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 [FEE REQUIRED]
For the fiscal year ended December 31, 2000
----------------------------
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 ____________
TRANSOCEAN SEDCO FOREX SAVINGS PLAN
(Name changed January 1, 2000,
formerly Transocean Offshore Savings Plan)
(Full Title of the Plan and the Address of
the Plan, if Different from that of the
Issuer named below)
TRANSOCEAN SEDCO FOREX INC.
4 Greenway Plaza
Houston, Texas 77046
(Name of Issuer of the Securities Held Pursuant
to the Plan and Address of its
Principal Executive Office)
TRANSOCEAN SEDCO FOREX SAVINGS PLAN
Index to Financial Statements
December 31, 2000
Page
----
Report of Independent Auditors 1
Audited Financial Statements
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Supplemental Schedule
Schedule H, Line 4 (i) - Schedule of Assets (Held At End of Year) 9
Report of Independent Auditors
The Administrative Committee
Transocean Sedco Forex Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Transocean Sedco Forex Savings Plan (formerly, "Transocean Offshore
Savings Plan") as of December 31, 2000 and 1999, 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. 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 benefits of the Plan at
December 31, 2000 and 1999, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2000, is presented for purposes of
additional analysis and is not a required part of the 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 our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Houston, Texas
June 1, 2001
/s/ Ernst & Young LLP
1
TRANSOCEAN SEDCO FOREX SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31,
------------------------
2000 1999
----------- -----------
Investments, at Fair Value $59,589,137 $48,577,960
Contributions Receivable:
Employee 344,790 249,145
Employer 169,878 129,828
-------------------------------------------------------------
Net assets available for benefits $60,103,805 $48,956,933
=============================================================
See accompanying notes.
2
TRANSOCEAN SEDCO FOREX SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31,
-------------------------
2000 1999
----------- -----------
Additions:
Contributions:
Employee $ 6,108,082 $ 5,244,246
Employer 2,926,651 2,457,137
---------------------------------------------------------------------------
Total contributions 9,034,733 7,701,383
---------------------------------------------------------------------------
Investment income:
Net appreciation in fair value of investments 3,754,016 6,866,846
Investment income 1,698,759 1,939,367
---------------------------------------------------------------------------
Total investment income 5,452,775 8,806,213
---------------------------------------------------------------------------
Total additions 14,487,508 16,507,596
Deductions:
Participant loan processing fees (14,818) (10,987)
Benefits paid to participants (3,325,818) (4,037,308)
---------------------------------------------------------------------------
Total deductions (3,340,636) (4,048,295)
---------------------------------------------------------------------------
Net increase 11,146,872 12,459,301
---------------------------------------------------------------------------
Net assets available for benefits:
Beginning of year 48,956,933 36,497,632
---------------------------------------------------------------------------
End of year $60,103,805 $48,956,933
===========================================================================
See accompanying notes.
3
TRANSOCEAN SEDCO FOREX SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Plan Description
----------------
The Transocean Sedco Forex Savings Plan (formerly, "Transocean Offshore
Savings Plan") (the "Plan") is a defined contribution plan which was established
on June 25, 1993. The following description of the Plan provides only general
information of Plan provisions. Participants should refer to the Plan document
for a more complete description of the Plan's provisions.
On December 31, 1999, Transocean Offshore Inc. merged with Sedco Forex
Holdings Limited ("Sedco Forex"). As a result of the merger, Transocean Offshore
Inc. changed its name to Transocean Sedco Forex Inc. On January 1, 2000, the
Transocean Offshore Savings Plan changed its name to the Transocean Sedco Forex
Savings Plan.
Effective January 1, 2000, former employees of Sedco Forex became eligible
to participate in the Plan if they: (i) had satisfied the Plan's one (1) month
service requirement; (ii) were U.S. citizens, U.S. permanent residents or non
U.S. citizens working in the U.S. on a long-term assignment of six months or
more and subject to U.S. taxes and (iii) were employed in an eligible job
category.
General
Participation in the Plan is voluntary. The Plan is administered by an
Administrative Committee which is composed of at least three members appointed
by the Finance/Benefits Committee of the Board of Directors of Transocean Sedco
Forex Inc. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA"). Plan assets are held by the Plan trustee,
Fidelity Management Trust Company ("Fidelity").
Eligibility
All employees of participating Employers, as defined in the Plan, who are
citizens or permanent residents of the United States are eligible to participate
in the Plan after completion of one (1) full calendar month of service.
Effective June 1, 2000, non U.S. citizens (other than U.S. permanent
residents) working in the United States on a long-term assignment of six months
or more and subject to U.S. taxes who are not participating in the Plan have the
option to commence participation if they are employed in an eligible job
category.
Contributions
Participants may elect to make contributions to the Plan with pre-tax
dollars ("Before-Tax Contributions"), pursuant to Section 401(k) of the Internal
Revenue Code (the "Code"), and/or contributions with after-tax dollars ("After-
Tax Contributions") up to a maximum of 20 percent of earnings per pay period.
