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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 1-13086
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WEATHERFORD INTERNATIONAL, INC. EMPLOYEE STOCK PURCHASE PLAN
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Weatherford International, Inc.
515 Post Oak Boulevard
Suite 600
Houston, TX 77027
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Weatherford International, Inc. Employee
Stock Purchase Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Weatherford International, Inc. Employee Stock Purchase Plan
(the Plan) as of December 31, 2001 and 2000, and the related statements of
changes in net assets available for plan benefits for each of the three years in
the period ended December 31, 2001. These financial statements are the
responsibility of the Plan's Administrative Committee. 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 the Plan's Administrative Committee, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As further discussed in Note 1 to the accompanying financial statements,
effective June 30, 2001, the board of directors of Weatherford International,
Inc., voted to terminate the Plan. In accordance with accounting principles
generally accepted in the United States, the Plan has changed its basis of
accounting from the ongoing plan basis used in presenting the 2000 and 1999
financial statements to the liquidation basis used in presenting the 2001
financial statements.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 2001 and 2000, and the changes in net assets available for plan
benefits for each of the three years in the period ended December 31, 2001, in
conformity with accounting principles generally accepted in the United States.
/s/ ARTHUR ANDERSEN LLP
Houston, Texas
March 27, 2002
F-1
WEATHERFORD INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2001 AND 2000
<Table>
<Caption>
2001 2000
---------- ----------
ASSETS:
Common Stock of Weatherford International, Inc., at quoted market value,
32,322 shares at $47.250 per share (cost $951,517) in 2000 $ - $1,527,215
Common stock of Grant Prideco, Inc., at quoted market value,
18,264 shares at $21.938 per share (cost $175,122) in 2000 - 400,676
Contributions receivable-
Company - 23,531
Participants - 53,961
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- 77,492
Other receivable - 28,775
Cash and cash equivalents 3,549 2,722
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NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 3,549 $2,036,880
========== ==========
</Table>
The accompanying notes are an integral part of these financial statements.
F-2
WEATHERFORD INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2001
<Table>
<Caption>
2001 2000 1999
------------ ------------ ------------
CONTRIBUTIONS:
Company $ 162,811 $ 232,624 $ 152,656
Participants 374,243 504,259 307,807
NET REALIZED GAIN ON THE SALE OR DISTRIBUTION OF:
Weatherford International, Inc., common stock 199,097 187,201 71,699
Grant Prideco, Inc., common stock 26,285 197,923 -
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF:
Weatherford International, Inc., common stock (575,698) 307,231 456,583
Grant Prideco, Inc., common stock (225,554) 225,554 -
INTEREST INCOME 265 427 348
OTHER - - 17,641
WITHDRAWALS BY PARTICIPANTS:
Shares, at market value (1,985,362) (695,867) (363,236)
Cash (9,418) (5,208) (563)
------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS (2,033,331) 954,144 642,935
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 2,036,880 1,082,736 439,801
------------ ------------ ------------
End of year $ 3,549 $ 2,036,880 $ 1,082,736
============ ============ ============
</Table>
The accompanying notes are an integral part of these financial statements.
F-3
WEATHERFORD INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
General
The Weatherford International, Inc. Employee Stock Purchase Plan (the Plan) was
established for the purpose of affording eligible employees of Weatherford
International, Inc., and its subsidiaries (the Company) an opportunity to
regularly and systematically invest in Weatherford International, Inc. common
stock (Common Stock).
In October 1999, the Company's board of directors approved the spin-off of the
Grant Prideco, Inc. Drilling Products Division. The spin-off was completed on
April 14, 2000. As a result, the board of directors declared a distribution of
one share of Grant Prideco, Inc. common stock for each share of Common Stock
outstanding at the close of business on March 23, 2000. Shares of Grant Prideco,
Inc. common stock remained in each participant's account until distribution was
requested by the participant or final liquidation of the Plan.
Termination of Plan
Effective June 30, 2001, the board of directors of the Company terminated the
Plan and no further contributions were made to the Plan by participants or the
Company. As of December 31, 2001, all whole shares of stock and cash for
fractional shares had been distributed to participants. Subsequent to December
31, 2001, the remaining cash of $3,549 was utilized to pay administrative
expenses of the Plan.
Basis of Accounting
In conjunction with the Plan's termination, the 2001 financial statements have
been prepared on the liquidation basis of accounting in accordance with
accounting principles generally accepted in the United States. The 2000 and 1999
financial statements of the Plan were prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States.
Participant Accounts
JPMorgan Chase Bank (the Trustee), formerly Chase Bank of Texas, N.A.,
maintained a separate account for each participating employee. The Trustee
allocated to each account the number of shares of Common Stock purchased with
contributions credited to such account and dividends, if any. The Plan included
458 participants as of December 31, 2000.
