UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[ 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
For the transition period from __________ to __________
COMMISSION FILE NUMBER 001-12929
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
COMMSCOPE, INC. OF NORTH CAROLINA EMPLOYEES RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
COMMSCOPE, INC.
---------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-4135495
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1100 COMMSCOPE PLACE SE, P.O. BOX 339
HICKORY, NORTH CAROLINA 28603
(Address of principal executive offices)
(Zip Code)
(828) 324-2200
(Registrant's telephone number, including area code)
COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
Financial Statements as of December 31, 2001
and 2000 and for Each of the Three Years in
the Period Ended December 31, 2001,
Supplemental Schedules for the
Year Ended December 31, 2001,
and Independent Auditors' Report
COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December
31, 2001 and 2000 2
Statements of Changes in Net Assets Available for Benefits for
the Years Ended December 31, 2001, 2000 and 1999 3
Notes to Financial Statements 4-7
SUPPLEMENTAL SCHEDULES:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets
(Held at End of Year) as of December 31, 2001 8
Form 5500, Schedule H, Part IV, Line 4j - Schedule of Reportable
Transactions for the Year Ended December 31, 2001 9
NOTE:The accompanying financial statements have been prepared for the purpose of
filing with the Department of Labor's Form 5500. Supplemental schedules
required by Section 2520 of the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security
Act of 1974, other than those listed above, are omitted because of the
absence of the conditions under which they are required.
INDEPENDENT AUDITORS' REPORT
To the Participants and Administrator
of CommScope, Inc. of North Carolina
Employees Retirement Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of CommScope, Inc. of North Carolina Employees Retirement Savings Plan (the
"Plan") as of December 31, 2001 and 2000, and the related statements of changes
in net assets available for benefits for each of the three years in the period
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 net assets available for benefits of the Plan at December 31, 2001
and 2000, and the changes in net assets available for benefits for each of the
three years in the period 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 schedules listed in the
Table of Contents are presented for the purpose 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 schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in our audit of
the basic 2001 financial statements and, in our opinion, are fairly stated in
all material respects when considered in relation to the basic financial
statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
Hickory, North Carolina
May 21, 2002
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COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 AND 2000
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ASSETS 2001 2000
INVESTMENTS (Notes 1, 2, 3, 4 and 5) $122,309,673 $111,818,720
------------ ------------
RECEIVABLES:
Employer's contribution 70,363 194,237
Participants' contributions 222,472 598,235
------------ ------------
Total receivables 292,835 792,472
------------ ------------
TOTAL ASSETS 122,602,508 112,611,192
LIABILITIES - Excess contributions refundable 6,235 18,897
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $122,596,273 $112,592,295
============ ============
See notes to financial statements.
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COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------
2001 2000 1999
ADDITIONS:
Investment income (loss):
Net (depreciation) appreciation in fair value of
investments (Notes 2, 3 and 4) $ (1,608,662) $ (26,130,356) $ 18,433,174
Interest and dividend income (Note 2) 4,286,306 5,983,434 4,933,008
------------- ------------- -------------
Total investment income (loss) 2,677,644 (20,146,922) 23,366,182
Contributions:
Employer's contributions (Note 1) 9,232,136 8,072,003 5,459,083
Participants' contributions (Note 1) 5,754,442 6,061,636 4,794,962
Participants' rollover contributions (Note 1) 936,198 1,202,433 301,348
------------- ------------- -------------
Total contributions 15,922,776 15,336,072 10,555,393
------------- ------------- -------------
Total additions, net 18,600,420 (4,810,850) 33,921,575
DEDUCTIONS - Benefits paid to participants 8,596,442 7,501,684 7,167,816
------------- ------------- -------------
NET INCREASE (DECREASE) 10,003,978 (12,312,534) 26,753,759
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 112,592,295 124,904,829 98,151,070
------------- ------------- -------------
End of year $ 122,596,273 $ 112,592,295 $ 124,904,829
============= ============= =============
See notes to financial statements.
