UNITED STATES
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 [FEE REQUIRED] For the fiscal year ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____ to _____
Commission file number 0-20421
LIBERTY MEDIA 401(k) SAVINGS PLAN
-----------------------------------
(Full title of the Plan)
LIBERTY MEDIA CORPORATION
-----------------------------------------------------------------
(Issuer of the securities held pursuant to the Plan)
12300 Liberty Boulevard
Englewood, Colorado 80112
-----------------------------------
(Address of its principal executive office)
REQUIRED INFORMATION
FINANCIAL STATEMENTS: PAGE NO.
-------------------- --------
Independent Auditors' Report 1
Statements of Net Assets Available
for Participant Benefits,
December 31, 2001 and 2000 2
Statements of Changes in Net Assets
Available for Participant Benefits,
Years ended December 31, 2001 and 2000 3 - 4
Notes to Financial Statements,
December 31, 2001 and 2000 5 - 9
Schedule 1 - Schedule H, Line 4i - Schedule of Assets
(Held at End of Year), December 31, 2001 10
Schedule 2 - Schedule H, Line 4a - Schedule of
Nonexempt Transactions, Year ended December 31, 2001 11
Schedule 3 - Schedule H, Line 4j - Schedule of
Reportable Transactions, Year ended December 31, 2001 12
EXHIBIT -
-------
23-Consent of KPMG LLP
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the members of the Plan Committee have duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
LIBERTY MEDIA 401(k) SAVINGS PLAN
(Name of Plan)
By /s/ Robert R. Bennett
-------------------------------
Robert R. Bennett
Member of Plan Committee
June 27, 2002
INDEPENDENT AUDITORS' REPORT
The Plan Committee
Liberty Media 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for
participant benefits of the Liberty Media 401(k) Savings Plan (the "Plan") as of
December 31, 2001 and 2000, and the related statements of changes in net assets
available for participant benefits for the years then ended. 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for participant benefits of the
Plan as of December 31, 2001 and 2000, and the changes in net assets available
for participant benefits for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held at end of year, nonexempt transactions, and reportable transactions 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
supplemental schedules are the responsibility of the Plan's management. The
supplemental schedules have been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
KPMG LLP
Denver, Colorado
June 1, 2002
1
LIBERTY MEDIA 401(k) SAVINGS PLAN
Statements of Net Assets Available
for Participant Benefits
December 31, 2001 and 2000
ASSETS 2001 2000
------------------- -------------------
amounts in thousands
Investments, at fair value (note 3):
Liberty Media Stock Fund $ 46,625 --
Liberty Livewire Corporation ("Liberty Livewire") Stock Fund 100 --
AT&T Corp. common stock (note 5):
AT&T Common Stock Fund -- 6,497
AT&T Liberty Media Stock Fund -- 29,661
------------------- -------------------
46,725 36,158
------------------- -------------------
Mutual Funds:
Janus Worldwide 5,958 1,445
Fidelity Magellan 26,052 2,421
Fidelity Equity Income 6,187 2,955
Fidelity Investment Grade Bond 4,997 1,389
Fidelity Retirement Money Market 12,087 450
------------------- -------------------
55,281 8,660
------------------- -------------------
Participant loans (note 2) 2,038 10
------------------- -------------------
Net assets available for participant benefits $ 104,044 44,828
=================== ===================
See accompanying notes to financial statements.