F-4
Investment Valuation
The Plan primarily invested in shares of Common Stock and, subsequent to the
spin-off, shares of Grant Prideco, Inc. common stock. Shares were reflected in
the accompanying financial statements at quoted market value, as listed on the
NYSE. The change in the difference between the quoted market value and the cost
of shares not withdrawn is reported as Change in Unrealized Appreciation
(Depreciation) in the Statements of Changes in Net Assets Available for Plan
Benefits (see Note 4). Net realized gain (loss) on the sale or distribution of
shares is reported based on actual cost (see Note 3). Contributions pending
purchase of Common Stock and liquidations pending distribution to participants
and payment of administrative expenses were invested in a short-term investment
fund with cost equal to market value. The short-term investment fund is
reflected in the accompanying Statements of Net Assets Available for Plan
Benefits as Cash and Cash Equivalents.
2. PROVISIONS OF THE PLAN:
Administration
The Plan was administered by a committee (the Administrative Committee) of not
less than three persons appointed from time to time by the board of directors of
the Company.
Eligibility
Subject to certain restrictions imposed by foreign countries in which the
Company maintains offices, every full-time non-U.S. employee and every full-time
U.S. employee not eligible for the Company's 401(k) savings plan was eligible to
participate in the Plan on the first day of active service with the Company.
Participants were eligible to receive a Company contribution after completing
one year of service with the Company.
Participant Contributions
Prior to the Plan's termination, an eligible employee could contribute by
payroll deductions two percent to six percent of base salary, but in no event
less than twenty dollars per month or more than a maximum dollar amount
determined from time to time, in advance, by the Administrative Committee.
Company Contributions
Prior to the Plan's termination, the Company contributed fifty cents to each
dollar contributed by participants up to six percent. Participants vested
immediately in both their contributions to the Plan and all Company
contributions made on their behalf.
The Trustee and Purchases of Common Stock
The Trustee maintained custody of the Plan's assets and used the participants'
payroll deductions, the Company's contributions and cash dividends received to
purchase Common Stock. The Company has not declared or paid any cash dividends
on its Common Stock since 1984. The Common Stock was purchased on the open
market or from the Company by the Trustee at a price equal to the closing price
of the Common Stock on the NYSE.
Withdrawals and Termination of Employment
Prior to the Plan's termination, participating employees could withdraw part or
all of the whole shares of Common Stock in their accounts as of March 31 of any
calendar year after giving written notice prior to March 1. Cash in lieu of
fractional shares and any other credits were also paid to the withdrawing
employee. On termination of employment, a distribution was made to the employee,
or, in the case of death, to the persons entitled thereto, of all shares of
Common Stock and shares of Grant Prideco, Inc. common stock and cash adjustments
as described above.
F-5
Federal Income Tax Consequences
The Plan was not qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended. Subject to differing tax consequences imposed by foreign
countries in which the Company maintains offices, amounts contributed to the
Plan by an employee through payroll deductions and amounts contributed by the
Company were treated as ordinary income. The Plan was not subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended.
3. NET REALIZED GAIN:
The following table sets forth the net realized gain for each of the three years
in the period ended December 31, 2001:
<Table>
<Caption>
2001 2000 1999
------------ ---------- ----------
Weatherford International, Inc., common stock-
Sale or distribution of shares, at market $ 1,793,203 $ 480,270 $ 367,624
Less- Sale or distribution of shares, at cost 1,594,106 293,069 295,925
------------ ---------- ----------
Net realized gain $ 199,097 $ 187,201 $ 71,699
============ ========== ==========
Grant Prideco, Inc., common stock-
Sale or distribution of shares, at market $ 201,407 $ 234,487 $ -
Less- Sale or distribution of shares, at cost 175,122 36,564 -
------------ ---------- ----------
Net realized gain $ 26,285 $ 197,923 $ -
============ ========== ==========
</Table>
4. CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
The change in unrealized appreciation (depreciation) is as follows for each of
the three years in the period ended December 31, 2001:
<Table>
<Caption>
2001 2000 1999
------------ ---------- -----------
Weatherford International, Inc., common stock-
Unrealized appreciation at end of year $ - $ 575,698 $ 268,467
Less- Unrealized appreciation (depreciation) at beginning of year 575,698 268,467 (188,116)
------------ ---------- -----------
Change in unrealized appreciation (depreciation) $ (575,698) $ 307,231 $ 456,583
============ ========== ===========
Grant Prideco, Inc., common stock-
Unrealized appreciation at end of year $ - $ 225,554 $ -
Less- Unrealized appreciation (depreciation) at beginning of year 225,554 - -
------------ ---------- -----------
Change in unrealized appreciation (depreciation) $ (225,554) $ 225,554 $ -
============ ========== ===========
</Table>
F-6
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
WEATHERFORD INTERNATIONAL, INC. EMPLOYEE STOCK PURCHASE PLAN
March 27, 2002 /s/Jon R. Nicholson
Date ------------------------------------------
Jon R. Nicholson
Senior Vice President, Human Resources and
Information Technology for
Weatherford International, Inc., and
Administrative Committee Member
F-7
INDEX TO EXHIBIT
<Table>
<Caption>
Exhibit
Number
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23.1 Consent of Independent Public Accountants
99.1 Temporary Note 3T to Article 3 of Regulation S-X
</Table>