-----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, EI555GoJq9sB+A9eLPAqxuJg08jfZqtsBf6Y03tqS3wDN4O4XfwylUHVw0blhOHD ffzN1CeePN6npgnu5DrYHg== 0000950133-02-002444.txt : 20020701 0000950133-02-002444.hdr.sgml : 20020701 20020701153625 ACCESSION NUMBER: 0000950133-02-002444 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020701 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORBITAL SCIENCES CORP /DE/ CENTRAL INDEX KEY: 0000820736 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 061209561 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14279 FILM NUMBER: 02693582 BUSINESS ADDRESS: STREET 1: 21700 ATLANTIC BLVD CITY: DULLES STATE: VA ZIP: 20166 BUSINESS PHONE: 7034065000 MAIL ADDRESS: STREET 1: 21700 ATLANTIC BLVD STREET 2: 21700 ATLANTIC BLVD CITY: DULLES STATE: VA ZIP: 20166 FORMER COMPANY: FORMER CONFORMED NAME: ORBITAL SCIENCES CORP II DATE OF NAME CHANGE: 19900212 11-K 1 w61912e11vk.txt ANNUAL REPORT ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- ANNUAL REPORT ON FORM 11-K For the fiscal year ended December 31, 2001 Commission file number 0-18287 ---------------- ORBITAL SCIENCES CORPORATION (Exact name of registrant as specified in charter) DELAWARE 06-1209561 (State of Incorporation of Registrant) (I.R.S. Employer I.D. No.) 21839 ATLANTIC BOULEVARD DULLES, VIRGINIA 20166 (Address of principal executive offices) (703) 406-5000 (Registrant's telephone number) DEFERRED SALARY AND PROFIT SHARING PLAN FOR EMPLOYEES OF ORBITAL SCIENCES CORPORATION -------------------------------------------------------------- (Full Title of the Plans) ================================================================================ REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the Deferred Salary and Profit Sharing Plan for Employees of Orbital Sciences Corporation 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 Deferred Salary and Profit Sharing Plan for Employees of Orbital Sciences Corporation (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 at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. 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. PricewaterhouseCoopers LLP McLean, Virginia June 25, 2002 DEFERRED SALARY AND PROFIT SHARING PLAN FOR EMPLOYEES OF ORBITAL SCIENCES CORPORATION STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ---------------------------- 2001 2000 ------------ ------------ Investments $152,360,121 $209,694,280 Contributions receivable: Participant 343,561 484,573 Company 2,587,963 153,242 ------------ ------------ Net assets available for benefits $155,291,645 $210,332,095 ============ ============
See accompanying notes to financial statements. 2 DEFERRED SALARY AND PROFIT SHARING PLAN FOR EMPLOYEES OF ORBITAL SCIENCES CORPORATION STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 2001 ----------------- Investment income (loss): Net depreciation in fair value of investments $(14,972,171) Interest on investment contracts 2,932,428 Interest on participant loans 366,773 ------------ Net investment loss (11,672,970) ------------ Contributions: Participant 11,518,881 Company 6,639,549 ------------ Total contributions 18,158,430 ------------ Net additions 6,485,460 Deductions from net assets attributable to: Benefits paid to participants 61,480,327 Administrative expenses 45,583 ------------ Total deductions 61,525,910 ------------ Net decrease (55,040,450) Net assets available for benefits, beginning of year 210,332,095 ------------ Net assets available for benefits, end of year $155,291,645 ============
See accompanying notes to financial statements. 3 DEFERRED SALARY AND PROFIT SHARING PLAN FOR EMPLOYEES OF ORBITAL SCIENCES CORPORATION NOTES TO FINANCIAL STATEMENTS NOTE 1 - DESCRIPTION OF THE PLAN The following description of the Deferred Salary and Profit Sharing Plan for Employees of Orbital Sciences Corporation (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. General The Plan is a voluntary defined contribution plan that is intended to constitute a tax-qualified profit sharing plan under Section 401(a) of the Internal Revenue Code (the "Code"). All U.S domestic employees of Orbital Sciences Corporation (the "company") who are scheduled to work 1,000 hours during a 12-consecutive month period, or are not so scheduled but in fact complete a year of service for participation ("Plan Year"), and have attained the age of 21, are eligible to participate in the Plan. The Plan is subject to the