UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------------------------------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(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
Commission file number 1-8002
A. Full title of the plan and address of the plan, if different from that
of the issuer named below:
Thermo Electron Corporation Choice Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of the principal executive office:
Thermo Electron Corporation
81 Wyman Street
Waltham, Massachusetts 02454-9046
THERMO ELECTRON CORPORATION CHOICE PLAN
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 by the undersigned hereunto duly
authorized.
THERMO ELECTRON CORPORATION CHOICE PLAN
By: Thermo Electron Corporation, Plan Administrator
By: /s/ Kenneth J. Apicerno
-----------------------------------------------
Kenneth J. Apicerno
Treasurer
Date: July 1, 2002
Thermo Electron Corporation Choice Plan
FINANCIAL STATEMENTS
AND
SUPPLEMENTARY INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
WITH
INDEPENDENT AUDITORS' REPORTS
Thermo Electron Corporation Choice Plan
Table of Contents
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Page Number
Independent Auditors' Reports 1 - 2
Financial Statements:
Statements of Net Assets Available for Benefits 3
Statement of Changes in Net Assets Available for Benefits 4
Notes to Financial Statements 5 - 8
Supplementary Information:
Schedule H, Part IV, Item 4(i) - Form 5500 - Schedule of Assets Held for
Investment Purposes at End of Year, December 31, 2001 9
INDEPENDENT AUDITOR'S REPORT
To the Pension Committee of
Thermo Electron Corporation Choice Plan
Waltham, Massachusetts
We have audited the accompanying statement of net assets available for benefits
of the Thermo Electron Corporation Choice Plan (the Plan) as of December 31,
2001, and the related statement of changes in net assets available for benefits
for the year 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 audit.
We conducted our audit 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 the Plan's 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, 2001 and the changes in its 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.
Our audit was performed for the purpose of forming an opinion on the basic 2001
financial statements taken as a whole. The accompanying 2001 supplementary
schedule of assets held for investment purposes at end of year is presented for
the purpose of additional analysis and is not a required part of the basic 2001
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 supplementary schedule
is the responsibility of the Plan's management. The supplementary schedule has
been subjected to the auditing procedures applied in the audit of the basic 2001
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic 2001 financial statements taken as a whole.
CARLIN, CHARRON, & ROSEN LLP
Worcester, Massachusetts
June 27, 2002
-1-
Report of Independent Public Accountants
To the Pension Committee of
Thermo Electron Corporation:
We have audited the accompanying statement of net assets available for plan
benefits of the Thermo Electron Corporation Choice Plan (the Plan) as of
December 31, 2000. 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 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 statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by the Plan's 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 statement referred to above presents fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 2000 in conformity with accounting principles generally accepted
in the United States.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
May 29, 2001
-2-
THERMO ELECTRON CORPORATION CHOICE PLAN
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
------------------------------------------------------------------------------------------------------------------
2001 2000
Assets
Cash and cash equivalents $ 762,879 $ 1,191,085
Investments, at fair value 281,948,235 317,611,354
Employer Securities
Thermo Electron Stock (Employer Stock) 15,216,739 24,227,537
Loans to participants 4,569,758 7,027,217
------------ ------------
302,497,611 350,057,193
------------ ------------
Receivables
Employer contributions 674,807 702,313
Participant contributions 901,560 1,505,285
------------ ------------
1,576,367 2,207,598
------------ ------------
Total assets $304,073,978 $352,264,791
============ ============
Net assets available for benefits $304,073,978 $352,264,791
============ ============
See independent auditors' reports and accompanying notes
to financial statements
-3-
THERMO ELECTRON CORPORATION CHOICE PLAN
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 2001
------------------------------------------------------------------------------------------------------------------
Additions to net assets attributed to:
Realized and unrealized losses on investments $(28,759,262)
Interest and dividends 8,057,044
Transfer in 75,644,603
Employer contributions 8,077,541
Participant contributions 16,518,007
Participant rollovers 1,343,500
------------
Total additions 80,881,433
------------
Deductions from net assets attributed to:
Benefits paid to participants 26,453,151
Transfer out 102,599,344
Administrative expenses 19,751
------------
Total deductions 129,072,246
------------
Net decrease (48,190,813)
Net assets available for benefits
Beginning of year 352,264,791
------------
End of year $304,073,978
============
See independent auditors' reports and accompanying notes
to financial statements
-4-
THERMO ELECTRON CORPORATION CHOICE PLAN
Notes to Financial Statements
For the Years Ended December 31, 2001 and 2000
--------------------------------------------------------------------------------
1. Plan Description
The following description of the Thermo Electron Corporation Choice Plan
(the Plan) provides only general information. Participants should refer to
the Plan agreement for a more complete description of the Plan's
provisions.
