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, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 001-11953
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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
P.O. BOX 0816-01098
PANAMA, REPUBLIC OF PANAMA
TELEPHONE NO.: 011-507-213-0947
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Financial Statements and Supplemental Schedules
December 31, 2003 and 2002
(With Report of Independent Registered Public Accounting Firm Thereon)
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
TABLE OF CONTENTS
PAGE
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Report of Independent Registered Public Accounting Firm 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits
December 31, 2003 and 2002 2
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 2003 and 2002 3
Notes to Financial Statements
December 31, 2003 and 2002 4 - 9
SUPPLEMENTAL SCHEDULES:
Schedule 1 - Schedule H, Line 4a - Schedule of Delinquent Participant Contributions
Year ended December 31, 2003 10
Schedule 2 - Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003 11
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.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Willbros Employee 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, 2003
and 2002, 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 the standards of the Public Company
Accounting Oversight Board (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 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, 2003 and 2002, and the
changes in net assets available for plan benefits for the years then ended in
conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule H, line 4a -
schedule of delinquent participant contributions for the year ended December 31,
2003 and schedule H, line 4i - schedule of assets (held at end of year) as of
December 31, 2003, 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 25, 2004
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2003 and 2002
2003 2002
----------- -----------
Investments, at fair value $18,155,238 14,324,690
Investments, at contract value 2,744,284 2,972,812
Non interest-bearing cash 52,469 --
Accrued investment income 2,763 3,625
Due from broker -- 227,169
Contributions receivable:
Employer - cash 3,861 42,543
Employer - stock 1,830 10,923
Participants 15,600 121,499
Due to broker -- (234,097)
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Net assets available for plan benefits $20,976,045 17,469,164
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See accompanying notes to financial statements.
2
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 2003 and 2002
2003 2002
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Investment income (loss):
Net appreciation (depreciation) in fair value of investments $ 3,815,663 (2,926,002)
Dividends 37,696 49,611
Interest 33,973 36,210
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3,887,332 (2,840,181)
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Contributions:
Employer - cash, net of forfeitures 582,195 619,900
Employer - stock 234,859 453,813
Participants 1,773,153 2,132,536
Rollovers 44,082 161,220
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2,634,289 3,367,469
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Benefits paid to participants (2,909,454) (6,619,390)
Trustee and other fees (105,286) (95,728)
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Net increase (decrease) 3,506,881 (6,187,830)
Net assets available for plan benefits:
Beginning of year 17,469,164 23,656,994
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End of year $ 20,976,045 17,469,164
============ ============
See accompanying notes to financial statements.
3
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(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
Willbros Energy Services Company (collectively the Company). The
Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA).
(b) 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 Employee Benefits Committee retains the right to change
the options available to participants.
(c) ELIGIBILITY
Eligible employees begin participation in the Plan after
completing three months of service, as defined in the plan
document.
(d) CONTRIBUTIONS
Effective June 1, 2002, participants may contribute by payroll
deductions from 1% to 50% of their compensation to the Plan and
allocate these amounts as deferred or taxable contributions.
Previously, participants could contribute from 1% to 20% 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 $2,000 and $1,000 in
2003 and 2002, respectively. The catch-up contribution is not
eligible for Company matching. Effective January 1, 2003, the
Company matches employee contributions, up to a maximum of 4% of
salary in the form of cash or Willbros Group, Inc. common stock,
as elected by the employee. Previously, the Company matched
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. Effective
January 1, 2003, Company matching contributions elected in
Willbros Group, Inc. common stock were immediately subject to
investment direction by the participant. Prior to January 1, 2003,
Company matching contributions elected in Willbros Group Inc.
common stock were not subject to the participants' investment
direction for a two-year period and were 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, an individual
retirement account or annuity.
4 (Continued)
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(e) 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.
(f) VESTING
Participants are immediately vested in their voluntary
contribution account and their salary reduction account plus
actual earnings thereon. 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%.
(g) 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.
During 2003 and 2002, forfeitures reduced Company contributions by
$16,816 and $29,119, respectively. Forfeitures available to reduce
future Company contributions totaled $40,254 and $3,174 at
December 31, 2003 and 2002, respectively.
(h) 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 pretax 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.
Participants electing to take a hardship withdrawal are suspended
from making contributions to the Plan for a six-month period.
(i) 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.
5 (Continued)
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(j) 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.
CORE INVESTMENT OPTIONS
Participants may direct the investment of their accounts into the
following core investments:
Russell Investment Contract Fund
Russell Fixed Income I Fund
Russell Balanced Income Fund
Russell Domestic Conservative Fund
Russell Global Balanced Fund
Russell Aggressive Balanced Fund
Russell Global Equity Fund
Russell Equity I Fund
Russell All International Markets Fund
Russell Small Cap 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 1%
increments into approximately 400 mutual funds.
(k) 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 AND USE OF ESTIMATES
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
assets and liabilities and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ
from those estimates.
(b) PAYMENT OF BENEFITS
Benefits are recorded when paid.
