UNITED STATES
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, 2003
Or
[ ] Transition report pursuant to Section 15(d) of the Securities
Exchange Act of 1934
(No fee required)
For the transition period from ___________ to ___________
Commission file number 1-12317
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
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office NATIONAL-OILWELL, INC.
10000 RICHMOND AVENUE
6TH FLOOR
HOUSTON, TEXAS 77042-4200
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 Registered Public Accounting Firm thereon are being filed in this
Report:
(a) Report of Independent Registered Public Accounting Firm
(b) Statements of Net Assets Available for Benefits - December 31, 2003
and 2002
(c) Statement of Changes in Net Assets Available for Benefits - Year
ended December 31, 2003; and
(d) Notes to Financial Statements
The Consent of Independent Registered Public Accounting Firm 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, 2003
TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm...........................................................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 Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
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, 2003 and
2002, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2003. 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 the standards of the Public Company
Accounting Oversight Board (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, 2003 and 2002, and the changes in its net assets available for
benefits for the year ended December 31, 2003, in conformity with U.S. generally
accepted accounting principles.
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, 2003, 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 23, 2004
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National-Oilwell Retirement and Thrift Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
---------------------------------------
2003 2002
------------ ------------
ASSETS
Receivables:
Accrued income $ -- $ 621
Sales not yet settled 427,313 --
------------ ------------
Total receivables 427,313 621
Investments 139,282,854 111,825,776
------------ ------------
Total assets 139,710,167 111,826,397
LIABILITIES
Cash overdraft 227,392 27,016
Purchases not yet settled 104,791 --
------------ ------------
Total liabilities 332,183 27,016
------------ ------------
Net assets available for benefits $139,377,984 $111,799,381
============ ============
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, 2003
Additions:
Employer contributions $ 9,100,437
Participant contributions 7,731,905
Participant rollovers 616,830
Investment income 816,591
Net appreciation in fair value of investments 12,967,187
------------
Total additions 31,232,950
Deductions:
Benefits paid to participants 8,765,086
Corrective distributions 4,897
Administrative expenses 63,498
------------
Total deductions 8,833,481
Other changes in net assets:
Transfers from other qualified plans 5,179,134
------------
Net increase 27,578,603
Net assets available for benefits at:
Beginning of year 111,799,381
------------
End of year $139,377,984
============
See accompanying notes.
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National-Oilwell Retirement and Thrift Plan
Notes to Financial Statements
December 31, 2003
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 November 1, 2003, the Company merged the Hydralift Holding Inc. 401(k)
Retirement Plan and Trust into the Plan. Net assets of approximately $4,447,300
were transferred into the Plan as a result of the merger.
Effective December 1, 2003, the Company merged the Hydralift Inc. 401(k) Plan
and Trust into the Plan. Net assets of approximately $731,800 were transferred
into the Plan as a result of the merger.
CONTRIBUTIONS
Participants may make both pretax and after-tax contributions to the Plan.
Effective January 1, 2003, the Plan was amended to allow pretax salary deferral
contributions of 1% to 100% (less any after-tax contributions, required
withholdings, or other elected deductions) of compensation, subject to certain
Internal Revenue Service ("IRS") limitations. After-tax contributions remain at
1% to 18% of compensation. However, combined pretax and after-tax contributions,
required withholdings, and other elected deductions cannot exceed 100% of
compensation. Prior to January 1, 2003, the minimum contribution was 1% of
compensation and the maximum contribution was 18% (both pretax and after-tax
combined). The Company matches 100% of the first 3% and 50% of the next 2% of
each participant's contribution. The Company's discretionary contribution to the
Plan, the Employer Retirement Contribution ("Retirement"), is allocated to
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National-Oilwell Retirement and Thrift Plan
Notes to Financial Statements (continued)
participants' accounts based on their years of service. 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.
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 certain 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 U.S. generally accepted
accounting principles. 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 U.S. generally
accepted accounting principles 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 AND INCOME RECOGNITION
Money market funds 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 trust 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.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
RISK AND UNCERTAINTIES
The Plan provides for investments in various securities which, in general, are
exposed to various risks, such as interest rate, credit, and overall market
volatility risks. 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.
3. INVESTMENTS
Effective October 1, 2003, Wachovia Bank, N.A. ("Wachovia"), was named trustee
of the Plan. Prior to October 1, 2003, American Express Trust Company ("AETC")
served as the Plan's trustee. Due to certain contractual restrictions, AETC
continues to hold the American Express Trust Income Fund II at December 31,
2003. All other Plan assets are held by Wachovia.
-9-
National-Oilwell Retirement and Thrift Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Individual investments that represent 5% or more of the Plan's net assets are as
follows:
DECEMBER 31
-------------------------------------
2003 2002
----------- -----------
American Express Trust Income Fund II $25,307,741 $47,753,497
National-Oilwell common stock 9,477,778 9,265,052
Enhanced Stock Market Fund 16,239,005 --
Vanguard Growth Index Fund 14,488,029 --
Vanguard Total International Stock Fund 10,451,540 --
Vanguard Balanced Index Fund 8,169,082 --
Gartmore Morley Stable Value Fund 26,941,954 --
American Express Trust Equity Index Fund II -- 12,116,031
AIM Balanced Fund -- 6,435,757
AXP Growth Fund -- 11,052,635
Janus Worldwide Fund -- 7,030,521
During 2003, the Plan's investments (including investments bought, sold, and
held during the year) appreciated in value as follows:
Common stock $ 328,930
Common collective trust funds 4,907,061
Mutual funds 7,731,196
-----------
Net appreciation $12,967,187
===========
4. INCOME TAX STATUS
The Plan has received a determination letter from the IRS dated September 8,
2003, 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 determination by the IRS, the Plan was amended.
Once qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan sponsor has indicated that it will take the
necessary steps, if any, to bring the Plan's operations into compliance with the
IRC.
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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, 2003
EIN: 76-0488987 PN: 001
IDENTITY OF ISSUE, BORROWER, CURRENT
LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
-------------------------- ------------------------------ -----------------
*National-Oilwell, Inc. 423,782 shares of common stock $ 9,477,778
*Wachovia Bank Enhanced Stock Market Fund 16,239,005
Dreyfus Funds Dreyfus Small Cap Stock Index Fund 881,438
Dreyfus Funds Dreyfus Midcap Index Fund 1,010,788
Principal Investors Principal Investors Midcap Value
Institutional Fund 598,491
Principal Investors Principal Investors Midcap Growth
Institutional Fund 6,045,869
Vanguard Vanguard Value Index Fund 6,065,538
Vanguard Vanguard Growth Index Fund 14,488,029
Vanguard Vanguard Small Cap Value Index Fund 879,852
Vanguard Vanguard Small Cap Growth Index Fund 910,627
Vanguard Vanguard Total International Stock Index
Fund 10,451,540
Vanguard Vanguard Balanced Index Fund 8,169,082
Vanguard Vanguard Index Fund 6,213,329
Gartmore Morley Gartmore Morley Stable Value Fund 26,941,954
Evergreen Investments Evergreen Money Market Fund 93,425
*American Express Trust Company American Express Trust Income Fund II 25,307,741
Various Self-directed brokerage accounts 28,321
*Participant loans Various maturities and interest rates
ranging from 5.00% to 11.00% 5,480,047
-----------------
$ 139,282,854
=================
*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 25, 2004 /s/Daniel L. Molinaro
--------------------- -----------------------------
Date Daniel L. Molinaro
Member of the National-Oilwell Benefits
Plan Administrative Committee
-12-
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
23.1 Consent of Independent Registered Public Accounting Firm