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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
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[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 1-15157
A. Full title of the plan and address of the plan, if different from that
of the issuer named below:
PACTIV 401(k) SAVINGS AND INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
PACTIV CORPORATION
1900 WEST FIELD COURT
LAKE FOREST, IL 60045
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Pactiv Corporation Benefits Committee:
We have audited the accompanying statements of net assets available for plan
benefits of the Pactiv 401(k) Savings and Investment Plan, known prior to
January 1, 2001, as the Pactiv Corporation Thrift Plan, as of December 31, 2000
and 1999, and the related statement of changes in net assets available for plan
benefits for the year ended December 31, 2000. These financial statements and
the supplemental schedule referred to below are the responsibility of the Pactiv
Corporation Benefits Committee. Our responsibility is to express an opinion on
these financial statements and supplemental schedule 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 plan benefits of the Pactiv
401(k) Savings and Investment Plan as of December 31, 2000 and 1999, and the
changes in net assets available for plan benefits for the year ended December
31, 2000, in conformity with accounting principles generally accepted in the
United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2000, is presented for purposes 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. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois
June 15, 2001
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PACTIV 401(k) SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2000 AND 1999
2000 1999
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ASSETS:
Investments, at fair value-
Corporate securities-
Pactiv Corporation common stock $ 28,801,162 $ 42,470,703
Tenneco Automotive Inc. common stock 637,616 7,755,831
El Paso Energy common stock - 8,137,662
Newport News Shipbuilding Inc. common stock - 5,822,081
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29,438,778 64,186,277
Collective trust funds-
Barclays Global Investors Equity Index Fund 20,864,003 67,891,099
Barclays Global Investors U.S. Debt Market Index Fund 2,994,357 6,968,963
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23,858,360 74,860,062
Registered investment companies-
Fidelity Growth Company Fund 45,671,609 119,218,324
INVESCO Total Return Fund 5,880,475 14,178,495
Putnam New Opportunities Fund 20,562,296 56,252,806
Templeton Foreign Fund 4,988,993 10,711,975
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77,103,373 200,361,600
Nations Cash Reserves 34,056,664 91,948,554
Bankers Trust Pyramid Directed Account Cash Fund 2,167,955 2,609,515
Participant loans receivable 2,964,925 8,412,203
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Total investments 169,590,055 442,378,211
Receivables-
Employee contributions 344,487 -
Employers' contributions 290,079 1,948,448
Accrued interest and dividends 185,277 479,637
Due from broker 411,154 365,617
Due from affiliated plan - 285,714
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Total receivables 1,230,997 3,079,416
Cash, noninterest bearing - 1,338
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Total assets 170,821,052 445,458,965
LIABILITIES:
Due to broker 205,812 604,346
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Total liabilities 205,812 604,346
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NET ASSETS AVAILABLE FOR PLAN BENEFITS $170,615,240 $444,854,619
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The accompanying notes to financial statements are an
integral part of these financial statements.
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PACTIV 401(k) SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2000
NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year $ 444,854,619
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ADDITIONS:
Dividends-
Corporate securities 105,509
Registered investment companies 8,661,596
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Total dividends 8,767,105
Interest 2,289,212
Repayment of loan interest 259,479
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2,548,691
Net appreciation (depreciation) in fair value of investments-
Corporate securities 3,144,603
Collective trust funds (3,856,178)
Registered investment companies (18,000,656)
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Total net depreciation in fair value of investments (18,712,231)
Contributions-
Employee 9,733,438
Employers' 8,402,034
Rollover 420,041
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Total contributions 18,555,513
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Total additions 11,159,078
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DEDUCTIONS:
Withdrawals 38,160,951
Administrative expenses 355,175
Transfers to other plans (Note 1) 246,882,331
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Total deductions 285,398,457
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NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year $ 170,615,240
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The accompanying notes to financial statements are an
integral part of this financial statement.
