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, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER 1-14337
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
-------------------------------------------------
(Full title of the Plan)
PENTON MEDIA, INC.
------------------
(Name of Issuer of the Securities Held Pursuant to the Plan)
1300 East Ninth Street, Cleveland, Ohio 44114
---------------------------------------------
(Address of Issuer's Principal Executive Office)
PENTON MEDIA, INC.
INDEX TO FORM 11-K
Page
(a) Financial Statements - financial statements 3-14
required to be filed are listed in the
Index to Financial Statements attached hereto,
which is incorporated herein by reference.
(b) Signatures 15
(c) Exhibit:
Number Description
------ -----------
23 Consent of Independent Accountants 16
2
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2001 AND 2000
3
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
--------------------------------------------------------------------------------
Page
Report of Independent Accountants 5
Financial Statements:
Statements of Net Assets Available for Benefits
at December 31, 2001 and 2000 6
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 2001 7
Notes to Financial Statements 8-13
Supplemental Schedule required by ERISA: *
Schedule H Part IV Item 4i -
Schedule of Assets Held for Investment Purposes at December 31, 2001 14
* Note: All other schedules required by 29 CFR 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under ERISA (Employee
Retirement Income Security Act of 1974) have been omitted because the conditions
under which they are required are not present.
4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
Penton Media, Inc. 401(k) Retirement Savings 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 Penton Media, Inc. 401(k) Retirement Savings Plan (the "Plan") at
December 31, 2001 and 2000, and the changes in net assets available for benefits
for the year ended December 31, 2001 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
for Investment Purposes 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 supplemental schedule is the responsibility of the Plan's management.
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/ PricewaterhouseCoopers LLP
------------------------------
Cleveland, Ohio
June 21, 2002
5
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------
DECEMBER 31,
2001 2000
Assets:
Investments, at fair market value $ 61,474,709 $ 69,917,426
Participant loans 1,658,583 1,375,468
------------- -------------
Total Investments 63,133,292 71,292,894
Contribution Receivables:
Employee contributions - 14,966
Employer contributions - 5,704
------------- -------------
- 20,670
Net assets available for benefits: $ 63,133,292 $ 71,313,564
============= ==============
The accompanying notes are an integral part of the financial statements.
6
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------
FOR THE YEAR ENDED
DECEMBER 31,
2001
Increases:
Investment Income:
Interest and dividends $ 1,279,432
Contributions:
Participant contributions 7,074,856
Employer contributions 2,215,260
--------------
9,290,116
Transfers in (Note 1) 5,835,192
--------------
Total Additions 16,404,740
Deductions:
Investment Loss:
Net depreciation in fair market value of investments (16,523,965)
Distributions and fees:
Benefit payments to participants (8,050,768)
Administrative fees (10,279)
--------------
(8,061,047)
Total Deductions (24,585,012)
Net decrease (8,180,272)
Net Assets Available for Benefits:
Beginning of year 71,313,564
--------------
End of year $ 63,133,292
==============
The accompanying notes are an integral part of the financial statements.
7
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
1. PLAN DESCRIPTION
The following description of the Penton Media, Inc. 401(k) Retirement
Savings Plan (the "Plan") provides only general information. Participants
should refer to the Plan document for a more complete description of the
Plan's provisions.
GENERAL
Prior to August 7, 1998, Penton Media, Inc. ("Penton" or "Company") was a
wholly owned subsidiary of Pittway Corporation ("Pittway"). Pittway
distributed 100% of Penton's common stock on August 7, 1998, to Pittway's
shareholders in a tax-free spinoff. On September 1, 1998, the Company
adopted the Plan, a 401(k) defined contribution plan. Effective January 1,
2001, the Plan was amended and restated to incorporate various plan
qualification requirements made by the Uruguay Round Agreements Act (GATT),
the Taxpayer Relief Act of 1997, the Reemployment Rights Act of 1994
(USERRA), the Internal Revenue Service Restructuring and Reform Act of 1998
and the Small Business Job Protection Act of 1996 (SBJPA).
On March 15, 2000 Penton sold its Direct Mail segment. Pursuant to Section
401(k)(10) of the Code, employees of the Direct Mail segment were given the
option to keep their accounts in the Plan, transfer their account balances
to a qualified IRA, transfer their account balances to a new plan or
receive a distribution.
