11-K 1 h88778e11-k.txt LETOURNEAU, INC. - SAVINGS AND INVESTMENT PLAN 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____ TO ____ COMMISSION FILE NUMBER 1-5491 A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM THAT OF THE ISSUER NAMED BELOW: LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE: ROWAN COMPANIES, INC. 2800 POST OAK BOULEVARD, SUITE 5450 HOUSTON, TEXAS 77056-6127 REQUIRED INFORMATION THE LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN (THE "PLAN") IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 ("ERISA"). THEREFORE, IN LIEU OF THE REQUIREMENTS OF ITEMS 1-3 OF FORM 11-K, THE FINANCIAL STATEMENTS AND SCHEDULES OF THE PLAN FOR AND AS OF THE FISCAL YEAR AND FISCAL YEAR-ENDS REFLECTED THEREIN, WHICH HAVE BEEN PREPARED IN ACCORDANCE WITH THE FINANCIAL REPORTING REQUIREMENTS OF ERISA, ARE ATTACHED HERETO AS APPENDIX 1 AND INCORPORATED HEREIN BY THIS REFERENCE. SIGNATURES THE PLAN, PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND 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. LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN BY: LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN ADMINISTRATIVE COMMITTEE: /S/ JACK W. MCELROY JUNE 29, 2001 JACK W. MCELROY /S/ S. MARIA NARISI JUNE 29, 2001 S. MARIA NARISI /S/ E. E. THIELE JUNE 29, 2001 E. E. THIELE 2 APPENDIX 1 LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN FINANCIAL STATEMENTS AS OF DECEMBER 31, 2000 AND 1999 AND FOR THE YEARS THEN ENDED, SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2000 AND INDEPENDENT AUDITORS' REPORT 3 LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN TABLE OF CONTENTS --------------------------------------------------------------------------------
PAGE INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits, December 31, 2000 and 1999 2 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2000 and 1999 3 Notes to Financial Statements for the Years Ended December 31, 2000 and 1999 4 SUPPLEMENTAL SCHEDULE - Schedule of Assets (Held at End of Year), December 31, 2000 8
Schedules other than those listed above are omitted because of the absence of the conditions under which they are required. 4 INDEPENDENT AUDITORS' REPORT LeTourneau, Inc. Savings and Investment Plan: We have audited the accompanying statements of net assets available for benefits of the LeTourneau, Inc. Savings and Investment Plan (the "Plan") as of December 31, 2000 and 1999, and the related statements of changes in net assets available for benefits for the years then ended. 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 of America. 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, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2000 and 1999, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets (Held at End of Year), December 31, 2000, is presented for the purpose of additional analysis and is not a required part of the basic 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. The schedule is the responsibility of the Plan's management. Such schedule has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Houston, Texas June 29, 2001 -1- 5 LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, DECEMBER 31, 2000 AND 1999 --------------------------------------------------------------------------------
2000 1999 ------------ ------------ ASSETS: Cash $ 19,961 $ 30,374 Investments - at fair value 34,456,802 36,763,071 Receivables: Contributions: Employee 227,330 210,619 Employer 78,644 75,976 Investment income 281 251 Unsettled sales 73,116 46,280 ------------ ------------ TOTAL ASSETS 34,856,134 37,126,571 ------------ ------------ LIABILITIES - payable for unsettled purchases 1,447 6,881 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS $ 34,854,687 $ 37,119,690 ============ ============
See notes to financial statements. -2- 6 LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999 --------------------------------------------------------------------------------
2000 1999 ------------ ------------ ADDITIONS: Net appreciation in investments $ 2,857,672 Investment income $ 2,390,721 2,412,140 Contributions: Employee 2,644,044 2,616,707 Employer 916,687 743,212 Other 35,570 ------------ ------------ Total additions 5,951,452 8,665,301 ------------ ------------ DEDUCTIONS: Net depreciation in investments 2,921,141 Employee withdrawals 5,278,691 3,096,759 Administrative expenses 16,623 22,944 Other 1,067 ------------ ------------ Total deductions 8,216,455 3,120,770 ------------ ------------ INCREASE (DECREASE) IN NET ASSETS AVAILABLE FOR BENEFITS (2,265,003) 5,544,531 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 37,119,690 31,575,159 ------------ ------------ End of year $ 34,854,687 $ 37,119,690 ============ ============
