11-K PROFIT SHARING AND RETIREMENT PLAN 2005

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, 2005

 

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

 

  1. 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

 

  • Name of 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

     
     

     


     

    REQUIRED INFORMATION

    The Core Laboratories Profit Sharing and Retirement Plan is subject to the requirements of the Employee Retirement Income Security Act of 1974, also known as ERISA.

    ITEM 4. As permitted by the U.S. Securities and Exchange Commission Rules, Items 1, 2, and 3 of this Annual Report on Form 11-K have been omitted, and the following financial statements of the Plan, notes to such financial statements, and the Report of Independent Registered Public Accounting Firm on such financial statements are being filed in this Report in accordance with ERISA reporting requirements:

      1. Report of Independent Registered Public Accounting Firm

      2. Statements of Net Assets Available for Benefits at December 31, 2005 and 2004

      3. Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2005

      4. Notes to Financial Statements as of December 31, 2005 and 2004

      5. Schedule H, Line 4i - Schedule of Assets (Held at End of Year), as of December 31, 2005

    The Independent Registered Public Accounting Firm's Consent to the incorporation by reference of these financial statements in the Registration Statement on Form S-8 (No. 333-73772, 333-73774, 333-80473, 333-43859), which pertains to the Core Laboratories Profit Sharing and Retirement Plan, is being filed as Exhibit 23.1 and Exhibit 23.2 to this Annual Report on Form 11-K.

     


     

    CORE LABORATORIES

    PROFIT SHARING AND RETIREMENT PLAN

    DECEMBER 31, 2005 and 2004

    INDEX TO FINANCIAL STATEMENTS

    AND SUPPLEMENTAL SCHEDULE

     

     

    Page

       

               Report of Independent Registered Public Accounting Firm - Ham, Langston & Brezina
               L.L.P.

    1

       
       

               Financial Statements:

     

                         Statements of Net Assets Available for Benefits as of December 31, 2005 and 2004

    2

       

                         Statement of Changes in Net Assets Available for Benefits for the Year Ended
                         December 31, 2005

    3

       

              Notes to Financial Statements

    4

       

              Supplemental Schedule:*

     

                        Schedule of Assets (Held at End of Year) as of December 31, 2005

    9

       

              Signature

    10

       

              Index to Exhibits:

     

              Exhibit 23.1 ― Consent of Independent Registered Public Accounting Firm - Ham,
              Langston & Brezina L.L.P.

    12

       

    * All other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because the schedules are not applicable.


     

    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     

     

    To the Plan Administrator of Core Laboratories Profit Sharing and Retirement Plan:

    We have audited the accompanying Statements of Net Assets Available for Benefits of the Core Laboratories Profit Sharing and Retirement Plan (the "Plan") as of December 31, 2005 and 2004 and the related Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2005. 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 audit provides 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 as of December 31, 2005 and 2004 and the changes in net assets available for benefits for the year ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America.

    Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental schedule of assets held for investment purposes as of December 31, 2005 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. The supplemental schedule and fund information 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.

    Ham, Langston & Brezina L.L.P.

    Houston, Texas

    May 22, 2006

     


     

    CORE LABORATORIES

    PROFIT SHARING AND RETIREMENT PLAN

    STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

    AS OF DECEMBER 31, 2005 AND 2004

     

     

    2005

     

    2004

    ASSETS

         

    Cash, non-interest bearing

    $ 22,794

     

    $ 19,244

           
           

    Investments, at fair value:

         

              Money market funds

    109,610

     

    1,401

              Life insurance contract

    39,332

     

    42,078

              Common collective trusts

    9,545,014

     

    7,538,429

              Core Laboratories N.V. common stock,

              at fair value

    14,007,581

     

    9,979,883

              Registered investment companies, (mutual

              funds)

    44,372,525

     

    38,774,194

              Participant loans, at cost

    1,685,332

     

    1,235,240

     

    69,759,394

     

    57,571,225

           

    Receivables:

         

              Employee contributions receivable

    120,671

     

    113,176

              Employer contributions receivable

    543,384

     

    545,313

              Other receivables

    28,157

     

    23,500

     

    692,212

     

    681,989

           

                        Total assets

    70,474,400

     

    58,272,458

           

    LIABILITIES

         

              Payable to plan sponsor

    25,000

     

    25,000

              Other payables

    134,521

     

    18,220

           

                        Total liabilities

    159,521

     

    43,220

           

    NET ASSETS AVAILABLE FOR BENEFITS

    $ 70,314,879

     

    $ 58,229,238

     

    The accompanying notes are an integral part of these financial statements.