2
LIBERTY MEDIA 401(k) SAVINGS PLAN
Statement of Changes in Net Assets Available
for Participant Benefits
Year ended December 31, 2001
Liberty
Media AT&T
Participant Stock Liberty Media
Directed Funds Fund Stock Fund Total
---------------- ---------------- ------------------ ----------------
amounts in thousands
Contributions:
Employer $ -- 2,579 4,679 7,258
Participant 9,035 585 1,299 10,919
Rollovers 3,449 1,425 101 4,975
Transfers from other plans (note 4) 43,717 -- 375 44,092
---------------- ---------------- ------------------ ----------------
56,201 4,589 6,454 67,244
---------------- ---------------- ------------------ ----------------
Repayments of participant loans (45) 31 14 --
Investment income (loss):
Net appreciation (depreciation) of fair
value of investments (2,077) (5,287) 5,771 (1,593)
Interest and dividend income 775 6 5 786
---------------- ---------------- ------------------ ----------------
(1,302) (5,281) 5,776 (807)
---------------- ---------------- ------------------ ----------------
Total contributions and net investment income
(loss) 54,854 (661) 12,244 66,437
Interfund transfers (8,284) 48,163 (39,879) --
Administrative expenses (16) (21) (188) (225)
Loans to participants 447 (144) (303) --
Distributions to participants (4,749) (712) (1,535) (6,996)
---------------- ---------------- ------------------ ----------------
Increase (decrease) in net assets available
for participant benefits 42,252 46,625 (29,661) 59,216
Net assets available for participant benefits:
Beginning of year 15,167 -- 29,661 44,828
---------------- ---------------- ------------------ ----------------
End of year $ 57,419 46,625 -- 104,044
================ ================ ================== ================
See accompanying notes to financial statements.
3
LIBERTY MEDIA 401(k) SAVINGS PLAN
Statement of Changes in Net Assets Available
for Participant Benefits
Year ended December 31, 2000
AT&T
Participant Liberty Media
Directed Funds Stock Fund Total
---------------- ------------------ ----------------
amounts in thousands
Contributions:
Employer $ -- 5,395 5,395
Participant 3,428 1,991 5,419
Rollovers 746 -- 746
---------------- ------------------ ----------------
4,174 7,386 11,560
---------------- ------------------ ----------------
Investment income (loss):
Net depreciation of fair value of
investments (12,618) (30,394) (43,012)
Interest and dividend income 544 -- 544
---------------- ------------------ ----------------
(12,074) (30,394) (42,468)
---------------- ------------------ ----------------
Total contributions and net investment loss (7,900) (23,008) (30,908)
Interfund transfers 150 (150) --
Administrative expenses -- (202) (202)
Distributions to participants (2,145) (3,632) (5,777)
---------------- ------------------ ----------------
Decrease in net assets available for
participant benefits (9,895) (26,992) (36,887)
Net assets available for participant benefits:
Beginning of year 25,062 56,653 81,715
---------------- ------------------ ----------------
End of year $ 15,167 29,661 44,828
================ ================== ================
See accompanying notes to financial statements.
4
LIBERTY MEDIA 401(k) SAVINGS PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements of the Liberty Media 401(k)
Savings Plan (the "Liberty Plan") have been prepared on the accrual
basis and present the net assets available for participant benefits and
the changes in those net assets. The sponsor of the Liberty Plan is
Liberty Media Corporation ("Liberty"). From March 9, 1999 through
August 9, 2001, Liberty was a wholly-owned subsidiary of AT&T Corp.
("AT&T"). Effective August 10, 2001, AT&T effected the split-off (the
"Split Off") of Liberty pursuant to which Liberty's common stock was
recapitalized, and each outstanding share of AT&T Class A Liberty Media
Group common stock and AT&T Class B Liberty Media Group common stock
was redeemed for one share of Liberty Series A common stock and Liberty
Series B common stock, respectively. In connection with the Split Off,
participants' balances in the AT&T Liberty Media Stock Fund were
transferred to the Liberty Media Stock Fund.
TRUST FUND MANAGED BY FIDELITY MANAGEMENT TRUST COMPANY ("TRUSTEE")
Under the terms of a trust agreement between the Trustee and the
Liberty Plan, the Trustee manages a trust fund on behalf of the Liberty
Plan and has been granted authority concerning purchases and sales of
investments for the trust fund. The Trustee may invest up to 100% of
the assets of the Liberty Plan in employer securities without regard to
any fiduciary requirement to diversify Liberty Plan assets.
