-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MeNv6Qs1WwxHszSlJu4FctMJFPUpDIP+Nyj0OGJ5y6U16ECH6nEgoH9vza80Vb5A EVrCulLos/9MRl11JtglQA== /in/edgar/work/20000628/0000950132-00-000471/0000950132-00-000471.txt : 20000920 0000950132-00-000471.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950132-00-000471 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLOBAL CROSSING LTD CENTRAL INDEX KEY: 0001061322 STANDARD INDUSTRIAL CLASSIFICATION: [4813 ] IRS NUMBER: 980189783 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-24565 FILM NUMBER: 662134 BUSINESS ADDRESS: STREET 1: WESSEX HOUSE 45 REID ST STREET 2: HAMILTON HM12 CITY: BERMUDA STATE: D0 ZIP: HM12 BUSINESS PHONE: 4412968600 MAIL ADDRESS: STREET 1: WESSEX HOUSE 45 REID STREET STREET 2: HAMILTON HM12 CITY: BERMUDA 11-K 1 0001.txt FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of The Securities Exchange Act of 1934 For the years ended December 31, 1999 and 1998 Commission File Number 000-24565 FRONTIER GROUP EMPLOYEES' RETIREMENT SAVINGS PLAN (Full name of plan) GLOBAL CROSSING LTD. (Name of issuer of securities held pursuant to the plan) WESSEX HOUSE 45 REID STREET HAMILTON HM12, BERMUDA (Address of principal executive offices) REQUIRED INFORMATION Report of Independent Accountant - Arthur Andersen LLP Report of Independent Accountant - PricewaterhouseCoopers LLP Index to Financial Statements and Schedules Statements of Net Assets Available for Benefits as of December 31, 1999 and 1998 Page 1 Statement of Changes in Net Assets Available for Benefits, for the Year Ended December 31, 1999 Page 2 Notes to Financial Statements Pages 3-7 Schedule of Assets Held for Investment Schedule I Purposes as of December 31, 1999 The following exhibits are filed as part of this Report. Consent of Independent Accountants - Arthur Andersen LLP Consent of Independent Accountants - PricewaterhouseCoopers LLP FRONTIER GROUP EMPLOYEES' RETIREMENT SAVINGS PLAN FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999 AND 1998 TOGETHER WITH AUDITORS' REPORT REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Administrator of the Frontier Group Employees' Retirement Savings Plan: We have audited the accompanying statement of net assets available for benefits of Frontier Group Employees' Retirement Savings Plan (the Plan) as of December 31, 1999, and the related statement of changes in net assets available for benefits, for the year then ended. These financial statements and the schedule referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedule based upon our audit. We conducted our audit 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 audit provides 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 benefits of the Plan as of December 31, 1999, and the changes in its net assets available for benefits, for the year then ended, in conformity with accounting principles generally accepted in the United States. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule listed in the accompanying index 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 audit 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 Rochester, New York June 1, 2000 Report of Independent Accountants To the Participants and Administrator of the Frontier Group Employees' Retirement Savings Plan In our opinion, the accompanying statement of net assets available for benefits presents fairly, in all material respects, the net assets available for benefits of the Frontier Group Employees' Retirement Savings Plan at December 31, 1998, in conformity with accounting principles generally accepted in the United States. This financial statement is the responsibility of the Plan's management; our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit of this statement in accordance with auditing standards generally accepted in the United States, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is 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 audit provides a reasonable basis for the opinion expressed above. /s/ PricewaterhouseCoopers LLP February 26, 1999 FRONTIER GROUP EMPLOYEES' RETIREMENT SAVINGS PLAN INDEX TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998
PAGE STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1999 AND 1998 1 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1999 2 NOTES TO FINANCIAL STATEMENTS 3 SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1999 8
FRONTIER GROUP EMPLOYEES' RETIREMENT SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1999 AND 1998
1999 1998 ------------------ ------------------ Investments, at fair value: Registered investment companies- Putnam Income Fund $ 10,360,302 $ 12,899,159 Putnam Global Growth Fund 36,514,170 23,481,464 Putnam Voyager Fund 76,505,629 52,783,761 Putnam Fund for Growth and Income 5,565,976 3,106,035 Putnam Asset Allocation Fund Balanced Portfolio 1,736,067 1,179,075 Common trust- Putnam S&P 500 Index Fund 45,017,349 37,889,923 Stable Value Fund 44,038,661 39,410,558 Frontier Corporation common stock - 79,185,985 Global Crossing Ltd. common stock 250,232,062 - Participant loans 8,333,902 7,314,405 ------------------ ------------------ Total investments 478,304,118 257,250,365 ------------------ ------------------ Receivables: Participants' contributions 921,746 844,359 Employer's contributions 337,689 1,441,579 ------------------ ------------------ Total receivables 1,259,435 2,285,938 ------------------ ------------------ Net assets available for benefits $ 479,563,553 $ 259,536,303 ================== ==================
