UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 (NO FEE REQUIRED)
For the transition period from ___________ to ___________
Commission File Number 001-14273
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
CORE LABORATORIES PROFIT SHARING AND RETIREMENT PLAN
6316 Windfern Road
Houston, Texas 77040
B. Name and issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Core Laboratories N.V.
Herengracht 424
1017 BZ Amsterdam
The Netherlands
CORE LABORATORIES
PROFIT SHARING AND RETIREMENT PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
AS OF DECEMBER 31, 2002
TOGETHER WITH AUDITORS' REPORT
CORE LABORATORIES
PROFIT SHARING AND RETIREMENT PLAN
INDEX TO FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2002
Page(s)
Report of Independent Auditors.......................................... 1
Financial Statements-
Statements of Net Assets Available for Plan Benefits as of
December 31, 2002 and 2001...................................... 2
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 2002........................... 3
Notes to Financial Statements........................................... 4-8
Supplemental Schedule*-
Schedule of Assets (Held at End of Year) as of December 31, 2002..... 9
* All other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under ERISA have been
omitted because the information required by the schedules has been included in
the notes to financial statements or the schedules are not applicable.
REPORT OF INDEPENDENT AUDITORS
To the Participants and Administrator of
Core Laboratories Profit Sharing and Retirement Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of Core Laboratories Profit Sharing and Retirement Plan (the "Plan") at December
31, 2002 and December 31, 2001, and the changes in net assets available for
benefits for the year ended December 31, 2002 in conformity with accounting
principles generally accepted in the United States of America. 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 of these statements in accordance with auditing standards
generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
Our audit was 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) 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. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Houston, Texas
June 26, 2003
1
CORE LABORATORIES
PROFIT SHARING AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2002 AND 2001
2002 2001
---- ----
ASSETS
Cash, noninterest-bearing $ 44,263 $ 167,580
Investments, at fair value:
Life insurance 43,709 54,325
Interest-bearing cash 2,617 19,802
Collective trust fund 5,894,230 3,952,082
Common stock 6,388,643 7,635,867
Mutual funds 22,554,374 25,914,574
Participant loans 1,211,004 1,034,700
----------- -----------
36,094,577 38,611,350
Receivables:
Other receivables 2,097 17,536
----------- -----------
2,097 17,536
----------- -----------
Total assets 36,140,937 38,796,466
LIABILITIES
Other payables 38,018 139,779
----------- -----------
Total liabilities 38,018 139,779
----------- -----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 36,102,919 $ 38,656,687
=========== ===========
The accompanying notes are an integral part of these financial statements.
2
CORE LABORATORIES
PROFIT SHARING AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2002
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Interest and dividends $ 311,253
Contributions:
Participant 3,562,405
Employee rollovers 300,118
Employer 1,727,763
Excess funds transferred from retirement plan (Note 7) 189,523
-----------
5,779,809
-----------
Total additions 6,091,062
-----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Net depreciation in fair value of investments:
Common stock 1,337,962
Mutual funds 3,688,783
-----------
5,026,745
Withdrawals and retirement benefits 3,502,819
Administrative expenses 96,820
Other deductions 18,446
-----------
Total deductions 8,644,830
-----------
NET DECREASE (2,553,768)
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of year 38,656,687
-----------
End of year $36,102,919
===========
The accompanying notes are an integral part of these financial statements.
3
CORE LABORATORIES
PROFIT SHARING AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 and 2001
1. SUMMARY OF SIGNIFICANT PLAN PROVISIONS:
The Core Laboratories Profit Sharing and Retirement Plan (the "Plan" or "Core
Lab Plan") was established by Core Laboratories LP (the "Company"), effective
October 1, 1994. Effective May 1, 2002, the Plan was amended to reflect a change
in the Company's name and legal status from Core Laboratories, Inc. to Core
Laboratories LP. The Plan is a defined contribution plan and is subject to the
provisions of the Employee Retirement Security Act of 1974, as amended
("ERISA"). Effective January 1, 2002, the Plan was restated in its entirety to
incorporate previous amendments necessary to conform to recent legislation.
Effective July 1, 2002 the plan was amended to allow for the excess funds of the
terminated Retirement Income Plan for Employees of Saybolt Inc. to be
transferred into the Plan. As of December 1, 2002 the plan was amended to allow
participants who attained age 50 before the close of the Plan year to contribute
an additional amount in accordance with, and subject to certain limitations of
the Code.
Plan Administrator and Trustee
The Company is the Plan administrator as defined under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). The Company contracts with
The 401K Company (the "Recordkeeper") to maintain the Plan's participant account
balances. Austin Trust Company (the "Trustee") is the trustee of all investments
held by the Plan. The management companies that issue securities are custodians
of the mutual fund investments and the Pershing Division of Donaldson, Lufkin &
Jenrette Securities Corporation is custodian of Core Laboratories N.V. common
stock ("Company Common Stock").
