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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
(Mark One)
( X ) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO ___________
COMMISSION FILE NUMBER 333-21399
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Willbros Employees' 401(k) Investment Plan
4400 Post Oak Parkway, Suite 1000
Houston, Texas 77027
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Willbros Group, Inc.
Plaza 2000 Building
50th Street, 8th Floor
Apartado 6307
Panama 5, Republic of Panama
Telephone No.: (50-7) 213-0947
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Willbros Employees' 401(k) Investment Plan has duly caused this annual report to
be signed on its behalf by the undersigned hereunto duly authorized.
WILLBROS EMPLOYEES' 401(k)
INVESTMENT PLAN
Date: June 30, 2003 By: /s/ Warren L. Williams
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Warren L. Williams
Willbros Employee Benefits Committee
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WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
INDEX TO
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FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
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Page
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Independent Auditors' Report 4
Financial Statements:
Statements of Net Assets Available for Plan Benefits 5
Statements of Changes in Net Assets Available for Plan Benefits 6
Notes to Financial Statements 7-12
Schedule 1 -- Schedule G, part III -- Schedule of nonexempt
transactions 13
Schedule 2 -- Schedule H, Line 4i - Schedule of Assets
(Held at End of Year) 14
All other schedules required by the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974 are omitted, as they are inapplicable or not required.
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INDEPENDENT AUDITORS' REPORT
Willbros Employees' Benefits Committee
Willbros USA, Inc.:
We have audited the accompanying statements of net assets available for plan
benefits of Willbros Employees' 401(k) Investment Plan as of December 31, 2002
and 2001, and the related statements of changes in net assets available for plan
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, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of Willbros
Employees' 401(k) Investment Plan as of December 31, 2002 and 2001, and the
changes in net assets available for plan benefits for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule G, part III --
schedule of nonexempt transactions for the year ended December 31, 2002 and
schedule H, line 4i - schedule of assets (held at end of year) as of December
31, 2002, 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 are the responsibility of the Plan's
management. 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.
Houston, Texas
June 27, 2003
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WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2002 and 2001
2002 2001
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Investments, at fair value $ 17,297,502 23,585,782
Accrued investment income 3,625 4,840
Due from broker 227,169 --
Contributions receivable:
Employer - cash 42,543 42,483
Employer - stock 10,923 --
Participants 121,499 62,407
Due to broker (234,097) (38,518)
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Net assets available for plan benefits $ 17,469,164 23,656,994
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See accompanying notes to financial statements.
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WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 2002 and 2001
2002 2001
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Investment income:
Net (depreciation) appreciation in fair value of investments $ (2,926,002) 1,999,422
Dividends 49,611 53,581
Interest 36,210 20,671
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(2,840,181) 2,073,674
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Contributions:
Employer - cash, net of forfeitures 619,900 542,433
Employer - stock 453,813 418,169
Participants 2,132,536 1,874,746
Rollovers 161,220 1,919,931
Other -- 1,702
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3,367,469 4,756,981
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Benefits paid to participants (6,619,390) (2,506,163)
Trustee and other fees (95,728) (99,892)
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Net (decrease) increase (6,187,830) 4,224,600
Net assets available for plan benefits:
Beginning of year 23,656,994 19,432,394
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End of year $ 17,469,164 23,656,994
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See accompanying notes to financial statements.
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WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(1) DESCRIPTION OF PLAN
The following description of the Willbros Employees' 401(k) Investment Plan
(the Plan) provides only general information. Participants should refer to
the Plan document for a more complete description of the Plan's provisions.
(a) GENERAL
The Plan is a defined contribution plan covering eligible employees of
Willbros USA, Inc., Willbros Engineers, Inc., Willbros RPI, Inc.,
Willbros Operating Services, Inc., and all salaried employees of
Willbros Energy Services Company (collectively, the Company). It is
subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended (ERISA).
(b) ELIGIBILITY
Eligible employees begin participation in the Plan after completing
three months of service, as defined in the Plan document. Prior to
April 1, 2001 the eligibility period was one year of service.
