SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
| þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
| For the Fiscal Year | Commission | |||||
| Ended December 31, 2004 | File Number 000-23709 | |||||
DOUBLECLICK INC.
401(k) PLAN
(Name of Plan)
DOUBLECLICK INC.
(Name of Issuer of Securities held pursuant to Plan and
address of its principal executive office.)
DoubleClick Inc. 401(k) Plan
| Page | ||||||||
| 1 | ||||||||
| Audited Financial Statements: | ||||||||
| 2 | ||||||||
| 3 | ||||||||
| 4-9 | ||||||||
| Supplemental Schedule: * | ||||||||
| 10 | ||||||||
| 11 | ||||||||
| Exhibits | ||||||||
| 12 | ||||||||
| EX-23.1: CONSENT OF PRICEWATERHOUSECOOPERS LLP | ||||||||
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator of
DoubleClick Inc. 401(k) 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 the DoubleClick Inc. 401(k) Plan (the “Plan”) at December 31, 2004 and 2003, and the changes in net assets available for benefits for the year ended December 31, 2004 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 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
Our audits were 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 audits 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
New York, New York
June 29, 2005
1
DoubleClick Inc. 401(k) Plan
| 2004 | 2003 | |||||||
Assets | ||||||||
| Investments, at fair value: | ||||||||
| Mutual funds | $ | 29,464,042 | $ | 21,067,483 | ||||
| DoubleClick Inc. common stock | 7,242,748 | 7,433,774 | ||||||
| Collective investment fund | 2,323,237 | 1,635,239 | ||||||
| Participant loans | 352,668 | 230,940 | ||||||
Total investments | 39,382,695 | 30,367,436 | ||||||
| Receivables: | ||||||||
| Employer contributions | 345,985 | 269,214 | ||||||
| Employee contributions | 214,089 | 155,836 | ||||||
Total receivables | 560,074 | 425,050 | ||||||
Net assets available for benefits | $ | 39,942,769 | $ | 30,792,486 | ||||
The accompanying notes are an integral part of these financial statements.
2
DoubleClick Inc. 401(k) Plan
| 2004 | ||||
Additions: | ||||
| Investment income: | ||||
| Interest, dividends, and capital gain distributions | $ | 329,064 | ||
| Net realized and unrealized appreciation in fair value of investments | 1,172,788 | |||
Total investment income | 1,501,852 | |||
| Contributions: | ||||
| Employer | 2,416,167 | |||
| Employee | 6,753,957 | |||
| Rollover | 2,155,899 | |||
Total contributions | 11,326,023 | |||
Total additions | 12,827,875 | |||
Deductions: | ||||
| Benefits paid to participants | 3,673,212 | |||
| Administrative and other fees | 4,380 | |||
Total deductions | 3,677,592 | |||
Net increase | $ | 9,150,283 | ||
| Net assets available for benefits: | ||||
| Beginning of year | 30,792,486 | |||
| End of year | $ | 39,942,769 | ||
The accompanying notes are an integral part of these financial statements.