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COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
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1. DESCRIPTION OF THE PLAN
The following description of the CommScope, Inc. of North Carolina
Employees Retirement Savings Plan (the "Plan") is provided for general
information purposes only. Participants should refer to the plan document
for more complete information.
General - The Plan is a defined contribution plan covering all eligible
domestic employees of CommScope, Inc. of North Carolina and subsidiaries
("CommScope" or the "Company"). Eligibility for participation in the salary
deferral savings and Company-match portions of the Plan occurs on the first
day of the calendar month following the completion of one hour of service.
Eligibility for participation in the employer discretionary profit-sharing
portion of the Plan occurs on the first day of the calendar month following
the completion of 1,000 hours of service in a 12-month period. The
Compensation Committee of the Board of Directors of the Company controls
and manages the operation and administration of the Plan. Vanguard
Fiduciary Trust Company ("Vanguard") serves as the trustee of the Plan. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
The Plan was amended, effective June 1, 2000, to change its name from
CommScope, Inc. of North Carolina Employees Profit Sharing and Savings Plan
to CommScope, Inc. of North Carolina Employees Retirement Savings Plan.
The Plan was amended effective January 1, 1995 to allow a participant to
elect a cash-option distribution for a portion of the employer
discretionary profit-sharing portion of the Plan. Under this amendment, a
participant may elect to receive up to 30% of his employer discretionary
profit-sharing contribution in cash. If this election is not made, the
cash-option deferral is allocated to the participant's account based on the
participant's investment elections. The remaining 70% of the employer
discretionary profit-sharing contribution is also allocated to the
participant's account based on the participant's investment elections.
During 2001, the discretionary profit-sharing contribution consisted of
$721,027 in cash-option deferrals and $6,772,939 for the remaining 70% of
contributions. During 2000, the discretionary profit-sharing contribution
consisted of $685,957 in cash-option deferrals and $5,670,187 for the
remaining 70% of contributions. During 1999, the discretionary
profit-sharing contribution consisted of $406,995 in cash-option deferrals
and $3,533,028 for the remaining 70% of contributions.
Contributions - Each year, participants may contribute any whole percentage
up to 10% of their pretax annual base compensation, as defined in the Plan.
For each plan year, the Company may make a matching contribution equal to
50% of the first 4% of base compensation that a participant contributes to
the Plan through salary-reduction contributions. The Company may increase
its matching contribution for any plan year in a consistent and
nondiscriminatory manner. In addition, for each plan year, the Company may
make a discretionary cash contribution to the Plan in such amount as
approved by the Board of Directors. Contributions are subject to certain
Internal Revenue Code limitations. Participants may also contribute amounts
representing distributions from other qualified defined benefit or defined
contribution plans.
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Participant Accounts - Individual accounts are maintained for each plan
participant. Each participant's account is credited with the participant's
contributions, the Company's matching contributions, and allocations of (a)
the Company's discretionary contributions and (b) plan earnings, and
charged with an allocation of plan losses. Allocations are based on
participant earnings or account balances, as defined. The benefit to which
a participant is entitled is the benefit that can be provided from the
participant's vested account.
Investments - Participants direct the investment of their contributions in
increments of 10 percent into various investment options offered by the
Plan. Company-matching contributions are nonparticipant-directed in that
they are automatically invested in the CommScope Stock Fund. The Company's
discretionary profit-sharing contributions, including cash-option
deferrals, are allocated to any of the 10 investment options, as directed
by the participants. The Plan currently offers 8 mutual funds, a common
trust fund and a company stock fund as investment options for participants.
Vesting - Participants are immediately vested in their salary-reduction
contributions, Company-matching contributions, cash-option deferrals and
related earnings. Participants become fully vested in the Company's
discretionary profit-sharing contributions and related earnings over a
period of five years of continuous employment with the Company, involuntary
termination related to a permanent layoff, reaching age 65, permanent
disability, death or termination of the Plan. If a participant terminates
employment before he has a fully vested interest in his account for reasons
other than those listed above, the amount of the Company's discretionary
contribution which is not fully vested is forfeited by the participant and
is used to reduce future Company-matching and discretionary contributions.
