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, 2001 ----------------------------------------------- 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 - -------------------------------------------------------------------------------- 4TH 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 Auditors thereon are being filed in this Report: (a) Report of Independent Auditors (b) Statements of Net Assets Available for Benefits -- December 31, 2001 and 2000 (c) Statement of Changes in Net Assets Available for Benefits -- Year ended December 31, 2001; 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, 2001 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)......13 Signature.....................................................................14 Exhibit Index Exhibit 23.1--Consent of Independent Certified Public Accountants....15
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, 2001 and 2000, and the related statement of changes in net assets available for benefits for the year ended December 31, 2001. 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, 2001 and 2000, and the changes in its net assets available for benefits for the year ended December 31, 2001, 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, 2001, 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, Texas June 4, 2002 - 4 -
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN Statements of Net Assets Available for Benefits DECEMBER 31 2001 2000 --------------------------------------- ASSETS Cash $ 475,754 $ -- Receivables: Employer contributions -- 144,125 Participant contributions -- 154,019 Accrued investment income 431 1,874 --------------------------------------- Total receivables 431 300,018 Investments 113,475,228 84,786,846 --------------------------------------- Total assets 113,951,413 85,086,864 LIABILITIES Cash overdraft -- 43,383 Other -- 20,794 --------------------------------------- Total liabilities -- 64,177 --------------------------------------- Net assets available for benefits $ 113,951,413 $ 85,022,687 ======================================= See accompanying notes. - 5 -
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2001 Additions: Employer contributions $ 5,517,741 Participant contributions 6,437,282 Participant rollovers 3,402,763 Interest and dividends 1,157,628 ------------ Total additions 16,515,414 Deductions: Benefits paid to participants 8,251,860 Corrective distributions 34,685 Administrative expenses 18,098 Net depreciation in fair value of investments 15,705,032 ------------ Total deductions 24,009,675 Other changes in net assets: Transfers from other qualified plans 36,422,987 ------------ Net increase 28,928,726 Net assets available for benefits at: Beginning of year 85,022,687 ------------ End of year $113,951,413 ============ See accompanying notes. - 6 -
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001 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"). CONTRIBUTIONS Participants may make both pretax and after-tax contributions to the Plan. The minimum contribution is 1% of compensation. Prior to July 1, 2001, the maximum contribution (both pretax and after-tax combined) was 14% of compensation. Effective July 1, 2001, the maximum contribution is 18% (both pretax and after-tax combined). At its discretion, the Company may match a portion of the participant's contribution. For 2001, the Company elected to match 25% of the first 6% of each participant's contribution. The Company may also make an additional discretionary matching contribution as of the end of each plan year, which is determined by the Company's financial performance during the plan year. For 2001, no additional discretionary match was made. The Company made two other types of discretionary contributions to the Plan in 2001. The first type of contribution, 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. Each participant may direct the trustee to invest both the participant's and the Company's contributions in one or more investment options. - 7 -
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN NOTES TO FINANCIAL STATEMENTS 1. DESCRIPTION OF PLAN (CONTINUED) TRANSFERS FROM OTHER QUALIFIED PLANS As a result of the merger with IRI International Corporation ("IRI") effective January 1, 2001, the Company merged certain subsidiary plans, including the Bowen Supplemental Savings Plan and the Bowen Tools Savings Plan, into the Plan. Effective February 1, 2001, the Company merged the Profit Sharing and Salary Deferral Plan for Employees of IRI International Corporation into the Plan. Effective September 1, 2000, the Company acquired the Wheatley Gaso and Omega pump product lines from Halliburton Company. As a result of this acquisition, effective January 2, 2001, certain participants were spun-off from the Halliburton Retirement and Savings Plan and merged into 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 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. - 8 -
