UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number: 000-28600
A. FULL TITLE OF THE PLAN:
CCC INFORMATION SERVICES INC. 401(K) RETIREMENT SAVINGS & INVESTMENT PLAN
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE ADDRESS
OF ITS PRINCIPAL EXECUTIVE OFFICES:
CCC INFORMATION SERVICES GROUP INC.
World Trade Center Chicago
444 Merchandise Mart
Chicago, Illinois 60654-1005
CCC INFORMATION SERVICES INC.
(A WHOLLY-OWNED SUBSIDIARY OF CCC INFORMATION SERVICES GROUP INC.)
401(K) RETIREMENT SAVINGS & INVESTMENT PLAN
REPORT ON AUDITS OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AT DECEMBER 31, 2002 AND 2001 AND FOR THE YEAR ENDED DECEMBER 31, 2002
CONTENTS
--------
PAGE
REPORT OF INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . 1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits . . . . . . . . . . 2
Statement of Changes in Net Assets Available for Benefits . . . . . 3
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . 4-8
SUPPLEMENTARY SCHEDULES*
Schedule I: Schedule H, line 4i -
Schedule of Assets (Held at End of Year). . . . . . . 9
Schedule II: Schedule G, Part III - Schedule of
Nonexempt Transactions. . . . . . . . . . . . . . . . 10
SIGNATURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
EXHIBITS
Exhibit 23 - Consent of Independent Accountants . . . . . . . . . . E-1
Exhibit 99 - Certification of Plan Administrator. . . . . . . . . . E-2
- ----------------
*Note: Other supplementary schedules required by Section 2520.103-10 of the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974 have been
omitted because they are not applicable.
REPORT OF INDEPENDENT AUDITORS
------------------------------
To the Participants and Administrator of the
CCC Information Services Inc.
401(k) Retirement Savings & Investment Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the CCC Information Services Inc. 401(k) Retirement Savings & Investment Plan
(the "Plan") at December 31, 2002 and 2001, and the changes in net assets
available for benefits for the year ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America. 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 of these statements in accordance with
auditing standards generally accepted in the United States of America, which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
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
at End of Year and Schedule of Nonexempt Transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements but are 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. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
June 27, 2003
1
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 AND 2001
-----------------------------------------------
2002 2001
----------- -----------
ASSETS:
Investments, at fair value . . . . . . . . . . . . . . $21,180,109 $22,558,585
Receivables:
Participant contributions. . . . . . . . . . . . . . 1,971 86,966
Employer contributions . . . . . . . . . . . . . . . 702,518 145,464
----------- -----------
Total receivables. . . . . . . . . . . . . . . . . 704,489 232,430
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS . . . . . . . . . . . $21,884,598 $22,791,015
=========== ===========
The accompanying notes are an integral part of these financial statements.
2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2002
---------------------------------------------------------
ADDITIONS:
Investment income (loss):
Net realized and unrealized depreciation in
fair value of investments . . . . . . . . . . . . . . . . . $ (3,966,497)
Interest on participant notes receivable. . . . . . . . . . . 39,607
Interest and dividends. . . . . . . . . . . . . . . . . . . . 353,277
--------------
Total investment loss. . . . . . . . . . . . . . . . . . . (3,573,613)
CONTRIBUTIONS:
Participant . . . . . . . . . . . . . . . . . . . . . . . . . 3,631,853
Employer. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,593,175
--------------
Total contributions. . . . . . . . . . . . . . . . . . . . 5,225,028
--------------
Total additions. . . . . . . . . . . . . . . . . . . . . . 1,651,415
--------------
DEDUCTIONS:
Distributions to participants . . . . . . . . . . . . . . . . (2,551,761)
Administrative expenses . . . . . . . . . . . . . . . . . . . (6,071)
--------------
Total deductions . . . . . . . . . . . . . . . . . . . . . (2,557,832)
--------------
Decrease in net assets . . . . . . . . . . . . . . . . . . . . . (906,417)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year . . . . . . . . . . . . . . . . . . . . . . 22,791,015
--------------
End of year . . . . . . . . . . . . . . . . . . . . . . . . . $ 21,884,598
==============
The accompanying notes are an integral part of these financial statements.
3
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. DESCRIPTION OF THE PLAN
-----------------------
GENERAL
The CCC Information Services Inc. ("the Company") 401(k) Retirement Savings
& Investment Plan ("the Plan") is a defined contribution plan pursuant to
Section 401(k) of the Internal Revenue Code ("IRC"). It is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Participants should refer to the Plan document for a
more complete description of the Plan's provisions.
