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, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
COMMISSION FILE NUMBER 001-12929
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
COMMSCOPE, INC. OF NORTH CAROLINA EMPLOYEES RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
COMMSCOPE, INC.
---------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-4135495
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1375 LENOIR-RHYNE BOULEVARD, P.O. BOX 339
HICKORY, NORTH CAROLINA 28603
(Address of principal executive offices)
(Zip Code)
(828) 324-2200
(Registrant's telephone number, including area code)
COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
(FORMERLY COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES PROFIT SHARING AND SAVINGS PLAN)
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS
Years Ended December 31, 2000, 1999 and 1998
Supplemental Schedules
Year Ended December 31, 2000
COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
(FORMERLY COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES PROFIT SHARING AND SAVINGS PLAN)
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2000 AND
1999 AND FOR THE YEARS ENDED
DECEMBER 31, 2000, 1999 AND 1998:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-9
SUPPLEMENTAL SCHEDULES:
Form 5500, Schedule H, Part IV, Line 4i - Schedule
of Assets Held for Investment
Purposes at End of Year 10
Form 5500, Schedule H, Part IV, Line 4j - Schedule
of Reportable Transactions for the Year Ended
December 31, 2000 11
NOTE: The accompanying financial statements have been prepared for the
purpose of filing with the Department of Labor's Form 5500.
Supplemental schedules required by Section 2520 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974, other than those
listed above, are omitted because of the absence of the conditions
under which they are required.
INDEPENDENT AUDITORS' REPORT
To the Participants and Administrator
of CommScope, Inc. of North Carolina
Employees Retirement Savings Plan
(Formerly CommScope, Inc. of North Carolina
Employees Profit Sharing and Savings Plan):
We have audited the accompanying statements of net assets available for
benefits of CommScope, Inc. of North Carolina Employees Retirement Savings
Plan (Formerly CommScope, Inc. of North Carolina Employees Profit Sharing
and Savings Plan) (the "Plan") as of December 31, 2000 and 1999, and the
related statements of changes in net assets available for benefits for each
of the three years in the period ended December 31, 2000. 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 of America. 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, such financial statements 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 net assets available for benefits for
each of the three years in the period ended December 31, 2000 in conformity
with accounting principles generally accepted in the United States of
America.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules
listed in the Table of Contents are presented for the purpose 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. These schedules are the responsibility of the
Plan's management. Such schedules have been subjected to the auditing
procedures applied in our audit of the basic 2000 financial statements and,
in our opinion, are fairly stated, in all material respects, when
considered in relation to the basic financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
Hickory, North Carolina
May 25, 2001
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COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
(FORMERLY COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES PROFIT SHARING AND SAVINGS PLAN)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
- -------------------------------------------------------------------------------
ASSETS 2000 1999
Investments, at fair value
(Notes 1, 2, 3, 4 and 5):
Mutual funds $ 81,027,022 $ 83,633,117
Common trust fund 5,756,082 6,929,130
CommScope stock fund 17,846,843 27,026,809
Loans to participants 7,188,773 6,929,017
------------- ------------
Total investments 111,818,720 124,518,073
------------- ------------
RECEIVABLES:
Employer's contribution 194,237 96,609
Participants' contributions 598,235 297,384
------------- ------------
Total receivables 792,472 393,993
------------- ------------
TOTAL ASSETS 112,611,192 124,912,066
LIABILITIES - Excess contributions 18,897 7,237
------------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 112,592,295 $124,904,829
============= ============
See notes to financial statements.
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COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
(FORMERLY COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES PROFIT SHARING AND SAVINGS PLAN)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
- ----------------------------------------------------------------------------------------------------------
2000 1999 1998
ADDITIONS:
Investment (loss) income:
Net (depreciation) appreciation in fair value of
investments (Notes 2 and 3) $(26,130,356) $ 18,433,174 $ 10,291,667
Interest and dividend income (Note 2) 5,983,434 4,933,008 4,980,431
------------ ------------- ------------
Total investment (loss) income (20,146,922) 23,366,182 15,272,098
Contributions:
Employer's contributions (Note 1) 8,072,003 5,459,083 5,433,319
Participants' contributions (Note 1) 6,061,636 4,794,962 4,220,987
Participants' rollover contributions (Note 2) 1,202,433 301,348 238,113
------------ ------------- ------------
Total contributions 15,336,072 10,555,393 9,892,419
------------ ------------- ------------
Total additions, net (4,810,850) 33,921,575 25,164,517
DEDUCTIONS - Benefits paid to participants 7,501,684 7,167,816 6,854,277
------------ ------------- ------------
NET (DECREASE) INCREASE (12,312,534) 26,753,759 18,310,240
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 124,904,829 98,151,070 79,840,830
------------ ------------- ------------
End of year $112,592,295 $ 124,904,829 $ 98,151,070
============ ============= ============
See notes to financial statements.