The accompanying notes to financial statements are an integral part of these statements. 1 FRONTIER GROUP EMPLOYEES' RETIREMENT SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1999 Additions: Additions to net assets attributed to- Investment income: Interest and dividends $ 14,476,926 Realized gain, net 33,129,802 Net appreciation in fair value of investments 174,116,182 Participant loan interest income 541,301 Contributions: Participants' contributions 22,955,100 Employer's contributions 8,247,723 ------------ Total additions 253,467,034 ------------ Deductions: Deductions from net assets attributed to- Benefits paid to participants 32,289,862 Excess contributions (1998 plan year) 7,493 Loan fees 32,387 Other expense 11,354 ------------ Total deductions 32,341,096 ------------ Net increase prior to fund transfers 221,125,938 Transfers from other Frontier sponsored plans 1,204,230 Transfers to non-Frontier sponsored plans (2,302,918) ------------ Net increase 220,027,250 Net assets available for benefits, beginning of year 259,536,303 ------------ Net assets available for benefits, end of year $479,563,553 ============
The accompanying notes to financial statements are an integral part of this statement. 2 FRONTIER GROUP EMPLOYEES' RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 1. DESCRIPTION OF THE PLAN ----------------------- General - ------- The following brief description of the Frontier Group Employees' Retirement Savings Plan (the "Plan") is provided for general information purposes only. Participants should refer to the plan document for more complete information. The Plan is a defined contribution plan established by the Board of Directors of Frontier Corporation (the "Company") effective March 1, 1994. The Plan was amended and restated effective January 1, 1999. The Plan is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974 (ERISA) as amended. Participation - ------------- All nonbargaining employees, except for temporary, summer, and leased employees are eligible to participate in the Plan upon the first of the month after 30 days of employment. The Plan allows the Company's Employee Benefit Committee to transfer participant accounts from plans the participants are no longer eligible to participate in to a substantially similar 401(k) plan sponsored by Frontier Corporation or any corporation/business entity in which Frontier Corporation has a 50 percent or more ownership or profits interest. These transfers are included in the statement of changes in net assets available for benefits, as transfers to other Frontier sponsored plans. Administration - -------------- The Plan is administered by the Company's Employee Benefit Committee whose members are appointed by the Company's Board of Directors. The Trustee of the Plan is Putnam Fiduciary Trust Company. Funding Policy - -------------- The Plan provides participants the option of having their basic and supplemental contributions to the Plan made on a salary reduction basis and on a deferred tax basis. Upon enrollment in the Plan, a participant may direct contributions into the following investment options. . Putnam Income Fund - Funds are primarily invested in corporate bonds and U.S. ------------------ government and agency obligations. . Putnam Global Growth Fund - Funds are primarily invested in foreign and ------------------------- domestic common stocks. . Putnam Voyager Fund - Funds are invested in emerging growth companies and ------------------- opportunity stocks. . Putnam Fund for Growth & Income - Funds are primarily invested in common ------------------------------- stocks. . Putnam Asset Allocation Fund Balanced Portfolio - Funds are invested in ----------------------------------------------- stocks, bonds, and money market instruments. . Putnam S&P 500 Index Fund - Funds are primarily invested in stocks listed in ------------------------- the S&P 500 Index. . Stable Value Fund - Funds are invested in a diversified portfolio of high- ----------------- quality stable value investments offering price stability and liquidity. 3 FRONTIER GROUP EMPLOYEES' RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 . Frontier Corporation Common Stock Fund - Funds invested in common stock of -------------------------------------- Frontier Corporation. All investments in this fund were transferred to the Global Crossing Common Stock Fund upon acquisition of Frontier Corporation by Global Crossing, Ltd. Each share of Frontier Corporation common stock was exchanged for 2.05 shares of Global Crossing Ltd. common stock pursuant to the acquisition of Frontier Corporation by Global Crossing Ltd. effective September 28, 1999. . Global Crossing Common Stock Fund - Funds are invested in common stock of --------------------------------- Global Crossing, Ltd., parent company of Frontier Corporation. The shares of stock in the Global Crossing Common Stock Fund are qualified employer securities as defined by ERISA. Each individual's investment in these funds is recorded in his or her account on a per share basis. All other funds are tracked on a dollar value basis with each fund's activity allocated to participants on a pro rata basis. Therefore the plan does not record activity on a unit value basis. The Plan provides that each participant may voluntarily make contributions through a salary reduction agreement for whatever whole percentage a participant chooses, up to a maximum of 16 percent, subject to maximum contributions imposed by the Internal Revenue Code under Section 401(k). Individual accounts which record the participant's contributions, the earnings on all contributions, and the