(c) CONTRIBUTIONS
Participants may contribute, by payroll deductions, from 1% to 20% of
their compensation to the Plan and allocate these amounts as deferred
or taxable contributions. Effective as of June 1, 2002, participants
may contribute from 1% to 50% of their compensation. Effective June 1,
2002, participants who are age 50 or older at any time during the plan
year may elect to make an additional catch-up contribution of up to
$1,000 in 2002. The catch-up contribution is not eligible for Company
matching. The Company matches employee contributions, up to a maximum
of 4% of salary as follows: 100% in the form of cash or 125% in the
form of Willbros Group, Inc. common stock, as elected by the employee.
Matching contributions elected in the form of Willbros Group Inc.
Common Stock are not subject to the participants investment direction
for a two year period and are not available for loans or withdrawals
during such two year period.
Participants may also elect to rollover distributions from a former
employer's qualified retirement plan.
(d) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contributions and the Company contributions. At each valuation date,
participants' accounts for each investment option are credited with
their share of the net income and gains and charged with losses and
administrative expenses. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
vested account.
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WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(e) VESTING
Participants are immediately vested in their voluntary contribution
account and their salary reduction account plus actual earnings
thereon. Effective April 1, 2001, vesting in the Company contribution
account is based on years of service earned as follows: one to two
years - 25%; two to three years - 50%; three to four years - 75%; and
over four years - 100%. Prior to April 1, 2001, vesting in the Company
contribution account was based on years of service earned as follows:
three to four years - 50%; four to five years - 75%; five or more
years - 100%.
(f) FORFEITURES
The portion of a participant's Company contribution account that is
forfeited because of termination of employment before full vesting is
used to reduce the Company's future contributions.
(g) PAYMENT OF PLAN BENEFITS
Upon termination of service, participants may elect to receive a
lump-sum amount equal to the vested value of their accounts, or, if
vested plan benefits exceed $5,000, defer distribution until age 65 is
reached or death occurs.
Participants may make a withdrawal of their after-tax contribution
account, the vested percentage of their Company contribution account
and, if over age 59-1/2, their pre-tax contribution accounts provided
that amounts withdrawn from any account have been in that account for
more than two years. Only one withdrawal is permitted within any
twelve-month period. If a participant makes a withdrawal the
participant is suspended from Company matching contributions for a
six-month period.
Hardship withdrawals from salary reduction accounts before age 59-1/2
are also permitted under certain circumstances.
(h) PARTICIPANT LOANS
Participants may borrow from the Plan pursuant to Section 408(b)(1) of
ERISA. Loans to a participant may not exceed the lesser of 50% of the
vested portion of his or her account, or $50,000 less the
participant's highest outstanding loan balance during the preceding 12
months. The minimum loan is $1,000.
Loans are stated at cost, which approximates fair value.
(i) INVESTMENT OPTIONS
Participants may direct the investment of their account as follows:
SPECIFICALLY DIRECTED INVESTMENTS
Participants who were employed by Willbros USA, Inc. or Willbros
Energy Services Company on December 31, 1996 may direct the investment
of their accounts into savings accounts, certificates of deposits,
obligations of the United States, common and preferred stocks, call
and put options, bonds, debentures and other debt instruments and
stock, debt or securities issued by private placement.
-8- (Continued)
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2002 and 2001
CORE INVESTMENT OPTIONS
Participants may direct the investment of their accounts into the
following core investments:
The Frank Russell Investment Contract Fund
The Frank Russell Fixed Income I Fund
The Frank Russell Balanced Income Fund
The Frank Russell Domestic Conservative Balanced Fund
The Frank Russell Global Balanced Fund
The Frank Russell Aggressive Balanced Fund
The Frank Russell Global Equity Fund
The Frank Russell Equity I Fund
The Frank Russell All International Markets Fund
The Frank Russell Small Capitalization Fund
Willbros Group, Inc. Common Stock
FLEXIBLE CHOICE OPTIONS
Participants who are currently employed may direct the investment of
existing account balances, but not current contributions, in one
percent increments into approximately 400 mutual funds.