Participant Loans - Participants may borrow from their fund accounts up to
a maximum of $50,000 or 50% of their vested account balances, whichever is
less. The loans are secured by the balance in the participant's account and
bear interest at prime rate plus 1%. The participant is required to repay
the loan in equal installments to be made not less frequently than
quarterly and can elect a 1 to 5 year repayment plan or up to 15 years for
the purchase of a primary residence.
Payment of Benefits - Withdrawals from a participant's account are
permitted upon reaching age 59 1/2, termination, retirement, death,
disability or financial hardship, as defined by the Plan. Distributions are
generally paid in a single lump sum in cash or in cash plus that number of
whole shares allocated to the participant's account in the CommScope Stock
Fund. However, distributions may also be made on an installment basis, as
allowed by the Plan. In addition, vested participants who are eligible for
distributions may elect to defer their distribution and continue investment
in the Plan up to age 70 1/2. The Plan allows participants who attain age
70 1/2 the election to have life expectancies recalculated.
Forfeitures - At December 31, 2001, forfeited nonvested accounts totaled
$140,781. These accounts will be used to reduce future Company-matching
and/or discretionary profit-sharing contributions. During 2001,
Company-matching contributions were reduced by $70,712 from forfeited
nonvested accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America.
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 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.
- 5 -
Investment Valuation and Income Recognition - The Plan's investments are
stated at fair value. Shares of mutual funds are valued at quoted market
prices, which represent the fair value of shares held by the Plan at
year-end. Investments in the common trust fund are stated at estimated fair
values, which have been determined based on the unit values of the fund.
Unit values are determined by the organization sponsoring such common trust
fund by dividing the funds' net assets at fair value by the units
outstanding at each valuation date. The CommScope Stock Fund is valued at
year-end unit closing price (comprised of year-end market price for shares
held by the funds plus the value of money-market reserves). The loans to
participants are valued at cost plus accrued interest, which approximates
fair value.
Purchases and sales of fund investments are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date. Capital gain distributions are included
in dividend income.
Expenses - All administrative expenses of the Plan are paid by the Company.
Payments of Benefits - Benefit payments are recorded when paid.
3. INVESTMENTS
The Plan's investments that represent 5% or more of the Plan's net assets
available for benefits as of December 31, 2001 and 2000 are as follows:
December 31,
-------------------------
2001 2000
Vanguard Wellington Fund, 895,741 and 797,996 shares,
respectively $24,417,912 $22,511,476
Vanguard Federal Money Market Fund, 20,508,185 and
18,176,990 shares, respectively 20,508,185 18,176,990
Vanguard 500 Index Fund, 231,540 and 222,429
shares, respectively 24,517,820 27,105,162
Vanguard U.S. Growth Fund, 227,153 shares -- 6,280,794
Vanguard Retirement Savings Trust, 7,541,548 and 5,756,082
shares, respectively 7,541,548 5,756,082
CommScope Stock Fund, 1,140,537 and 1,077,545 shares,
respectively 24,259,226* 17,846,843*
Loans to participants 7,462,966 7,188,773
* Nonparticipant-directed.
During 2001, 2000 and 1999, the Plan's investments (including gains and
losses on investments bought and sold, as well as held during the year)
(depreciated) appreciated in value by ($1,608,662), ($26,130,356) and
$18,433,174, respectively, as follows:
Years Ended December 31,
--------------------------------------------
2001 2000 1999
Mutual funds $ (6,940,003) $ (5,768,675) $ 4,884,016
Company stock funds 5,331,341 (20,361,681) 13,549,158
------------ ------------ ------------
$ (1,608,662) $(26,130,356) $ 18,433,174
============ ============ ============
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4. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments
is as follows as of December 31, 2001 and 2000, and for the three years in
the period ended December 31, 2001:
December 31,
----------------------------
2001 2000
Net assets - CommScope Stock Fund $ 24,259,226 $ 17,846,843
Years Ended December 31,
--------------------------------------------
2001 2000 1999
Changes in net assets:
Investment income (loss) $ 5,354,027 $(20,355,551) $ 13,445,325
Employer's contributions 2,804,891 1,738,559 1,454,086
Participants' contributions 941,419 802,259 394,769
Participants' rollover contributions 550,576 222,303 64,654
Benefits paid to participants (1,432,189) (1,554,645) (1,102,189)
Transfers (to) from participant-directed
investments (1,806,341) 9,967,109 3,770,262
------------ ------------ ------------
Net change 6,412,383 (9,179,966) 18,026,907
CommScope Stock Fund:
Beginning of year 17,846,843 27,026,809 8,999,902
------------ ------------ ------------
End of year $ 24,259,226 $ 17,846,843 $ 27,026,809
============ ============ ============
5. RELATED PARTY TRANSACTIONS
Certain plan investments are shares of mutual funds and units of
participation in a common trust fund managed by an affiliate of Vanguard.