     

    CORE LABORATORIES

    PROFIT SHARING AND RETIREMENT PLAN

    STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

    FOR THE YEAR ENDED DECEMBER 31, 2005

     

       

    ADDITIONS TO NET ASSETS ATTRIBUTED TO:

     

    Investment income:

              Interest and dividends

    $ 2,301,316

              Net appreciation in fair value of investments:

     

                        Core Laboratories N.V. common stock

    5,746,716

                        Mutual funds

    2,248,706

     

    10,296,738

    Contributions:

     

              Participant

    3,866,117

              Participant rollovers

    168,059

              Employer

    2,205,576

    6,239,752

                        Total additions

    16,536,490

       

    DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:

     
       

    Withdrawals and retirement benefits

    4,346,898

    Administrative expenses

    103,951

                        Total deductions

    4,450,849

       

    INCREASE IN NET ASSETS

    12,085,641

    NET ASSETS AVAILABLE FOR BENEFITS:

     

                        Beginning of year

    58,229,238

                        End of year

    $ 70,314,879

     

    The accompanying notes are an integral part of these financial statements.


     

    CORE LABORATORIES

    PROFIT SHARING AND RETIREMENT PLAN

    NOTES TO FINANCIAL STATEMENTS

    DECEMBER 31, 2005 and 2004

     

    1. SUMMARY OF SIGNIFICANT PLAN PROVISIONS:

    The Core Laboratories Profit Sharing and Retirement Plan (the "Plan" or "Core Lab Plan") is sponsored by an entity (the "Company") wholly owned by Core Laboratories N.V. and was established through its predecessor entity, Core Laboratories, Inc. effective October 1, 1994. The following brief description of the Plan provides only general information. Participants should refer to the summary plan description or Plan document for a more complete description of the Plan's provisions.

    The Plan is a defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and the Internal Revenue Code (the "Code").

    Plan Administrator and Trustee

    An administrative committee appointed by the Company is the Plan administrator as defined under ERISA. The 401K Company (the "Recordkeeper") has been contracted to provide administration services for the Plan, including maintaining 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 are eligible to participate in the Plan. For most eligible employees, 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. However, certain designated classes of employees must satisfy a service requirement of either six months or 1,000 hours of service during a Plan year before becoming eligible to participate.

    Contributions

    As amended effective January 1, 2003, the Plan allows each participant to make pre-tax contributions of up to 60% of his or her compensation, as defined by the Plan, up to the statutory limit of $14,000 for 2005 ($13,000 for 2004). The Plan also allows participants who attained age 50 before the close of the Plan year to contribute an additional "catch-up" contribution as permitted under the Code. The Company may, in its discretion, make matching contributions equal to a designated percentage of each participant's pre-tax contributions, up to a maximum of a designated percentage of the participant's compensation. In addition, the Company may, in its discretion, make an additional discretionary contribution for a Plan year with respect to each participant who has completed one year of service (as defined by the Plan) and is employed by the Company on the last day of such Plan year. During 2005 and 2004, the Company made matching contributions in accordance with the Plan provisions up to a maximum of 4% of the participants' compensation. In addition, the Company made a discretionary contribution for each of the 2005 and 2004 Plan years equal to 1% of the base compensation of the participants eligible to share in the contribution. Such discretionary contribution was allocated to those eligible participants based upon a formula which included the employee's compensation and weighted average years of service, in accordance with the terms of the Plan document.

    The application of certain rules and restrictions under the Code may require that a portion of the contributions from certain highly compensated employees, as well as a portion of the corresponding Company matching contributions, be refunded in order to comply with the Code. Any such excess contributions are recorded as corrective distributions.


    Participant Accounts

    Each participant's account is credited with the participant's contribution, the Company's matching contribution, allocations of any additional Company contribution and Plan earnings, and charged with an allocation of administrative expenses. Allocations are generally based on participant earnings or account balances, as applicable, in accordance with the terms of the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account balance.

    Vesting

    Participants are fully vested in their contributions and related earnings/losses. Participants vest in Company matching and discretionary contributions and the related investment earnings or losses at the rate of 20% for each completed year of service (as defined by the Plan). A participant becomes fully vested in Company contributions and related earnings/losses if such participant, while employed by the Company, becomes totally and permanently disabled, attains normal retirement age, or dies.

    Investment Program

    Participants may direct the investment of 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 can also choose from four Asset Allocation Models: Conservative Model; Moderate Model; Moderate Aggressive Model or Aggressive Model, each of which represents 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 Company Common Stock.