The Plan holds units of the Frank Russell Trust Company Investment
Contract Fund (Investment Contract Fund). The Investment Contract Fund
invests primarily in group annuity contracts and synthetic investment
contracts and is fully benefit-responsive. The Investment Contract
Fund is recorded at contract value which approximates fair value. The
average yield of the Investment Contract Fund was 5.46% and 6.37% for
the years ended December 31, 2002 and 2001, respectively.
(j) ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan (except transaction fees for
participants' specifically directed investments and trustee fees) are
paid by the Company.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying financial statements of the Plan have been prepared
on an accrual basis. The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and
assumptions that affect the reported amounts of net assets available
for plan benefits and changes in net assets available for plan
benefits during the reporting period. Actual results could differ from
those estimates.
-9- (Continued)
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(b) NET ASSETS AVAILABLE FOR PLAN BENEFITS
Net assets available for plan benefits include benefits payable to
current participants and those who have withdrawn from the Plan. The
annual information return filed with the Internal Revenue Service
(Form 5500) requires amounts due to participants who have withdrawn
from the Plan to be stated as a liability and a distribution. There
were no such benefits payable at December 31, 2002 and 2001.
(c) INVESTMENTS
Investments in equity securities and mutual funds are recorded at fair
value based upon quoted market prices. Investments in common
collective trust funds are recorded at the Plan's proportionate share
of the fair value of the holdings of the common collective trust
funds. Participant loans are valued at cost, which approximates fair
value. Realized gains (losses) on the sale of investments and
unrealized appreciation (depreciation) in the fair value of
investments are shown as net appreciation (depreciation) in fair value
of investments in the statement of changes in net assets available for
plan benefits.
Purchase and sales of securities are recorded on a trade-date basis.
Interest is recorded as earned. Dividends are recorded on the
ex-dividend date.
(3) RISKS AND UNCERTAINTIES
The Plan provides for investments in equity securities, mutual funds
common/collective trust funds and Willbros Group, Inc. common stock.
Investment securities, 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 value of investment securities will
occur in the near term.
(4) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of plan
termination, participants will become 100% vested in their accounts.
(5) TAX STATUS
The Plan was established January 1, 1976 under the provisions of ERISA. The
Internal Revenue Service (IRS) has determined that the Plan is qualified
under Section 401(a) and 401(k) of the Internal Revenue Code (IRC) and that
the Plan is exempt from Federal income taxes under Section 501(a) which
provides that earned income is taxable only upon distribution thereof. A
favorable determination letter was received from the IRS on August 1, 2002.
The Plan has been amended since receiving the determination letter.
However, management believes that the Plan is designed and is currently
operated within the applicable requirements of the IRC.
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WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(6) ADMINISTRATION
The Plan's investments and cash are held by Bank of Oklahoma, N.A. and
administered under a trust agreement with the Company. The Plan's
investment options are managed by Frank Russell Trust Company (FRTC),
which has full discretionary authority for purchase and sale of
investments not specifically directed by participants within the approved
Plan options; however, the Willbros Employees' Benefits Committee retains
the right to change the options available to participants.
The following table presents the fair values of individual investments
that represent 5% or more of the Plan's net assets at December 31, 2002
and 2001.
2002 2001
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The Frank Russell Investment Contract Fund $2,972,812 2,290,682
The Frank Russell Fixed Income I Fund 2,382,642 1,632,329
The Frank Russell Global Balanced Fund 1,880,900 2,751,195
The Frank Russell Equity I Fund 2,353,844 2,729,545
The Frank Russell Small Capitalization Fund 1,358,998 1,653,133
Willbros Group, Inc. common stock 1,520,453 2,658,976
During 2002 and 2001, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) (depreciated)
appreciated in value by $(2,926,002) and $1,999,422, respectively as
follows:
2002 2001
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Mutual Funds $(1,373,960) 1,359,607
Common stock (1,552,042) 519,850
Government bonds -- 119,965
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$(2,926,002) 1,999,422
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(7) RECLASSIFICATIONS
Certain reclassifications have been made to the prior year amounts to
conform to the current year presentation.