Additionally, the Liberty Plan is allowed to invest in non-employer
securities.
INVESTMENTS
Investments are reflected in the accompanying financial statements at
fair value. Fair value represents the closing prices for those
securities having readily available market quotations and fair value as
determined by the Trustee with respect to other securities. The stock
funds are unitized funds that are measured in units rather than shares.
The unitized stock funds consist mostly of stock with an insignificant
amount of cash or cash equivalents. The per share fair values used for
investments in common stock are as follows:
December 31,
----------------------------------------
2001 2000
------------------- -----------------
Liberty Series A common stock $ 14.00 N/A
Liberty Livewire Class A common stock $ 6.94 N/A
AT&T common stock N/A $ 17.25
AT&T Class A Liberty Media Group common stock N/A $ 13.56
The foregoing prices are the closing market prices of the common stocks
on those dates. Changes in market values after the Liberty Plan's year
end are not reflected in the accompanying financial statements.
5
LIBERTY MEDIA 401(k) SAVINGS PLAN
Notes to Financial Statements
Securities and investment transactions are accounted for on the trade
date. Distributions are priced at fair value and are accounted for when
shares are transferred by the Trustee to participants. The cost basis
of such shares distributed is determined using the "first-in,
first-out" method. Dividend income is recorded on the ex-dividend date.
Income from other investments is recorded as earned on an accrual
basis.
INCOME TAXES
The Internal Revenue Service has determined and informed Liberty by a
letter dated March 1, 2001, that the Liberty Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code ("IRC"). Once qualified, the Liberty Plan is required to operate
in conformity with the IRC to maintain its qualification. The Liberty
Plan administrator is not aware of any course of action or series of
events that have occurred that might adversely affect the Liberty
Plan's qualified status.
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 assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of additions
and deductions during the reporting period. Actual results could differ
significantly from those estimates.
PLAN EXPENSES
Any employer contribution amounts forfeited may be used to pay plan
expenses except for loan origination fees, which are paid by
participants. Any additional administrative expenses of the Liberty
Plan are paid by Liberty.
(2) DESCRIPTION OF THE LIBERTY PLAN
The following description of the Liberty Plan is provided for general
information purposes only. Participants should refer to the plan
document for more complete information.
GENERAL
Effective March 2, 1999 the Liberty Plan was created as a spin-off of
the TCI 401(k) Stock Plan. The Liberty Plan is a defined contribution
plan sponsored by Liberty, which enables participating employees of
Liberty and its qualifying subsidiaries to receive an interest in
Liberty and to receive benefits upon retirement. Employees of Liberty
and its 80% owned subsidiaries who are at least 18 years of age and (i)
have worked at least three consecutive months or (ii) have completed
one year of service (as defined in the Liberty Plan document) are
eligible to participate in the Liberty Plan.
6
LIBERTY MEDIA 401(k) SAVINGS PLAN
Notes to Financial Statements
CONTRIBUTIONS
Participants, other than employees of Liberty Livewire, may contribute
on a pre-tax or after-tax basis up to 10% of their compensation, as
defined, to the Liberty Plan. Liberty and its subsidiaries, other than
Liberty Livewire, make matching contributions equal to 100% of
participant contributions, up to a maximum match of 10% of eligible
compensation. Participants who are employees of Liberty Livewire may
contribute on a pre-tax or after-tax basis up to 15% of their
compensation, as defined, to the Liberty Plan. Liberty Livewire makes
matching contributions equal to $.50 for each $1.00 contributed by the
participant up to 6% of eligible compensation. Employer contributions
are made to the Liberty Media Stock Fund. Employee contributions may be
made to any investments in the Liberty Plan, including the Liberty
Media Stock Fund. Liberty reserves the right to change the matching
contribution amount at any time.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up
to the lesser of $50,000 or 50% of their vested account balance. Loans,
other than those transferred from other plans, must be repaid within
five years and bear interest at a rate equal to prime rate in effect on
the first day of the calendar quarter in which the loan is originated
plus 1%. Loans transferred from other plans, as described in note 4,
retain the repayment terms and interest rates in effect at the time of
transfer. Loans are secured by the vested balance in the participant's
account, and bear interest at rates ranging from 6.5% to 10.5% at
December 31, 2001. Principal and interest are paid ratably through
monthly payroll deductions.