Vanguard is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest transactions.
6. PLAN TERMINATION
Although it has not expressed any intention 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 accounts.
7. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated August 9, 1996, that the Plan and related trust were designed
in accordance with applicable regulations of the Internal Revenue Code. The
Plan has been amended since receiving the determination letter. However,
the Company and the plan administrator believe that the Plan is currently
designed and operated in compliance with the applicable requirements of the
Internal Revenue Code and the Plan and related trust continue to be
tax-exempt. Therefore, no provision for income taxes has been included in
the Plan's financial statements.
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COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i -
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2001
--------------------------------------------------------------------------------
Description of Investment,
Identity of Issue, Including Maturity Date,
Borrower, Lessor Rate of Interest, Collateral, Current
or Similar Party Par or Maturity Value Cost Value
* Vanguard Vanguard Wellington Fund ** $ 24,417,912
* Vanguard Vanguard Federal Money Market Fund ** 20,508,185
* Vanguard Vanguard GNMA Fund ** 5,298,707
* Vanguard Vanguard 500 Index Fund ** 24,517,820
* Vanguard Vanguard STAR Fund ** 1,541,963
* Vanguard Vanguard U.S. Growth Fund ** 5,376,036
* Vanguard Vanguard International Growth Fund ** 1,208,082
* Vanguard Vanguard Extended Market Index Fund ** 177,228
* Vanguard Vanguard Retirement Savings Trust ** 7,541,548
* CommScope CommScope Stock Fund $ 28,085,621 24,259,226
* Participant loans Participant loans (maturing 2002 to 2017
at interest rates ranging from 6% to 11%) ** 7,462,966
------------
TOTAL $122,309,673
============
* Permitted party-in-interest.
** Cost information is not required for participant-directed investments and, therefore, is not included.
- 8 -
COMMSCOPE, INC. OF NORTH CAROLINA
EMPLOYEES RETIREMENT SAVINGS PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 2001
--------------------------------------------------------------------------------
Current
Value of
Asset on
Identity of Purchase Selling Cost of Transaction
Party Involved Description of Asset Price Price Asset Date Net Loss
CommScope CommScope Stock Fund:
177 purchases $8,020,649 $ -- $8,020,649 $8,020,649 $ --
217 sales -- 6,938,483 8,489,009 6,938,483 (1,550,526)
- 9 -
SIGNATURE
The Plan. 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 on its behalf by the undersigned
hereunto duly authorized.
CommScope, Inc. of North Carolina
Employees Retirement Savings Plan
June 24, 2002 /s/ Jearld L. Leonhardt
------------- --------------------------------------------
Date Jearld L. Leonhardt
Executive Vice President, Finance and
Administration signing both in his capacity
as Executive Vice President on behalf of the
Registrant and as Chief Financial Officer of
the Registrant and as a Member of the
CommScope, Inc. of North Carolina Employees
Retirement Savings Plan Investment Committee
- 10 -
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
333-39072, 333-54017, 333-33555 and 333-29725 of CommScope, Inc. on Form S-8 of
our report dated May 21, 2002, appearing in this Annual Report on Form 11-K of
CommScope, Inc. of North Carolina Employees Retirement Savings Plan for the year
ended December 31, 2001.
/s/ Deloitte & Touche LLP
Hickory, North Carolina
June 24, 2002
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