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 # 1-4252
UIC 401(K) RETIREMENT SAVINGS PLAN
(Full title of the plan)
UNITED INDUSTRIAL CORPORATION
(Name of the issuer of the securities held pursuant to the plan)
United Industrial Corporation
570 Lexington Avenue
New York, New York 10022
(Address of principal executive office)
REQUIRED INFORMATION
Item 4.
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The financial statements and schedules of the UIC 401(k) Retirement
Savings Plan for the year ended December 31, 2000 (attached).
Exhibits
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23.1 Consent of Ernst & Young LLP.
2
UIC 401(K) RETIREMENT SAVINGS PLAN
Audited Financial Statements and Supplemental Schedule
Year ended December 31, 2000 with Report of Independent Auditors
UIC 401(k) Retirement Savings Plan
Audited Financial Statements and Supplemental Schedule
Year ended December 31, 2000
CONTENTS
Report of Independent Auditors.............................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits............................2
Statement of Changes in Net Assets Available for Benefits..................3
Notes to Financial Statements..............................................4
Supplemental Schedule
Schedule H, Line 4i -
Schedule of Assets (Held At End of Year)................................9
Report of Independent Auditors
Administrative Committee
UIC 401(k) Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the UIC 401(k) Retirement Savings Plan as of December 31, 2000 and 1999, and
the related statement of changes in net assets available for benefits for the
year 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. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2000 and 1999 and the changes in its net assets available for
benefits for the year ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2000 is presented for the purpose 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
Harrisburg, Pennsylvania
May 11, 2001
1
UIC 401(k) Retirement Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2000 1999
----------------------------------------
ASSETS
Investments $ 96,122,751 $ 112,883,353
Due from broker 1,448 89,656
----------------------------------------
Net assets available for benefits $ 96,124,199 $ 112,973,009
========================================
See accompanying notes.
2
UIC 401(k) Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2000
ADDITIONS
Investment income:
Net realized and unrealized depreciation in aggregate
fair value of investments $ (10,375,237)
Interest and dividends 6,425,945
----------------------
(3,949,292)
Contributions:
Employee 5,845,148
Employer 1,547,755
Rollovers 544,946
----------------------
7,937,849
----------------------
Total additions, net 3,988,557
DEDUCTIONS
Benefit payments 15,214,301
----------------------
Net decrease prior to plan transfer (11,225,744)
Transfer to other plan (5,623,066)
----------------------
Net decrease (16,848,810)
Net assets available for benefits at beginning of year 112,973,009
----------------------
Net assets available for benefits at end of year $ 96,124,199
======================
See accompanying notes.
3
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements
Year ended December 31, 2000
1. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the UIC 401(k) Retirement Savings Plan (the "Plan")
have been prepared on the accrual basis of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in mutual funds are reported at current redemption value. The United
Industrial Corporation Common Stock is reported at fair value, based on
published market prices. Participant loans represent the outstanding principal
balances of the loans and are valued at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
GENERAL
The Plan is a defined contribution plan. The purpose of the Plan is to encourage
employees to save regularly and to provide additional funds upon retirement.
United Industrial Corporation (the "Company" or "Employer") is the named
fiduciary, which controls and manages the operations of the Plan and acts as
Administrator. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
4
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
GENERAL (CONTINUED)
On September 29, 2000, the Company disposed of Symtron Systems, Inc.
("Symtron"), a wholly owned subsidiary. In connection with this disposition, the
employees of Symtron became employees of the acquiring company and participants
in a 401(k) plan sponsored by such company effective October 1, 2000. The
account balances of these participants were transferred to the other plan on
September 29, 2000, and such transfer is recorded on the accompanying statement
of changes in net assets available for benefits.
Additional information about the Plan and the vesting and benefit provisions is
contained in the Plan Document of the UIC 401(k) Retirement Savings Plan. Copies
are available from the Company's Human Resources department.
ELIGIBILITY
Effective July 1, 1998, all full-time employees are eligible to participate in
the Plan upon hire, or if later, attainment of age 18. Part-time employees who
have attained the age of 18 are eligible to participate in the Plan upon
completion of 1,000 hours of service during their first 12 months of employment.
If 1,000 hours of service are not completed during the first 12 months of
employment, a part-time employee may participate when they have completed 1,000
hours of service during a Plan year. Prior to July 1, 1998, all employees aged
21 or older who had completed one year of continuous employment, consisting of
at least 1,000 hours with the Company (including its participating subsidiaries)
were eligible to participate in the Plan.
CONTRIBUTIONS
Participating employees contribute to the Plan through payroll deductions in
amounts not less than 2% of their earnings, up to the annual IRS limit, and for
certain participants from 2% to 15% of their earnings, up to the annual IRS
limit. Contributions to the Plan are invested in the following available
investment options in accordance with the participants' elections; Fidelity
Magellan Fund, Fidelity Managed Income Portfolio, Fidelity Retirement Government
Money Market Fund, Fidelity Growth and Income Fund, Fidelity Contrafund,
Fidelity Investment Grade Bond Fund, United Industrial Corporation Common Stock
Fund, Templeton Foreign A Fund, Invesco Total Return Fund, Fidelity Low Priced
Stock Fund, and Spartan US Equity Index Fund. All employee contributions to the
Plan are immediately vested.