In September 2000, Penton acquired the stock of Duke Communications
International ("Duke"). Effective February 23, 2001, Duke employees ceased
participation in the Duke Communications International 401(k) Retirement
Plan ("the Duke Plan"), the Duke Plan was frozen and Duke employees began
participation in the Plan. Effective March 7, 2001, the Duke Plan was
merged into the Plan and the assets from the Duke Communications
International 401(k) Retirement Plan were transferred to Fidelity.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). All non-union employees of the Company become
eligible to participate in the plan on the first day of the month that is
at least 30 days after the date on which the employee begins employment
with the Company.
CONTRIBUTIONS
Each year, participants may contribute up to 15% of pretax annual
compensation, as defined in the Plan. Unless waived, 3% of an
eligible employee's compensation will automatically be deducted and
contributed to the Plan. The matching percentage contributed by the
Company is determined by resolution of the Board of Directors of the
Company, at their discretion. Contributions are subject to certain
limitations. Prior to January 1, 2002, the matching contribution was equal
to 50% of the first 6% of the participants' contributions to the Plan.
Effective January 1, 2002, the Company temporarily suspended the Company
match.
The Plan also permits rollover contributions from other qualified
retirement plans. Rollover contributions are included in participant
contributions and amounted to $626,384 in 2001.
PARTICIPANT ACCOUNTS
Fidelity maintains an individual account for each participant. This account
is credited with participant contributions, employer matching contributions
and Plan earnings, as allocated, based upon each participant's election.
8
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
VESTING
Participants are immediately vested in both employee and the employer
matching contributions, plus actual earnings thereon.
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employee and matching
employer contributions in one quarter percent increments in any of the
investment options. Two of the investment options are no longer available
for future investment purposes, as noted in the descriptions which follow.
Northern Trust is the trustee for the following funds: AptarGroup Inc.
Stock Fund, Pittway Corporation Stock Fund, and the Penton Media, Inc.
Stock Fund. Northern Trust reports all activity of these funds to
Fidelity. Fidelity manages the following remaining funds: Retirement
Government Money Market Portfolio, Managed Income Portfolio, Growth &
Income Portfolio, Aggressive Growth Fund, Magellan Fund, Spartan 500 Index
Fund, Diversified International Fund, Fidelity Mid-Cap Stock Fund, PIMCO
Total Return Fund II, Neuberger Berman Genesis, Morgan Stanley Value Added
Equity, and the Fidelity Freedom Funds.
Fidelity Retirement Government Money Market Portfolio is a money market
mutual fund that invests in obligations, issued or guaranteed as to
principal and interest by the U.S. Government.
Fidelity Managed Income Portfolio is a stable value fund (common or
collective trust). It invests primarily in high-quality, short and long
term insurance company investment contracts (GICs), bank investment
contracts (BICs), short term money market instruments and "synthetic" GICs
(debt obligations issued by one institution and insured by another as to
the payment of principal at maturity).
Fidelity Growth & Income Portfolio is a growth and income mutual fund,
which seeks long-term capital growth, current income, and growth of income
consistent with reasonable investment risk. It invests primarily in U.S.
and foreign stocks, focusing on those that pay dividends and show potential
earnings growth. It may also invest in bonds.
Fidelity Aggressive Growth Fund is a growth mutual fund and invests
primarily in stocks of small and medium size developing companies that have
the potential to grow rapidly. Such stocks may be subject to abrupt or
erratic price changes.
Fidelity Magellan Fund is a growth mutual fund and seeks long-term capital
appreciation by investing in the stocks of both well known and lesser known
companies with potentially above-average growth potential and a
correspondingly higher level of risk. Securities held by the fund may
include both foreign and domestic companies.
Spartan 500 Index Fund is a growth mutual fund and invests primarily in the
stocks that are included in the Standard & Poor's Composite Index of 500
stocks and other securities that are based on the value of the index.
Fidelity Diversified International Fund is a growth mutual fund that
invests primarily in stocks of companies located outside of the U.S. that
are included in the Morgan & Stanley EAFE Index (Europe, Australia, Far
East Index). It seeks stocks of larger companies that are considered
undervalued in their countries.
Fidelity Mid-Cap Stock Fund is a long-term growth mutual fund that invests
primarily in domestic and foreign stocks of companies with medium market
capitalization.
9
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
PIMCO Total Return Fund II seeks total fund return with an average
portfolio duration between three and six years. The fund invests primarily
in investment grade fixed income securities, which may include U.S.
government obligations, mortgage and asset backed securities, variable and
floating debt securities and convertible securities.
