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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED].
For the fiscal year ended June 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED].
For the transition period from ________ to _______
Commission File Number: 0-26802
A. Full title of plan and the address of the plan, if different from that
of the issuer named below:
CHECKFREE CORPORATION 401(k) PLAN
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
CHECKFREE CORPORATION
4411 East Jones Bridge Road
Norcross, Georgia 30092
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CHECKFREE CORPORATION 401(k) PLAN
FINANCIAL STATEMENTS
AS OF JUNE 30, 2001 AND 2000
AND FOR THE YEAR ENDED JUNE 30, 2001
AND INDEPENDENT AUDITORS' REPORT
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits
as of June 30, 2001 and 2000 2
Statement of Changes in Net Assets Available for
Benefits for the Year Ended June 30, 2001 3
Notes to Financial Statements 4-7
SUPPLEMENTAL SCHEDULE:
Form 5500 Schedule H, Part IV, Line 4i, Schedule of
Assets Held for Investment Purposes as of June 30, 2001* 8-9
* Schedules required under the Employee Retirement Income Security Act of 1974,
other than the schedule listed above, are omitted because of the absence of the
conditions under which they are required.
INDEPENDENT AUDITORS' REPORT
Plan Administrator and Participants
CheckFree Corporation 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of the CheckFree Corporation 401(k) Plan as of June 30, 2001 and 2000 and the
related statement of changes in net assets available for benefits for the year
ended June 30, 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 net assets available for benefits of the Plan at June 30, 2001 and
2000 and the changes in net assets available for benefits for the year ended
June 30, 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 of assets held
for investment purposes at end of year 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. The supplemental 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
Atlanta, Georgia
June 14, 2002
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CHECKFREE CORPORATION 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 30,
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2001 2000
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ASSETS
INVESTMENTS, At fair value:
Mutual funds............................................................... $ 26,237,399 $ 28,820,402
Common collective funds.................................................... 23,362,928 23,904,829
CheckFree Corporation common stock......................................... 6,534,149 7,731,912
Participant loans.......................................................... 1,193,566 1,127,193
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Total investments........................................... 57,328,042 61,584,336
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RECEIVABLES:
Employer contributions..................................................... 3,621,179 2,483,985
Employee contributions..................................................... 425,127 -
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Total receivables........................................... 4,046,306 2,483,985
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NET ASSETS AVAILABLE FOR BENEFITS............................................... $ 61,374,348 $ 64,068,321
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See notes to financial statements.
-2-
CHECKFREE CORPORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED
JUNE 30, 2001
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ADDITIONS (DEDUCTIONS):
Investment income:
Interest and dividends................................................ $ 4,183,185
Net depreciation in fair value of investments.......................... (16,953,983)
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(12,770,798)
Investment expenses......................................................... (175,642)
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Net investment loss..................................... (12,946,440)
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Contributions:
Employer contributions................................................. 3,625,179
Employee contributions................................................. 8,893,424
Rollovers.............................................................. 3,000,959
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Total contributions..................................... 15,519,562
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Distributions to participants............................................... (5,249,033)
Administrative expenses..................................................... (18,062)
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NET DECREASE IN NET ASSETS AVAILABLE FOR BENEFITS (2,693,973)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year...................................................... 64,068,321
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End of year............................................................ $ 61,374,348
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See notes to financial statements.
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CHECKFREE CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2001 AND 2000 AND FOR THE YEAR ENDED JUNE 30, 2001
1. DESCRIPTION OF PLAN
The following brief description of the CheckFree Corporation 401(k) Plan (the
"Plan") is provided for general information purposes only. Participants should
refer to the Plan document for a more complete description of the Plan's
provisions.
General - The Plan is a defined contribution savings plan covering all full-time
employees of CheckFree Corporation (the "Company"). An employee may immediately
enroll in the Plan upon attaining age 18 and having completed one hour of
service. Employees who have completed 1,000 hours of service and are employed on
the last day of the Plan year, or an employee who dies, becomes disabled, or
retires during the year is eligible to receive the employer-matching
contributions to the Plan. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1934 ("ERISA").