TRUSTEE
The Company has appointed an officer of the Company as Trustee for the
Plan.
THIRD PARTY ADMINISTRATOR AND CUSTODIAN
MFS Retirement Services, Inc. and Reliance Trust Company each perform
certain third party administrator duties.
PARTICIPATION AND VESTING
Generally, all employees of the Company who are not members of a collective
bargaining unit or leased employees are eligible to participate if they are
at least 21 years of age and are regularly scheduled to work more than 20
hours per week. Employees of the Company who are 21 years of age and are
regularly scheduled to work 20 hours per week or less shall be eligible to
participate upon the completion of 1,000 hours of service during the
12-month period that begins on the date on which the employee first
completes an hour of service. If an employee does not complete 1,000 hours
of service during the initial 12-month period, subsequent eligibility
periods will begin on each January 1st after that date. Participation may
begin on the first day of each month. Participants are immediately vested
in their voluntary contributions, pre-1999 matching contributions, Company
profit sharing contributions, and rollover contributions, plus actual
earnings (losses) thereon. Vesting of the remainder of the participants'
accounts, which consists of post-1998 Company matching contributions and
accumulated earnings (losses), is based on years of service. A year of
service is any calendar year in which the employee completes 1,000 hours of
service. A participant vests one-third for each year of service and,
therefore is 100 percent vested after three years of service. Forfeitures
from nonvested accounts are used to pay the Plan's administrative expenses
and then to reduce future employer contributions. Unallocated forfeitures
at December 31, 2002 and 2001 were $124,920 and $-, respectively. For the
years ended December 31, 2002 and 2001, there were $- and $44,650,
respectively, of nonvested forfeitures used to reduce employer
contributions.
CONTRIBUTIONS
Plan participants may contribute ("Participant Contributions") an amount
ranging between 1% and 25% of eligible compensation into any of the Plan's
established investment funds, as specified in the Plan agreement.
Participant Contributions may be made from before-tax earnings, which has
the effect of reducing current taxable earnings for federal income taxes.
All Participant Contributions are subject to limitations set forth in the
IRC and the regulations promulgated thereunder. For the Plan years 2002 and
2001, the IRC limit on before-tax contributions was $11,000 and $10,500,
respectively.
4
The Company makes contributions ("Matching Contributions") equal to 50% of
Participant Contributions, up to a maximum of 3% of the participant's
eligible compensation. However, if the participant annual compensation is
$33,400 or less, then the Matching Contribution will be 50% of Participant
Contributions up to a total of $1,000 in Matching Contributions. Matching
Contributions begin the next month after the participant's six month
anniversary date.
In addition, effective January 1, 2002, the Company, at its sole
discretion, may make a discretionary contribution ("Profit Sharing
Contribution") for any given Plan year. Any employee who has met the
eligibility requirements for Plan participation will be eligible to receive
a Profit Sharing Contribution, if any, provided that such employee is
employed with the Company or any participating employer on the last day of
the Plan year.
To comply with certain provisions of the Tax Reform Act of 1986, as amended
(the "Act"), the Plan limits eligible compensation for purposes of
determining Participant and Matching Contributions (collectively,
"Contributions") to $200,000 and $170,000 for each of the Plan years ended
December 31, 2002 and 2001, respectively.
All contributions are subject to limitations imposed by the IRC and ERISA.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
several investment securities. Investment securities are exposed to various
risks, such as interest rate, market and credit. Due to the level of risk
associated with certain investment securities and the level of uncertainty
related to the changes in the value of investment securities, it is at
least reasonably possible that changes in risks in the near term would
materially affect the participants' account balances and the amounts
reported in the Statements of Net Assets Available For Benefits and the
Statement of Changes in Net Assets Available For Benefits.
PARTICIPANT NOTES RECEIVABLE
The Plan provides for loans to participants in certain situations governed
by the Plan's loan procedures. Loans to participants shall be the lesser of
$50,000 or 50% of their vested account balance. Loans must be repaid within
a five-year period, unless the loan is for acquisition of a primary
residence, in which case it may be repaid up to 30 years. A participant may
have no more than two outstanding loans. The loan repayment terms and
interest rates are approved by the Plan Trustee. Principal and interest on
loans is paid ratably through monthly payroll deductions. At December 31,
2002, interest rates on participant loans range from 5.75% to 10.5%. The
total number of participants with outstanding loans at December 31, 2002
and 2001 was 173 and 147, respectively.