The Plan allows rollovers from other qualified plans. Participants may
invest their rollovers into the Transocean Sedco Forex Ordinary Shares Fund (a
unitized fund investing in Transocean Sedco Forex Inc. ordinary shares) or any
of the mutual funds available under the Plan. Amounts rolled over can be
withdrawn at any time.
4
TRANSOCEAN SEDCO FOREX SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Plan Description (continued)
-----------------------------
Participating Employer Matching Contributions
The participating Employer matching contributions for each participant are
equal to the sum of 100 percent of the first 3 percent of earnings contributed
by the participant to the Plan, plus 50 percent of the next 3 percent of
earnings contributed by the participant to the Plan. Such percentages are
applied on a pay period by pay period basis. Earnings are defined as base pay
plus overtime pay associated with base pay. Diversification of participating
Employer matching contributions is permitted. Participants may direct
participating Employer matching contributions into any investment fund offered
by the Plan on a daily basis. Participants may also transfer participating
Employer matching account balances between all investment funds on a daily
basis.
Investment of Earnings
All dividends paid on Transocean Sedco Forex Inc. ordinary shares held in
the Transocean Sedco Forex Ordinary Shares Fund are used to purchase additional
units of that stock fund. Earnings on mutual funds are reinvested in that fund.
Vesting
Participants are immediately vested in their After-Tax, Before-Tax and
participating Employer matching contributions plus actual earnings thereon.
Withdrawals
Participants may not withdraw Before-Tax Contributions and earnings thereon
until the earliest of termination of employment, attainment of age 59 1/2 or in
the event of financial hardship. Effective January 1, 2000, hardship withdrawals
attributable to Before-Tax Contributions are not eligible for any type of
rollover. This was a result of a change in the law. There is no limit on the
number of withdrawals which may be made by participants from their accounts
after age 70 1/2. Participants can withdraw After-Tax Contributions and
earnings thereon once in any 12-month period after one year of Plan
participation. Except as noted below, participating Employer matching
contributions and earnings thereon cannot be withdrawn from the Plan prior to
termination of employment. Participating Employer matching contributions and
earnings thereon resulting from contributions made prior to June 4, 1993 can be
withdrawn once in any 12-month period. All distributions from mutual funds are
made in cash. All amounts invested in the Transocean Sedco Forex Ordinary Shares
Fund, whether purchased with participant or participating Employer matching
contributions, are distributed in the form of stock certificates or cash at the
participant's election. Dividends paid to Fidelity on units purchased for or
credited to the participant's account prior to the distribution of such units to
the participant are applied to the purchase of additional units for the
participant's account.
Upon termination of service for any reason, if a participant's account is
less than or equal to $5,000, the account balance will automatically be
distributed to the participant within 12 months following termination unless
otherwise requested. Participants may request distributions upon termination for
accounts greater than $5,000.
5
TRANSOCEAN SEDCO FOREX SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Plan Description (continued)
----------------------------
Participant Loans
Participants may borrow from their account balance up to a maximum of 50
percent of their balance, with a minimum loan amount of $1,000 and maximum of
$50,000. Participants may have two loans outstanding at any one time a "general
loan" which can be used for any purpose and is to be repaid over five years or
less and a "home loan" which can only be used to purchase a primary residence
and is required to be repaid in equal amounts over 15 years or less. Loans bear
interest at prime rate at the beginning of the quarter in which the loan
originates plus one percent. The interest rate is fixed for the term of the
loan. Interest is repaid to the participant's account. There is a one-time loan
origination fee of $35 per loan and an annual maintenance fee of $15 for each
calendar year the loan is outstanding. These fees are deducted from the
participant's account. Outstanding loan amounts are due upon termination of
employment.
Plan Termination
It is intended that the Plan will continue, although the Plan may be amended
or discontinued at any time subject to the provisions of ERISA. In the event
the Plan is terminated, the full amount credited to each participant's account
will be payable as soon as practicable following such termination.
2. Summary of Significant Accounting Policies
------------------------------------------
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method
of accounting in accordance with accounting principles generally accepted in the
United States.
Use of Estimates
The preparation of these financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates that affect the amounts reported in the financial statements,
accompanying notes and schedule. Actual results may differ from those
estimates.
Investment Valuation
Amounts invested in the investment funds are carried at fair value based on
the last quoted sales price of the year. Participant loans are valued at
amortized cost which approximates fair value.
6
TRANSOCEAN SEDCO FOREX SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (continued)
------------------------------------------------------
Unit Accounting
The Plan utilizes the unit method of accounting, which allows the Transocean
Sedco Forex Ordinary Shares Fund to hold a small amount of cash for liquidity
purposes. The value of each unit does not vary significantly from the price of
the ordinary shares held in the fund. The ordinary share price is readily
available to the participants and is printed in many publications. Participants
may hold units of the Transocean Sedco Forex Ordinary Shares Fund representing
their proportionate interest in both the ordinary shares and cash held in the
fund.