Administration - The Plan is administered by the Company. AMVESCAP National
Trust Company is the trustee and recordkeeper for the Plan. All administrative
fees paid to the trustee in order to manage the Plan are paid by the Company.
Administrative fees related to loan setup and maintenance charges are paid by
Participants and investment expenses are paid by the Plan.
Contributions - Eligible employees of the Company may elect to defer 1% to 15%
of their annual income for retirement. The Company matches 100% of the
participant's contribution up to a maximum $1,000 contribution per employee in
Company common stock. The Company, at its discretion, may make additional
matching contributions into the Plan. In 2001, the Company elected to make a
discretionary matching contribution up to a maximum of $2,000 per participant;
however, no participant's total Company contribution could exceed $2,000.
Participant Accounts - Each participant's account is credited with the
participant's contributions and an allocation of the Company's contribution and
Plan earnings (losses) and charged with any administrative expenses associated
with distributions. Allocations are based on the participant's account balance,
as defined in the Plan. 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 contributions plus the
earnings thereon. In addition, the participants are immediately vested in the
matching employer contribution and any discretionary contributions made into the
Plan.
Participant Loans - Loans are recorded at an amount equal to their remaining
principal balance. Loan terms range from 1 to 15 years, are collateralized by
the balance in the participant's account, and bear interest at rates determined
by the Plan trustee. Participants may borrow a minimum of $1,000 up to a maximum
of 50% of the borrower's plan account, not to exceed $50,000. Interest rates
ranged from 7.5% to 10.50% and 6.00% to 10.50% as of June 30, 2001 and 2000,
respectively. Principal and interest are paid ratably through monthly payroll
deductions.
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CHECKFREE CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS, 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 would become 100% vested in their employer
contributions.
Payment of Benefits - A participant's account balance may be withdrawn before
retirement or termination of employment only upon attainment of age 59 1/2. A
participant's account balance may be withdrawn upon retirement (age 62) or
termination of employment. A participant must commence receiving benefits by age
70 1/2. A participant may elect to receive the value of his or her account in
one or more of the following methods: (a) lump-sum payment; (b) a single or
joint and survivor premium annuity contract; (c) partly in cash and partly as a
single premium annuity contract; or (d) periodic installments over a period not
to exceed 15 years.
Investment Options - Upon enrollment in the Plan, a participant may direct
employee contributions in any of 16 investment options: IRT International Equity
Fund, IRT 500 Index Fund, IRT Stable Value Fund, IRT Total Return Fund, AIM
Value Fund, AIM Constellation Fund, Invesco Telecommunications, Invesco Health
Sciences, Invesco Leisure, Invesco Technology II, Invesco Financial Services,
Invesco Small Company Growth, Invesco Cash Reserves, Bond Fund of America, Janus
Mercury, and MAS Midcap Value Investor. Participants may change their investment
options at any time during the Plan year.
2. SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting - The financial statements of the Plan are prepared under
the accrual method of accounting.
Investment Valuation and Income Recognition - The Plan's investments are stated
at fair value. Shares of registered investment companies are valued at quoted
market prices which represent the net asset value of shares held by the Plan at
year-end. Common collective funds are valued at fair value based on quoted
market prices of the underlying instruments. CheckFree Corporation common stock
is valued at its quoted market price. 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. Participant loans are
valued at cost which approximates fair value.
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 net assets available for benefits and changes therein. 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 various 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.
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CHECKFREE CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Payment of Benefits - Benefits are recorded when paid.
Reclassifications - Certain prior year amounts have been reclassified to conform
to current year presentations.
3. INVESTMENTS
The following table presents the fair values of investments as of June 30.