provisions of the Employment Retirement Income Security Act of 1974 ("ERISA"). The Plan is administered by the company. Contributions Participants may contribute up to 15% of their total eligible compensation on a pre-tax basis, subject to certain annual limitations under the Plan and the Code. Participants are also permitted to make employee contributions to the Plan on an after-tax basis up to 19%, including pre-tax contributions, of total eligible compensation. The Plan provides for company matching and profit-sharing contributions. Both of these contributions are at the company's discretion. The company's matching contribution is based on the amount and rate of salary-deferral contributions. In 2001, the company matched 100% of each dollar of participant contributions up to 4% of the participant compensation. Beginning January 1, 2001, the company's matching contribution has been in the form of company common stock. Company contributions are made quarterly. The number of shares of common stock contributed to each employee's account is equal to the dollar amount of the company's matching contribution divided by the fair market value of the company's common stock on the last business day of each quarter. Each year the company decides the amount, if any, of its profit-sharing contribution. The company profit-sharing contribution is calculated as a percentage of gross pay. A profit-sharing contribution of approximately $1,301,000 was made by the company for 2001 in the form of company common stock. 4 Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers 11 pooled separate accounts, an investment contract with guaranteed rate of return and company stock. The Plan also allows participants to make rollover contributions from other tax qualified plans. Rollover contributions are included in the accompanying financial statements as a component of employee contributions. Participants' Accounts A separate account is maintained for each investment option of a participant by type of contribution. Each participant's account is credited with the participant's contributions, transfers, rollovers, company contributions and Plan earnings, and is charged with an allocation of administrative expenses. Allocations of administrative expenses are based on participants' contributions, earnings or account balances, as applicable as defined in the Plan document. Participants are entitled to a benefit equal to the vested portion of their participant account. Vesting Participants are immediately vested in their voluntary contributions and rollovers plus actual earnings thereon. For participants who separated from service prior to January 1, 2000, the company's matching and discretionary contributions, plus earnings thereon, vested equally over a period of five years of employment, as defined. For participants actively employed or hired on or after January 1, 2000, the company's matching and discretionary contributions, plus earnings thereon, vest equally over a period of three years. Participants vest immediately upon death or long-term disability. Forfeitures Forfeitures by terminated employees of nonvested employer contributions are held in a separate account and are used to offset either future employer contributions or administrative expenses of the Plan. In 2001, company contributions were reduced by $17,757 from forfeited nonvested accounts. Payment of Benefits Upon termination of service, death, long-term disability, attainment of age 59 1/2 or qualified financial hardship, a participant may elect to receive either a lump-sum amount equal to the vested value of the participant's account or installments over a determined period, as defined in the Plan document. Participants may also withdraw their vested account balances while still in service of the company, as defined in the Plan document. Termination of Plan 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% vested in their accounts. 5 Participant Loans Participants may borrow from their respective participant accounts up to the lesser of 50% of their vested balance or $50,000 reduced by their highest outstanding loan balance in the past 12 months. Loan terms generally may not exceed five years. Loans for the purchase of a primary residence may not exceed ten years. The loans accrue interest at a rate commensurate with prevailing rates as determined by the Plan. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting. Investments The Plan's investments are stated at fair value, except for the CIGNA Fixed Income Fund investment contract, which is valued at contract value. Quoted market prices as of December 31, 2001 and 2000, respectively, are used to value pooled separate accounts. The company stock fund is valued at its year-end closing market price. Participant loans receivable are carried at cost, which approximates fair market value. Purchases and sales of securities are recorded on a trade-date basis. Contributions Receivable Contributions receivable are recorded at net realizable value. This takes into consideration any increase or decrease in the company's stock price from the date of calculation to the date deposited. Benefit Payments Benefits are recorded when paid. Administrative Expenses The Plan document provides that administrative expenses may be paid by either the Plan or the company. For the year ended December 31, 2001, certain administrative services, such as legal fees and Plan management costs, were provided by the company at no cost to the Plan. Direct transaction expenses are paid by the Plan and are either netted against investment income or recorded as a deduction from net assets. 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 assets and liabilities and disclosure of contingent 6 assets and liabilities at the date of the financial statements and the reported amounts of additions to and deductions from net assets available for benefits during the reporting period. Such estimates include those regarding fair value. Actual results may differ from those estimates. NOTE 3 - FEDERAL INCOME TAXES The Internal Revenue Service has determined and informed the company by letter dated August 23, 2001 that the Plan and its underlying trust qualify under the applicable provisions of the Code and therefore are exempt from Federal income tax. The company believes that the Plan design and operations are in compliance with the applicable requirements of the Code and, therefore, believes that the Plan remains qualified and the related trust remains tax-exempt. Therefore, no provision for income taxes has been included in the Plan's financial statements. NOTE 4 - INVESTMENTS The following investments represent 5% or more of the Plan's total net assets available for benefits as of December 31:
2001 2000 ----------- ----------- Investments at fair value: Fidelity Equity - Income II Fund Account $13,571,980 $21,090,621 Vanguard Growth and Income Fund Account 23,393,399 35,202,618 Fidelity Advisor Growth Opportunities Fund Account 17,439,511 30,029,946 Janus Worldwide Fund Account 12,701,377 21,198,519 Orbital Sciences Corporation Common Stock 7,765,115 * 2,965,426 Investments at contract value: CIGNA Fixed Income Fund Account $46,993,730 $60,094,611
* Nonparticipant-directed During 2001, the Plan's investments at fair value (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows: Pooled separate accounts $(16,478,701) Orbital Sciences Corporation common stock 1,506,530 ------------ Net depreciation $(14,972,171) ============
Nonparticipant-Directed Investment: The Plan's assets held in Orbital Sciences Corporation common stock are classified as nonparticipant-directed because they include company-directed contributions. Prior to January 1, 2001, company matching and discretionary contributions were made in cash to participant-directed investments. Beginning January 1, 2001, company contributions have been made in 7 Orbital Sciences Corporation common stock. Participants are able to make transfers from Orbital Sciences Corporation common stock to other Plan investments at any time. Information about the significant components of the changes in the Orbital Sciences Corporation common stock investments for the year ended December 31, 2001 is as follows: Contributions $ 4,702,379 Net appreciation 1,506,530 Benefits paid to participants (1,236,431) Transfers to participant-directed investments, net (139,081) Administrative expenses (33,708) ----------- $ 4,799,689 ===========
