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, 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 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 27, 2003
Jack W. McElroy
/S/ S. MARIA NARISI June 27, 2003
S. Maria Narisi
/S/ E. E. THIELE June 27, 2003
E. E. Thiele
APPENDIX 1
LETOURNEAU, INC.
SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2002 AND 2001
AND FOR THE YEARS THEN ENDED AND INDEPENDENT AUDITORS' REPORT
LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits, December 31, 2002 and 2001 2
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 2002 and 2001 3
Notes to Financial Statements for the Years Ended December 31, 2002 and 2001 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, 2002 and 2001, 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,
2002 and 2001 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.
DELOITTE & TOUCHE LLP
Houston, Texas
June 27, 2003
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LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 2002 AND 2001
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2002 2001
ASSETS:
Investments - at fair value $ 33,394,264 $ 33,275,401
Receivables:
Employee contributions 210,185 272,140
Employer contributions 78,835 71,906
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 33,683,284 $ 33,619,447
============ ============
See notes to financial statements.
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LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
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2002 2001
ADDITIONS:
Contributions:
Employee $ 2,913,550 $ 2,968,232
Employer 1,022,978 799,323
Merger of Oilfield-Electric-Marine plan 444,913
------------- -------------
Total additions 4,381,441 3,767,555
------------- -------------
DEDUCTIONS:
Plan interest in Rowan Master Trust net investment loss 2,250,773 2,742,173
Employee withdrawals 2,066,831 2,260,622
------------- -------------
Total deductions 4,317,604 5,002,795
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
AVAILABLE FOR BENEFITS 63,837 (1,235,240)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 33,619,447 34,854,687
------------- -------------
End of year $ 33,683,284 $ 33,619,447
============= =============
See notes to financial statements.
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LETOURNEAU, INC. SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
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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". During 2002, following an
aquisition by LeTourneau's parent company of Oilfield-Electric-Marine,
Inc. (OEM), the assets of the TRS Oilfield-Electric-Marine 401(k) Plan
were merged into the Plan and all eligible OEM employees became
participants of the Plan.
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% and additional contributions of up to 14% 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.
INVESTMENT OPTIONS - The assets of the Plan are held in a master trust and
managed by Fidelity Management Trust Company, the Trustee of the Plan (the
"Trustee"). Plan participants direct the investment of their accounts
among the Plan's investment options and may, at their sole discretion,
transfer amounts between such options, including the Rowan Companies
Unitized Stock Fund, at any time.
EXPENSES - Participants' accounts are charged with investment advisory and
other fees by the Trustee. Other expenses of administering the Plan and
master trust 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 three years or more of qualified service.
Participants at age 65 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, 2002 and 2001, Plan
assets included approximately $5,000 and $20,000, respectively, of
distributions payable to former Plan participants.
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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 2002 and 2001, LeTourneau utilized approximately
$45,000 and $200,000, respectively, of employee forfeitures for employer
contributions and Plan administrative expenses. At December 31, 2002 and
2001, Plan assets included approximately $42,000 and $25,000,
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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements are prepared on the accrual
basis of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at fair value as determined by quoted market prices. Purchases and
sales of securities are recorded on a trade-date basis. Dividends are
recorded on the ex-dividend date. The net increase (decrease) in fair
value of investments consists of the net change in unrealized gains
(losses) in fair values and realized gains (losses) upon the sale of
investment securities. The net change in unrealized gains (losses) and
realized gains (losses) upon sale are determined using fair values as of
the beginning of the year or the purchase price if acquired during the
year.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
USE OF ESTIMATES - 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 assets and liabilities and changes therein, and
disclosure of contingent assets and liabilities. Actual results could
differ from those estimates.
RECLASSIFICATIONS - Certain reclassifications have been made to the prior
year's financial statements to conform to the current year presentation.
3. RISKS AND UNCERTAINTIES
The Plan provides for various investments in common stock and registered
investment companies. 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.
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4. INVESTMENT IN ROWAN MASTER TRUST
The Master Trust for Rowan Companies and Affiliates Defined Contribution
Plans (the "Trust") commingles, for investment and administrative
purposes, Plan assets 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, 2002 and 2001, the Trust held the following investments, at
fair value:
2002 2001
Amount % Amount %
------------ ---- ------------ ----
Investments - at fair
value:
Rowan Companies Unitized Stock Fund $ 11,362,999 14% $ 10,321,204 14%
Registered Investment Companies 68,355,683 86% 65,667,610 86%
------------ ------------
Total investments $ 79,718,682 100% $ 75,988,814 100%
============ ============
Investment income (loss) for the Trust for the years ended December 31,
2002 and 2001 was as follows:
2002 2001
Investment income (loss):
Increase (decrease) in fair value of investments:
Rowan Companies Unitized Stock Fund $ 2,091,295 $ (982,245)
Registered Investment Companies (10,078,069) (9,144,396)
Interest and dividends 1,560,180 2,095,121
------------- -------------
Net investment income (loss) $ (6,426,594) $ (8,031,520)
============= =============
The Plan's interest in the Trust's total investment units was
approximately 42% at December 31, 2002 and 44% at December 31, 2001, with
the balance attributed to the other Rowan-sponsored plan.
5. 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.
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INDEX TO EXHIBITS
Exhibit
Number Description
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23.1 Independent Auditors' Consent