3. Investments
-----------
Investments that represent five percent or more of the Plan's net assets are
as follows:
December 31,
-------------------------
2000 1999
----------- -----------
Transocean Sedco Forex Ordinary Shares Fund $24,872,200 $17,608,329
Fidelity Magellan Fund 14,836,356 12,434,439
Spartan U.S. Equity Index Portfolio 6,617,067 5,777,706
Fidelity Puritan Fund 4,775,843 4,742,527
Fidelity Retirement Government Money Market Portfolio 4,440,771 5,131,348
During 2000 and 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in value as follows:
Years Ended
December 31,
------------------------
2000 1999
----------- ----------
Mutual funds $(2,833,008) $1,860,926
Ordinary Shares Fund 6,587,024 5,005,920
----------- ----------
Net appreciation $ 3,754,016 $6,866,846
=========== ==========
The Sonat Inc. Common Stock Fund is not a current investment option for the
Plan. Until July 1, 1999 participants held units of the Sonat Inc. Common Stock
Fund in the Plan as a result of the transfer of balances and the merger of
predecessor plans into the Plan. Dividends received and participant loan
repayments relating to the Sonat Inc. Common Stock Fund were reinvested into
such fund, but no additional units could be purchased by participants.
Participants in the Plan were required to transfer their investment balances in
the Sonat Inc. Common Stock Fund to one of the current investment options by
July 1, 1999. If no action was taken to liquidate the fund before July 1,
1999, the balance in this Stock Fund automatically transferred to the Fidelity
Retirement Government Money Market Portfolio.
7
TRANSOCEAN SEDCO FOREX SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
4. Income Tax Status
-----------------
The Plan received a determination letter from the Internal Revenue Service
dated February 20, 1998, stating that the Plan is qualified under Section 401(a)
of the Code and, therefore, the related trust is exempt from taxation.
Subsequent to the issuance of the determination letter, the Plan was amended.
Once qualified, the Plan is required to operate in conformity with the Code to
maintain its qualification. The Plan Administrator believes the Plan is being
operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan, as amended, is qualified and the related
trust is tax exempt.
5. Transactions with Parties-in-Interest
-------------------------------------
Fidelity executed all mutual fund investment transactions for the years
ended December 31, 2000 and 1999. Fidelity also provided certain accounting
services to the Plan. Except for participant loan processing fees, the
participating Employers have paid all administrative expenses of the Plan,
including legal, accounting and trustee fees.
6. Subsequent Events
-----------------
On January 31, 2001, Transocean Sedco Forex Inc. completed a merger
transaction with R&B Falcon Corporation ("R&B Falcon"). As a result of the
merger, certain R&B Falcon employees will be allowed to participate in the Plan
beginning June 1, 2001, July 1, 2001 or August 1, 2001 based on their assignment
and geographic location.
In addition, certain R&B Falcon employees who were not eligible to
participate in the Transocean Sedco Forex Retirement Plan will receive an
additional contribution into the Plan. The additional contribution will be made
annually on the last business day of the year and will be a minimum of 1.5
percent of base salary, as defined by the Plan. The contribution will have a
two-year vesting period with the employees receiving credit for their previous
periods of employment with R&B Falcon.
8
SUPPLEMENTAL SCHEDULE
TRANSOCEAN SEDCO FOREX SAVINGS PLAN
Schedule H, Line 4 (i) - Schedule of Assets (Held At End of Year)
PN: 002
DECEMBER 31, 2000
Current
Identity of Issue Description Value
----------------- --------------- ----------
* Transocean Sedco Forex
Ordinary Shares Fund Ordinary Shares Fund;
540,732 Shares $24,872,200
* Fidelity Magellan Fund Mutual Fund;
124,362 Shares 14,836,356
* Spartan U.S. Equity
Index Portfolio Mutual Fund;
141,360 Shares 6,617,067
* Fidelity Ret. Government
Money Market Portfolio Mutual Fund;
4,440,771 Shares 4,440,771
* Fidelity Puritan Fund Mutual Fund;
253,629 Shares 4,775,843
Neuberger & Berman
Partners Trust Mutual Fund;
34,773 Shares 587,660
MAS Fixed Income Portfolio Mutual Fund;
68,143 Shares 766,606
Templeton Foreign Fund A Mutual Fund;
55,328 Shares 572,087
* Participant Loans Loans Receivable
with various maturity
dates and interest rates
ranging from 8.75% to
10.50% 2,120,547
-----------
Total Investments $59,589,137
===========
* Indicates a party-in-interest to the Plan.
9
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Transocean Sedco Forex Savings Plan (formerly, "Transocean Offshore Savings
Plan") has duly caused this Annual Report on Form 11-K to be signed on its
behalf by the undersigned hereunto duly authorized, on the 18 day of June, 2001.
by TRANSOCEAN SEDCO FOREX SAVINGS PLAN
By /s/ Ann Clinton
------------------------------------
Ann Clinton
Plan Administrator
EXHIBIT LIST
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Number
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1. Consent of Independent Auditors Filed herewith