Neuberger Berman Genesis Trust seeks long term capital appreciation. The
fund primarily invests in common stocks of small companies.
Morgan Stanley Value Added Equity Fund seeks capital appreciation and
current income. The fund primarily invests in common stocks listed on the
S&P 500.
Fidelity Freedom Funds provides investing opportunities for both short and
long term goals by allowing investors to choose from the following fund
options based on the participants' targeted retirement date: Fidelity
Freedom Income Fund, Fidelity Freedom 2000 Fund, Fidelity Freedom 2010
Fund, Fidelity Freedom 2020 Fund, Fidelity Freedom 2030 Fund and Fidelity
Freedom 2040 Fund. The funds invest in a combination of Fidelity equity,
fixed income and money market funds which are allocated differently based
on the retirement goal.
AptarGroup, Inc. Stock Fund is a fund which, under a former plan, invested
exclusively in shares of AptarGroup, Inc. stock. Any contributions or
investment gains previously invested in the AptarGroup, Inc. Stock Fund,
may, at the present time, remain invested in Aptar Stock. These
contributions or investment gains may be reinvested in another fund. The
AptarGroup, Inc. Stock Fund is no longer available as an investment option
for future contributions.
Pittway Corporation Stock Fund is a fund which, under a former plan,
invested exclusively in shares of Pittway Corporation Class A stock. Early
in 2000, Pittway was sold to Honeywell International, Inc ("Honeywell").
Upon consummation of the transaction, the Pittway Corporation Stock Fund
was liquidated and participants were given the option to transfer any
assets held in the Pittway Stock Fund to the other remaining funds. During
2000 (for the period prior to the sale to Honeywell), the fund was not
available as an investment option; therefore, any contributions or
investment gains previously invested in the fund remained invested in
Pittway stock.
Penton Media, Inc. Stock Fund invests exclusively in shares of Penton
Media, Inc. stock. Investment gains may result from both dividends and
increases in the market value of shares. Shares in the Penton Media, Inc.
Stock Fund are acquired on the open market at fair market value on the date
purchased.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 not to
exceed the lesser of $10,000 or 50% of the account balance. Loan repayments
are treated as a transfer to the investment funds from the Loan Fund.
Participant loans are reflected as a transfer from the respective
investment funds to the Loan Fund. Loan terms may not exceed five years.
The loans are secured by the balance in the participant's vested account
and carry an interest rate equal to the prime rate plus one percent on the
date of the loan. Interest rates range from 6.00% to 11.50%. Principal and
interest are paid ratably through payroll deductions.
10
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
PAYMENT OF BENEFITS AND WITHDRAWALS
A participant may withdraw their account balance upon termination of
employment or upon reaching age 59 1/2 by calling Fidelity directly.
Hardship withdrawals are available if requirements are met as outlined in
the plan document.
Upon termination of employment or death, the accumulated benefits will be
paid to the participant or beneficiary based on their payment election.
Participants may elect to receive either a lump sum, a series of
installments over a period of time as determined by the plan document, or a
combination of the two.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared on the accrual
basis of accounting in accordance with accounting principles generally
accepted in the United States of America ("GAAP").
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation or depreciation in the fair value of its
investments, which consists of the realized gains or losses and the
unrealized appreciation or depreciation on those investments.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from these estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in the AptarGroup, Inc. Stock Fund, Pittway Corporation Stock
Fund, and Penton Media, Inc. Stock Fund are valued at quoted market prices
at year end. Investments in the Fidelity Growth and Income Portfolio,
Fidelity Aggressive Growth Fund, Fidelity Magellan Fund, Spartan 500 Index
Fund, Fidelity Diversified International Fund, Fidelity Mid-Cap Stock
Fund, PIMCO Total Return Fund II, Neuberger Berman Genesis Trust, Morgan
Stanley Value Added Equity Fund, and Fidelity Freedom Funds are valued at
quoted market prices which represent the net asset value of shares
held by the Plan at year-end. Investments in the Fidelity Retirement
Government Money Market Portfolio and Fidelity Managed Income Portfolio
are stated at fair value as determined by the trustee. Participant loans
are valued at cost which approximates fair market value.
Purchases and sales of securities, including related gains and losses, are
recorded as of the trade date. Interest income is recorded when earned.