General
The Thermo Electron Corporation Choice Plan (the Plan) is a defined
contribution plan. The Plan covers eligible full-time and part-time
employees of Thermo Electron Corporation and subsidiaries (the Company)
who have completed two months of service. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Contributions
Each year participants may contribute up to 15 percent of pre-tax
annual compensation or $10,500, as defined in the Plan. Participants
may also contribute amounts representing distributions from other
qualified defined benefit or defined contribution plans. Beginning on
the first day of the calendar quarter following completion of one year
of service, the Company makes non-discretionary matching contributions
equal to 200 percent of the first 2 percent and 25 percent of the next
2 percent of base compensation that a participant contributes to the
Plan. Participants direct the investment of their contributions and the
Company match into various investment options offered by the Plan. The
Plan currently offers the Company's common stock and seventeen mutual
funds as investment options for participants. Contributions are subject
to certain limitations.
Participant Accounts
Each participant's account is credited with the participant's
contributions and allocations of the Company's contribution and plan
earnings, and charged with an allocation of administrative expenses.
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.
Vesting
Participants are immediately vested in their voluntary contributions
plus actual earning thereon. Vesting in the Company matching
contributions plus actual earnings thereon is based on years of
service. A participant is 100 percent vested after three years of
credited service.
A participant is automatically 100 percent vested in all contributions
upon the attainment of age 65, upon becoming permanently disabled, or
upon death while still an active participant.
-5-
THERMO ELECTRON CORPORATION CHOICE PLAN
Notes to Financial Statements
For the Years Ended December 31, 2001 and 2000
--------------------------------------------------------------------------------
1. Plan Description (Continued)
Vesting (Continued)
Due to the number of divestitures in 2001 and 2000, the Company may
have experienced partial terminations. As a result, the Company has
taken a conservative approach and accelerated the vesting of all
contributions for all participants involved in the divestitures.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum equal to $50,000 or 50% of the vested account balance,
whichever is less. The term of the loan is generally five years except
when use of the proceeds is for the purchase of a primary residence,
for which the term can be up to 30 years. The loans are secured by the
balance in the participant's account and bear interest at a rate
commensurate with local prevailing rates as determined by the plan
administrator. The interest rates on plan loans range from 7% to 11% at
December 31, 2001. Principal and interest are repaid through payroll
deductions.
Benefit Payments and Plan Withdrawals
On termination of service due to death, disability or retirement, a
participant (or beneficiary) may elect to receive either a lump-sum
amount equal to the value of the participant's vested interest in his
or her account or periodic installments. For termination of service due
to other reasons, a participant may receive the value of the vested
interest in his or her account as a lump-sum distribution. Withdrawals
may be made under certain other circumstances in accordance with the
Plan document.
Forfeitures
Upon a participant's break in service, as defined, the nonvested
portion of the participant's account is forfeited and is used to reduce
the Company's future funding requirements. If a participant who has
terminated employment is rehired by the Company before the greater of a
five-year break in service or the number of the participant's years of
service prior to the participant's break in service, the participant
shall be reinstated in such forfeited amount. At December 31, 2001,
there were no forfeited nonvested accounts.
Transfer In/Out
In connection with certain reorganization activities at the Company,
the assets of certain other plans sponsored by subsidiaries of the
Company have been transferred into the Choice Plan in connection with
the termination of those plans. These transfers from other plans are
captioned "transfer in" in the financial statements. Additionally, the
reorganization has involved a number of business dispositions. As a
result, the plan assets in the accounts of the affected employees have
sometimes been transferred to plans sponsored by the acquirers of these
businesses disposed. These transfers to other plans are captioned
"transfer out" in the financial statements.
-6-
THERMO ELECTRON CORPORATION CHOICE PLAN
Notes to Financial Statements
For the Years Ended December 31, 2001 and 2000
--------------------------------------------------------------------------------
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of plan assets and
liabilities and changes therein, and disclosure of contingent assets
and liabilities. Actual results could differ from those estimates.