    Administrative Expenses

    The Plan pays substantially all administrative expenses. For 2005, expenses were comprised of approximately $48,000 for recordkeeper fees, $45,000 for broker fees, and $10,000 for audit fees. Any legal fees associated with the Plan have been paid by the Company and are considered immaterial to the Plan assets. Additionally, the Company provides various other operational and administrative services to the Plan for which the costs are incurred directly by the Company. These expenses are not included in the Plan's financial statements. Any such expenses not paid by the Company are paid by the Plan and are included in the Plan's financial statements.

    Loans

    The Plan permits participants to borrow a minimum of $1,000 and up to a maximum amount equal to the lesser of $50,000 or 50% of their vested account balances in the Plan. Loans bear interest ranging from 5.52% to 9.69%. Loans are repaid through payroll deductions over a period not to exceed five years and are collateralized by the vested balance in the participant's account.

    Payment of Benefits and Forfeitures

    Upon termination of employment, death, or retirement, a participant, or the participant's estate in the case of death, may elect to receive a distribution equal to the participant's vested interest in his or her Plan account balance. A participant may elect an in-kind distribution of the portion of his or her vested account balance that is invested in Company Common Stock.


    A participant may make an in-service withdrawal from his or her vested account balance at age 59 1/2. Subject to satisfying the applicable requirements of the Code, a participant also may make an in-service withdrawal from his or her pre-tax contributions in the event of financial hardship, although such participant will be suspended from making additional pre-tax contributions to the Plan for a period of six months (twelve months for hardship withdrawals made prior to 2003). A participant can withdraw his or her after-tax contributions and rollover contributions, if any, from the Plan without being suspended from making additional pre-tax contributions to the Plan.

    Upon a participant's termination of employment, any unvested Company contributions and the related investment earnings or losses will be forfeited. Subject to certain conditions, a participant who returns to employment within five years from his or her previous termination date is entitled to have his or her forfeited account balance restored. Forfeitures, net of amounts restored, are used to reduce future Company contributions under the Plan or to pay Plan expenses. During 2005, forfeitures of $146,301 were used to reduce Company contributions. At December 31, 2005, forfeitures of $64,113 were available to reduce future Company contributions or to pay 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% vested in their accounts and the net assets of the Plan will be allocated and distributed among the participants and beneficiaries of the Plan in accordance with ERISA and the terms of the Plan.

     

    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 of America. Distributions to participants are recorded when paid.

    Investment Valuation

    Investments in mutual funds and Company Common Stock are reported at fair value based on quoted market prices. Participant loans receivable are valued at cost, which approximates fair value. 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, 2005, was 4.6%. Investment income is recorded as earned. Purchases and sales are recorded on a trade-date basis. Investments in life insurance policies are recorded at the cash surrender value of the life insurance policies, as determined by the issuer of the insurance policy, which approximates fair value.

    Net realized gains or losses on the sale of investments and net unrealized appreciation (depreciation) in the fair value of investments are recorded in the accompanying Statement of Changes in Net Assets Available for Benefits as net appreciation (depreciation) in fair value of investments. Dividends are recorded at the ex-dividend date.

    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 amount of net assets available for benefits and changes therein. Actual results could differ from those estimates.


    3. INVESTMENTS:

    The following presents investments that represent five percent or more of the Plan's net assets as of December 31, 2005 and 2004.

    As of December 31, 2005

       

    Core Laboratories N.V. Common Stock

    $ 14,007,581

    Invesco Stable Value Fund

    9,545,014

    Washington Mutual Investors Fund - Class A

    8,947,954

    The Growth Fund of America - Class A

    6,405,830

    Franklin Balance Sheet Investment Fund - Class A

    5,384,239

    EuroPacific Growth Fund - Class A

    5,086,665

    PIMCO Total Return Fund - Class A

    4,477,203

    Vanguard 500 Index Fund

    4,231,597

    As of December 31, 2004

       

    Core Laboratories N.V. Common Stock

    $ 9,979,883

    Washington Mutual Investors Fund - Class A

    8,269,687

    Invesco Stable Value Fund

    7,538,429

    The Growth Fund of America - Class A

    5,136,179

    Franklin Balance Sheet Investment Fund - Class A

    4,542,168

    EuroPacific Growth Fund - Class A

    4,154,060

    Vanguard 500 Index Fund

    4,087,534

    PIMCO Total Return Fund - Class A

    4,087,028

    Franklin Real Estate Securities

    2,983,621

     

    4. RISKS AND UNCERTAINTIES:

    The Plan provides for various investments in a collective trust fund, mutual funds and Company Common Stock. Investment securities, in general, are exposed to various risks, such as interest rate, foreign exchange, 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 and such changes could materially affect the amounts reported in the Statements of Net Assets Available for Benefits and the amounts reported in participant accounts.