See notes to financial statements. -3- 7 LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999 -------------------------------------------------------------------------------- 1. PLAN DESCRIPTION The following brief description of the LeTourneau, Inc. Savings and Investment Plan (the "Plan") is provided for general informational purposes only. Participants should refer to the Plan agreement for more complete information. GENERAL - The Plan is a defined contribution, individual account 401(k) plan covering substantially all employees of LeTourneau, Inc. and its wholly owned subsidiary, LeTourneau Sales and Service Company, collectively referred to herein as "LeTourneau". PARTICIPATION - Employees are eligible to enter the Plan on the January 1 or July 1 immediately following the completion of 1,000 hours of service in the 12-month period beginning on the employee's date of hire and ending on the anniversary of such date. FUNDING - Under the Plan, participants may make basic contributions of up to 6% of their regular compensation on a before- or after-tax basis. LeTourneau makes a matching contribution equal to 50% of a participant's basic, pre-tax contribution. Participants may make additional contributions and, effective July 1, 2000, the additional contribution limit was increased from 9% to 14%. INVESTMENT OPTIONS - The assets of the Plan are held and managed by Fidelity Management Trust Company, the Trustee of the Plan (the "Trustee"). Participants direct the investment of their accounts into any of the following: Fidelity Puritan Fund seeks current income and capital preservation by investing primarily in high-yielding domestic and foreign stocks and bonds. Fidelity Magellan Fund seeks long-term capital appreciation by investing primarily in domestic and foreign stocks and convertible bonds across a variety of industries and sectors. Fidelity Intermediate Bond Fund seeks a high level of current income by investing primarily in domestic and foreign securities with intermediate maturities. Fidelity Equity-Income II Fund seeks current income and capital appreciation by investing primarily in income-producing stocks. Fidelity Aggressive Growth Fund seeks long-term capital appreciation by investing primarily in stocks of companies believed to offer the potential for accelerated growth. Fidelity (Retirement Government) Money Market Portfolio seeks a high level of current income and capital and liquidity preservation by investing primarily in obligations issued or guaranteed by the U. S. government or its agencies. Fidelity Managed Income Portfolio seeks capital preservation and a competitive level of current income over time by investing primarily in short- and long-term investment contracts. The Rowan Companies Unitized Stock Fund allows participants convenient access to the common stock of Rowan Companies, Inc. ("Rowan"), LeTourneau's parent company. -4- 8 Effective July 1, 2000, the following additional investment options were made available to participants: Fidelity Freedom Funds consist of five separate funds holding investments in other Fidelity fixed-income, money market and equity funds in varying allocations consistent with investment goals ranging from high current income (for investors currently or soon to be in retirement) to high total return (for investors expecting to retire around the year 2030). Spartan U.S. Equity Index Fund seeks to provide investment results that correspond to the total return of a broad range of common stocks publicly traded in the United States by attempting to duplicate the composition and return of the Standard & Poors 500. Fidelity Diversified International Fund seeks capital growth primarily through investment in foreign securities, normally common stock. Fidelity Small Cap Selector Fund seeks capital appreciation through investments in common stocks of domestic and foreign issuers, with at least 65% of total assets invested in companies with small capitalizations. EXPENSES - Participants' accounts are charged with investment advisory and other fees by the Trustee. Other expenses of administering the Plan are borne by the Plan or by LeTourneau, at its discretion. VESTING PROVISIONS - Participants are 100% vested at all times in their own contributions, plus any earnings accrued thereon, and achieve 100% vesting in employer matching contributions, plus any earnings thereon, after five years or more of qualified service. Participants at age 60 are entitled to 100% of all contributions, plus any earnings accrued thereon. Upon death or permanent disability, a participant, or his beneficiary, will be entitled to 100% of all contributions, plus any earnings accrued thereon. DISTRIBUTIONS - Participants can obtain lump-sum or installment distributions of vested balances upon termination of employment, retirement, disability or death. Other hardship withdrawals can be obtained under certain conditions. At December 31, 2000 and 1999, Plan assets included approximately $27,000 and $56,000, respectively, of distributions payable to former Plan participants. FORFEITURES - Upon termination of employment, participants' nonvested balances are forfeited. Such forfeitures can be applied to reduce employer contributions or Plan administrative expenses otherwise payable by LeTourneau. During 2000 and 1999, LeTourneau utilized approximately $12,000 and $166,000, respectively, of employee forfeitures for employer contributions and Plan administrative expenses. At December 31, 2000 and 1999, Plan assets included approximately $145,000 and $10,000, respectively, of nonvested forfeited accounts. PLAN TERMINATION - Although it has not expressed any intention to do so, LeTourneau may terminate the Plan at any time subject to the provisions of the Employee Retirement Income Security Act of 1974. In the event the Plan is terminated, each participant shall be entitled to 100% of all contributions, plus any earnings accrued thereon, as of the date of termination. PARTY-IN-INTEREST TRANSACTIONS - The investment by the Trustee of Plan contributions into mutual funds managed by an affiliate of the Trustee are party-in-interest transactions, and the related management fees are deducted from investment earnings. Rowan is also a party-in-interest. -5- 9 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Plan have been prepared on the accrual basis of accounting. Investments are stated at fair value as determined by the Trustee based upon quoted market prices for the underlying securities, and realized and unrealized gains or losses are computed based on the fair value of the assets at the beginning of the Plan year. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions to and deductions from such assets and liabilities during the reporting period. Actual results could differ from these estimates. 3. INVESTMENTS Plan investments, at fair value, at December 31, 2000 and 1999 consisted of the following:
2000 1999 ------------ ------------ Fidelity mutual funds: Magellan Fund $ 10,092,383* $ 11,734,738* Money Market Portfolio 7,239,366* 7,620,024* Puritan Fund 4,274,224* 5,079,703* Managed Income Portfolio 3,974,021* 5,060,817* Aggressive Growth Fund 3,242,379* 2,591,806* Intermediate Bond Fund 2,201,904* 2,087,238* Equity-Income II Fund 1,071,320 1,059,017 Freedom 2000 141,450 Freedom 2020 86,314 Freedom 2010 54,717 Spartan US Equity Index 49,691 Diversified International 41,709 Small Cap Selector 36,574 Freedom 2030 9,801 Rowan Companies Stock Fund 1,940,949* 1,529,728 ------------ ------------ Total Investments $ 34,456,802 $ 36,763,071 ============ ============
* Represents investments greater than 5% of Plan assets. 4. TAX STATUS OF THE PLAN The Internal Revenue Service has determined and informed LeTourneau by a letter dated February 13, 1996, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code ("IRC"). Though the Plan has been amended since that date, the Plan administrator and LeTourneau believe that the Plan continues to be designed and is currently being operated in compliance with the applicable requirements of the IRC. A request for a new determination letter has been made. -6- 10 5. MASTER DEFINED CONTRIBUTION TRUST A Master Defined Contribution Trust (the "Trust") commingles, for investment and administrative purposes, Plan assets included in the Rowan Companies Unitized Stock Fund with those of another plan sponsored by Rowan. The Trustee maintains supporting records for the purpose of allocating investment gains or losses to the participating plans. The investment accounts of the Trust are valued at fair value at the end of each trading day based upon quoted market prices. Net investment gains or losses for each day are allocated by the Trustee to each participating plan based on the plans' relative interest in the investment units of the Trust. At December 31, 2000, the Trust had net assets available for benefits of $6,707,339, including $65,869 of cash, $242,170 of receivables and $6,404,076 fair value of Rowan common stock, net of $4,776 of payables. At December 31, 1999, the Trust had net assets available for benefits of $4,751,079, including $91,223 of cash, $138,193 of receivables and $4,542,100 fair value of Rowan common stock, net of $20,437 of payables. The net investment gain for the Trust during the year ended December 31, 2000 was $1,422,187, including $1,410,002 of net appreciation in Rowan common stock and $12,185 of interest income. The net investment gain for the Trust during the year ended December 31, 1999 was $2,837,305, including $2,831,474 of net appreciation in Rowan common stock and $5,831 of interest income. The Plan's interest in the Trust's total investment units was approximately 30% at December 31, 2000 and 34% at December 31, 1999, with the balance attributed to the other Rowan-sponsored plan. 6. UNIT VALUES The Plan's Rowan Companies Unitized Stock Fund had 786,165 and 681,226 participation units outstanding at December 31, 2000 and 1999, respectively. Plan participants' equity per unit during 1999 and 2000 was as follows:
2000 1999 March 31 $9.37 $4.13 June 30 9.56 5.98 September 30 9.15 5.26 December 31 8.53 6.97
****** -7- 11 LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN SUPPLEMENTAL SCHEDULE OF ASSETS HELD AT END OF YEAR, DECEMBER 31, 2000 --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN E -------- -------- -------- -------- IDENTITY OF ISSUER, BORROWER, LESSOR DESCRIPTION OF FAIR OR SIMILAR PARTY INVESTMENT VALUE * Fidelity Management Trust Co. Puritan Fund $ 4,274,224 * Fidelity Management Trust Co. Magellan Fund 10,092,383 * Fidelity Management Trust Co. Intermediate Bond Fund 2,201,904 * Fidelity Management Trust Co. Equity-Income II Fund 1,071,320 * Fidelity Management Trust Co. Aggressive Growth Fund 3,242,379 * Fidelity Management Trust Co. Diversified International 41,709 * Fidelity Management Trust Co. Small Cap Selector 36,574 * Fidelity Management Trust Co. Freedom 2000 141,450 * Fidelity Management Trust Co. Freedom 2010 54,717 * Fidelity Management Trust Co. Freedom 2020 86,314 * Fidelity Management Trust Co. Freedom 2030 9,801 * Fidelity Management Trust Co. Money Market Portfolio 7,239,366 * Fidelity Management Trust Co. Managed Income Portfolio 3,974,021 * Fidelity Management Trust Co. Spartan US Equity Index 49,691 * Rowan Companies, Inc. Rowan Companies Stock Fund 1,940,949 ------------ Total $ 34,456,802 ============
* Party-in-interest -8- 12 INDEX TO EXHIBITS
Exhibit Number Description ------ ----------- 23.1 Independent Auditors' Consent