Gemstar TV Guide International (GMST) Inactive
Filed: 28 Jun 05, 12:00am
[X] Annual Report Pursuant to Section 15(d) of The Securities Exchange Act of 1934
For the Fiscal Year ended December 31, 2004
OR
[ ] Transition Report Pursuant to Section 15(d) of The Securities Exchange Act of 1934
For the Transition Period from ______ to ______
Commission file number 0-24218
| A. | Full title of plan and the address of the plan, if different from that of the issuer named below: |
6922 Hollywood Boulevard
12th Floor
Los Angeles, CA 90028
| B. | Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office: |
6922 Hollywood Boulevard
12th Floor
Los Angeles, CA 90028
| Page | |||
| Report of Independent Registered Public Accounting Firm | 3 | ||
| Financial Statements: | |||
| Statements of Net Assets Available for Benefits | 4 | ||
| Statement of Changes in Net Assets Available for Benefits | 5 | ||
| Notes to Financial Statements | 6 | ||
| Supplemental Schedule | |||
| Schedule of Assets (Held at End of Year) | 11 | ||
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To the Plan Administrator
GEMSTAR-TV GUIDE INTERNATIONAL, INC. 401(k) PLAN:
We have audited the accompanying statements of net assets available for benefits of Gemstar-TV Guide International, Inc. 401(k) Plan as of December 31, 2004 and 2003, and the related statement of changes in net assets available for benefits for the year ended December 31, 2004. 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. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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.
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, 2004 and 2003, and the changes in its net assets available for benefits for the year ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.
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, 2004 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 financial statements taken as a whole.
/s/ Ernst & Young LLP
Los Angeles, California
May 20, 2005
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Statements of Net Assets Available for Benefits
| December 31, | |||||
|---|---|---|---|---|---|
| 2004 | 2003 | ||||
| Cash | $ 57,646 | $ 38,897 | |||
| Investments at fair value: | |||||
| Common/collective trust funds | 28,719,185 | 29,405,687 | |||
| Mutual funds | 55,332,480 | 50,304,594 | |||
| Common stock | 493,169 | 409,161 | |||
| Preferred stock | - | 118,032 | |||
| Participant loans | 1,568,711 | 1,732,117 | |||
| Total investments | 86,113,545 | 81,969,591 | |||
| Receivables: | |||||
| Employee contributions receivable | 75,060 | 1,243 | |||
| Employer contributions receivable | 35,185 | 608 | |||
| Accrued income | 9,869 | 9,391 | |||
| Total receivables | 120,114 | 11,242 | |||
| Net assets available for benefits | $86,291,305 | $82,019,730 | |||
See accompanying notes to financial statements.
4
Statement of Changes in Net Assets
Available for Benefits
Year Ended December 31, 2004
Additions to net assets available for benefits attributed to:
| Investment income: | |||
| Interest | $ | 84,333 | |
| Dividends | 1,946,621 | ||
| Total investment income | 2,030,954 | ||
| Contributions: | |||
| Employee | 6,382,769 | ||
| Employer, net of forfeitures | 2,879,883 | ||
| Total contributions | 9,262,652 | ||
| Net appreciation in fair value of investments | 5,263,598 | ||
| Total additions | 16,557,204 | ||
| Deductions from net assets available for benefits attributed to: | |||
| Benefits paid to participants | 12,255,228 | ||
| Other, net | 30,401 | ||
| Total deductions | 12,285,629 | ||
| Net increase in net assets available for benefits | 4,271,575 | ||
| Net assets available for benefits: | |||
| Beginning of year | 82,019,730 | ||
| End of year | $ | 86,291,305 | |
See accompanying notes to financial statements.