NOTE 5 - DEPOSIT WITH INSURANCE COMPANY The Plan participates in a contract via an investment in the CIGNA Fixed Income Account, which is valued at contract value. The Plan's investment in the CIGNA Fixed Income Account is credited with interest at the rate specified in the contract. The effective yield for the six-month periods ended June 30, 2001 and December 31, 2001 was 6.15% and 5.85%, respectively. The guaranteed rate of return is stated semi-annually and is guaranteed against change for a six-month period. NOTE 6 - RELATED PARTY TRANSACTIONS The Plan's investments are held by CIGNA in an investment contract, pooled separate accounts which invest in various mutual funds, and in Orbital Sciences Corporation common stock. CIGNA is the trustee and the company is the Plan Sponsor as defined by the Plan. Thus, these transactions qualify as party-in-interest transactions which are exempt from the prohibited transaction rules. Purchases of $5,754,300 (including $4,702,379 in contributions) and sales of $2,461,141 of Orbital Sciences Corporation common stock were made during 2001. The market value of Orbital Sciences Corporation common stock at December 31, 2001 and 2000 was $7,765,115 and $2,965,426, respectively. 8 NOTE 7 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2001 and 2000 to the Form 5500:
2001 2000 ------------ ------------ Net assets available for benefits per the financial statements $155,291,645 $210,332,095 Less amounts allocated to withdrawing participants (110,344) (6,415) ------------ ------------ Net assets available for benefits per the Form 5500 $155,181,301 $210,325,680 ============ ============
The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 2001 to the Form 5500: Benefits paid to participants per the financial statements $61,480,327 Add: Amounts allocated to withdrawing participants at December 31, 2001 110,344 Less: Amounts allocated to withdrawing participants at December 31, 2000 (6,415) Other (2,806) ------------ Benefits paid to participants per the Form 5500 $61,581,450 ============
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to year-end but not paid as of that date. 9 ADDITIONAL INFORMATION SCHEDULE I DEFERRED SALARY AND PROFIT SHARING PLAN FOR EMPLOYEES OF ORBITAL SCIENCES CORPORATION SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2001
CURRENT IDENTITY OF ISSUE ASSET DESCRIPTION COST VALUE ----------------- ----------------- ----------- ------------ Connecticut General Life Insurance Company Investment Contract, 5.85% Retirement & Investment Services stated interest rate $46,993,730 $ 46,993,730 (CIGNA) Fixed Income Fund Account * Vanguard Wellington Fund Account Pooled Separate Contract 6,399,926 7,392,079 Fidelity Equity - Income II Fund Account Pooled Separate Contract 11,305,580 13,571,980 Vanguard Growth and Income Fund Account Pooled Separate Contract 22,414,973 23,393,399 Fidelity Advisor Growth Opportunities Fund Pooled Separate Contract 18,663,848 17,439,511 Account PBHG Growth Fund Account Pooled Separate Contract 8,930,568 5,024,551 Janus Worldwide Fund Account Pooled Separate Contract 15,339,773 12,701,377 Berger Small Value Fund Account Pooled Separate Contract 5,645,082 6,713,723 PIMCO Total Return Fund Account Pooled Separate Contract 1,007,031 1,009,833 Dresdner Large Growth Fund Account Pooled Separate Contract 229,256 230,858 American Century International Growth Fund Pooled Separate Contract 2,201,462 2,279,723 Account Vanguard Explorer Fund Account Pooled Separate Contract 3,237,680 3,846,367 Orbital Sciences Corporation * Common Stock 11,687,591 7,765,115 Participant Loans * Participant Loans, interest rates ranging from 5.00% to 16.01% and maturity dates ranging from January 2002 to January 2011 -- 3,997,875 ------------ $152,360,121 ============
* Denotes a party-in-interest 10 SIGNATURE Pursuant to the requirement of the Securities Exchange Act of 1934, Orbital Sciences Corporation, the administrator of the employee benefit plan covered by this Report on Form 11-K, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. ORBITAL SCIENCES CORPORATION, Plan Administrator for the Deferred Salary and Profit Sharing Plan for Employees of Orbital Sciences Corporation Dated: July 1, 2002 By: /s/ Hollis M. Thompson -------------------------------------- Hollis M. Thompson Vice President and Corporate Controller 11 EXHIBIT INDEX Exhibit 23 Consent of PricewaterhouseCoopers LLP (transmitted herewith) 12 EX-23 3 w61912exv23.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-59474) of Orbital Sciences Corporation of our report dated June 25, 2002 relating to the December 31, 2001 and 2000 financial statements of the Deferred Salary and Profit Sharing Plan for Employees of Orbital Sciences Corporation, which appears in this Form 11-K. PricewaterhouseCoopers LLP McLean, Virginia July 1, 2002 13 -----END PRIVACY-ENHANCED MESSAGE-----