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PACTIV 401(k) SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
1. DESCRIPTION OF THE PACTIV
401(k) SAVINGS AND INVESTMENT PLAN:
The following description of the Pactiv 401(k) Savings and Investment Plan (the
Plan), known prior to January 1, 2001, as the Pactiv Corporation Thrift Plan,
provides only general information. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended (ERISA). Pactiv
Corporation is sponsor of the Plan. In conjunction with a series of transactions
during 1999, certain employees of Tenneco Automotive Inc. and Packaging
Corporation of America and their subsidiaries continued to participate in the
Plan through January 31, 2000. Effective February 1, 2000, account balances of
affected participants totaling approximately $246,000,000 were transferred to
plans sponsored by Tenneco Automotive Inc. and Packaging Corporation of America.
In conjunction with the sale of two Pactiv Corporation locations during 2000,
account balances of affected participants totaling approximately $1,000,000 were
transferred to a plan sponsored by the purchaser.
For purposes of these financial statements, "Employers" refers to Pactiv
Corporation, Tenneco Automotive Inc., Packaging Corporation of America and their
subsidiaries that participated in the Plan through January 31, 2000. Subsequent
to January 31, 2000, "Employers" refers to Pactiv Corporation and its
subsidiaries.
Eligibility and Contributions
Eligible employees, as defined in the Plan document, generally participate in
the Plan the first day of the month following the completion of one year of
service.
Eligible employees may make contributions by payroll deduction of not less than
4 percent nor greater than 8 percent of their base salary, with such
contributions limited to $10,500 for 2000. The Employers contribute on behalf of
the participant an amount up to the participant's contribution according to the
following percentages of the participant's base salary, based on the number of
years of participation in the Plan: 4 percent--through three years; 5
percent--over three through five years; 6 percent--over five through seven
years; and 8 percent--over seven years.
The Pactiv Corporation contributions are invested in Pactiv Corporation common
stock. The Pactiv Corporation matching contributions and the related earnings
made after January 1, 1993, must remain in the form of Pactiv Corporation common
stock until the participant reaches age 55 or terminates employment and requests
a total distribution.
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Investment Options
Each participant has the right upon enrollment to select the funds in which the
balance in the participant's account, excluding certain Employers' matching
contributions, will be invested. During 2000, participants can invest in two
collective trust funds, four registered investment companies, a money market
fund and Pactiv Corporation common stock. Monies pending purchase in each of the
investment options are temporarily invested in the Bankers Trust Pyramid
Directed Account Cash Fund.
Shares of Newport News Shipbuilding Inc. common stock, received through a 1996
distribution, and El Paso Energy common stock, received through a 1996 merger
transaction, were held in separate funds; however, participants could not direct
contributions or fund transfers to these funds. Dividends earned by these funds
were invested in Nations Cash Reserves. During 2000, these investments were
liquidated and transferred at the participant's direction into the other
investment options.
Vesting
All participants are 100 percent vested in their entire account balance in the
Plan.
Withdrawals and Participant Loans
Upon retirement or other termination of employment, the participant may receive
the value of his account as a lump-sum distribution. A participant who has
attained age 55 may request an in-service withdrawal. If a participant has not
attained age 59-1/2, he may elect to withdraw all or part of his account
balance, reduced by the portion of his account balance attributable to employee
contributions. A participant who has not attained age 55 may request an
in-service withdrawal of his employee contributions made prior to April 1, 1984,
and any Employers' matching contributions credited to his account prior to
January 1, 1993. Plan equity as of December 31, 2000 and 1999, includes amounts
pending distribution to participants of $1,158,539 and $705,874, respectively
(see Note 5).
Active participants and certain other individuals who have not had a loan during
the previous three months may obtain a loan with a term not to exceed 54 months
from his account. The borrower may have only one loan outstanding at any time,
and the amount of the loan may not be less than $1,000 and shall not exceed the
lesser of (a) $50,000 or (b) one-half the borrower's account balance. The loan
interest rate is equal to The Wall Street Journal prime rate. Loan principal and
interest repayments are made through payroll deductions.