5
Notes to Financial Statements
| The following description of the Gemstar-TV Guide International, Inc. 401(k) Plan, (the “Plan”) provides only general information. Participants should refer to the Plan document for a complete description of the Plan’s provisions. |
(a) General
| The Plan is a defined contribution plan covering all eligible employees of Gemstar-TV Guide International, Inc. (the “Company”) and its participating affiliates, who have completed one month of service and are age twenty-one or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). The Plan sponsor is Gemstar-TV Guide International, Inc. |
(b) Contributions
| Participants can elect to contribute, through payroll deductions, from 1% to 25% of pre-tax compensation, as defined in the Plan, subject to certain limitations outlined in the Internal Revenue Code (the “Code”). Eligible employees may make a rollover contribution to the Plan of all or any portion of eligible rollover distributions as defined in the Plan. The Company may make a matching contribution of an amount equal to a designated percentage rate of each participant’s contribution of pre-tax compensation. The Company’s matching percentage is determined by the Company and announced prior to the beginning of the Plan year. For the year ended December 31, 2004, the Company matched 100% of the first 4% of each participant’s contribution of pre-tax compensation. For any Plan year, additional matching contributions can be made at the discretion of the Company. There were no additional discretionary matching contributions made for the year ended December 31, 2004. |
| Participant contributions reported in the accompanying Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2004, includes $316,269 rolled over into the Plan from other qualified plans. |
(c) Participant Accounts
| Each participant’s account is credited with the participant’s contributions, the Company’s matching contributions, and an allocation of the Plan’s earnings. The benefit to which a participant is entitled is the vested balance in the participant’s account. |
(d) Vesting
| Participants are immediately vested in their contributions plus actual earnings thereon. Vesting for Company matching contributions is at a rate of 20% per year beginning after the employee’s first full year of service with an additional 20% for each of the next four years, achieving 100% vesting at five years of credited service. Participants become fully vested in the Company matching contributions upon retirement or in the event of death or disability. |
| Employer matching contributions plus actual earnings or losses thereon forfeited due to employees leaving the Company prior to fully vesting are primarily used to offset future employer contributions. At December 31, 2004 and 2003, forfeited non-vested accounts totaled $325,437 and $260,151, respectively. During the year ended December 31, 2004, |
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Notes to Financial Statements
(d) Vesting (continued)
| employer contributions were reduced by $151,302 from forfeited non-vested accounts. |
(e) Investment Options
| Upon enrollment in the Plan, a participant may direct employer and employee contributions in 1% increments to the available investment options. Participants may change their investment options and transfer balances between existing investments on a daily basis. |
(f) Payment of Benefits
| Upon separation of service due to termination, death, disability or retirement, participants can elect to leave their account balance within the Plan until minimum distribution payments are required by law or elect to receive either a lump sum distribution of their account or, if their account balance is greater than $5,000, equal periodic payments over a designated period in accordance with current tax regulations. |
(g) Participant Loans
| Under certain circumstances, participants may borrow from their accounts up to a maximum of $50,000 or 50% of their vested account balance, whichever is less. Loan terms are not to exceed five years (20 years for the purchase of a principal residence). The loans are secured by the balance in the participant’s account and bear interest at the prime rate published in the Wall Street Journal on the first business day of the month prior to the date the loan is funded plus 1%. The participant repays principal and interest either through payroll deductions or in such a manner as determined by the committee appointed to administer the Plan. |
(h) Administrative Expenses
| The Company may elect to pay all administrative expenses of the Plan. Administrative expenses not paid by the Company are paid from Plan assets. The Company paid all administrative expenses in 2004. |
(a) Basis of Presentation
| The accompanying financial statements of the Plan have been prepared on an accrual basis of accounting in conformity with U.S. generally accepted accounting principles. |
(b) Investment Valuation
| The Plan’s investments are stated at fair value. Mutual funds and common stock are valued based quoted market prices. Common/collective trusts are valued by an affiliate of the trustee based upon quoted market prices of underlying investments. The participant loans are valued at their outstanding balance, which approximates fair value. Purchases and sales of securities are recorded on a trade date basis. |
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Notes to Financial Statements
(b) Investment Valuation (continued)
| The net appreciation or depreciation in investment values during the period is reflected in the Statement of Changes in Net Assets Available for Benefits. The net appreciation or depreciation includes realized gains and losses on investments sold during the period and unrealized gains and losses on investments held. |
(c) Use of Estimates
| The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
(d) Payment of Benefits
| Benefits are recorded when paid. |
(e) Risks and Uncertainties
| The Plan provides for various investment options in mutual funds and other 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 and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statement of Changes in Net Assets Available for Benefits. |
| The following table presents the fair values of individual investments greater than 5% of the Plan’s net assets at December 31, 2004 and 2003: |
| 2004 | 2003 | ||||
|---|---|---|---|---|---|
| Merrill Lynch Retirement Preservation Trust | $ | 18,302,888 | $ | 18,420,600 | |
| Davis New York Venture Fund Class A | 12,625,065 | 11,377,780 | |||
| Merrill Lynch Equity Index Trust Tier 1 | 10,416,297 | 10,985,087 | |||
| PIMCO Total Return Fund Class A | 6,173,987 | 6,126,334 | |||
| Dreyfus Premier Balanced Fund Class A | 5,249,590 | 5,333,024 | |||
| ING International Value Fund Class A | 5,683,929 | 4,465,627 | |||
| Pioneer Growth Shares Class A | * | 4,117,813 | |||
* Balance is less than 5% of the Plan’s net assets available for benefits.
