SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[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
Commission file number 1-7182
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Merrill Lynch & Co., Inc.
4 World Financial Center
New York, N.Y. 10080
Financial Statements and Exhibits
---------------------------------
(a) Financial Statements for the Years Ended December 31, 2001 and 2000,
Supplemental Schedule for the Year Ended December 31, 2001, and
Independent Auditors' Report.
The financial statements required to be filed hereunder appear commencing
at page 2 hereof.
(b) Exhibits
(23.1) Consent of Independent Public Accountants (following financial
statements).
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
--------
of 1934, the Administrative Committee (the persons who administer the employee
benefit plan) has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
Merrill Lynch & Co., Inc.
401(k) Savings & Investment Plan
Date: June 27, 2002 By: /s/ Thomas A. Panebianco, Jr.
-----------------------------
Thomas A. Panebianco, Jr.
Vice President, Merrill Lynch
Trust Company, FSB
Trustee
Merrill Lynch & Co., Inc. 401(k)
Savings & Investment Plan
Independent Auditors' Report
Financial Statements
Years Ended December 31, 2001 and 2000
Supplemental Schedule
December 31, 2001
MERRILL LYNCH & CO., INC.
401(k) SAVINGS & INVESTMENT PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000:
Statements of Assets Available for Benefits as of December 31, 2001 and 2000 2
Statement of Changes in Assets Available for Benefits for the year ended December 31, 2001 3
Notes to Financial Statements 4-7
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2001:
Schedule of Assets Held for Investment Purposes 8-10
INDEPENDENT AUDITORS' REPORT
Trustees of the Merrill Lynch & Co., Inc.
401(k) Savings & Investment Plan
We have audited the accompanying statements of assets available for benefits of
the Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan (the "Plan") as
of December 31, 2001 and 2000, and the related statement of changes in 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 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 assets available for benefits of the Plan at December 31, 2001 and
2000, and the changes in assets available for benefits for the year ended
December 31, 2001 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 schedule listed in the
Table of Contents 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 schedule is the responsibility of the Plan's management. Such
supplemental schedule has been subjected to the auditing procedures applied in
our audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
/s/ Deloitte & Touche LLP
June 21, 2002
MERRILL LYNCH & CO., INC.
401(k) SAVINGS & INVESTMENT PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 AND 2000
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2001 2000
ASSETS:
Investments, at fair value:
Common stock $1,069,994,966 $1,369,830,999
Funds and trusts 2,053,055,087 2,147,468,561
Loans receivable 72,293,273 55,649,908
-------------- --------------
Total investments 3,195,343,326 3,572,949,468
Cash 11,695,426 8,607,408
Receivable for pending transactions
and accrued income 1,955,797 5,849,574
Employer contributions receivable 937,339 989,508
Employee contributions receivable 4,905,477 5,830,087
-------------- --------------
ASSETS AVAILABLE FOR BENEFITS $3,214,837,365 $3,594,226,045
============== ==============
See notes to financial statements.
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MERRILL LYNCH & CO., INC.
401(k) SAVINGS & INVESTMENT PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2001
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2001
ADDITIONS:
Investment (loss):
Net (depreciation) in fair value of investments $ (621,071,060)
Dividends and interest 113,142,961
---------------
Total investment (loss) (507,928,099)
Contributions to the Plan by the Company 54,965,867
Contributions to the Plan by the participants 289,107,115
Rollovers from other qualified plans 13,899,146
Transfers from other qualified plan 379,471
---------------
Total (149,576,500)
---------------
DEDUCTIONS:
Disbursements of benefits to beneficiaries or participants 229,768,076
Administrative expenses 44,104
---------------
Total deductions 229,812,180
---------------
NET DECREASE IN ASSETS AVAILABLE
FOR BENEFITS (379,388,680)
ASSETS AVAILABLE FOR BENEFITS:
3,594,226,045
---------------
End of year $ 3,214,837,365
===============
See notes to financial statements.
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Merrill lynch & co., inc.
401(k) savings & investment plan
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000
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1. DESCRIPTION OF THE PLAN
The following description of the Merrill Lynch & Co., Inc. 401(k) Savings
& Investment Plan (the "Plan") is provided for general information
purposes only. Participants should refer to the Plan document for more
complete information. Terms used in this description have the same meaning
as in the Plan document.
General - The Plan was adopted on April 23, 1987 and commenced activities
on October 1, 1987. The purpose of the Plan is to encourage employees to
save for retirement. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
Eligibility for Pre-tax Contributions - Effective July 1, 2000, qualifying
employees no longer have to complete one year of service to participate in
the 401(k) plan. During 1999 and the first half of 2000, qualifying
employees could elect to participate in the Plan as of the first day of
the month following 12 months of employment or the first day of any month
thereafter.