The Plan also provides for in-service distributions in certain hardship
situations, including the purchase of a participant's primary residence,
for payment of post-secondary education tuition, for the payment of certain
medical expenses, and to prevent eviction or foreclosure from the
participant's primary residence. Any loans or in-service distribution
reduces participant investments in their respective selective Investment
Funds.
5
INVESTMENT OPTIONS
The Plan allows participants to allocate their contributions to various
investment options available under the Plan. These elections must be made
in 1% increments. Participants are allowed to reallocate their entire
account balances in multiples of 1% among the Plan's investment options.
2. SIGNIFICANT ACCOUNTING POLICIES
-------------------------------
WITHDRAWALS
The Plan provides that a participant may receive a distribution only in the
following circumstances: (1) the participant attains age 70-1/2, (2) the
participant retires, (3) the participant separates from the Company, (4)
the participant dies, (5) the participant becomes disabled, (6) the
participant encounters a financial hardship as specified in the Plan, or
(7) there is a Qualified Domestic Relations Order issued by a court against
the participant. In addition, participants who have attained age 59-1/2 may
make a withdrawal from the portion of their account attributable to
Participant Contributions.
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual method
of accounting, in accordance with accounting principles generally accepted
in the United States of America ("GAAP").
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts in assets, liabilities and changes therein. Actual results could
differ from those estimates.
INVESTMENT VALUATION AND INCOME
The Plan's investments are stated at fair value. Shares of registered
investments companies, as well as the Company stock are valued at quoted
market prices. Participant loans are valued at amortized 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.
The net appreciation or depreciation in the fair value of the Plan's
investments, as applicable, consists of realized and unrealized
appreciation and depreciation for the specified period. Net unrealized
appreciation or deprecation is determined based on the difference between
the average cost of the investments and the market value as of each
valuation date of such investments. Average cost is determined based on the
weighted average cost of all investments purchased less any dispositions.
PAYMENT OF BENEFITS
Benefits are recorded when paid. Upon termination of service with the
Company, participants become eligible for a lump sum distribution of the
vested portion of their account. Participants may also elect to receive
distribution in substantially equal annual installment payments. Retired
and terminated participants who have an account balance in excess of $5,000
may elect various forms of deferred distribution.
6
EXPENSES OF THE PLAN
The Company has paid expenses incurred by the Plan in the administration of
the Plan. The Company may elect, at any time, to charge Plan administration
expenses to the Plan. Fees paid by the Plan for investment management
services were $6,071 for the year ended December 31, 2002.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of termination, the
Plan's assets will be distributed to participants in accordance with the
Plan's provisions.
3. INVESTMENTS
-----------
The investments reflected in the statements of Net Assets Available for
Benefits represent the total assets in the Trust at December 31, 2002 and
2001. The following tables present investments that represent 5 percent or
more of the Plan's net assets, at fair value, at December 31:
2002 2001
----------- -----------
Massachusetts Investors Trust. . . . . . . . . . $ 2,972,142 $ 4,024,331
MFS Institutional Fixed Fund . . . . . . . . . . 2,886,340 1,773,283
MFS Total Return Fund. . . . . . . . . . . . . . 2,638,904 2,549,620
MFS New Discovery Fund . . . . . . . . . . . . . 2,365,971 3,827,452
Massachusetts Investors Growth Stock Fund . . . 2,142,538 2,850,316
MFS Bond Fund. . . . . . . . . . . . . . . . . . 2,012,298 1,178,690
MFS Capital Opportunities Fund . . . . . . . . . 1,328,497 2,044,210
American Funds Europacific Growth Fund . . . . . 1,184,754 1,230,220
MFS Strategic Growth Fund. . . . . . . . . . . . 781,579 1,172,978
4. TAX STATUS
----------
The Internal Revenue Service (IRS) has determined and informed the Company
by a letter dated November 20, 2002, that the Plan and related Trust are
designed in accordance with applicable sections of the IRC. The Plan has
been amended since receiving the determination letter. However, the Plan
administrator and the Plan's legal counsel believe that the Plan amendments
do not alter the tax status of the Plan and the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the IRC.
7
5. RELATED PARTY TRANSACTIONS
--------------------------
Certain Plan investments are shares of mutual funds managed by MFS
Investment Management, of which the plan administrator, MFS Retirement
Services, Inc. is a subsidiary. The common stock of CCC Information
Services Group Inc. is an investment of the Plan. CCC Information Services
Inc., the sponsor of the Plan, is a wholly-owned subsidiary of CCC
Information Services Group Inc. and therefore, these transactions qualify
as party-in-interest. Fees paid by the Company for the investment
management services were nominal for the year ended December 31, 2002.
