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, 2001
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.
The financial statements and supplemental schedule of the UIC 401(k)
Retirement Savings Plan for the year ended December 31, 2001 (attached).
Exhibits
- --------
23.1 Consent of Ernst & Young LLP.
2
UIC 401(K) RETIREMENT SAVINGS PLAN
Audited Financial Statements and Supplemental Schedule
Year ended December 31, 2001 with Report of Independent Auditors
UIC 401(k) Retirement Savings Plan
Audited Financial Statements and Supplemental Schedule
Year ended December 31, 2001
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, 2001 and 2000, and
the related statement of changes in net assets available for benefits for the
year ended December 31, 2001. 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, 2001 and 2000 and the changes in its net assets available for
benefits for the year ended December 31, 2001, 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, 2001 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 3, 2002
1
UIC 401(k) Retirement Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2001 2000
------------------------------------------
ASSETS
Investments $ 94,629,620 $ 96,122,751
Employer contribution receivable 156,776 -
Due from broker 51,057 1,448
------------------------------------------
Net assets available for benefits $ 94,837,453 $ 96,124,199
==========================================
See accompanying notes.
2
UIC 401(k) Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2001
ADDITIONS
Investment income (loss):
Net realized and unrealized depreciation in aggregate fair value of investments $ (8,474,856)
Interest and dividends 2,316,414
--------------------
(6,158,442)
Contributions:
Employee 7,070,736
Employer 3,823,054
Rollovers 579,463
--------------------
11,473,253
--------------------
Total additions, net 5,314,811
DEDUCTIONS
Benefit payments 6,601,557
--------------------
Net decrease (1,286,746)
Net assets available for benefits at beginning of year 96,124,199
--------------------
Net assets available for benefits at end of year $ 94,837,453
====================
See accompanying notes.
3
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements
Year ended December 31, 2001
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.
Investments in common stocks, including the United Industrial Corporation Common
Stock, are reported at fair value, based on published market prices. United
States Government securities traded on a national securities exchange are valued
at the last reported sales price on the last business day of the plan year;
listed securities for which no sale was reported on that date are valued at the
average of the last reported bid and ask 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)
Additional information about the Plan and the vesting and benefit provisions is
contained in the Plan Document. Copies are available from the Company's Human
Resources department.
ELIGIBILITY
Full-time employees are eligible to participate in the Plan in the quarter
following their date of hire, or if later, the quarter following 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.
CONTRIBUTIONS
Effective January 1, 2001, participating employees contribute to the Plan
through payroll deductions in amounts not less than 2% nor more than 17% of
their earnings, up to the annual Internal Revenue Service (IRS) limit. Prior to
January 1, 2001, participating employees contributed to the Plan a minimum of 2%
of 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 accordance with the participants' elections. All employee
contributions to the Plan are immediately vested.
Effective January 1, 2001, Employer matching contributions are based on the
participants' years of service, and range between 3% and 8% of employee
compensation. Prior to January 1, 2001, Employer matching contributions were
equal to the lesser of 50% of the employees' contributions or 4% of employee
compensation.
Effective January 1, 2001, participants are immediately 100% vested in employer
contributions. Prior to January 1, 2001, Employer contributions were vested
after five years of service.
5
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
CONTRIBUTIONS (CONTINUED)
In 2001 and 2000, certain participants' Employer matching contributions are 50%
of the employees' contributions up to 6% of compensation. Additionally, these
same participants who have at least one hour of service during the year are
eligible for an Employer contribution equal to 3% of compensation plus 3% of
compensation in excess of the Social Security taxable wage base, as defined.
This latter contribution amounted to approximately $339,000 in 2001, of which
approximately $157,000 is receivable at December 31, 2001.
Employer contributions for certain participants continue to vest according to a
five-year vesting schedule.
Upon enrollment, a participant may direct employee and employer contributions in
1% increments to any of the Plan's 16 investment fund options, one of which is a
self-directed brokerage account. Generally, participants may change their
investment options at any time.
PAYMENT OF BENEFITS
Upon termination of service or attainment of 59 1/2years of age, any participant
may elect to receive a lump-sum distribution equal to his or her vested account
balance. Participants may also receive hardship withdrawals, subject to certain
restrictions as defined in the Plan Document.
PARTICIPANT LOANS
Participants may borrow from their plan 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 loans incurred for the purchase of a primary
residence.
6
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
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 trustee of the investments of
the Plan, were paid by the Company in 2001.
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.
3. INVESTMENTS
During 2001, the Plan's investments (including investments bought, sold, and
held during the year) (depreciated) appreciated in aggregate fair value as
determined by quoted market prices as follows:
Mutual funds $ (8,762,238)
United States Government securities (100)
United Industrial Corporation common stock fund 425,692
Other common stocks (138,210)
--------------------
$ (8,474,856)
====================
7
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Investments that represent 5% or more of fair value of the Plan's net assets are
as follows:
DECEMBER 31
2001 2000
--------------------------------------
Fidelity Magellan Fund $ 35,507,950 $ 41,348,122
Fidelity Managed Income Portfolio 17,477,649 17,018,706
Fidelity Growth & Income Fund 14,100,271 15,426,664
Fidelity Contrafund 10,462,074 12,495,612
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.
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, 2001
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
IDENTITY OF ISSUE, BORROWER, LESSOR, OR SIMILAR PARTY INTEREST, PAR OR MATURITY VALUE COST** CURRENT VALUE
- --------------------------------------------------------- ----------------------------------- ------------------ ------------------
Mutual Funds
*Fidelity Magellan Fund 340,702 shares $ 35,507,950
*Fidelity Managed Income Portfolio 17,477,649 shares 17,477,649
*Fidelity Retirement Government Money Market Fund 2,920,813 shares 2,920,813
*Fidelity Growth & Income Fund 377,214 shares 14,100,271
*Fidelity Contrafund 244,612 shares 10,462,074
*Fidelity Investment Grade Bond Fund 288,488 shares 2,117,500
*Fidelity Diversified International Fund 21,803 shares 416,002
Alger Mid Cap Growth Fund 72,401 shares 1,076,610
*Fidelity Low Priced Stock Fund 110,127 shares 3,019,688
Invesco Total Return Fund 9,602 shares 240,146
Spartan US Equity Index 50,351 shares 2,046,266
Janus Balanced Fund 24,644 shares 483,765
Janus Mercury Fund 34,677 shares 720,944
Templeton Foreign A Fund 23,392 shares 216,378
------------------
90,806,056
Common Stock
*United Industrial Corporation Common Stock 83,445 shares 1,397,704
Other
Self-directed brokerage accounts 653,911
Participant loans Interest rates from 8.00% -
11.50%; maturities to November
2016 1,771,949
------------------
Total $94,629,620
==================
* Party in interest
** Historical cost has not been 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 26th day of June, 2002.
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