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN NOTES TO FINANCIAL STATEMENTS 1. DESCRIPTION OF PLAN (CONTINUED) 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 would be 100% vested in their accounts in any event. 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. 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. The investment contracts with insurance companies are fully benefit-responsive and, therefore, are recorded at contract value which approximates fair value. Contract value represents contributions made under the contract plus interest at the contract rate less funds used to pay benefits and expenses. Participant loans are stated at cost, which approximates fair value. - 9 -
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN NOTES TO FINANCIAL STATEMENTS 2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) RISK AND UNCERTAINTIES The Plan provides for various investments in common stock, common collective funds, mutual funds, and investment contracts. 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. 3. INVESTMENTS Individual investments that represent 5% or more of the Plan's net assets are as follows: DECEMBER 31 2001 2000 ------------------------------------------ AET Equity Index II Fund $ 14,622,455 $ 12,096,201 AIM Balanced Fund 7,664,718 5,630,912 AXP Growth Fund 14,529,189 16,382,979 Janus Worldwide Fund 7,983,415 9,772,911 AET Income II Fund 43,894,634 19,719,349 Kentucky Commonwealth Life Insurance Company, group annuity contract at 6.41%, maturing 1/2/01 -- 5,121,533 National-Oilwell common stock 8,848,471 7,301,182 During 2001, the Plan's investments (including investments bought, sold, and held during the year) appreciated (depreciated) in value as follows: Common stock $ (4,208,588) Common collective funds 113,981 Mutual funds (11,610,425) ----------------------- Net depreciation $ (15,705,032) ======================= - 10 -
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN NOTES TO FINANCIAL STATEMENTS 4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500: DECEMBER 31 2000 ----------------------- Net assets available for benefits per the financial statements $ 85,022,687 Less accruals (277,162) ----------------------- Net assets available for benefits per the Form 5500 $ 84,745,525 ======================= The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500: YEAR ENDED DECEMBER 31 2001 ------------------- Net increase per the financial statements $ 28,928,726 Add change in accruals 277,162 ------------------- Net increase per the Form 5500 $ 29,205,888 =================== Differences are due to certain accruals not recorded on the Form 5500. 5. 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. 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 maintain the Plan's qualified status. 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 IRS and applied for a new determination letter. - 11 -
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN NOTES TO FINANCIAL STATEMENTS 6. SUBSEQUENT EVENTS Effective January 1, 2002, the Plan was amended to change the employer matching contribution to 100% of the first 3% and 50% of the next 2% of each participant's contribution. Effective January 1, 2002, the MSA contribution was discontinued. - 12 -
NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN SCHEDULE H, LINE 4(i) -- SCHEDULE OF ASSETS (HELD AT END OF YEAR) December 31, 2001 EIN: 76-0488987 PN: 001 IDENTITY OF ISSUE, BORROWER, CURRENT LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE - --------------------------------------------------------------------------------------------------------------- *National-Oilwell, Inc. 429,329 shares of common stock $ 8,848,471 *American Express Trust Company AET Equity Index II Fund 14,622,455 *American Express Trust Company AXP Bond Fund 3,703,066 AIM Funds AIM Balanced Fund 7,664,718 Baron Funds Baron Asset Fund 4,152,765 *American Express Trust Company AXP Growth Fund 14,529,189 Davis Funds Davis New York Venture Fund 3,815,395 Janus Janus Worldwide Fund 7,983,415 *American Express Trust Company AET Income II Fund 43,894,634 *Participant loans Various maturities and interest rates 4,261,120 ranging from 6% to 11% -------------------- $ 113,475,228 ==================== *Party-in-interest - 13 -
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 26, 2002 /s/Daniel L. Molinaro - -------------------- --------------------------------------------- Date Daniel L. Molinaro Treasurer for National-Oilwell, Inc. and National-Oilwell Benefits Plan Administrative Committee Member - 14 -
Exhibit Index 23.1 Consent of Independent Auditors
EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-46459) pertaining to the National-Oilwell Retirement and Thrift Plan of our report dated June 4, 2002, with respect to the financial statements and schedule of the National-Oilwell Retirement and Thrift Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2001. /s/ Ernst & Young LLP Houston, Texas June 25, 2002 - 15 -