Administration
The Plan is currently administered by the Pactiv Corporation Benefits Committee
(the Committee). Bankers Trust Company serves as trustee of the Plan trust (the
Trust).
2. SUMMARY OF ACCOUNTING POLICIES:
Basis of Accounting
The financial statements of the Plan are presented on the accrual basis of
accounting. Corporate securities and registered investment companies are
reported at quoted market value. Collective trust funds are valued by reference
to published market data, as available, of the underlying assets. Participant
loans receivable are reported at cost which approximates fair value.
Earnings
Individual participants' accounts are credited daily with investment earnings
and losses. Investment earnings and losses are credited based upon the number of
units held in an individual participant's account and the fair value per unit
based upon the net asset value or share price of the underlying securities at
the close of business each day.
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Expenses
Substantially all administrative expenses are paid by the Plan. These expenses
include record-keeping, audit and trustee fees.
Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to use
estimates and assumptions that affect the accompanying financial statements and
disclosures. Actual results could differ from those estimates.
3. NONPARTICIPANT-DIRECTED INVESTMENTS:
Information about the net assets relating to the nonparticipant-directed
investments is as follows as of December 31, 2000 and 1999:
2000 1999
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Pactiv Corporation common stock $ 19,530,068 $ 22,774,732
Tenneco Automotive Inc. common stock - 4,208,384
Bankers Trust Pyramid Directed Account Cash Fund 502,431 691,955
Employers' contributions receivable 290,079 1,948,448
Other (40,810) 3,118
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Net assets $ 20,281,768 $ 29,626,637
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The significant components of the change in net assets relating to the
nonparticipant-directed investments for the year ended December 31, 2000, are as
follows:
Investment income-
Interest $ 24,393
Repayment of loan interest 114,417
Net appreciation in fair value of
corporate securities 2,197,123
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2,335,933
Employers' contributions 7,895,368
Interfund transfers (584,750)
Withdrawals (1,775,620)
Transfers to other plans (17,215,800)
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Decrease in net assets $ (9,344,869)
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4. RISKS AND UNCERTAINTIES:
The Plan provides for investment in corporate securities, collective trust
funds, registered investment companies and money market funds. Investment
securities, in general, are exposed to various risks, such as interest rate,
credit and overall market volatility risks. 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.
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5. RECONCILIATION OF FINANCIAL
STATEMENTS TO FORM 5500:
The following is a reconciliation of net assets available for Plan benefits per
the financial statements to the Form 5500 as of December 31, 2000 and 1999:
2000 1999
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Net assets available for Plan benefits per the financial statements $ 170,615,240 $ 444,854,619
Less- Amounts allocated to withdrawing participants (1,158,539) (705,874)
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Net assets available for Plan benefits per the Form 5500 $ 169,456,701 $ 444,148,745
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The following is a reconciliation of withdrawals per the financial statements to
the Form 5500 for the year ended December 31, 2000:
Withdrawals per the financial statements $ 38,160,951
Add- Amounts allocated to withdrawing participants at December 31, 2000 1,158,539
Less- Amounts allocated to withdrawing participants at December 31, 1999 (705,874)
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Withdrawals per the Form 5500 $ 38,613,616
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Amounts allocated to withdrawing participants are recorded on the Form 5500 for
withdrawals that have been processed and approved for payment prior to December
31 but not paid as of that date.
6. FEDERAL INCOME TAXES:
The Plan obtained its latest determination letter on August 19, 1996, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code of
1986, as amended (the IRC). The Plan has been amended since receiving the
determination letter. However, the Committee believes that the Plan is currently
designed and being operated in compliance with the applicable requirements of
the IRC. Therefore, the Committee believes that the Plan was qualified and the
related trust was tax-exempt as of the financial statement date.