Eligibility
Substantially all of the Company's employees, including temporary or part-time
employees who have completed at least 1,000 hours of service in a Plan year, are
eligible to participate in the Plan. Participation may commence upon the later
of the first day of the calendar quarter coincident with or following such
eligible employee's date of hire or the date on which such employee attains the
age of 21.
Contributions
The Plan allows participants to contribute up to 15 percent of their
compensation, as defined by the Plan, on a pretax basis. The plan was amended
effective January 1, 2003 to provide for participant contributions of up to
sixty percent of compensation. At its discretion, the Company makes matching
contributions to the account of each participant up to four percent of each
participant's compensation. The Company may, at its discretion, also contribute
for a Plan year an additional amount with respect to each participant who has
4
completed one year of service and is employed by the Company on the last day of
such Plan year. The Company's board of directors shall determine whether such
contribution shall be made for a Plan year. No additional contributions were
made to the Plan for 2002 and 2001.
Participant Accounts
Each participant's account is credited with the participant's contribution and
allocations of (a) the Company's contribution and (b) Plan earnings, and charged
with an allocation of administrative expenses. Allocations are based on
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting
Participants are fully vested in their contributions and related earnings/losses
and vest in Company contributions and related earnings/losses at the rate of 20
percent for each year of service. Upon death, total and permanent physical or
mental disability, or normal retirement, all such participants become fully
vested in Company contributions and related earnings/losses.
Investment Program
Participants may invest their contributions, the Company's matching
contributions and any additional Company contributions in any of ten mutual
funds, one collective trust fund and Company Common Stock.
Contributions may be invested in one fund or divided among two or more funds.
Participants may transfer some or all of the balances out of any fund into one
or any combination of the other funds on a daily basis. Participants who are
seeking guidance in their investment direction can choose from four Asset
Allocation Models: Short-Term Model (1-5 years); Medium-Term Model (5-10 years);
Long-Term Model (10-15 years) or Longer-Term Model (15+ years) which represent a
designated blend of the available mutual funds. Participants who select one of
the Asset Allocation Models can also choose to invest a portion of their account
balances in the Company Common Stock.
Administrative Expenses
The Plan pays all administrative expenses.
Loans
The Plan permits participants to borrow a minimum of $1,000 up to a maximum
amount equal to the lesser of $50,000 or 50 percent of their vested account
balances in the Plan. New loans bear interest at treasury rates plus four
percent and are repaid through payroll deductions over a period not to exceed
five years. The loans are secured by the balance in the participant's account.
Withdrawals and Forfeitures
A participant may elect to receive benefit payments through any one of the
several methods provided by the Plan upon termination, retirement or financial
hardship. Participants can withdraw their after-tax contributions, if any from
the Plan, in cash without being suspended from making additional contributions
to the Plan. Participants may also make an in-service withdrawal at age 59 1/2
of their vested account balance. Participants may elect an in-kind distribution
of Core Laboratories N.V. stock in lieu of cash upon termination, retirement or
upon electing an in-service withdrawal at age 59 1/2.
Hardship withdrawals are allowed in the event of immediate and heavy financial
need, subject to the provisions of the Internal Revenue Code of 1986, as amended
(the "Code"). The participants can withdraw up to 100 percent of their pre-tax
5
contributions and are suspended for at least 12 months from making additional
contributions to the Plan.
Upon termination of employment with the Company, any unvested Company
contributions and related earnings/losses are forfeited. Participants returning
to the Company within 60 months of their initial termination are entitled to
have their previous account balance reinstated by the Company. During 2002,
$79,648 of forfeited balances were utilized to reduce the Company's
contributions. At December 31, 2002 forfeited amounts of $168,029 were available
to reduce future employer contributions or Plan expenses.
Priorities Upon 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 percent vested in their accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States. Distributions to participants are recorded when paid.
Investment Valuation
The Plan reports the investments in the financial statements at fair value.
Investments in life insurance policies is recorded at the cash surrender value
of the life insurance policies, as determined by the investment issuer.
Investments in mutual funds and common stock are reported at fair value based on
quoted market prices. The fair value of the investment in the collective trust
fund is based on the market value of the underlying assets, as determined by the
investment issuer. The collective trust fund holds investment contracts that are
recorded at contract value, which approximates fair value. The average yield of
the collective trust fund for the year ended December 31, 2002, was 5.02
percent. Investment income is recorded as earned. Purchases and sales are
recorded on a trade-date basis.