3
DoubleClick Inc. 401(k) Plan
| 1. | Description of the Plan | |||
| The following description of the DoubleClick Inc. 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the DoubleClick Inc. 401(k) Plan Summary Plan Description and Prospectus for a more complete description of the Plan’s provisions. | ||||
| General The Plan is a defined contribution plan established January 1, 1997, covering eligible employees of DoubleClick Inc. (the “Company” or “DoubleClick”), the Plan’s sponsor. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan is administered by the Company. | ||||
| Participant Accounts A separate account is established and maintained for each Plan participant. Contributions are invested in one or more investment options, as directed by the participant. Income earned and net appreciation or depreciation on Plan investments, for a given investment, are allocated in proportion to the participants’ account balances in that fund. On a daily basis, a participant may elect to transfer all or a portion of his or her account balance in a given investment to one or more of the Plan’s other investments. However, employer contributions in DoubleClick common stock may only be transferred upon termination of employment. Transfers of employee contributions in DoubleClick common stock are subject to blackout periods. | ||||
| Effective October 1, 2003 the Company eliminated DoubleClick Stock as an investment election for participant directed funds. Company stock purchased with contributions prior to that date could remain in the fund but no future contributions or fund exchanges are permitted. | ||||
| Contributions Plan participants are able to contribute to the Plan up to 20% of their pre-tax earnings. During 2004, the maximum pre-tax contribution allowed by the Internal Revenue Code was $13,000. In addition, participants 50 years of age and older could contribute an additional $3,000 as a “catch-up contribution” in 2004. The Company automatically contributes an amount equal to 50% of the first 6% of a participant’s contribution each pay period in DoubleClick common stock. A “true-up” Employer match will be made in the following year for participants who have contributed 6% or more of their annual salary, but the Company has matched less than 50% of the 6% due to each pay period’s match limit of 50% of 6% of each participant’s contribution amount. | ||||
| Vesting Participants are fully vested in their contributions and actual earnings thereon. Contributions by the Company become fully vested after two years of | ||||
4
DoubleClick Inc. 401(k) Plan
| employment. The Plan provides that forfeitures, the unvested portion of Company contributions for terminated participants, will serve to reduce future Company contributions. | ||||
| Payment of Benefits Upon retirement, disability, death or termination of employment, participants’ account balances are distributed to the participants in the form of a lump-sum amount equal to the value of the accounts, or installments over a period not to exceed the lives of the participants and their beneficiaries. Participants are allowed to withdraw certain portions of their vested contributions under certain circumstances, subject to penalty. | ||||
| Participant loans Participants may borrow from their accounts a minimum of $1,000 up to a maximum of the lesser of $50,000, or 50% of their vested balances. Loan terms range from one to five years or up to ten years for loans used to purchase a primary residence. Loans are secured by the balances in participants’ accounts and the interest rate is determined by prime +1% at the time of the loan. Principal and interest is paid ratably through semi-monthly payroll deductions. | ||||
| Forfeited Accounts At December 31, 2004 and 2003 forfeited non-vested accounts totaled $151,813 and $68,361, respectively. These accounts will be used to reduce future employer contributions. In 2004, employer contributions were not reduced from activity of forfeited non-vested accounts. | ||||
| 2. | Summary of Significant Accounting Policies | |||
| Basis of presentation The financial statements of the Plan have been prepared in accordance with accounting principles generally accepted in the United States of America. | ||||
| Investment valuation The Plan’s investments in mutual funds are stated at market value based on the latest quoted net asset value per share. The Plan’s investment in DoubleClick common stock is stated at market value as determined by the latest quoted market prices. Participant loans are valued at cost, which approximates fair value. | ||||
| Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and disclosures at the date of the financial statements and the reported amounts of total additions and deductions in the statement of changes in net assets available for benefits. Actual results could differ from those estimates. | ||||
5
DoubleClick Inc. 401(k) Plan
| The Plan invests in mutual funds that hold various securities including U.S. Government securities, corporate debt instruments and common stocks. Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in values in the near term would materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits. | ||||
| Income recognition Dividends, interest income, and capital gain distributions from mutual funds are recorded as earned. | ||||
| Administrative expenses The Company pays a portion of Plan expenses, including custodian fees and brokers commissions, incurred in the management and administration of the Plan. In 2004, the Plan’s administrative fees of $500 were paid by the Company. | ||||
| Payment of benefits Benefits are recorded when paid. At December 31, 2004 benefits payable to participants were $9,969. | ||||
| 3. | Investments | |||
| As of December 31, 2004, the Plan’s investments were as follows: | ||||
| DoubleClick Inc. Common Stock, 930,944 shares | $ | 7,242,748 | * | |
| Van Kampen Comstock Fund | 4,818,149 | * | ||
| Euro Pacific Growth Fund | 3,280,166 | * | ||
| Jennison US Emerging Growth Fund | 2,717,340 | * | ||
| Jennison Equity Opportunity | 1,724,798 | |||
| Growth Fund of America | 6,292,668 | * | ||
| Oppenheimer Global Fund | 3,183,227 | * | ||
| Dryden Stock Index Fund | 2,674,059 | * | ||
| Dryden Total Return Bond Fund | 1,809,287 | |||
| Franklin US Government Securities | 714,694 | |||
| Jennison 20/20 Focus Fund | 178,114 | |||
| State Street Research Emerging Growth Fund | 2,071,540 | * | ||
| Prudential Stable Value Fund | 2,323,237 | * | ||
| Participant Loans | 352,668 | |||
| Total Investments | $ | 39,382,695 | ||
6
DoubleClick Inc. 401(k) Plan
| As of December 31, 2003, the Plan’s investments were as follows: |
| DoubleClick Inc. Common Stock, 721,726 shares | $ | 7,433,774 | * | |
| MFS New Discovery Fund | 2,038,170 | * | ||
| Van Kampen Comstock Fund | 2,808,028 | * | ||
| Euro Pacific Growth Fund | 2,271,564 | * | ||
| Jennison US Emerging Growth Fund | 1,828,525 | * | ||
| Jennison Equity Opportunity | 917,722 | |||
| Growth Fund of America | 4,151,688 | * | ||
| Oppenheimer Global Fund | 2,556,729 | * | ||
| Dryden Stock Index Fund | 2,436,925 | * | ||
| Dryden Total Return Bond Fund | 1,382,970 | |||
| Franklin US Government Securities | 617,462 | |||
| Jennison 20/20 Focus Fund | 57,700 | |||
| Prudential Stable Value Fund | 1,635,239 | * | ||
| Participant Loans | 230,940 | |||
| Total Investments | $ | 30,367,436 | ||
| * | Represents 5% or more of the Plan’s net assets |
| During 2004, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $1,172,788 as follows: |
| DoubleClick common stock | $ | (1,870,633 | ) | |
| Mutual funds | 2,969,226 | |||
| Collective investment fund | 74,195 | |||
| $ | 1,172,788 | |||
| 4. | Nonparticipant-Directed Investments | |||
| Participants at their discretion may invest their contributions in any or all of the twelve investment fund options offered under the Plan. However, the Employer’s contributions to the Plan are automatically invested in the DoubleClick Inc. Common Stock Fund (the “Stock Fund”). As of December 31, 2004 and 2003, the net assets of the Stock Fund were $7,242,748 and $7,433,774, respectively. The components of the changes in net assets relating to the Stock Fund are as follows: | ||||
7
DoubleClick Inc. 401(k) Plan
| Year ended December 31, 2004 | ||||
| Changes in net assets | ||||
| Net depreciation | $ | (1,870,633 | ) | |
| Contributions | 2,358,091 | |||
| Benefit paid to participants | (647,121 | ) | ||
| Transfers to participant-directed investments | (31,363 | ) | ||
| Net Change | $ | (191,026 | ) | |
| 5. | Plan Termination | |||