7. TERMINATION OF THE PLAN:
Although Pactiv Corporation intends to continue the Plan, it reserves the right
to terminate the Plan. Any assets which are not allocated to the accounts of
participants upon the complete termination of the Plan, or complete
discontinuance of contributions, will be allocated among all of the
participants' accounts pro rata on the basis of their respective balances.
8. PARTY IN INTEREST:
The Plan invests in shares of the Bankers Trust Pyramid Directed Account Cash
Fund, which is managed by Bankers Trust Company. Bankers Trust Company is the
trustee and, therefore, these transactions qualify as party-in-interest
transactions.
The Plan also invests in Pactiv Corporation common stock. Pactiv Corporation is
the Plan's sponsor and, therefore, these transactions qualify as
party-in-interest transactions.
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9. SUBSEQUENT EVENTS (UNAUDITED):
In December 2000, Pactiv Corporation entered into agreements to sell its
packaging polyethylene business and its interest in Sentinel Polyolefins LLC, a
protective packaging joint venture. These transactions closed in January 2001.
Effective January 1, 2001, the Plan was amended and restated. Pursuant to the
amendment and restatement, the following Plan provisions changed: (a) employees
are allowed to enter the Plan on the first day of the month following the
completion of one month of service and (b) eligible employees may make
contributions by payroll deduction of not less than 1 percent nor greater than
16 percent of their base salaries.
Effective July 2, 2001, the Plan will terminate its trustee agreement with
Bankers Trust Company and enter into a new trust agreement with Fidelity
Management Trust Company. Pursuant to the change in trustee, participants will
have the ability to direct their investment into Pactiv Corporation common stock
and 10 registered investment companies.
Effective July 2, 2001, the Plan's record-keeping function will transition to
Fidelity Investment Institutional Operating Company, Inc.
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SCHEDULE
PACTIV 401(k) SAVINGS AND INVESTMENT PLAN
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2000
Shares or Current
Identity of Issue Description of Asset Face Value Cost Value
- --------------------------------- ------------------------------------------------ ----------- ----------- ------------
Pactiv Corporation* Pactiv Corporation common stock 2,327,367 $38,847,240 $ 28,801,162
Tenneco Automotive Inc. Tenneco Automotive Inc. common stock 212,539 (a) 637,616
Barclays Global Investors Barclays Global Investors Equity Index Fund 564,655 (a) 20,864,003
Barclays Global Investors Barclays Global Investors U.S. Debt Market
Index Fund 192,316 (a) 2,994,357
Fidelity Investment Institutional
Services Co. Fidelity Growth Company Fund 639,390 (a) 45,671,609
INVESCO Funds Group, Inc. INVESCO Total Return Fund 222,492 (a) 5,880,475
Putnam Management Company Putnam New Opportunities Fund 350,773 (a) 20,562,296
Franklin Templeton Templeton Foreign Fund 482,494 (a) 4,988,993
Bank of America, N.A. Nations Cash Reserves 34,056,664 (a) 34,056,664
Bankers Trust Company* Bankers Trust Pyramid Directed Account Cash Fund 2,167,955 2,167,955 2,167,955
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Pactiv 401(k) Savings and Participant loans receivable (interest rates
Investment Plan* ranging from 7.75% to 8.5%) $ 2,964,925 (a) 2,964,925
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Total assets (held at end of year) $169,590,055
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*Indicated party in interest.
(a)Cost omitted for participant-directed investments.
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SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities and Exchange Act of
1934, the Pactiv Corporation Benefits Committee have duly caused this annual
report to be signed on its behalf by the undersigned hereunder duly authorized.
PACTIV 401(k) SAVINGS
AND INVESTMENT PLAN
Date: June 28, 2001 /s/ Henry M. Wells, III
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Henry M. Wells, III
Vice President and Chief Human Resources
Officer and Member of Pactiv Corporation
Benefits Committee
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INDEX TO EXHIBIT
EXHIBIT
NUMBER DESCRIPTION
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23.1 Consent of Independent Public Accountants