5
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
CONTRIBUTIONS (CONTINUED)
Employer contributions are 50% of employees' contributions up to 4% of employee
compensation, and for certain participants 50% of employees' contributions up to
6% of compensation, as defined in the Plan Document. Employer contributions are
vested after five years of service, and for certain participants there is
partial vesting over a five year period.
PAYMENT OF BENEFITS
On termination of service or attainment of 59 1/2 years of age, any participant
may elect to immediately receive a lump-sum distribution equal to his or her
vested account balance.
PARTICIPANT LOANS
Participants may borrow from their fund accounts up to 50% of their vested
account balance subject to a minimum of $1,000 and a maximum of $50,000. The
loans are secured by the balance in the participant's account and bear interest
at a rate determined by the Company. Principal and interest is paid ratably
through payroll deductions and must be repaid over a period not to exceed 60
months, except in the case of a purchase of a primary residence.
PARTICIPANT ACCOUNTS
Each participant account is credited with the participant's contributions and an
allocation of (a) the Employer's contributions and (b) investment income.
Allocations are based on account balances. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
ADMINISTRATIVE EXPENSES
Administrative expenses associated with the Plan, including the amount paid to
Fidelity Management Trust Company for acting as custodian of the investments of
the Plan, were paid by the Company in 2000.
6
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
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 percent vested in the nonvested portion of their
accounts.
3. INVESTMENTS
During 2000, the Plan's investments (including investments bought, sold as well
as held during the year) (depreciated) appreciated in aggregate fair value as
determined by quoted market prices as follows:
Mutual funds $ (10,512,034)
United Industrial Corporation common stock fund 136,797
-----------------
$ (10,375,237)
=================
Investments that represent 5% or more of fair value of the Plan's net assets are
as follows:
DECEMBER 31
2000 1999
---------------------------------
Fidelity Magellan Fund $ 41,348,122 $ 49,170,483
Fidelity Managed Income Portfolio 17,018,706 19,858,963
Fidelity Growth & Income Fund 15,426,664 18,876,244
Fidelity Contrafund 12,495,612 13,524,003
7
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated January 16, 1996, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (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.
5. SUBSEQUENT EVENT
Effective January 1, 2001, the Company's Board of Directors approved certain
amendments to the Plan. The more significant Plan amendments are (1) employer
contributions are immediately vested; (2) employer match will be increased to
50% of the employee's contributions up to a minimum of 6% of compensation and
higher depending upon the participants' years of service; and (3) a
self-directed brokerage account has been added as an investment option; it is
limited to a maximum of 50% of a participant's entire account balance.
8
Supplemental Schedule
UIC 401(k) Retirement Savings Plan
EIN: 95-2081809
Plan # 002
Schedule H, Line 4i -
Schedule of Assets (Held At End of Year)
December 31, 2000
DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE,
RATE OF INTEREST, COLLATERAL, CURRENT
IDENTITY OF ISSUE, BORROWER, LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE COST** VALUE
- --------------------------------------------------------------------------------------------------------------------------
*Fidelity Management Trust Company Cash Reserve Fund
$ 26,940
*Fidelity Magellan Fund 346,589 Shares 41,348,122
*Fidelity Managed Income Portfolio 17,018,706 Shares 17,018,706
*Fidelity Retirement Government Money Market Fund
2,121,816 Shares 2,121,816
*Fidelity Growth & Income Fund 366,429 Shares 15,426,664
*Fidelity Contrafund 254,131 Shares 12,495,612
*Fidelity Investment Grade Bond Fund 219,845 Shares 1,574,092
*United Industrial Corporation Common Stock Fund
67,264 Shares 748,646
Templeton Foreign A Fund 56,332 Shares 582,471
Invesco Total Return Fund 12,037 Shares 318,128
*Fidelity Low Priced Stock Fund 46,405 Shares 1,072,890
Spartan US Equity Index Fund 41,069 Shares 1,922,417
*Participant loans Interest rates from 8.00% to
11.50%; maturities to
December, 2015 1,466,247
-----------------
$ 96,122,751
=================
* Party in interest
** Historical cost is not required to be presented as all investments are
participant-directed
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the 401(k) Committee of the United Industrial Corporation 401(k) Retirement
Savings Plan (the "Plan"), which administers the Plan, has duly caused this
annual report to be signed on its behalf by the undersigned, hereunto duly
authorized, on the 27th day of June, 2001.
By: /s/ James H. Perry
---------------------------------
James H. Perry
Committee Member
EXHIBIT INDEX
Exhibit No. Description
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23.1 Consent of Independent Auditors