amount of the participant's interest in each fund, are maintained for each participant. The participant's contributions during a month are allocated directly to his or her individual account when the Trustee receives contributions. Participants have the option to invest their contributions in any of the funds and may change their allocation between funds at any time. Employer contributions consist of three components: . Company Fixed Contributions - Each payroll period, the Company contributes --------------------------- 0.5 percent of the payroll period compensation for each of its employees who is a participant in the Plan. . Company Matching Contributions - Each payroll period, the Company contributes ------------------------------ an amount equal to 100 percent of participant contributions, up to the first 3 percent of compensation. . Company Profit Sharing Contributions - Each plan year, the Company may elect ------------------------------------ to make a profit sharing contribution to participant accounts based on the Company's performance. There were no profit sharing contributions for 1999. All employer contributions will be invested initially in the Global Crossing Common Stock Fund. All employer contributions invested in this fund must remain for five years, while an active participant, after which time the participant may elect to transfer the amounts to any of the other funds or retain the amounts in this fund. If the participant terminates service with the Company, he or she may elect to transfer the amounts in the Global Crossing Common Stock Fund to any other funds or retain the amounts in this fund. Vesting - ------- Participants are immediately 100 percent vested in their individual accounts and all employer matching contributions and earnings thereon. 4 FRONTIER GROUP EMPLOYEES' RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 Payment of Benefits - ------------------- Payment of benefits generally begins upon termination of service and attaining normal retirement age (65). A participant may elect to receive either a lump- sum amount equal to the value of his or her vested account balance, or a participant may elect to receive installments over a period not to exceed 20 years. However, a participant who has reached age 59 1/2 , but who has not yet terminated employment, may withdraw all or a portion of his or her accumulated account balance in accordance with the terms of the Plan. If upon termination of service, a participant does not attain normal retirement age and the participant's vested account balance is greater than $5,000, the participant may elect to receive a lump-sum amount, a direct rollover to a qualified plan under Section 401 of the Internal Revenue Code, or a direct rollover to a qualified Individual Retirement Account equal to the value of his or her vested account balance. If the vested account balance is less than $5,000, the balance will be distributed to the participant as soon as administratively feasible. Individual Participant Loans - ---------------------------- Loans are available to participants in the Plan on a nondiscriminatory basis. Participant loans cannot exceed the lesser of 50 percent of the vested amounts in the participant's account or $50,000. A participant may only have two loans outstanding, and they are treated as directed investments by the borrower with respect to his or her account. The interest rate on loans is established based on the prime rate, under current Plan provisions. Interest paid on the loan is credited to the borrower's account and the participant does not share in the income of the Plan's assets with respect to the amounts outstanding. Loans have a term of no more than five years except that a loan may be granted for a period not to exceed 25 years if the proceeds are used to purchase the participant's principal residence. 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 will become 100 percent vested in their accounts. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ------------------------------------------ Basis of Accounting - ------------------- The financial statements have been prepared on the accrual basis of accounting. The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan's management to make estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from those estimates. Contributions and Benefits Paid - ------------------------------- Contributions are recorded by the Plan when withheld from employees and accrued by the Company. Benefits are recorded when paid. Participants may receive distributions in cash or in common stock of Global Crossing Ltd. for amounts invested in the Global Crossing Common Stock Fund. Purchases and sales of securities are recorded on the trade date. 5 FRONTIER GROUP EMPLOYEES' RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 Investments and Investment Income - --------------------------------- Investments in registered investment companies and employer securities are stated at fair value, measured by quoted market prices. Investments in common trust funds are stated at estimated fair values, which represent the net asset value of shares held by the Plan at year-end. Adjustments for unrealized appreciation or depreciation of such values are included in the operating results of the Plan. Funds invested in the Stable Value Fund are stated at contract value, measured as cost plus earned interest income. Contract value approximates fair value at December 31, 1999 and 1998. Participant loans are valued at cost, which approximates fair value. Interest and dividend income is recorded as earned on an accrual basis. Administrative Expenses - ----------------------- Significant expenses associated with the Plan are paid by the Company. 