Investment Valuation
Investments are stated at fair value as determined by Fidelity
Management Trust Company (the Trust Company), a trust company that is
the trustee and custodian of the Plan's investment assets.
Payment of Benefits
Benefits are recorded when paid.
3. Federal Income Taxes
The Plan has received a favorable determination letter from the Internal
Revenue Service dated May 15, 1995. The Plan has been amended since that
date; however, the plan administrator and Plan's tax counsel believe the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. In addition, the
Trust Company has received a favorable tax determination letter for the
prototype plan used in administrating the Plan.
4. Investments
Investments that represent five percent or more of the Plan's net assets
are as follows:
December 31,
---------------------------------
2001 2000
Janus Worldwide Fund $19,271,006 $37,358,545
Fidelity Balanced Fund 40,077,454 41,246,506
Fidelity Blue Chip Growth Fund 47,921,091 81,786,830
Fidelity Equity Income II Fund 43,815,474 65,125,197
Fidelity U.S. Equity Index Commingled Pool 17,742,087 -
Stable Value Fund 61,893,402 65,439,645
Thermo Electron Stock Fund 15,216,739 24,227,537
Fidelity Growth Company Fund 25,193,042 -
-7-
THERMO ELECTRON CORPORATION CHOICE PLAN
Notes to Financial Statements
For the Years Ended December 31, 2001 and 2000
--------------------------------------------------------------------------------
5. Related Party Transactions
Plan investments are managed by the Trust Company, which is a trustee as
defined by the Plan. Therefore, these transactions qualify as
party-in-interest transactions. There were no fees paid by the Plan for
investment management services for the period ended December 31, 2001.
6. Plan Termination
Although it has not expressed an 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 would become 100% vested in their employer
contributions.
7. Administrative Expenses
The Company pays for administrative expenses associated with management of
and professional services for the Plan. Administrative fees for hardship
withdrawals and loan transactions are paid by the participants. The
administrative expenses included in the statement of changes in net assets
available for benefits represent expenses paid by the participants.
8. Subsequent Events
Total investments have depreciated approximately 10% during the first six
months of 2002. This decline is consistent with the overall financial
market trend.
On March 31, 2002, the Company merged approximately $14.1 million of plan
assets from a subsidiary into the Choice Plan during 2002.
See independent auditors' reports
-8-
THERMO ELECTRON CORPORATION CHOICE PLAN
Schedule H, Part IV, Item 4(i) - Form 5500
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2001
--------------------------------------------------------------------------------------------------------------------------
E.I.N. 04-2209186
Plan No. 001
(a) (b) (c) (d) (e)
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
--------------------------------------------------------------------------------------------------------------------------
PIMCO Total Return ADM Fund $ 6,389,802
T. Rowe Price Small Cap Stock Fund 12,770,072
* Fidelity Management Trust Company Janus Worldwide Fund 19,271,006
* Fidelity Management Trust Company Balanced Fund 40,077,454
* Fidelity Management Trust Company Blue Chip Growth Fund 47,921,091
* Fidelity Management Trust Company Equity Income II Fund 43,815,474
* Fidelity Management Trust Company U.S. Equity Index Commingled Pool 17,742,087
* Fidelity Management Trust Company Stable Value Fund 61,893,402
* Thermo Electron Corporation Company Stock Fund 15,216,739
* Fidelity Management Trust Company Growth Company Fund 25,193,042
* Fidelity Management Trust Company Diversified International Fund 3,237,818
* Fidelity Management Trust Company Freedom Income Fund 215,302
* Fidelity Management Trust Company Freedom 2001 Fund 152,669
* Fidelity Management Trust Company Freedom 2010 Fund 896,665
* Fidelity Management Trust Company Freedom 2020 Fund 1,611,039
* Fidelity Management Trust Company Freedom 2030 Fund 716,070
* Fidelity Management Trust Company Freedom 2040 Fund 45,242
* Participant Loans Interest rates between 7% and 11%;
maturity dates through October 2031 4,569,758
*Represents a party-in-interest to the Plan.
The independent auditors' reports should be read with this supplementary schedule
-9-
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K into Thermo Electron Corporation's previously
filed Registration Statement File No. 33-54347 on Form S-8.
CARLIN, CHARRON & ROSEN LLP
Worcester, Massachusetts
June 27, 2002
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K into Thermo Electron Corporation's previously
filed Registration Statement File No. 33-54347 on Form S-8.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
July 1, 2002