SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934
(No fee required, effective October 7, 1996)
For the fiscal year ended DECEMBER 31, 2002
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Or
[ ] Transition report pursuant to Section 15(d) of the Securities
Exchange Act of 1934
(No fee required)
For the transition period from to
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Commission file number 1-12317
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A. Full title of the plan and the address of the plan, if different
from that of the issuer named below NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN
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B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office NATIONAL-OILWELL, INC.
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10000 RICHMOND AVENUE
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6TH FLOOR
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HOUSTON, TEXAS 77042-4200
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REQUIRED INFORMATION
The National-Oilwell Retirement and Thrift Plan (the Plan) is subject to the
requirements of the Employee Retirement Income Security Act of 1974 (ERISA).
ITEM 4. In lieu of the requirements of Items 1, 2, and 3 of this Form 11-K, the
following financial statements of the Plan, notes thereto, and the Report of
Independent Auditors thereon are being filed in this Report:
(a) Report of Independent Auditors
(b) Statements of Net Assets Available for Benefits - December 31, 2002 and
2001
(c) Statement of Changes in Net Assets Available for Benefits - Year ended
December 31, 2002; and
(d) Notes to Financial Statements
The Consent of Independent Auditors to the incorporation by reference of the
foregoing financial statements in the Registration Statement on Form S-8 (No.
333-46459) pertaining to the Plan is being filed as Exhibit 23.1 to this Report.
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 2002
TABLE OF CONTENTS
Report of Independent Auditors ................................................... 4
Audited Financial Statements
Statements of Net Assets Available for Benefits ......................... 5
Statement of Changes in Net Assets Available for Benefits ............... 6
Notes to Financial Statements ........................................... 7
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held At End of Year) ......... 11
Signature ........................................................................ 12
Exhibit Index .................................................................... 13
Exhibit 23.1--Consent of Independent Certified Public Accountants
Exhibit 99.1--Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
Report of Independent Auditors
The Benefit Plan Administrative Committee
National-Oilwell Retirement and Thrift Plan
We have audited the accompanying statements of net assets available for benefits
of the National-Oilwell Retirement and Thrift Plan as of December 31, 2002 and
2001, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2002. 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. 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 Plan at
December 31, 2002 and 2001, and the changes in its net assets available for
benefits for the year ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2002, is presented for purposes of
additional analysis and is not a required part of the 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 our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Houston, TX
June 12, 2003
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National-Oilwell Retirement and Thrift Plan
Statements of Net Assets Available for Benefits
DECEMBER 31,
2002 2001
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ASSETS
Cash $ -- $ 475,754
Accrued investment income 621 431
Investments 111,825,776 113,475,228
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Total assets 111,826,397 113,951,413
LIABILITIES
Cash overdraft 27,016 --
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Total liabilities 27,016 --
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Net assets available for benefits $ 111,799,381 $ 113,951,413
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See accompanying notes.
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National-Oilwell Retirement and Thrift Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2002
Additions:
Employer contributions $ 8,182,013
Participant contributions 7,031,849
Participant rollovers 238,371
Investment income 958,067
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Total additions 16,410,300
Deductions:
Benefits paid to participants 8,677,772
Administrative expenses 42,429
Net depreciation in fair value of investments 9,842,131
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Total deductions 18,562,332
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Net decrease (2,152,032)
Net assets available for benefits at:
Beginning of year 113,951,413
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End of year $ 111,799,381
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See accompanying notes.
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National-Oilwell Retirement and Thrift Plan
Notes to Financial Statements
December 31, 2002
1. DESCRIPTION OF PLAN
The following description of the National-Oilwell Retirement and Thrift Plan
(the "Plan") is provided for general information only. Participants should refer
to the Summary Plan Description for a more complete description of the Plan's
provisions, a copy of which is available from National-Oilwell, L.P. (the
"Company").
GENERAL
The Plan was established effective April 1, 1987 for the benefit of the
employees of the Company. The Plan is a defined contribution plan covering
substantially all domestic employees who have completed at least six months of
service. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
Effective January 1, 2002, the Plan was amended and restated to conform with
certain statutory changes and to change certain administrative provisions. The
Plan has submitted the amendments to the Internal Revenue Service and applied
for a new determination letter.
CONTRIBUTIONS
Participants may make both pretax and after-tax contributions to the Plan. The
minimum contribution is 1% of compensation and the maximum contribution is 18%
(both pretax and after-tax combined). Effective January 1, 2002, the Company
will match 100% of the first 3% and 50% of the next 2% of each participant's
contribution. Prior to January 1, 2002, the Company's matching contributions
were discretionary. The Company's other discretionary contribution to the Plan,
the Employer Retirement Contribution ("Retirement"), is allocated to
participants' accounts based on their years of service. The second discretionary
contribution, the Employer Medical Savings Contribution ("MSA"), was established
to accumulate assets for payment of medical insurance premiums after retirement,
and is allocated to the participants' accounts based on years of service.