3. PARTY-IN-INTEREST TRANSACTIONS ------------------------------ The Plan's holdings of Frontier Corporation common stock, Global Crossing Ltd. common stock, the Putnam Investment, Inc. common trust, and the five Putnam Investment, Inc. registered investment company funds are party-in-interest investments. As of December 31, 1999, the Plan held 5,004,641 shares of Global Crossing Ltd. common stock at a fair market value of $250,232,062. As of December 31, 1998, the Plan held 2,328,998 shares of Frontier Corporation common stock at a fair market value of $79,185,985. On September 28, 1999, all shares of Frontier Corporation common stock was acquired by Global Crossing Ltd. and exchanged for Global Crossing Ltd. common stock at a ratio of 2.05 shares of Global Crossing common stock for each share of Frontier Corporation common stock. During the plan year ended December 31, 1999, the fair market value of Company stock contributions into the Frontier Corporation Stock Fund and Global Crossing Stock Fund totaled $8,247,723. During the plan year ended December 31, 1999, the fair market value of Frontier Corporation and Global Crossing Ltd. common stock distributed to participants was $6,208,813. 4. FEDERAL INCOME TAX STATUS ------------------------- The Plan obtained its latest determination letter on February 14, 1995, 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 (IRC). The plan administrator and the Plan's tax counsel believe the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. Therefore, they believe that the Plan was qualified and the related trust was tax exempt as of the financial statement date. 5. BENEFITS PAYABLE ---------------- In accordance with generally accepted accounting principles, obligations to terminated employees for claims approved but not yet paid are not shown as a plan liability (nor as a reduction of net assets available for benefits) and totaled $674,590 at December 31, 1999. 6 FRONTIER GROUP EMPLOYEES' RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 6. INVESTMENTS ----------- The fair market value of the individual investments that represent 5 percent or more of the net assets available for plan benefits at December 31, 1999 and 1998 is as follows:
1999 1998 Putnam Global Growth Fund $ 36,514,170 $23,481,464 Putnam Voyager Fund 76,505,629 52,783,761 Putnam S&P 500 Index Fund 45,017,349 37,889,923 Putnam Stable Value Fund 44,038,661 39,410,558 Frontier Corporation common stock N/A 79,185,985 Global Crossing Ltd. common stock 250,232,062 N/A
7. SUBSEQUENT EVENT ---------------- Effective January 1, 2000, the Plan is amended to provide that participants may withdraw rollover contributions in addition to pretax contributions for certain hardship related situations as defined by the Plan. Effective March 6, 2000, the certificate of incorporation of Frontier Corporation, the Plan's sponsor, was amended changing the name of the corporation to Global Crossing North America, Inc. 7 FRONTIER GROUP SCHEDULE I EMPLOYEES' RETIREMENT SAVINGS PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES EIN: 16-0613330 DECEMBER 31, 1999 PN: 021
Current Number Value of December 31, Shares 1999 ---------------- ------------------ Interests in registered investment companies: * Putnam Income Fund 1,628,978 $ 10,360,302 * Putnam Global Growth Fund 1,964,183 36,514,170 * Putnam Voyager Fund 2,471,112 76,505,629 * Putnam Fund for Growth and Income 296,852 5,565,976 * Putnam Asset Allocation Fund Balanced Portfolio 133,956 1,736,067 ------------------ Total interests in registered investment companies 130,682,144 Common trust: * Putnam S&P 500 Index Fund 1,288,419 45,017,349 Common stock: * Global Crossing 5,004,641 250,232,062 Participant loans: Participant loan accounts (rate 6.0% - 9.0%) (maturities range from 2000 to 2024) 8,333,902 8,333,902 Insurance company pooled separate account: Stable Value Fund 44,038,661 44,038,661 ------------------ Total investments $478,304,118 ==================
* Denotes party-in-interest The accompanying notes to financial statements are an integral part of this schedule. 8 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 on its behalf by the undersigned thereunto duly authorized. Frontier Corporation Employees' Retirement Savings Plan Date: June 27, 2000 /s/ Kenneth P. Schirmuhly ------------------------------- Kenneth P. Schirmuhly, Vice President, Human EX-23.1 2 0002.txt ARTHUR ANDERSEN CONSENT EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K into the previously filed Registration Statements on Form S-8 (File No. 33-51885) of Frontier Corporation (now known as Global Crossing North America, Inc.), Form S-8 (File No. 333-86693) of Global Crossing Ltd. and Form S-8 (File No. 333-94893) of Global Crossings Ltd. /s/ Arthur Andersen LLP Rochester, New York June 27, 2000 EX-23.2 3 0003.txt CONSENT OF PRICEWATERHOUSE COOPERS LLP EXHIBIT 23.2 Consent of Independent Accountants We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (File No. 33-51885) of Frontier Corporation (now known as Global Crossing North America, Inc.) and the Registration Statements on Form S-8 (File No. 333-86693 and 333-94893) of Global Crossing Ltd. of our report dated February 26, 1999 relating to the financial Statements of the Frontier Group Employees' Retirement Savings Plan which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP Rochester, New York June 27, 2000 -----END PRIVACY-ENHANCED MESSAGE-----