Net realized gains or losses on the sale of investments and unrealized
appreciation (depreciation) in the fair value of investments are recorded in the
accompanying statement of changes in net assets available for plan benefits as
net appreciation (depreciation) in fair value of investments. Dividends are
recorded at the ex-dividend rate.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make the use of
estimates and assumptions that affect the accompanying financial statements and
disclosures. Actual results could differ from those estimates.
6
3. INVESTMENTS:
The following presents investments that represent five percent or more of the
Plan's net assets as of December 31, 2002 and 2001.
2002-
Stable Value Fund $ 5,894,166
Core Laboratories N.V. Common Stock 6,388,643
Washington Mutual Investors Fund - Class A 5,223,471
EuroPacific Growth Fund - Class A 2,197,837
Franklin Balance Sheet Investment Fund - Class A 2,458,461
Lord Abbett Developing Growth Fund 1,703,028
Putnam Growth Opportunities - Class A 2,904,160
Vanguard 500 Index Fund 2,461,505
The Bond Fund of America - Class A 3,005,886
2001-
Stable Value Fund $ 3,952,018
Core Laboratories N.V. Common Stock 7,635,867
Washington Mutual Investors Fund - Class A 6,003,312
EuroPacific Growth Fund - Class A 2,698,514
Franklin Balance Sheet Investment Fund - Class A 2,659,598
Lord Abbett Developing Growth Fund 2,296,875
Putnam Growth Opportunities - Class A 3,431,073
Vanguard 500 Index Fund 2,844,814
The Bond Fund of America - Class A 3,351,428
4. RISKS AND UNCERTAINTIES:
The Plan provides for various investments in a collective trust fund, mutual
funds and 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 values of investment securities
will occur in the near term.
5. FEDERAL INCOME TAX STATUS:
The Plan obtained its latest determination letter on November 12, 1996, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Code. The Plan has been
amended and restated since receiving the determination letter. An application
was made in February 2002 for a favorable determination letter on the amended
and restated plan. The Company believes that the Plan is currently designed and
being operated in compliance with the applicable requirements of the Code.
Therefore, the Company believes that the Plan was qualified and tax-exempt as of
December 31, 2002 and 2001.
7
6. RELATED-PARTY TRANSACTIONS:
The Plan provides for investment in shares of the Company Common Stock. As the
Company is the Plan sponsor, these transactions qualify as party-in-interest
transactions.
7. CONTRIBUTIONS OF EXCESS FUNDS AND TRANSFERS FROM OTHER PLANS:
Excess funds from the terminated Retirement Income Plan for Employees of Saybolt
Inc. were transferred into the plan on October 15, 2002 in the amount of
approximately $578,000. Approximately $388,000 was used to fund the Company's
employer match contributions. Excess funds at December 31, 2002 approximate
$190,000 and will be used to fund future employer contributions.
8
Schedule H line4i
CORE LABORATORIES
PROFIT SHARING AND RETIREMENT PLAN
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2002
Identity of Issuer Description of Investment Current Value
----------------------------------- ----------------------------------- -------------
Conseco Life Insurance Company Cash surrender value of life insurance
policies $ 43,709
Alliance Capital Management Corp. Alliance Capital Reserves 2,617
American Funds The Cash Management Trust of America - Class A 64
AMVESCAP National Trust Company Stable Value Fund 5,894,166
Core Laboratories N.V.* Core Laboratories N.V.
Common Stock 6,388,643
American Funds The Bond Fund of America - Class A 3,005,886
American Funds Washington Mutual Investors Fund - Class A 5,223,471
American Funds EuroPacific Growth Fund - Class A 2,197,837
Franklin Templeton Investments Templeton Foreign Smaller Companies Fund -
Class A 633,972
Franklin Templeton Investments Templeton Developing Markets Trust - Class A 539,580
Franklin Templeton Investments Franklin Balance Sheet Investment Fund - Class A 2,458,461
Franklin Templeton Investments Franklin Real Estate Securities Fund - Class A 1,426,474
Lord Abbett & Company Lord Abbett Developing Growth Fund 1,703,028
Putnam Investments Putnam Growth Opportunities - Class A 2,904,160
The Vanguard Group Vanguard 500 Index Fund 2,461,505
Participant Loans* Interest rates ranging from 3.00% to 10.89%
with varying maturity dates (zero cost) 1,211,004
------------
Total assets (held at end of year) $ 36,094,577
============
Assets indicated by * are invested with parties-in-interest to the Plan as
defined by Section 3 (14) of ERISA.
9
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan administrator has duly caused this annual report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: June 27, 2003
CORE LABORATORIES
PROFIT SHARING AND RETIREMENT PLAN
By: /s/ Richard L. Bergmark
Richard L. Bergmark
Executive Vice President and
Chief Financial Officer
10
INDEX TO EXHIBIT
Exhibit
Number
23.1 - Consent of Independent Accountants
11