Dividend income is recorded on the ex-dividend date.
PAYMENT OF BENEFITS
Benefits are recorded when paid by the Plan.
TRUSTEE EXPENSES AND ADMINISTRATIVE EXPENSES
Certain trustee expenses and administrative expenses incurred in the
administration of the Plan are paid by either the Plan, the Company, or the
participants.
11
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
3. RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other 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
changes in the value of investment securities, it is at least reasonably
possible that changes in risks in the near term would materially affect
participants' account balances and the amounts reported in the Statement of
Net Assets Available for Benefits and the Statement of Changes in Net
Assets Available for Benefits.
4. PARTY-IN-INTEREST TRANSACTIONS
Party-in-interest transactions consist of loans made to participants,
investments in the Fidelity Funds and investments in the Penton Media, Inc.
Stock Fund, Pittway Corporation Stock Fund, and AptarGroup, Inc. Stock
Fund.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to amend or terminate the Plan subject to the
provisions of ERISA. The Company also has the right under the Plan to
discontinue its contributions at anytime. As mentioned previously in Note
1, Contributions, effective January 1, 2002, the Company temporarily
suspended the 50% Company match of the first 6% of each participant's
contribution.
6. INVESTMENTS
The following are investments that represent 5% or more of the Plan's net
assets at December 31:
2001 2000
---- ----
Fidelity Retirement Gov't Money Market Portfolio, $ 14,358,552 $ 14,147,164
14,358,552 and 14,147,164 shares, respectively
Fidelity Growth & Income Portfolio $ 10,458,287 $ 11,300,331
279,783 and 268,416 shares, respectively
Fidelity Magellan Fund $ 18,593,551 $ 19,058,159
178,407 and 159,750 shares, respectively
Fidelity Aggressive Growth Fund $ 5,897,179 $ 8,976,498
310,051 and 248,175 shares, respectively
Spartan 500 Index Fund $ 3,688,516 $ -
46,755 shares
Penton Media, Inc. Stock Fund $ - $ 8,967,197
333,663 shares
12
PENTON MEDIA, INC. 401(K) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
The Plan's investments depreciated as follows:
2001
----
Common Stock $ (6,595,466)
Mutual Funds (9,928,499)
--------------
Total $ (16,523,965)
==============
7. FEDERAL INCOME TAX STATUS
The Plan filed for a determination letter from the Internal Revenue Service
on December 20, 2001 with respect to its qualified status under Section
401(a) of the Code. The application for a determination letter was filed
within the remedial amendment period which extended the determination
letter filing deadline until February 28, 2002. Prior to this filing, the
Plan did not have a favorable determination letter. However, since the Plan
was spun-off from the Pittway 401(k) plan in the same form, and Pittway
received a favorable determination letter dated May 22, 1995, the plan
administrator believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the Code. As
such, the Plan financial statements do not reflect any accruals for federal
and state taxes.
13
PENTON MEDIA, INC. 401(k) RETIREMENT SAVINGS PLAN
SCHEDULE H PART IV ITEM 4i
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
At December 31, 2001
Number of
Investment Description Shares Market Value Interest Rate
----------------------------------------------------------- --------------------- ------------------- ----------------------
Fidelity Retirement Government Money Market Portfolio 14,358,552 $ 14,358,552
Fidelity Managed Income Portfolio 2,795,053 2,795,053
Fidelity Growth & Income Portfolio 279,783 10,458,287
Fidelity Aggressive Growth Fund 310,051 5,897,179
Fidelity Magellan Fund 178,407 18,593,551
Spartan 500 Index Fund 46,755 3,688,516
Fidelity Diversified International Fund 116,191 2,216,930
Fidelity Mid-Cap Stock Fund 656 14,814
PIMCO Total Return Fund II 3,897 40,762
Neuberger Berman Genesis Trust 751 21,855
Morgan Stanley Value Added Equity Fund 2,860 27,654
Fidelity Freedom Funds 1,746 21,070
AptarGroup, Inc. Stock Fund 7,020 245,925
Penton Media, Inc. Stock Fund 494,339 3,094,561
Participant Loans 1,658,583 6.00% - 11.50%
-------------------
$ 63,133,292
===================
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
PENTON MEDIA, INC. 401(k) RETIREMENT SAVINGS PLAN
BY: /s/ PRESTON L. VICE
---------------------
Interim Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
Date: June 28, 2002
15