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 [fee required]
For the fiscal year end December 31, 2002
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 _________
A. Full title of the plan and address of the plan, if different from that of the
issuer named below:
Genesis Health Ventures, Inc. Union Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
Genesis Health Ventures, Inc.
101 East State Street
Kennett Square, PA 19348
(610) 444-6350
Genesis Health Ventures, Inc. Union Retirement Savings Plan Financial
Statements, Supplemental Schedule and Exhibits as of December 31, 2002 and 2001
and for the year ended December 31, 2002.
The following plan financial statements, schedules and reports, have been
prepared in accordance with the financial reporting requirements of ERISA.
Items 1 - 3: Not applicable under ERISA filing.
Item 4: Financial Statements and Exhibits.
GENESIS HEALTH VENTURES, INC.
UNION RETIREMENT SAVINGS PLAN
Financial Statements and Supplemental Schedule
December 31, 2002 and 2001
(With Independent Auditors' Report Thereon)
GENESIS HEALTH VENTURES, INC.
UNION RETIREMENT SAVINGS PLAN
Table of Contents
Page
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits, December 31, 2002 and 2001 2
Statement of Changes in Net Assets Available for Benefits, Year ended December 31, 2002 3
Notes to Financial Statements 4
Schedule:
1 Schedule H, Line 4i - Schedule of Assets (Held at End of Year), December 31, 2002 9
Independent Auditors' Report
The Pension Committee and the Participants
Genesis Health Ventures, Inc. Union Retirement Savings Plan:
We were engaged to audit the accompanying statements of net assets available for
benefits of the Genesis Health Ventures, Inc. Union Retirement Savings Plan as
of December 31, 2002 and 2001, and the related statement of changes in net
assets available for benefits for the year ended December 31, 2002. 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 benefits of the Plan as of
December 31, 2002 and 2001, and the changes in net assets available for benefits
for the year ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.
Our audits were performed for the purposes of forming an opinion on the
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.
June 12, 2003
1
GENESIS HEALTH VENTURES, INC.
UNION RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
2002 2001
---------- ---------
Investments, at fair value $6,748,374 7,004,324
Participant loans 639,973 671,613
Employer's contributions receivable 38,195 53,721
Participant contributions receivable 70,394 101,008
---------- ---------
Total assets 7,496,936 7,830,666
---------- ---------
Net assets available for benefits $7,496,936 7,830,666
========== =========
See accompanying notes to financial statements.
2
GENESIS HEALTH VENTURES, INC.
UNION RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2002
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 84,685
Contributions:
Employer 490,274
Participants 1,372,124
Transfers from affiliated plans 29,850
-----------
Total additions 1,976,933
-----------
Deductions from net assets attributed to:
Net depreciation in fair value of investments 790,540
Benefit payments 664,900
Administrative expenses 28,794
Transfers to affiliated plans 826,429
-----------
Total deductions 2,310,663
-----------
Net decrease (333,730)
Net assets available for benefits:
Beginning of year 7,830,666
-----------
End of year $ 7,496,936
===========
See accompanying notes to financial statements.
3
GENESIS HEALTH VENTURES, INC.
UNION RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(1) Description of the Plan
The following description of the Genesis Health Ventures, Inc. Union
Retirement Savings Plan (the Plan) provides only general information.
Participants should refer to the Plan document for more complete
information.
(a) General
The Plan is a defined contribution savings plan that permits
voluntary employee contributions that are matched, in part, by
Genesis Health Ventures, Inc. (the Company). Employees of the
Company covered by collective bargaining agreements that call for
participation in the Plan are eligible for participation in the
Plan on the first day of January or July following one year of
service. The Plan is subject to the Employee Retirement Income
Security Act of 1974 (ERISA).
(b) Contributions
Each eligible employee may elect to participate in the Plan and
make contributions to the Plan through salary deductions in an
amount not less than 1% and not in excess of 50% of such
participant's compensation, as defined in the Plan, in any
calendar year. The Company matches 50% of the participant's
pre-tax contributions up to 3% of such participant's compensation.