Effective January 1, 2002, the MSA contribution was discontinued. Each
participant may direct the trustee to invest both the participant's and the
Company's contributions in one or more of the investment options offered by the
Plan.
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National-Oilwell Retirement and Thrift Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
VESTING
Participants are immediately vested in participant and employer contributions
and the related earnings which have been credited to their accounts.
BENEFIT PAYMENTS
The Plan pays lump-sum benefits on retirement, disability, death, or termination
of employment. In-service withdrawals, subject to certain rules and
restrictions, may also be made from all but the Retirement and MSA account
balances.
PARTICIPANT LOANS
The Plan includes a loan provision that permits participants to borrow up to the
lesser of $50,000 or 50% of the total value of their Plan assets. The loans are
payable in principal installments plus interest at prime plus 1% through payroll
deductions and are due in one to five-year terms.
ADMINISTRATIVE EXPENSES
Certain administrative expenses are paid from the Plan's assets. All other Plan
expenses are paid by the Company.
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. Participants are 100% vested in their
accounts in any event. Assets would be distributed to participants as prescribed
by ERISA.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements of the Plan have been prepared on the
accrual basis of accounting in accordance with accounting principles generally
accepted in the United States. Benefit payments to participants are recorded
upon distribution.
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National-Oilwell Retirement and Thrift Plan
Notes to Financial Statements (continued)
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the reported amounts in the financial statements and accompanying
notes and schedule. Actual results could differ from those estimates.
INVESTMENT VALUATION
Short-term investments are stated at cost, which approximates fair value.
Investments in common stock and mutual funds are stated at fair value, based on
quotations obtained from national securities exchanges. Investments in common
collective funds are based on quoted market values as determined by the issuer
based on the fair value of the underlying investments. Participant loans are
stated at cost, which approximates fair value.
RISK AND UNCERTAINTIES
The Plan provides for various investments in common stock, common collective
funds, and mutual funds. 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 statements of net assets available for benefits and participant
account balances.
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National-Oilwell Retirement and Thrift Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
American Express Trust Company serves as the Plan's trustee and holds all
investments of the Plan. Individual investments that represent 5% or more of the
Plan's net assets are as follows:
DECEMBER 31
2002 2001
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American Express Trust Equity Index Fund II $ 12,116,031 $ 14,622,455
AIM Balanced Fund 6,435,757 7,664,718
AXP Growth Fund 11,052,635 14,529,189
Janus Worldwide Fund 7,030,521 7,983,415
American Express Trust Income Fund II 47,753,497 43,894,634
National-Oilwell common stock 9,265,052 8,848,471
During 2002, the Plan's investments (including investments bought, sold, and
held during the year) appreciated (depreciated) in value as follows:
Common stock $ 964,513
Common collective funds (1,362,726)
Mutual funds (9,443,918)
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Net depreciation $ (9,842,131)
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4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
(the "IRS") dated September 18, 1997, stating that the Plan is qualified under
Section 401(a) of the Internal Revenue Code (the "IRC") and, therefore, the
related trust is exempt from taxation. Subsequent to this issuance of the
determination letter, the Plan was amended. Once qualified, the Plan is required
to operate in conformity with the IRC to maintain its qualification. The plan
administrator has indicated that it will take the necessary steps, if any, to
maintain the Plan's qualified status.
5. SUBSEQUENT EVENT
Effective January 1, 2003, the Plan was amended to allow pretax salary deferral
contributions of 1% to 100% of compensation, subject to certain IRS limitations.
After-tax contributions remain at 1% to 18% of compensation.
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National-Oilwell Retirement and Thrift Plan
Schedule H, Line 4(i) - Schedule of Assets (Held At End of Year)
December 31, 2002
EIN: 76-0488987 PN: 001
IDENTITY OF ISSUE, BORROWER, CURRENT
LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
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*National-Oilwell, Inc. 424,224 shares of common stock $ 9,265,052
*American Express Trust Company American Express Trust Equity Index Fund II 12,116,031
*American Express Funds AXP Bond Fund 4,800,949
AIM Funds AIM Balanced Fund 6,435,757
Baron Funds Baron Asset Fund 4,558,512
*American Express Funds AXP Growth Fund 11,052,635
Davis Funds Davis New York Venture Fund 3,843,786
Janus Janus Worldwide Fund 7,030,521
*American Express Trust Company American Express Trust Income Fund II 47,753,497
*American Express Trust Company American Express Trust Money Market Fund I 493,084
*Participant loans Various maturities and interest rates
ranging from 5.25% to 11.00% 4,475,952
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$ 111,825,776
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*Party-in-interest
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SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN
June 24, 2003 /s/ Daniel L. Molinaro
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Date Daniel L. Molinaro
Member of the National-Oilwell Benefits Plan
Administrative Committee
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EXHIBIT INDEX
Exhibit Number Description
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23.1 Consent of Independent Auditors
99.1 Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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