Each Participant may elect to make contributions to the Plan on a pre-tax
basis through payroll deductions from 1% through 15% of such Participant's
Eligible Compensation for each pay period up to an annual maximum of
$10,500 for 2001 and 2000 (subject to certain exceptions described in the
Plan). A Participant can elect to change the rate at which his/her
contribution is determined at any time during the year.
Eligibility for Company Contributions - Effective January 1, 2000, after
one year of service, Merrill Lynch & Co., Inc. (the "Company") matches
half of the first 6% of Eligible Compensation that the individual
contributes, up to an annual maximum Company contribution of $2,000.
No Employer contributions are made for any calendar year for Employees
who participate at any time during such calendar year in the Company's
Employee Stock Purchase Plan.
Participant Accounts - Individual accounts are maintained for each Plan
participant. Each participant's account is credited with the participant's
contributions and allocations of Company discretionary contributions and
Plan earnings, and charged with the allocation of Plan losses. Allocations
are based on participant earnings or account balances as defined.
Forfeitures - Participants are always 100% vested in contributions to the
Plan made from their Eligible Compensation and in amounts rolled over from
a former employer's qualified retirement plan. Participants who terminate
employment become vested in Employer contributions and earnings based on
completed Years of Service: 1 Year of Service - 20% vested; 2 Years of
Service - 40% vested; 3 Years of Service - 60% vested; 4 Years of Service
- 80% vested; and 5 Years of Service - 100% vested. Participants are 100%
vested in Employer contributions when they attain age 65 or terminate
employment because of death.
Investment Options - Participants direct the investment of their
contributions into the various investment options offered by the Plan.
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Vesting - Participants are vested immediately in their contributions plus
any earnings thereon.
Participant Loans - Active participants in the Plan are eligible for loans
from the Plan. Interest on loans is generally calculated based on the
Federal Prime Rate as per the Federal Reserve for the preceding quarter
plus 1%. The maximum loan amount that may be obtained is 50% of the
participant's account balance and the maximum amount of all loans
outstanding to a participant cannot exceed $50,000.
Payment of Benefits - Distributions of participants' account balances
occur only upon retirement, death or other termination of employment. A
participant, or a participant's beneficiary, may receive distributions
under one of several options. The options allow for payment in lump-sum
distributions of cash and/or securities, transfer to an individual
retirement account or other brokerage account, or the purchase of an
annuity.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting records of the Plan are maintained on an accrual basis
except that benefit distributions are recorded when paid. Purchases and
sales of securities are recorded on a trade date basis.
The cost of security investments is based on the average cost method for
individual securities. Quoted market values of security investments are
based on the last sale price (if traded on the last business day in
December), the prevailing bid price, or the prevailing asset value at the
close of trading on the last business day in December. Dividend income is
recorded on the ex-dividend date.
The accompanying financial statements do not include any investments in
VOCON and Deferred Profit Sharing Accounts, which are self-directed
accounts that were transferred into the Plan for administrative
convenience only.
New Accounting Pronouncements - In June 1998, the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting
Standards ("SFAS") No. 133, Accounting for Derivative Instruments and
Hedging Activities, which was later amended by SFAS No. 138. The effective
date of SFAS No. 133 is now for fiscal years beginning after June 15,
2000. Effective January 1, 2001, the Plan adopted this statement. Upon
adoption, SFAS No. 133 had no impact on the Plan's financial position or
results of operations. In September 2000, the FASB issued SFAS No. 140,
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities - a Replacement of FASB Statement No. 125.
SFAS No. 140 is effective for transfers occurring after March 31, 2001 and
for disclosures relating to securitization transactions and collateral for
fiscal years ended December 15, 2000. The adoption of this Statement had
no impact on the financial statements of the Plan for the year ended
December 31, 2001.
During 2001, the FASB issued the following SFAS:
SFAS No. 141 - Business Combination
SFAS No. 142 - Goodwill and Other Intangible Assets
These pronouncements are effective for the period beginning January 1,
2002, the adoption of the above referenced statements had no impact on the
Plan's financial position or results of operations.
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 and liabilities and disclosure of
contingent assets
-5-
and liabilities at December 31, 2001 and changes in the statement of
assets available for benefits for the year ended December 31, 2001. Actual
results could differ from the estimates and assumptions used. Estimates
that are particularly susceptible to change relate to the determination of
the fair value of investments.
The Plan invests in various securities including the Company stock and
mutual funds. 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 financial statements of the Plan.
Reclassification - Certain amounts in the prior year financial statements
have been reclassified to conform to the current year presentation.
