services, Inc. 401(k) Savings Plan.
In January 1999, account balances of certain prior employees of Precision
Radius, Inc., who are currently employed by Weatherford, were transferred to
the Plan and invested in similar investment funds offered by the Plan as
directed by the Administrative Committee. In conjunction with the transfer, the
Plan received approximately $189,000 from the Precision Radius, Inc. 401(k)
Plan.
6. TRANSFERS TO OTHER PLANS:
On November 1, 1999, account balances of employees of Grant Prideco, Inc., a
subsidiary of Weatherford prior to its spin-off from Weatherford on April 14,
2000, were transferred to the Grant Prideco, Inc. 401(k) Savings Plan (the
Grant Prideco Plan). The Plan transferred approximately $22,353,000 of assets
in-kind to the Grant Prideco Plan.
On September 1, 1999, the account balances of certain employees of CRC Evans
International, Inc., who formerly were employees of Weatherford and
participated in the Plan, were transferred to the CRC Holdings Corporation
401(k) Retirement Savings Plan (the CRC Plan). In conjunction with the
transfer, the Plan liquidated and transferred approximately $244,000 to the CRC
Plan.
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7. NONEXEMPT TRANSACTIONS:
As reported on Schedule II, certain Plan contributions were not remitted to the
trust within the time frame specified by the Department of Labor's Regulation
29 CFR 2510.3-102, thus constituting nonexempt transactions between the Plan
and the Company.
8. RELATED-PARTY TRANSACTIONS:
Certain Plan investments are managed by Merrill Lynch. Merrill Lynch is the
trustee and asset custodian of the Plan and, therefore, these transactions
qualify as party-in-interest transactions.
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SCHEDULE I
WEATHERFORD INTERNATIONAL, INC. 401(k) SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Principal
Amount or
Number
of Units/ Current
Identity of Issue Description of Investment Shares Cost Value
--------------------------------------- ---------------------------------------------- ----------- ---- ----------------
<S> <C> <C> <C>
COLLECTIVE TRUSTS:
Smith Barney Corporate Trust Company Consulting Group Capital Markets Funds
Stable Value Investments 155,918 (a) $ 1,755,635
The Merrill Lynch Trust Companies* Merrill Lynch Equity Index Trust 207,647 (a) 21,013,926
The Merrill Lynch Trust Companies* Merrill Lynch Retirement Preservation Trust 28,175,373 (a) 28,175,373
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Total collective trusts 50,944,934
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MUTUAL FUNDS:
Davis Venture Group Davis New York Venture Fund, Inc. 821,125 (a) 23,615,542
Hotchkis & Wiley Funds Hotchkis & Wiley International Fund 77,279 (a) 2,040,150
Phoenix Investment Partners Phoenix - Engemann Small Mid Cap
Growth Fund 129,956 (a) 5,776,534
Putnam Investments Asset Allocation Fund 13,759 (a) 206,799
Putnam Investments Capital Appreciation Fund 1,082 (a) 28,024
Putnam Investments Putnam Equity I Fund 4,152 (a) 57,542
Putnam Investments Putnam Growth A Fund 1,866 (a) 34,765
Putnam Investments Putnam Income Fund 3,997 (a) 25,261
Putnam Investments Putnam Investor Fund 38,411 (a) 719,445
Putnam Investments Putnam New Opportunities Fund 3,159 (a) 279,123
Putnam Investments Putnam Vista Fund 14,515 (a) 245,019
Smith Barney Corporate Trust Company Consulting Group Capital Markets Funds
International Equity Investments 73,722 (a) 1,089,609
Smith Barney Corporate Trust Company Consulting Group Capital Markets Funds
Large Cap Growth Investments 89,283 (a) 2,401,713
Smith Barney Corporate Trust Company Consulting Group Capital Markets Funds
Large Cap Value Equity 135,661 (a) 1,591,302
Smith Barney Corporate Trust Company Consulting Group Capital Markets Funds
Long Term Bonds 43,173 (a) 319,047
Smith Barney Corporate Trust Company Consulting Group Capital Markets Funds
Small Cap Growth Investments 83,898 (a) 1,895,255
The Merrill Lynch Trust Companies* Merrill Lynch Capital Fund Class A 583,314 (a) 18,706,883
The Merrill Lynch Trust Companies* Merrill Lynch Corporate Bond Fund Class A 322,278 (a) 3,435,484
The Merrill Lynch Trust Companies* Merrill Lynch Global Allocation Fund Class A 386,438 (a) 5,417,859
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Total mutual funds 67,885,356
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COMMON STOCKS:
Weatherford International, Inc.* Common stock of Weatherford International, Inc. 534,442 (a) 21,342,751
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Total common stocks 21,342,751
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MONEY MARKETS:
Smith Barney Corporate Trust Company Reserve Deposit Account VI 135,131 (a) 135,131
The Merrill Lynch Trust Companies* Merrill Lynch Government Reserve Fund 479,315 (a) 479,315
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Total money markets 614,446
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The Merrill Lynch Trust Companies* Cash, interest bearing $ 307,201 (a) 307,201
---------------
The Plan* Participant loans, interest rates ranging
from 7% to 10.75% per annum $ 7,074,060 (a) 7,074,060
---------------
Total assets held for
investment purposes $ 148,168,748
===============
</TABLE>
* Party in interest.
(a) Cost omitted for participant-directed investments.
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SCHEDULE II
WEATHERFORD INTERNATIONAL, INC. 401(k) SAVINGS PLAN
SCHEDULE OF NONEXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Description of Transactions, Including Interest
Maturity Date, Rate of Interest, Amount Incurred
Identity of Party Involved Collateral and Par or Maturity Value Loaned On Loan
------------------------------ --------------------------------------------------- ---------- ---------
<S> <C> <C> <C>
Weatherford International, Inc. Lending of monies from the Weatherford
International, Inc. 401(k) Savings Plan to the
Company - October and November 1998
employee contributions remitted April 19, 1999 $ 87,699 $ 12,790(a)
Weatherford International, Inc. Lending of monies from Weatherford International,
Inc. 401(k) Savings Plan to the Company -
May 1999, employee contributions remitted
July 7, 1999 2,547 238(b)
</TABLE>
(a) The related earnings were paid to the Plan on May 12, 1999.
(b) The related earnings were paid to the Plan subsequent to December 31, 1999.
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SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
WEATHERFORD INTERNATIONAL, INC. 401(k) SAVINGS PLAN
June 26, 2000 By: /s/ Jon R. Nicholson
-------------------------- ----------------------------------------
Date Jon R. Nicholson
Senior Vice President, Human Resources,
For Weatherford International, Inc., and
Administrative Committee Member
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
10.1 Weatherford International, Inc. 401(k) Savings Plan
(incorporated by reference to Exhibit 4.16 to the Company's
Registration Statement on Form S-8 (Reg. No. 333-36598))
23.1 Consent of Independent Public Accountants
</TABLE>