Investments that represent 5% or more of the Plan's net assets are separately
identified:
2001 2000
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IRT 500 Index Fund, 397,986 and 377,610 shares, respectively......... $ 11,764,454 $ 13,103,075
AIM Constellation Fund, 458,196 and 341,472 shares, respectively..... 11,152,487 15,052,097
AIM Value Fund, 839,333 and 246,987 shares, respectively............. 9,862,167 12,013,445
CheckFree Corporation common stock
186,317 and 149,951 shares, respectively........................ 6,534,149 7,731,912
IRT Stable Value Fund, 4,707,024 and
3,352,994 shares, respectively.................................. 4,707,024 3,352,994
IRT International Equity Fund, 220,056 and
217,748 shares, respectively.................................... 4,249,287 4,890,625
Others............................................................... 9,058,474 5,440,188
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$ 57,328,042 $ 61,584,336
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During the year ended June 30, 2001, the Plan's investments, including gains and
losses on investments bought and sold, as well as investments held during the
year, depreciated in value as follows:
Mutual funds........................................................ $ (11,397,947)
Common collective funds............................................. (2,558,421)
CheckFree Corporation common stock.................................. (2,997,615)
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$ (16,953,983)
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4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by letter
dated March 11, 1996 that the Plan was designed in accordance with the
applicable sections of the Internal Revenue Code ("IRC"). The Plan has been
amended since receiving the determination letter. However, the Plan
Administrator and the Plan's tax counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable provisions of the
IRC.
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5. RELATED-PARTY TRANSACTIONS
Administrative expenses and audit fees paid on behalf of the Plan by the
sponsor, CheckFree Corporation, were $17,250 for the year ended June 30, 2001.
Fees paid to AMVESCAP National Trust Company, the trustee and record keeper for
the Plan, were $193,704 for the year ended June 30, 2001.
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SUPPLEMENTAL SCHEDULE
(See Independent Auditors' Report)
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CHECKFREE CORPORATION 401(k) PLAN
FORM 5500, SCHEDULE H, PART IV, Line 4i
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
JUNE 30, 2001
DESCRIPTION OF INVESTMENT INCLUDING
PARTY-IN-INTEREST IDENTITY OF ISSUE, BORROWER, DATE, RATE OF INTEREST, COLLATERAL, CURRENT
TO THE PLAN LESSOR, OR SIMILAR PARTY PAR, OR MATURITY VALUE SHARES COST (1) VALUE
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* AMVESCAP National Trust Company IRT International Equity Fund 220,056 $ 4,249,287
* AMVESCAP National Trust Company IRT 500 Index Fund 397,986 11,764,454
* AMVESCAP National Trust Company IRT Stable Value Fund 4,707,024 4,707,024
* AMVESCAP National Trust Company IRT Total Return Fund 70,665 2,642,163
* AMVESCAP National Trust Company AIM Value Fund 839,333 9,862,167
* AMVESCAP National Trust Company AIM Constellation Fund 458,196 11,152,487
* AMVESCAP National Trust Company Invesco Telecommunications 8,962 213,214
* AMVESCAP National Trust Company Invesco Health Sciences 5,749 294,841
* AMVESCAP National Trust Company Invesco Leisure 5,854 238,944
* AMVESCAP National Trust Company Invesco Technology II 13,111 531,538
* AMVESCAP National Trust Company Invesco Financial Services 8,946 276,070
* AMVESCAP National Trust Company Invesco Small Company Growth 12,021 164,211
* AMVESCAP National Trust Company Invesco Cash Reserves Fund 47,696 47,696
American Funds Bond Fund of America 190,080 2,446,326
Janus Funds Janus Mercury 24,713 607,185
MAS Funds MAS MidCap Value Investor 19,005 402,720
* CheckFree Corporation CheckFree Corporation Common Stock 186,317 $5,274,607 6,534,149
* Participant Loans Various participant loans, interest rates 1,193,566
ranging from 7.5% to 10.5%,
maturing through 2016
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$ 57,328,042
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(1) Cost amounts not presented for participant-directed funds.
-9-
SIGNATURES
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 by the undersigned hereunto duly
authorized.
CheckFree Corporation 401(k) Plan
Dated: June 27, 2002 /s/ Jacquelyn Whitehead
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By: Jacquelyn Whitehead
Title: Plan Fiduciary