3. INVESTMENTS
The Administrative Committee has the authority to designate Investment
Funds for the investment of accounts to determine which accounts can be
self-directed and to establish rules and procedures with respect to
investment funds and self-directed accounts.
All contributions to the Plan are participant directed.
At December 31, 2001, there were 78 investment options available in the
Plan. This includes 7 core investment options and 71 noncore investment
options including Merrill Lynch & Co., Inc. common stock.
During 2001 and 2000, the Plan's investments (including investments
bought, sold and held during each year) (depreciated) appreciated in value
as follows:
2001 2000
Change in fair value of investments:
Common stock $ (347,802,559) $ 568,179,612
Funds and trusts (273,268,501) (308,296,926)
--------------- --------------
$ (621,071,060) $ 259,882,686
=============== ==============
The value of individual investments that represent 5% or more of the
Plan's net assets at December 31 are as follows:
2001 2000
Merrill Lynch & Co., Inc.* $ 1,069,994,966 $ 1,369,830,999
Merrill Lynch*:
Basic Value Fund Class A 390,138,764 400,521,705
Retirement Reserves Money Fund 194,527,544 180,257,616
Fundamental Growth Fund Class A 186,734,709 140,492,293
* Party-in-interest as defined by ERISA.
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4. ADMINISTRATIVE EXPENSES
All Plan expenses, including expenses of the Administrative Committee and
Trustee, to the extent not paid by the Plan, are paid by the Company.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan subject to the provisions of
ERISA.
In the event of termination, participants' account balances become fully
vested, no further allocations shall be made, and no eligible employee
shall become a participant after the date of termination.
6. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated July 13, 1995, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code
("IRC"). The Plan has been amended since receiving the determination
letter. However, the Plan Administrator believes that the Plan is designed
and is currently being operated in compliance with the applicable
requirements of the IRC.
7. RELATED PARTY TRANSACTIONS
The Retirement Group, a division of Merrill Lynch, Pierce Fenner & Smith
Inc., a subsidiary of the Plan sponsor, performs recordkeeping services
for the Plan including but not limited to the collection of contributions,
the allocation of forfeitures, and benefit distributions to participants.
Employees of The Retirement Group may also be participants in the Plan.
Certain administrative functions are performed by officers or employees of
the Company who may also be participants in the Plan. No such officer or
employee receives compensation from the Plan.
8. PLAN MERGERS
On March 24, 2000, the Mercury Asset Management International Ltd. 401(k)
Retirement Plan of Mercury Asset Management International Ltd. was merged
with the Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan.
Assets totaling $1,136,764 were transferred to the Trust established under
the Plan.
In January 2001, pursuant to the Merrill Lynch & Co., Inc. Executive
Committee resolution, it was decided to merge the Herzog, Heine, Geduld,
Inc., 401(k) Profit Sharing Plan into the Plan and that amounts held in
the Herzog Trust were transferred to the trust established under the Plan
on April 1, 2002. $16,032,241 of cash was added to the Plan in connection
with this merger and loan receivables of $574,112 were also added to the
plan.
In December 2001, pursuant to the Merrill Lynch & Co., Inc. Executive
Committee resolution, it was decided to merge the Tandem Financial Group,
Inc. 401(k) Profit Sharing Plan with and into the Plan and that all
amounts held in the Tandem trust were transferred to the trust established
under the Plan on December 4, 2001. Assets totaling $379,471 were added to
the Plan in connection with this merger.
******
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MERRILL LYNCH & CO., INC.