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COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
(FORMERLY COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES PROFIT SHARING AND SAVINGS PLAN)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the CommScope, Inc. of North Carolina
Employees Retirement Savings Plan (Formerly CommScope, Inc. of North
Carolina Employees Profit Sharing and Savings Plan) (the "Plan") is
provided for general information purposes only. Participants should
refer to the plan agreement for more complete information.
GENERAL - The Plan is a defined contribution plan covering all
eligible domestic employees of CommScope, Inc. of North Carolina and
subsidiaries ("CommScope" or the "Company"). Eligibility for
participation in the salary deferral savings and Company match
portions of the Plan occurs on the first day of the calendar month
following the completion of one hour of service. Eligibility for
participation in the employer discretionary profit sharing portion of
the Plan occurs on the first day of the calendar month following the
completion of 1,000 hours of service in a 12-month period. The
compensation committee of the Board of Directors of the Company
controls and manages the operation and administration of the Plan.
Vanguard Fiduciary Trust Company ("Vanguard") serves as the trustee of
the Plan. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
The Plan was amended effective June 1, 2000 to change its name from
CommScope, Inc. of North Carolina Employees Profit Sharing and Savings
Plan to CommScope, Inc. of North Carolina Employees Retirement Savings
Plan.
The Plan was amended effective January 1, 1995 to allow a participant
to elect a cash-option distribution for a portion of the employer
discretionary profit-sharing portion of the Plan. Under this
amendment, a participant may elect to receive up to 30% of his
employer discretionary profit-sharing contribution in cash. If this
election is not made, the cash-option deferral is allocated to the
participant's account based on the participant's investment elections.
The remaining 70% of the employer discretionary profit-sharing
contribution is also allocated to the participant's account based on
the participant's investment elections. During 2000, the discretionary
profit-sharing contribution consisted of $685,957 in cash-option
deferrals and $5,670,187 for the remaining 70% of contributions.
During 1999, the discretionary profit-sharing contribution consisted
of $406,995 in cash-option deferrals and $3,533,028 for the remaining
70% of contributions. During 1998, the discretionary profit-sharing
contribution consisted of $378,454 in cash-option deferrals and
$3,813,579 for the remaining 70% of contributions.
CONTRIBUTIONS - Participants may elect to contribute any whole
percentage up to 10% of their compensation, as defined, on a
tax-deferred basis. Upon enrollment in the Plan, a participant may
direct his or her contributions, in increments of 10%, to any of 10
investment options. Participants may change or transfer their
investment options without restriction. For each plan year, the
Company may make a matching contribution equal to 50% of the first 4%
-4-
of compensation that is contributed by each participant through
salary-reduction contributions. The Company may increase its matching
contribution for any plan year in a consistent and nondiscriminatory
manner. In addition, for each plan year, the Company may make a
discretionary cash contribution to the Plan in such amount as approved
by the Board of Directors. Contributions are subject to certain
Internal Revenue Code limitations. Participants may also contribute
amounts representing distributions from other qualified
defined-benefit or defined-contribution plans, subject to limitations
described in the Plan.
The Company-matching contributions are nonparticipant-directed in that
they are automatically contributed into the CommScope Stock Fund. The
Company discretionary profit-sharing contributions, including
cash-option deferrals, are allocated to any of 10 investment options,
as directed by the participants.
PARTICIPANT ACCOUNTS - Individual accounts are maintained for each
plan participant. Each participant's account is credited with the
participant's contributions, the Company's matching contributions, and
allocations of (a) the Company's discretionary contributions and (b)
plan earnings. Allocations are based on participant earnings or
account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
vested account.
VESTING - Participants are immediately vested in their
salary-reduction contributions, Company-matching contributions,
cash-option deferrals and related earnings. Participants become fully
vested in the Company's discretionary profit-sharing contributions and
related earnings over a period of five years of continuous employment
with the Company, involuntary termination related to a permanent
layoff, reaching age 65, permanent disability, death or termination of
the Plan. If a participant terminates employment before he has a fully
vested interest in his account for reasons other than those listed
above, the amount of the Company's discretionary contribution which is
not fully vested is forfeited by the participant and is used to reduce
future Company-matching and discretionary contributions.
PARTICIPANT LOANS - Participants may borrow from their fund accounts
up to a maximum of $50,000 or 50% of their vested account balance,
whichever is less. The loans are secured by the balance in the
participant's account and bear interest at prime rate plus one
percent. The participant is required to repay the loan in equal
installments to be made not less frequently than quarterly and can
elect a one to five year repayment plan (up to 15 years for the
purchase of a primary residence).