     

    5. FEDERAL INCOME TAX STATUS:

    The Plan received a favorable determination letter dated July 25, 2003, 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 since filing for this determination letter. However, the Plan administrator believes the Plan is currently designed and is being operated in compliance with the applicable requirements of the Code.

     

    6. RELATED-PARTY TRANSACTIONS:

    The Plan provides for investment in shares of Company Common Stock and the Plan invests in participant loans. These transactions qualify as party-in-interest transactions. These transactions are exempt from the ERISA prohibited transaction rules; consequently, these transactions are permitted.

    At December 31, 2005 and 2004, the Plan owed $25,000 to the Company as reimbursement of certain administrative expenses paid by the Company.


     

    SUPPLEMENTAL SCHEDULE

     


     

    SCHEDULE H, line 4i

    CORE LABORATORIES

    PROFIT SHARING AND RETIREMENT PLAN

    SCHEDULE OF ASSETS (HELD AT END OF YEAR)

    AS OF DECEMBER 31, 2005

     

     

    (a)

    (b) Identity of Issuer, Borrower,

    Lessor or Other Similar Party

    (c) Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value

    (d) # of Units

    ***

    (e) Current Value

    **

    Core Laboratories N.V. *

    Core Laboratories N.V. Common Stock

    374,918

    $ 14,007,581

    **

    AMVESCAP National Trust Company

    Stable Value Fund

    9,545,014

    9,545,014

    **

    American Funds

    Washington Mutual Investors Fund - Class A

    290,141

    8,947,954

    **

    American Funds

    The Growth Fund of America - Class A

    207,577

    6,405,830

    **

    Franklin Templeton Investments

    Franklin Balance Sheet Investment Fund - Class A

    87,222

    5,384,239

    **

    American Funds

    EuroPacific Growth Fund - Class A

    123,763

    5,086,665

    **

    PIMCO Funds

    PIMCO Total Return Fund Class A

    426,400

    4,477,203

    **

    The Vanguard Group

    Vanguard 500 Index Fund

    36,822

    4,231,597

    Franklin Templeton Investments

    Franklin Real Estate Securities Fund - Class A

    133,344

    3,430,940

    Lord Abbett & Company

    Lord Abbett Developing Growth Fund - Class A

    169,555

    2,980,778

    Franklin Templeton Investments

    Templeton Developing Markets Trust - Class A

    78,550

    1,839,647

    Participant Loans *

    Interest rates ranging from 5.52% to 9.69% with varying maturity dates

    N/A

    1,685,332

    Franklin Templeton Investments

    Templeton Foreign Smaller Companies Fund - Class A

    78,095

    1,587,672

    Alliance Capital Management Corp.

    Alliance Capital Reserves

    N/A

    109,610

    Conseco Life Insurance Company

    Cash surrender value of life insurance policies

    N/A

    39,332

    Total assets (held at end of year)

    $ 69,759,394

     

    * Represents a party-in-interest transaction.

    ** Represents investments comprising at least 5% of net assets available for benefits.

    *** Cost information is not presented because all investments are participant directed.

     


     

    SIGNATURE

     

     

    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 29, 2006

     

     

    CORE LABORATORIES

     

    PROFIT SHARING AND RETIREMENT PLAN

         
     

    By:

    Administrative Committee of the

       

    Core Laboratories Profit Sharing and

       

    Retirement Plan

         
     

    By:

    /s/ Richard L. Bergmark

       

    Richard L. Bergmark

       

    Administrative Committee Member,

       

    Core Laboratories Profit Sharing and

       

    Retirement Plan

         

     

     


     

     

    INDEX TO EXHIBITS

     

    Exhibit Number

    Description

       

    23.1

    Exhibit 23.1 - Consent of Independent Registered Public Accounting Firm - Ham, Langston & Brezina L.L.P.


     

    EXHIBIT 23.1

     

    CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     

    We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-73772, 333-73774, 333-80473, 333-43859) of Core Laboratories N.V. of our report dated May 22, 2006 relating to the financial statements of Core Laboratories Profit Sharing and Retirement Plan, which appears in this Form 11-K.

     

    /s/ Ham, Langston & Brezina L.L.P.

     

    Houston, Texas

    June 28, 2006