FORFEITURES
Forfeitures (due to participants' termination prior to full vesting)
are first used to pay Liberty Plan expenses, with any excess used to
reduce Liberty's future matching contributions. Forfeitures aggregated
$233,000 and $285,000 during 2001 and 2000, respectively. Unused
forfeitures aggregated $245,000 and $140,000 at December 31, 2001 and
2000, respectively. Participant contributions are always fully vested.
INVESTMENT OPTIONS
As of December 31, 2001, the Liberty Plan has six investment options
including five mutual funds and one unitized stock fund: a money market
mutual fund, a growth and income mutual fund, a diversified growth
mutual fund, an income mutual fund, a global growth fund, and the
Liberty Media Stock Fund. In addition to the foregoing investment
options, the Liberty Plan had assets of $100,000 invested in Liberty
Livewire Corporation Stock Fund at December 31, 2001. The Liberty
Livewire common stock was transferred into the Liberty Plan upon
completion of the merger of certain Liberty Livewire retirement plans
in June 2001 (see note 4). Subsequent to December 31, 2001, the Liberty
Livewire common stock was converted to Liberty Series A common stock.
Plan participants may change investment options and contribution
percentages on a daily basis.
BENEFIT PAYMENTS
Distributions from the Liberty Plan may be made to a participant upon
death, total disability, financial hardship or termination of
employment. Distributions and other withdrawals are processed on a
daily basis.
7
LIBERTY MEDIA 401(k) SAVINGS PLAN
Notes to Financial Statements
VESTING
Participants acquire a vested right in employer matching contributions,
other than employer contributions transferred from other plans, as
follows:
Vesting
Years of Service Percentage
---------------- ----------
Less than 1 0%
1 year 33%
2 years 66%
3 years 100%
Employer matching contributions transferred from other plans, as
described in note 4, vest according to the terms specified in the
Subsidiary Plans.
PLAN TERMINATION
Although Liberty has not expressed any intent to terminate the Liberty
Plan, it may do so at any time, subject to the provisions of ERISA. The
Liberty Plan provides for full and immediate vesting of all participant
rights upon termination of the Liberty Plan.
(3) INVESTMENTS
The fair value of individual investments that represent 5% or more of
the Liberty Plan's net assets at December 31, 2001 and 2000 are as
follows:
Fair value at
December 31,
--------------------------------
Investment 2001 2000
----------------------------------------- --------------- --------------
amounts in thousands
Liberty Media Stock Fund $ 46,625 --
Janus Worldwide 5,958 --
Fidelity Magellan 26,052 2,421
Fidelity Equity Income 6,187 2,955
Fidelity Retirement Money Market 12,087 --
AT&T Common Stock Fund -- 6,497
AT&T Liberty Media Stock Fund -- 29,661
(4) MERGERS WITH OTHER PLANS
During 2001, the Liberty Plan merged with retirement plans of certain
Liberty subsidiaries resulting in aggregate transfers of $44,092,000.
During 2000 and 2001, Liberty Livewire completed several acquisitions.
Effective May 1, 2001, employees of Liberty Livewire and certain of the
companies acquired by Liberty Livewire were eligible to participate in
the Liberty Plan. Effective June 1, 2001, assets from the acquired
companies' respective retirement plans ("Subsidiary Plans") were merged
into the Liberty Plan. The amount of such assets merged into the
Liberty Plan, including participant loan balances of $1,133,000,
aggregated $38,518,000.