(8) WILLBROS GROUP, INC. COMMON STOCK
Each participant is entitled to exercise voting rights attributable to the
shares of Willbros Group, Inc. common stock allocated to his or her account
and is notified by the trustee prior to the time that such rights are to be
exercised. If instructions have not been given by the participant, the
trustee will vote the Willbros Group, Inc. common stock credited to the
participant's account in the same proportion as it votes those shares
allocated to participants' accounts for which it receives voting
instructions.
-11- (Continued)
WILLBROS EMPLOYEES' 401(K) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(9) SUBSEQUENT EVENT
Effective January 1, 2003, the Plan reduced the rate of matching Company
stock contributions from $1.25 per dollar of participant contributions to
$1.00 per dollar of participant contributions.
In addition, Company matching contributions elected in Willbros Group, Inc.
common stock will be immediately subject to investment direction by the
participant.
(10) NONEXEMPT TRANSACTIONS
As reported on Schedule 1, a participant's contribution was 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 for the year ended December 31, 2002.
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SCHEDULE 1
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
SCHEDULE G, PART III - SCHEDULE OF NONEXEMPT TRANSACTIONS
YEAR ENDED DECEMBER 31, 2002
RELATIONSHIP TO LOANED
IDENTITY OF PARTY INVOLVED PLAN DESCRIPTION OF TRANSACTION AMOUNT
----------------------------- --------------- ------------------------------------------------ -------
Lending of monies from the Plan to the employer
(participant contribution not timely remitted to
Willbros Group, Inc. Employer the Plan) as follows:
Deemed loan dated February 22, 2002, maturity
June 21, 2002 $10,500
See accompanying independent auditors' report.
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SCHEDULE 2
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002
DESCRIPTION OF INVESTMENT
IDENTITY OF ISSUE, BORROWER, INCLUDING MATURITY DATE, RATE
LESSOR, OR SIMILAR PARTY OF INTEREST, PAR, OR MATURITY VALUE SHARES CURRENT VALUE
--------------------------------- -------------------------------------------------------- ------------- ---------------
AP Cash Management Cash 160,747 $ 160,746
Cash Cash 5,707 5,707
Flexible Choice Options Various investments -- 754,100
Frank Russell Investment Company Frank Russell Trust Equity I Fund 90,255 2,353,844
Frank Russell Investment Company Frank Russell Trust Fixed Income I Fund 107,423 2,382,642
Frank Russell Investment Company Frank Russell Trust Small Capitalization Fund 84,357 1,358,998
Frank Russell Investment Company Frank Russell Trust Investment Contract Fund 112,097 2,972,812
Frank Russell Investment Company Frank Russell Trust Balanced Income Fund 28,257 419,336
Frank Russell Investment Company Frank Russell Trust Domestic Conservative Balanced Fund 8,247 168,643
Frank Russell Investment Company Frank Russell Trust Global Balanced Fund 74,373 1,880,900
Frank Russell Investment Company Frank Russell Trust Aggressive Balance Fund 44,643 613,840
Frank Russell Investment Company Frank Russell Trust Global Equity Fund 11,338 270,627
Frank Russell Investment Company Frank Russell Trust All International Markets Fund 32,758 543,125
*Participant Loans Interest rates ranging from 5.25% to 10.5% 598,141 598,141
Specifically Directed Investments Various investments -- 1,293,588
*Willbros Group, Inc. Common Stock 184,970 1,520,453
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Total assets (held at end of year) $17,297,502
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* Indicates a party in interest.
See accompanying independent auditors' report.
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EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT
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23 Independent Auditors' Consent
99 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.