PAYMENT OF BENEFITS - Withdrawals from a participant's account are
permitted upon reaching age 59 1/2, termination, retirement, death,
disability or financial hardship, as defined by the Plan.
Distributions are generally paid in a single lump sum in cash or in
cash plus that number of whole shares allocated to the participant's
account in the CommScope Stock Fund. However, distributions may also
be made on an installment basis, as allowed by the Plan. In addition,
vested participants who are eligible for distributions may elect to
defer their distribution and continue investment in the Plan up to age
70 1/2. The Plan allows participants who attain age 70 1/2 the
election to have life expectancies recalculated.
FORFEITURES - At December 31, 2000, forfeited nonvested accounts
totaled $82,236. These accounts will be used to reduce future
Company-matching and/or discretionary profit-sharing contributions.
Also, during 2000, Company-matching contributions were reduced by
$190,430 from forfeited nonvested accounts.
-5-
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted
in the United States of America.
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 amounts of assets, liabilities
and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates. The
Plan utilizes various investment instruments. 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, it is reasonably
possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
the amounts reported in the statements of net assets available for
benefits.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments
are stated at fair value. Shares of mutual funds are valued at quoted
market prices, which represent the fair value of shares held by the
Plan at year-end. Investments in the common trust fund are stated at
estimated fair values, which have been determined based on the unit
values of the fund. Unit values are determined by the organization
sponsoring such common trust fund by dividing the fund's net assets at
fair value by its units outstanding at each valuation date. The
CommScope stock fund is valued at year-end unit closing price
(comprised of year-end market price for shares held by the fund plus
the value of money-market reserves). The loans to participants are
valued at cost plus accrued interest, which approximates fair value.
Purchases and sales of fund investments are recorded on a trade-date
basis. Interest income is recorded on the accrual basis. Dividend
income is recorded on the ex-dividend date. Capital gain distributions
are included in dividend income.
EXPENSES - All administrative expenses of the Plan are paid by the
Company.
PAYMENTS OF BENEFITS - Benefit payments are recorded when paid.
-6-
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's
net assets available for benefits:
DECEMBER 31,
-------------------------------
2000 1999
Vanguard Wellington Fund, 797,996 and 820,080 shares,
respectively $22,511,476 $22,929,424
Vanguard Federal Money Market Fund, 18,176,990 and
17,859,505 shares, respectively 18,176,990 17,859,505
Vanguard 500 Index Fund, 222,429 and 221,193
shares, respectively 27,105,162 29,934,010
Vanguard U.S. Growth Fund, 227,153 and 160,307 shares,
respectively 6,280,794 6,978,168
Vanguard Retirement Savings Trust, 5,756,082 and 6,929,130
shares, respectively 5,756,082 6,929,130
CommScope Stock Fund, 1,077,545 and 670,432 shares,
respectively* 17,846,843* 27,026,809*
Loans to participants 7,188,773 6,929,017
* Nonparticipant-directed.
During 2000, 1999 and 1998, the Plan's investments (including gains
and losses on investments bought and sold, as well as held during the
year) (depreciated) appreciated in value by ($26,130,356), $18,433,174
and $10,291,667, respectively, as follows:
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
2000 1999 1998
Mutual funds $ (5,768,675) $ 4,884,016 $ 5,889,876
Company stock fund (20,361,681) 13,549,158 4,401,791
------------- ------------ ------------
$(26,130,356) $ 18,433,174 $ 10,291,667
============= ============ ============
-7-
4. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed
investments is as follows:
DECEMBER 31,
---------------------------
2000 1999
Net assets - CommScope Stock Fund $17,846,843 $27,026,809
=========== ===========
YEARS ENDED DECEMBER 31,
---------------------------------------------
2000 1999 1998
Changes in net assets:
Net (depreciation) appreciation $(20,355,551) $13,445,325 $ 1,807,494
Employer's contributions 1,738,559 1,454,086 1,364,045
Participants' contributions 802,259 394,769 281,013
Participants' rollover contributions 222,303 64,654 25,032
Benefits paid to participants (1,554,645) (1,102,189) (464,799)
Transfers from particpant-directed
investments 9,967,109 3,770,262 2,678,640
------------ ----------- ------------
Net change (9,179,966) 18,026,907 5,691,425
CommScope Stock Fund:
Beginning of year 27,026,809 8,999,902 3,308,477
------------ ----------- ------------
End of year $ 17,846,843 $27,026,809 $ 8,999,902
============ =========== ============
5. RELATED PARTY TRANSACTIONS
The Plan invests in shares of mutual funds and units of participation
in a common trust fund managed by an affiliate of Vanguard. Vanguard
is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest transactions.