8
LIBERTY MEDIA 401(k) SAVINGS PLAN
Notes to Financial Statements
Effective May 24, 2001, the Ascent Entertainment Group 401(k) Plan was
merged into the Liberty Plan. Assets merged into the Liberty Plan
aggregated $5,574,000, including $391,000 of participant loans.
(5) AT&T WIRELESS GROUP STOCK
Effective July 9, 2001, AT&T effected the spin-off of the AT&T Wireless
Group ("Wireless") into a separate public company. In connection with
the Wireless spin-off, holders of AT&T common stock, including shares
held by the AT&T Stock Fund, received .3218 of a share of Wireless
stock for each share of AT&T common stock owned. Such Wireless stock
was subsequently exchanged for Liberty Series A common stock by the
Liberty Plan.
(6) PARTIAL PLAN TERMINATION
Effective May 25, 2001, and as a result of a merger transaction between
a subsidiary of Liberty and an unaffiliated third party, a partial plan
termination occurred. In connection therewith, employees of such
subsidiary, who were active participants in the Liberty Plan on May 25,
2001 (the "Subsidiary Employees"), were terminated from the Liberty
Plan. The Subsidiary Employees became fully vested in their employer
contributions upon the partial plan termination.
9
SCHEDULE 1
LIBERTY MEDIA 401(k) SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2001
Identity of Description of investment Fair
issuer including par value value
-------------------------- ---------------------------------------- -------------------------
amounts in thousands
Janus Janus Worldwide $ 5,958
Liberty Media Corporation Series A common stock, par value $.01
per share (historical cost
basis - $29,369,000) 46,625
Liberty Livewire Corporation Class A common stock, par value $.01 per
share 100
Fidelity Fidelity Magellan 26,052
Fidelity Fidelity Equity Income 6,187
Fidelity Fidelity Investment Grade Bond 4,997
Fidelity Fidelity Retirement Money Market 12,087
Participant loans Interest rates ranging from 6.5% to 10.5% 2,038
-------------
$ 104,044
=============
All investments are held by Fidelity Management Trust Company, Inc.,
which is a party-in-interest. Liberty Media Corporation is the plan sponsor,
which is a party-in-interest.
See accompanying independent auditors' report.
10
SCHEDULE 2
LIBERTY MEDIA 401(k) SAVINGS PLAN
Schedule H, Line 4a -
Schedule of Nonexempt Transactions
Year Ended December 31, 2001
Description of transactions
including maturity date,
Identity of Relationship to plan employer rate of interest collateral,
PARTY INVOLVED OR OTHER PARTY-IN-INTEREST PAR OR MATURITY VALUE
--------------------------------- ------------------------------------------- ----------------------------------
Liberty Media 401(k) Savings Plan Plan Sponsor (1)
(1) An unintentional delay by a subsidiary of Liberty in submitting a
certain 2001 employee contribution in the amount of $2,844 to the
trustee resulted in a prohibited transaction. Effectively a loan from
the Liberty Plan to a subsidiary of Liberty, this amount was remitted
to the trustee later than allowed by Department of Labor regulations.
Liberty intends to reimburse the Liberty Plan $5 for lost earnings and
interest thereon in 2002.
See accompanying independent auditors' report.
11
Schedule 3
LIBERTY MEDIA 401(k) SAVINGS PLAN
Schedule H, Line 4j - Schedule of Reportable Transactions
Year Ended December 31, 2001
(amounts in thousands)
Identity of Description Purchase Selling Cost of Net gain
party involved of asset Price Price Asset or (loss)
----------------- -------------------------- ------------- ----------- ---------- ------------
Liberty Media Series A Liberty common $2,579 -- -- --
Corporation* stock, par value $.01
per share
AT&T Corp.* AT&T Class A Liberty Media $4,679 -- -- --
Group Common Stock, par
value $1.00 per share
*Denotes party-in-interest
See accompanying independent auditors' report.
12
EXHIBIT INDEX
Shown below is the exhibit which is filed as a part of this Report -
23-Consent of KPMG LLP