6. EMPLOYER CONTRIBUTION RECEIVABLE
--------------------------------
In the prior year, the plan administrator identified system calculation
errors, which resulted in under-funded Matching Contributions. The
Company's related funding necessary to make each participant whole in
correcting these errors is $116,080, which is included in employer
contributions at December 31, 2002. The Company filed for approval of this
self-correction with the IRS and received a compliance statement from the
IRS in a letter dated May 19, 2003. Also included in employer contributions
at December 31, 2002 is an additional discretionary Profit Sharing
Contribution of $586,600, which was funded into the Plan for the benefit of
all eligible employees in February 2003 and was immediately invested in
Company stock. The remaining balance of employer contributions represents
normal Matching Contributions for the December 2002 pay periods not yet
funded at year end.
The employer contribution receivable at December 31, 2001 represents normal
Matching Contributions for the December 2001 pay periods not yet funded at
year end, as well as the aforementioned correction receivable.
7. NONEXEMPT TRANSACTIONS
----------------------
During 2002, $2,949 of employee withholdings relating to a July 2002 pay
period were deposited on dates beyond the regulatory deadline. As of
December 31, 2002, these employee contributions remained to be contributed
to the Plan in addition to accrued interest of $95. This late payment and
unremitted interest on the late payments are nonexempt prohibited
transactions. During 2003, the remaining employee contribution was
transferred by the Company to the Plan. The interest has not yet been
remitted to the Plan.
8
SCHEDULE I:
-----------
SCHEDULE H, line4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2002
-------------------------------------------------------------------------------
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF PRICE/
LESSOR, OR SIMILAR PARTY INVESTMENTS NAV CURRENT VALUE
-------------------------------------- ----------------- ------- ---------------
* Massachusetts Investment Trust Mutual Fund $ 12.87 $ 2,972,142
* MFS Institutional Fixed Fund Common/Collective 1.00 2,886,340
* MFS Total Return Fund Mutual Fund Trusts 13.27 2,638,904
* MFS New Discovery Fund Mutual Fund 11.43 2,365,971
* Massachusetts Investors Growth Stock Fund Mutual Fund 9.23 2,142,538
* MFS Bond Fund Mutual Fund 12.65 2,012,300
* MFS Capital Opportunities Fund Mutual Fund 9.34 1,328,497
American Funds Europacific Growth Fund Mutual Fund 22.97 1,184,754
* CCC Information Group Services Inc. Common Stock 14.97 1,016,077
* MFS Strategic Growth Fund Mutual Fund 13.94 781,579
Davis New York Venture Fund Mutual Fund 20.94 685,342
* Plan Participants/Loan Fund Participant Loans 1.00 534,523
Munder Index 500 Fund Mutual Fund 18.34 309,336
Liberty Small-Cap Value Fund Mutual Fund 28.54 280,001
* MFS Money Market Fund Money Market 1.00 41,805
---------------
Total $ 21,180,109
===============
* Denotes party-in-interest
9
SCHEDULE II:
- ------------
SCHEDULE G, PART III - SCHEDULE OF NONEXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2002
- ---------------------------------------------------------
(a) Identity of (b) Relationship to (c) Description of (d) Purchase (e) Selling (f) Lease
Party Involved Plan, Employer or Transactions Including Price Price Rental
Other Party-In-Interest Maturity Date, Rate of Connection
Interest, Collateral,
Par or Maturity Value
- ----------------------------- ----------------------- ---------------------- ----------- ----------- ----------
CCC Information Services Inc. Plan Sponsor/Employer July 2002 N/A N/A N/A
Employee deferrals
deposited in
excess of regulatory
deadlines
(g) Expenses (h) Cost (I) Current (j) Net Gain
Incurred in of Asset Value of or (Loss)
Connection With of Asset on Each
Transaction Transaction
- --------------- --------- ----------- ------------
N/A $ 2,949 $ 3,044 $ 95
10
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trustee (or other person who administers the employee benefit plan) has duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: June 30, 2003 CCC Information Services Group Inc.
By: /s/ Oliver G. Prince, Jr.
-------------------------
Name: Oliver G. Prince Jr.
Title: Plan Administrator and
Senior Vice President,
Human Resources
11