Notwithstanding any other provision of the Plan, the total pre-tax
contribution made to the Plan by any participant may not exceed
$11,000 for 2002. In addition, effective in 2002, each eligible
participant who has attained age 50 before the close of the Plan
year is eligible to make catch-up contributions in accordance
with, and subject to the limitations of, Section 414(v) of the
Internal Revenue Code. For 2002, the catch-up contribution
limitation is $1,000.
(c) Participant Accounts
Although Plan assets are collectively invested, records are
maintained for each participant's individual account. Each
participant's account is credited with the participant's
contribution and allocation of the Company's contribution and Plan
earnings (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 account.
4
GENESIS HEALTH VENTURES, INC.
UNION RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(d) Vesting
Participants are immediately vested in their pre-tax contributions
plus actual earnings and losses thereon. Vesting in the Company's
matching contributions and earnings and losses thereon is based
upon years of continuous service as follows:
Percentage
Years of service vested
------------------ ----------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
(e) Payment of Benefits
Normal and deferred retirement benefits, disability benefits, and
vested benefits are distributed as lump-sum or in approximately
equal installments over a period of years not to exceed the life
expectancy of the participant and his or her designated
beneficiary.
Death benefits are paid as a single-sum or in installments over a
period not to exceed five years, pursuant to the participant's
written election on forms provided by the Company.
Nonvested benefits that are subsequently forfeited may be used by
the Company to reduce future matching contributions.
(f) Participant Notes
Employees may borrow a minimum of $1,000 and a maximum of 50% of
their vested balance in the Plan, up to a maximum of $50,000. Such
loans, upon approval by the Company, are generally repaid through
payroll deductions over a period not to exceed five years and bear
interest at a market rate at the date of the loan. Interest rates
range from 4.25% to 9.50% as of December 31, 2002.
(2) Summary of Significant Accounting Policies
(a) Basis of Financial Statement Preparation
The Plan's financial statements are prepared on the accrual basis
of accounting.
(b) Investments
Plan investments are stated at fair value based on their quoted
net asset value. Participant loans are valued at cost which
approximates fair value. Purchases and sales of securities are
recorded on a trade-date basis.
5
GENESIS HEALTH VENTURES, INC.
UNION RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(c) Plan Expenses
Company personnel perform various administrative services for the
Plan, including maintenance of participant records. All Plan
expenses are paid by the Company, on a noncompensatory basis, with
the exception of trustee fees, which are paid for by the Plan.
(d) Benefits to Participants
Benefit payments to participants are recorded upon distribution.
(e) Forfeitures
Forfeitures of nonvested Company contributions are used to offset
such future contributions.
(3) Forfeitures
As of December 31, 2002, the amount of forfeitures available for the
reduction of future employer contributions was $14,292.
The total of nonvested forfeiture accounts used to reduce employer
contributions for 2002 was $20,000.
(4) Plan Termination
Although it has not expressed any intent to do so, the Company has the
right to terminate the Plan subject to the provisions of ERISA. In the
event of Plan termination, all participants become fully vested in the
Company's matching contributions.
(5) Investments
Federated Capital Preservation Fund invests primarily in guaranteed
investment contracts.
Janus Fund invests primarily in large-cap equity funds.
Janus Adviser Wordlwide Fund invests primarily in common stocks of
foreign and domestic companies.
Wachovia Diversified Bond Group Trust Fund invests in full maturity
bonds.
Wachovia Enhanced Stock Market Fund invests in large-cap equity index
funds.
Vanguard Wellington Fund invests in a balance of equities and fixed
income securities.
MFS Capital Opportunities Fund invests in large and mid-cap equity funds.
MFS New Discovery Fund invests in small-cap equity funds.
Dreyfus Mid Cap Index Fund invests in mid-cap equity funds.
AIM Basic Value Fund seeks long-term capital appreciation and invests in
large value funds.
Genesis Health Ventures Stock Fund invests primarily in Company common
stock.
6
GENESIS HEALTH VENTURES, INC.