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.
-8-
7. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company
by a letter dated August 9, 1996, that the Plan and related trust were
designed in accordance with applicable regulations of the Internal
Revenue Code ("IRC"). The Plan has been amended since receiving the
determination letter. However, the Company and the plan administrator
believe that the Plan is currently designed and operated in compliance
with the applicable requirements of the IRC and the Plan and related
trust continue to be tax-exempt. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
8. CHANGES TO PLAN FUNDS RESULTING FROM CHANGES IN THE PLAN SPONSOR'S
CORPORATE STRUCTURE
Prior to July 28, 1997, the Company was an indirect wholly owned
subsidiary of General Instrument Corporation ("GI"), a company with
publicly traded common stock listed on the New York Stock Exchange.
Through a series of transactions that was consummated on July 28, 1997
(the "Distribution Date"), GI distributed to stockholders of record
all of the outstanding shares of common stock of its wholly owned
subsidiaries, CommScope and NextLevel Systems, Inc. ("NextLevel
Systems"), in a transaction structured as a tax-free spin-off (the
"Distribution"). GI retained no ownership interest in either CommScope
or NextLevel Systems. Following the Distribution, GI was renamed
General Semiconductor.
Effective February 2, 1998, NextLevel Systems changed its name to
General Instrument Corporation ("General Instrument"). Subsequent to
the Distribution, each of the companies has publicly traded common
stock listed on the New York Stock Exchange.
As a result of the Distribution, all plan investments in the GI Stock
Fund at the Distribution date were sold and reinvested in appropriate
proportionate amounts of the CommScope Stock Fund, General Instrument
Stock Fund and General Semiconductor Stock Fund.
Subsequent to the Distribution date, no employee or employer
contributions could be directed to the General Instrument Stock Fund
or the General Semiconductor Stock Fund under the Plan. Effective as
of December 31, 1998, the Company discontinued both of these plans and
liquidated their assets shortly thereafter. The liquidated assets were
allocated to other funds within the Plan as designated by the affected
participants.
********
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COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
(FORMERLY COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES PROFIT SHARING AND SAVINGS PLAN)
FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2000
- -------------------------------------------------------------------------------
NUMBER OF
IDENTITY OF SHARES/
ISSUER DESCRIPTION UNITS COST FAIR VALUE
* Vanguard Vanguard Wellington
Fund 797,996 ** $ 22,511,476
* Vanguard Vanguard Federal Money
Market Fund 18,176,990 ** 18,176,990
* Vanguard Vanguard GNMA Fund 406,819 ** 4,165,828
* Vanguard Vanguard 500 Index 222,429 ** 27,105,162
Fund
* Vanguard Vanguard STAR Fund 72,299 ** 1,287,650
* Vanguard Vanguard U.S. Growth 227,153 ** 6,280,794
Fund
* Vanguard Vanguard International
Growth Fund 74,106 ** 1,398,388
* Vanguard Vanguard Extended Market
Index Fund 3,784 ** 100,734
* Vanguard Vanguard Retirement
Savings Trust 5,756,082 ** 5,756,082
* CommScope CommScope Stock
Fund 1,077,545 $28,553,982 17,846,843
* Participants Loans to participants, ** 7,188,773
with interest rates -------------
ranging from 7% to 11%
TOTAL INVESTMENTS $111,818,720
=============
* Permitted party-in-interest
** Cost information is not required for participant-directed investments
and, therefore, is not included.
-10-
COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
(FORMERLY COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES PROFIT SHARING AND SAVINGS PLAN)
FORM 5000, SCHEDULE H, PART IV, LINE 4j - SCHEDULE OF REPORTABLE
TRANSACTIONS (5%)
YEAR ENDED DECEMBER 31, 2000
- -------------------------------------------------------------------------------------------------------------
CURRENT
IDENTITY VALUE OF
OF ASSET ON
PARTY PURCHASE SELLING COST OF TRANSACTION
INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET DATE NET GAIN
CommScope CommScope Stock Fund:
223 Purchases $34,784,697 $ - $34,784,697 $34,784,697 $ -
204 Sales - 23,598,844 21,777,066 23,598,844 1,821,778
-11-
SIGNATURE
The Plan. 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.
CommScope, Inc. of North Carolina Employees
Retirement Savings Plan
June 28, 2001 /s/ Jearld L. Leonhardt
- ------------- -----------------------
Date Jearld L. Leonhardt
Executive Vice President, Finance and
Administration Signing both in his capacity
as Executive Vice President on behalf of the
Registrant and as Chief Financial Officer of
the Registrant and as a Member of the CommScope,
Inc. of North Carolina Employees Retirement
Savings Plan Investment Committee