| While the Company has not expressed an interest to terminate the Plan, it reserves the right to amend or terminate the Plan at any time, subject to the requirements and penalties of ERISA. No such amendment shall have the effect of diverting the whole, or any part, of the assets or income of the Plan for purposes other than for the exclusive benefit of participants and their beneficiaries. In the event of discontinuance and/or termination of the Plan, participants will become 100% vested in the Company contributions and net assets of the Plan will be allocated among the participants and their beneficiaries in accordance with the provisions of ERISA. | ||||
| 6. | Tax Status | |||
| The Internal Revenue Service determined and informed the Company by a letter dated December 13, 2004, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code. The Plan has not been amended since receiving the determination letter. Therefore, no provision for income taxes has been included in the Plan’s financial statements. | ||||
| 7. | Related Party Transactions | |||
| Certain Plan investments are shares of mutual funds managed by Prudential Retirement Services (the “Trustee”) of the Plan. In addition, one of the investment options of the Plan consists of Common Stock of the Plan sponsor, DoubleClick Inc. Transactions with the Trustee and the Company qualify as party-in-interest transactions. | ||||
| 8. | Concentration of Credit Risk | |||
| The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits. At December 31, 2004, Plan participants’ accounts that are invested in the Company’s common stock investment option, which amount to $7,242,748 or 18% of net assets available for benefits, are exposed to market risk in the event of a | ||||
8
DoubleClick Inc. 401(k) Plan
| significant decline in the value of the Company’s common stock. | ||||
| 9. | Reconciliation to Form 5500 | |||
| The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2004 and 2003, to Form 5500: | ||||
| 2004 | 2003 | |||||||
| Net assets available for benefits per the financial statements | $ | 39,942,769 | $ | 30,792,486 | ||||
| Less: Amounts requested by participants to be withdrawn from the Plan but have not yet been paid | (9,969 | ) | (14,048 | ) | ||||
| Net assets available for benefits per the Form 5500 | $ | 39,932,800 | $ | 30,778,438 | ||||
| The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 2004, to Form 5500: |
| Benefits paid to participants per the financial statements | $ | 3,673,212 | ||
| Add: Amounts requested by participants to be withdrawn from the Plan but have not yet been paid at December 31, 2004 | 9,969 | |||
| Less: Amounts requested by participants to be withdrawn from the Plan but have not yet been paid at December 31, 2003 | (14,048 | ) | ||
| Benefits paid to participants per Form 5500 | $ | 3,669,133 | ||
9
DoubleClick Inc. 401(k) Plan
Schedule I
| (e)Current | ||||||||||||
| (a) | (b) Identity of Issue | (c) Description of Investment | (d) Cost | Value | ||||||||
| State Street Research Emerging Growth Fund | Mutual Fund | ** | $ | 2,071,540 | ||||||||
| Van Kampen Comstock Fund | Mutual Fund | ** | 4,818,149 | |||||||||
| Euro Pacific Growth Fund | Mutual Fund | ** | 3,280,166 | |||||||||
| * | Jennison US Emerging Growth Fund | Mutual Fund | ** | 2,717,340 | ||||||||
| * | Jennison Equity Opportunity | Mutual Fund | ** | 1,724,798 | ||||||||
| Growth Fund of America | Mutual Fund | ** | 6,292,668 | |||||||||
| Oppenheimer Global Fund | Mutual Fund | ** | 3,183,227 | |||||||||
| * | Dryden Stock Index Fund | Mutual Fund | ** | 2,674,059 | ||||||||
| * | Dryden Total Return Bond Fund | Mutual Fund | ** | 1,809,287 | ||||||||
| Franklin US Government Securities | Mutual Fund | ** | 714,694 | |||||||||
| * | Jennison 20/20 Focus Fund | Mutual Fund | ** | 178,114 | ||||||||
| * | Prudential Stable Value Fund | Collective Investment Fund | ** | 2,323,237 | ||||||||
| * | DoubleClick Inc. Common Stock | Common Stock | $ | 8,254,202 | 7,242,748 | |||||||
| Total Investments | $ | 39,030,027 | ||||||||||
| Participant Loans* | Interest rate charged in 2004: 4.26% - 10.5% | |||||||||||
| Range of Maturity: 1-5 years | $ | 352,668 | ||||||||||
| * | Denotes party in interest |
| ** | Cost information is not required for participant directed investments and therefore is not included. |
10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, DoubleClick Inc., the administrator of the DoubleClick Inc. 401(k) Plan, has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.
| DOUBLECLICK INC. 401(k) PLAN | ||||
| By: | Cory Douglas | |||
| VP of Finance and Corporate Controller | ||||
| DoubleClick Inc. |
June 29, 2005
11