6 (Continued)
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(c) RECLASSIFICATIONS
Certain reclassifications have been made to the prior year amounts
to conform to the current year presentation.
(d) VALUATION OF INVESTMENTS AND INCOME RECOGNITION
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 fair value based upon
quoted market prices of the underlying assets. 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.
The Plan holds units of the Russell 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 4.09% and
5.46% for the years ended December 31, 2003 and 2002,
respectively.
(3) INVESTMENTS
The following table presents the fair values of individual investments
that represent 5% or more of the Plan's net assets at December 31, 2003
and 2002.
2003 2002
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Russell Investment Contract Fund $2,744,284 2,972,812
Russell Fixed Income I Fund 1,864,600 2,382,642
Russell Global Balanced Fund 2,084,141 1,880,900
Russell Equity I Fund 3,200,048 2,353,844
Russell Small Cap Fund 2,373,896 1,358,998
Willbros Group, Inc. common stock 2,065,385 1,520,453
7 (Continued)
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
During 2003 and 2002, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated (depreciated) in value by $3,815,663 and $(2,926,002),
respectively, as follows:
2003 2002
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Mutual funds $ 276,732 (191,168)
Common stock 854,893 (1,552,042)
Common collective trust funds 2,684,038 (1,182,792)
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$ 3,815,663 (2,926,002)
=========== ===========
(4) 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.
(5) 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.
(6) 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.
(7) 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 of
1986, as amended (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 dated
August 1, 2002 was received from the IRS. 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.
8 (Continued)
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(8) 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, 2003.
(9) RELATED-PARTY TRANSACTIONS
The Plan allows for investment in the Company's common stock. The Plan
also invests in a money market fund issued by Bank of Oklahoma. The
Company is the Plan sponsor and Bank of Oklahoma is the Plan's trustee;
therefore, these transactions qualify as party-in-interest. These are
exempt party-in-interest transactions under ERISA.
(10) SUBSEQUENT EVENTS
On March 29, 2004, the Company's board of directors approved, by
unanimous written consent, the merger of the following plans of
affiliates into the Plan effective June 1, 2004 (the Merger Date)
Mt. West Fabrication Plants and Stations, Inc. 401(k) Plan,
Pacific Industrial Electric, Inc. 401(k) Plan, and
Process Engineering Design, Inc. 401(k) Plan
The respective trustees have been directed to transfer plan assets to the
trustee of the Plan as soon as administratively feasible after the Merger
Date.
In addition, effective April 1, 2004, participants may contribute up to
75% of their compensation to the Plan.
9
SCHEDULE 1
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Schedule H, Line 4a - Schedule of Delinquent Participant Contributions
Year ended December 31, 2003
PARTICIPANT CONTRIBUTIONS TOTAL THAT CONSTITUTES NONEXEMPT
TRANSFERRED LATE TO PLAN PROHIBITED TRANSACTIONS
------------------------- --------------------------------
$ 108 $ 108
See accompanying report of independent registered public accounting firm.
10
SCHEDULE 2
WILLBROS EMPLOYEES' 401(k) INVESTMENT PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003
DESCRIPTION OF INVESTMENT
IDENTITY OF ISSUE, BORROWER, INCLUDING MATURITY DATE, RATE
LESSOR, OR SIMILAR PARTY OF INTEREST, PAR, OR MATURITY VALUE CURRENT VALUE
------------------------------------------- --------------------------------------------------------------- ----------------
* AP Cash Management Cash $ 158,493
Various Brokerage Accounts Flexible Choice Option 969,500
Various Brokerage Accounts Specifically Directed Investments 1,530,585
Russell Investment Group Russell Equity I Fund, 94,452 units 3,200,048
Russell Investment Group Russell Fixed Income I Fund, 79,616 units 1,864,600
Russell Investment Group Russell Small Cap Fund, 101,405 units 2,373,896
Russell Investment Group Russell Investment Contract Fund, 99,416 units 2,744,284
Russell Investment Group Russell Balanced Income Fund, 40,732 units 665,568
Russell Investment Group Russell Domestic Conservative Fund, 11,004 units 259,587
Russell Investment Group Russell Global Balanced Fund, 67,448 units 2,084,141
Russell Investment Group Russell Aggressive Balanced Fund, 56,187 units 998,448
Russell Investment Group Russell Global Equity Fund, 16,587 units 538,739
Russell Investment Group Russell All International Markets Fund, 36,286 units 858,535
* Participant Loans Interest rates ranging from 5.0% to 10.5% 587,713
* Willbros Group, Inc. Common Stock, 171,829 shares 2,065,385
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Total assets (held at end of year) $ 20,899,522
================
* Indicates a party-in-interest.
See accompanying report of independent registered public accounting firm.
11
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 25, 2004 By: /s/ Dennis G. Berryhill
-------------------------------------
Dennis G. Berryhill
Willbros Employee Benefits Committee
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT
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23 Consent of Independent Registered Public Accounting Firm