UNION RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
Investments as of December 31, 2002 and 2001, consisted of
December 31
------------------------------------
2002 2001
--------------- --------------
Cash $ -- 544
Federated Capital Preservation Fund 2,120,094 * 2,015,244 *
Janus Fund 1,099,574 * 1,361,832 *
Janus Worldwide Fund 562,224 * 612,349 *
Wachovia Diversified Bond Group Trust 1,279,253 * 1,078,920 *
Wachovia Enhanced Stock Market Fund 135,572 131,647
Vanguard Wellington Fund 785,874 * 886,704 *
MFS Capital Opportunities Fund 708,041 * 905,465 *
MFS New Discovery Fund 29,453 11,619
AIM Basic Value Fund 161 --
Dreyfus MidCap Index Fund 25,518 --
Genesis Health Ventures, Inc. Stock Fund 2,610 --
------------ ---------
$ 6,748,374 7,004,324
============ =========
* Represents 5% or more of the net assets of the Plan.
During 2002, the Plan's investments (including investments bought, sold,
and held during the year) depreciated in value by $790,540 as follows:
Funds $ 790,406
Genesis Health Ventures, Inc. Stock Fund 134
---------
$ 790,540
=========
(6) Income Taxes
A favorable determination letter was received February 7, 1996, from the
Internal Revenue Service stating that the Plan is qualified under
Sections 401(a) and 401(k) of the Internal Revenue Code and is exempt
from federal income taxes under Internal Revenue Code Section 501(a). In
the opinion of the Plan administrator, the Plan continues to operate and
qualify as designed.
7
GENESIS HEALTH VENTURES, INC.
UNION RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(7) Party-in-Interest Transactions
Plan investments in the Wachovia Diversified Bond Group Trust Fund and
the Wachovia Enhanced Stock Market Fund are shares of mutual funds
managed by Wachovia Bank, N.A., the trustee. These transactions qualify
as party-in-interest transactions.
The Plan incurred $28,794 of administrative fees for Wachovia's trustee
and record-keeping services. These transactions qualify as
party-in-interest transactions.
Plan investments in Genesis Health Ventures, Inc. Stock Fund invests
primarily in shares of the plan sponsor's publicly traded stock. These
transactions qualify as party-in-interest transactions.
(8) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for plan
benefits as of December 31, 2002 and 2001, from the financial statements
to the Form 5500:
2002 2001
------------ ---------
Net assets available for benefits per the
financial statements $ 7,496,936 7,830,666
Employer and participant receivables (108,589) (154,729)
------------ ---------
Net assets available for benefits per the Form 5500 $ 7,388,347 7,675,937
============ =========
8
Schedule 1
GENESIS HEALTH VENTURES, INC.
UNION RETIREMENT SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002
Description of Shares or Current
Identity of issue investments face amount value
-------------------------------------------------------- --------------------- ------------------ ---------------
Federated Capital Preservation Fund Fund 1,935,419 $ 2,120,094
Janus Fund Fund 19,512,844 1,099,574
Janus Worldwide Fund Fund 787,477 562,224
Wachovia Diversified Bond Group Trust* Fund 1,096,956 1,279,253
Wachovia Enhanced Stock Market Fund* Fund 164,497 135,572
Vanguard Wellington Fund Fund 855,877 785,874
MFS Capital Opportunities Fund Fund 1,120,376 708,041
MFS New Discovery Fund Fund 35,047 29,453
AIM Basic Value Fund Fund 164 161
Dreyfus MidCap Index Fund Fund 29,010 25,518
Genesis Health Ventures, Inc. Stock Fund* Stock fund 2,874 2,610
Participant loans (interest rates range from
4.25% to 9.50%)* Loan agreements 639,973
-----------
$ 7,388,347
===========
*Party-in-interest transactions.
See accompanying independent auditors' report.
9
SIGNATURES
The Plan: Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other person who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereto duly authorized.
GENESIS HEALTH VENTURES, INC. UNION RETIREMENT SAVINGS PLAN
(Name of Plan)
By: /s/ James W. Tabak
-------------------------------
James W. Tabak, Sr. Vice President,
Human Resources
Date: June 30, 2003
10
EXHIBIT INDEX
Item
---
23 Consent of Independent Auditors
99 Certificate of James W. Tabak, Senior Vice President, Human Resources
of the Company dated June 30, 2003 pursuant to 18 U.S.C. Section 1350.