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Notes to Financial Statements
| The following schedule presents the net appreciation in fair value for each significant class of investment for the year ended December 31, 2004: |
| 2004 | |||||
|---|---|---|---|---|---|
| Mutual funds | $ | 4,164,029 | |||
| Common/collective trust funds | 1,025,703 | ||||
| Common stock | 73,866 | ||||
| $ | 5,263,598 | ||||
| In addition to the Company and participants, there are three other parties-in-interest. Merrill Lynch & Co., Inc. (“Merrill Lynch”) and its affiliates, maintain certain common/collective trust funds which are included in the Plan investments. Merrill Lynch Retirement Services Group, a Merrill Lynch affiliate, performs recordkeeping responsibilities for the Plan and Merrill Lynch Trust Company is the Plan trustee. News Corporation is a significant holder of the Company’s common stock and certain of its officers and directors serve on the Company’s Board of Directors. |
| The Plan has received a determination letter from the Internal Revenue Service dated April 18, 2003, stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. 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 is qualified and the related trust is tax exempt. |
| Although it has not expressed any intent to do so, the Company’s Board of Directors has the right under the Plan to discontinue Company contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become fully vested in their accounts. |
| The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31, 2004: |
| Net assets available for benefits per the financial statements | $ | 86,291,305 | |||
| Amounts allocated to withdrawing participants | (57,090 | ) | |||
| Net assets available for benefits per the Form 5500 | $ | 86,234,215 | |||
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Notes to Financial Statements
| The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500 for the year ended December 31, 2004: |
| Benefits paid to participants per the financial statements | $ | 12,255,228 | |||
| Amounts allocated to withdrawing participants | 57,090 | ||||
| Benefits paid to participants per the Form 5500 | $ | 12,312,318 | |||
| Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, but not yet paid as of that date. |
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Schedule 1
Schedule H, Line 4i – Schedule of Assets (Held At End of Year)
December 31, 2004
| Party-in- Interest Identification | Identity of Issue, Borrower, Lessor, or Similar Party | Description of Investment Including Maturity Date, Rate of Interest, Par or Maturity Value | Current Value | ||||||
|---|---|---|---|---|---|---|---|---|---|
| * | Merrill Lynch: | ||||||||
| Equity Index Trust Tier 1 | Common/collective trust | 117,169 shares | $10,416,297 | ||||||
| Retirement Preservation Trust | Common/collective trust | 18,302,888 shares | 18,302,888 | ||||||
| PIMCO: | |||||||||
| High Yield Fund Class A | Mutual fund | 176,458 shares | 1,759,284 | ||||||
| Total Return Fund Class A | Mutual fund | 578,630 shares | 6,173,987 | ||||||
| ING International Value Fund Class A | Mutual fund | 322,036 shares | 5,683,929 | ||||||
| * | Merrill Lynch: | ||||||||
| Global Allocation Fund, Inc. Class A | Mutual fund | 53,597 shares | 884,883 | ||||||
| Value Opportunities Fund Class A | Mutual fund | 44,542 shares | 1,218,226 | ||||||
| Oppenheimer Capital Appreciation | |||||||||
| Fund Class A | Mutual fund | 54,273 shares | 2,237,113 | ||||||
| Wells Fargo Large Company Growth | |||||||||
| Fund Class A | Mutual fund | 3,154 shares | 155,049 | ||||||
| Fidelity Advisor Diversified | |||||||||
| International Fund Class T | Mutual fund | 70,082 shares | 1,300,727 | ||||||
| The Oakmark Equity and Income Fund | |||||||||
| Class II | Mutual fund | 80,589 shares | 1,888,204 | ||||||
| Lord Abbett Small Cap Value Fund | |||||||||
| Class A | Mutual fund | 42,852 shares | 1,176,720 | ||||||
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| Party-in- Interest Identification | Identity of Issue, Borrower, Lessor, or Similar Party | Description of Investment Including Maturity Date, Rate of Interest, Par or Maturity Value | Current Value | ||||||
|---|---|---|---|---|---|---|---|---|---|
| MFS Strategic Growth Fund Class A | Mutual fund | 5,929 shares | $ 112,062 | ||||||
| Delaware Trend Fund Class A | Mutual fund | 67,403 shares | 1,427,599 | ||||||
| Van Kampen: | |||||||||
| Van Kampen American Value Fund | |||||||||
| Class A | Mutual fund | 129,807 shares | 3,159,513 | ||||||
| Pioneer Growth Shares Class A | Mutual fund | 351,204 shares | 4,260,108 | ||||||
| Dreyfus Premier Balanced Fund | |||||||||
| Class A | Mutual fund | 411,410 shares | 5,249,590 | ||||||
| AllianceBernstein Global Technology | |||||||||
| Fund Class A | Mutual fund | 46,028 shares | 2,624,087 | ||||||
| Massachusetts Investors Trust Class A | Mutual fund | 196,775 shares | 3,396,334 | ||||||
| Davis New York Venture Fund | |||||||||
| Class A | Mutual fund | 411,374 shares | 12,625,065 | ||||||
| * | Gemstar-TV Guide International, | ||||||||
| Inc. Common Stock | Common stock | 49,886 shares | 295,326 | ||||||
| * | News Corporation | ||||||||
| Common Stock Class A | Common stock | 4,754 shares | 88,709 | ||||||
| * | News Corporation | ||||||||
| Common Stock Class B | Common stock | 5,684 shares | 109,134 | ||||||
| * | Participant Loans | Interest rates from 5.0% to 10.5% | 1,568,711 | ||||||
| $86,113,545 | |||||||||
* Party-in-Interest as defined by ERISA
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Pursuant to the requirements of the Securities 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.
| GEMSTAR-TV GUIDE INTERNATIONAL, INC. 401(K) PLAN BY: /S/ Marc Verville Marc Verville Senior Vice President, Corporate Finance Operations Gemstar-TV Guide International, Inc. |
Date: June 28, 2005
13
| Exhibit No. | Description |
|---|---|
| 23.1 | Consent of Ernst & Young LLP |
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