401(k) SAVINGS & INVESTMENT PLAN
SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
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Number of Market
Description Shares Value
COMMON STOCK:
*Merrill Lynch & Co., Inc. 20,529,451 $ 1,069,994,966
FUNDS AND TRUSTS:
GSIF U.S. Gov. Zero Coupon Bond Series 8 - Various Trusts
2004 Trust Zero Coupon 133,351 12,442,203
2009 Trust Zero Coupon 470,545 32,686,893
2014 Trust Zero Coupon 206,621 10,348,402
* Merrill Lynch:
Aggregate Bond Index Trust 154,121 2,043,645
Balanced Capital Fund Class A 5,501,405 147,052,553
Basic Value Fund 13,324,411 390,138,765
Bond Fund, Inc. - Core Bond Portfolio Class A 3,930,476 43,471,060
Corporate Bond Fund, Inc. - High Income Portfolio Class A 5,565,601 26,436,605
Bond Fund, Inc. - Intermediate Portfolio Class A 849,674 9,592,820
Developing Capital Markets Fund Class A 168,664 1,725,436
Disciplined Equity Fund Class A 40,161 394,382
Dragon Fund Class A 819,243 6,160,708
Emerging Markets Debt Fund A 129,840 829,678
Equity Income Fund Class A 305,746 3,540,541
Equity Index Trust 3 1,706,633 141,445,783
Euro Fund Class A 1,962,859 24,653,507
Focus Twenty Fund Class A 8,053,534 15,623,856
Focus Value Fund Class A 1,436,212 16,559,528
Fundamental Growth Fund Class A 10,311,138 186,734,709
Global Allocation Fund Class A 11,247,268 144,527,391
Global Bond Fund for Investment & Retirement Class A 109,214 831,118
Global Growth Fund Class A 3,000,446 28,204,190
Global Small Cap Fund Class A 1,047,815 17,875,726
Global Technology Fund Class A 8,433,461 74,045,789
Global Value Fund Class A 2,073,986 22,544,227
Healthcare Fund Class A 5,387,952 37,069,112
International Equity Fund Class A 140,270 1,134,782
International Index Trust 421,643 4,494,717
Large Cap Core Fund Class A 628,932 6,245,297
Large Cap Growth Fund Class A 570,797 4,691,949
Large Cap Value Fund Class A 683,165 7,890,558
Latin America Fund 147,789 1,905,005
Merrill Lynch Global Financial Services Class A 115,388 1,292,350
Mid-Cap Value Fund A 570,487 9,932,187
Natural Resources Trust Fund A 298,818 5,788,102
(Continued)
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MERRILL LYNCH & CO., INC.
401(k) SAVINGS & INVESTMENT PLAN
SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
- ----------------------------------------------------------------------------------------------------------------
Number of Market
Description Shares Value
FUNDS AND TRUSTS (continued):
Pacific Fund Class A 1,787,711 $ 29,801,136
Premier Growth Fund Class A 187,918 563,754
Retirement Preservation Trust 135,584,113 135,584,113
Retirement Reserves Money Fund 194,527,544 194,527,544
Select Ten Retirement Portfolio 2000 60 60
Select Ten Retirement Portfolio 2001 20,398,702 19,019,750
Short-Term U.S. Government Fund Class A 134,839 1,294,452
Small Cap Index Trust 594,909 6,948,535
Small Cap Value Fund Class A 3,213,331 77,762,621
U.S. Government Mortgage Fund Class A 224,952 2,231,526
U.S. High Yield Fund Class A 561,012 3,405,346
Utilities & Telecommunications Fund Class A 554,186 5,314,647
World Income Fund Class A 117,929 643,895
* Mercury
Global Balanced Fund Class I 6,589 56,992
Global Holdings Fund Class I 355,430 2,473,792
Growth Opportunity Fund Class I 37,537 520,644
HW International Value Fund Class I 408,946 7,962,183
HW Mid-Cap Value Fund Class I 631,913 10,565,590
HW Large Cap Value Fund Class I 210,127 3,330,513
HW Small Cap Value Fund 393,425 11,334,576
Large Cap Growth Fund Class I 222 1,636
Low Duration Fund 159,999 1,588,792
International Fund 719,197 6,012,484
Pan European Growth Fund Class I 424,869 3,551,906
QA International Fund Class I 17,726 122,842
QA Large Cap Core Fund Class I 29,597 216,943
QA Large Cap Growth Fund Class I 44,673 291,714
QA Large Cap Value Fund Class I 29,197 242,042
QA Mid Cap Fund Class I 73,073 682,498
QA Small Cap Fund Class I 42,257 426,376
QA Strategy All Equity Fund Class I 26,119 201,119
QA Strategy Growth & Income Fund Class I 5,820 50,754
QA Strategy Long-Term Growth Fund 59,650 487,936
Select Growth Fund Class I 43,507 446,383
Total Return Bond Fund 180,794 2,305,121
U.S. Government Securities Fund I 89,305 935,020
U.S. Large Cap Fund Class I 18,025 145,099
U.S. Small Cap Growth Fund 191,791 2,036,816
(Continued)
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MERRILL LYNCH & CO., INC.
401(k) SAVINGS & INVESTMENT PLAN
SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
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Number of Market
Description Shares Value
FUNDS AND TRUSTS (continued):
Other:
AIM International Equity Fund 1,066,422 $ 15,889,690
Alliance Quasar Fund Class A 312,858 6,357,269
Blackrock Small Capital Growth 1,894,035 23,694,376
Ivy International Fund Class A 159,506 3,300,188
MFS Research Fund 1,513,992 28,463,047
Munder Multi-Season Growth 134,493 1,909,797
--------------
Total Funds and Trusts 2,053,055,087
--------------
TOTAL INVESTMENTS $3,123,050,053
==============
*LOANS RECEIVABLE $ 72,293,273
==============
TOTAL $3,195,343,326
==============
* Permitted Party-in-interest
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