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
For the fiscal year ended December 31, 1996
OR
Transition Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934 for
the transition period from _________ to
_____________
Commission File # 1-4252
UIC 401(K) RETIREMENT SAVINGS PLAN
------------------------------------------------------------
(Full title of the plan)
UNITED INDUSTRIAL CORPORATION
--------------------------------------------------------------
(Name of the issuer of the securities held pursuant to the
plan)
United Industrial Corporation
18 East 48th Street
New York, New York 10017
--------------------------------------------------------------
(Address of principal executive office)
<PAGE>
REQUIRED INFORMATION
Item 4.
The financial statements and schedules of UIC
401(k) Retirement Savings Plan for the year ended December 31, 1996 (attached).
Exhibits
23.1 Consent of Ernst & Young LLP.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the 401(k) Committee of the United Industrial Corporation 401(k)
Retirement Savings Plan (the "Plan"), which administers the Plan, has duly
caused this annual report to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 30th day of June, 1997.
By: /s/ James H. Perry
----------------------
Name: James H. Perry
Title: Committee Member
<PAGE>
AUDITED FINANCIAL STATEMENTS
AND SCHEDULES
UIC 401(K) RETIREMENT
SAVINGS PLAN
Years ended December 31, 1996 and 1995
with Report of Independent Auditors
<PAGE>
UIC 401(k) Retirement Savings Plan
Audited Financial Statements and Schedules
Years ended December 31, 1996 and 1995
CONTENTS
Report of Independent Auditors...............................................1
Financial Statements
Statements of Net Assets Available for Plan Benefits.........................2
Statements of Changes in Net Assets Available for Plan Benefits..............3
Notes to Financial Statements................................................4
Department of Labor Schedules
Item 27a--Schedule of Assets Held for Investment Purposes...................11
Item 27d--Schedule of Reportable Transactions...............................12
<PAGE>
Report of Independent Auditors
Administrative Committee
UIC 401(k) Retirement Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of the UIC 401(k) Retirement Savings Plan (the "Plan") as of December
31, 1996 and 1995, and the related statements of changes in net assets available
for plan 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 generally accepted auditing
standards. 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 plan benefits of the Plan at
December 31, 1996 and 1995, and the changes in its net assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1996 and reportable transactions
for the year then ended are presented for purposes of complying with the
Department of Labor's Rule and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required part
of the financial statements. The supplemental schedules have been subjected to
the auditing procedures applied in our audit of the 1996 financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the 1996 financial statements taken as a whole.
/s/ Ernst & Young LLP
May 23, 1997
Baltimore, Maryland
1
<PAGE>
UIC 401(k) Retirement Savings Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1996 1995
-------------------------------------
<S> <C> <C>
ASSETS
Cash $ 36,697 $ -
Investments, stated at fair value:
Fidelity Magellan Fund 25,130,876 23,897,306
Fidelity Managed Income Portfolio 18,669,141 18,627,395
Fidelity Retirement Government Money Market Fund 1,532,499 1,181,631
Fidelity Growth & Income Fund 9,519,034 5,945,845
Fidelity Contrafund 5,183,449 2,377,157
Fidelity Investment Grade Bond Fund 481,517 407,306
United Industrial Corporation Common Stock 281,075 231,465
Participant loans 1,553,359 1,276,836
------------------- -----------------
Total investments 62,350,950 53,944,941
------------------- -----------------
Net assets available for Plan benefits $62,387,647 $ 53,944,941
=================== =================
</TABLE>
See accompanying notes.
2
<PAGE>
UIC 401(k) Retirement Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1996 1995
----------------------------------------
<S> <C> <C>
ADDITIONS
Employee contributions $ 4,746,692 $ 4,495,503
Employer contributions 1,374,153 1,197,912
Rollover contributions 142,971 2,258,061
Investment income:
Fidelity Magellan Fund 3,881,615 1,385,264
Fidelity Managed Income Portfolio 1,067,628 1,096,507
Fidelity Growth & Income Fund 432,968 287,152
Fidelity Retirement Government Money Market Fund 65,489 64,807
Fidelity Contrafund 342,958 180,475
Fidelity Investment Grade Bond Fund 32,184 18,903
United Industrial Corporation Stock Fund 9,350 7,990
Interest on loans to participants 131,151 90,846
----------------------------------------
Total investment income 5,963,343 3,131,944
----------------------------------------
12,227,159 11,083,420
DEDUCTIONS
Withdrawals (3,969,114) (3,020,175)
Net realized and unrealized appreciation in aggregate fair value
of investments 184,661 6,249,712
----------------------------------------
Net increase 8,442,706 14,312,957
Net assets available for Plan benefits at beginning of year 53,944,941 39,631,984
----------------------------------------
Net assets available for Plan benefits at end of year $62,387,647 $53,944,941
========================================
See accompanying notes.
</TABLE>
3
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
Investments in the Fidelity Magellan Fund, Fidelity Growth & Income Fund,
Fidelity Managed Income Portfolio, Fidelity Retirement Government Money Market
Fund, Fidelity Contrafund and Fidelity Investment Grade Bond Fund are reported
at current redemption value. The United Industrial Corporation Common Stock is
reported at market value, based on published market prices. Participant loans
represent the outstanding principal balances of the loans and are valued at
cost, which approximates current value.
The change in the difference between cost and market value is reflected in the
statements of changes in net assets available for benefits net of realized gains
and losses as net realized and unrealized appreciation (depreciation) in the
aggregate fair value of investments. The realized gain or loss on investments is
the difference between the proceeds and the specific cost of the investments.
Rollover contributions represent transfers from other qualified retirement
plans.
Administrative expenses associated with the UIC 401(k) Retirement Savings Plan
(the "Plan"), including the amount paid to Fidelity Management Trust Co. for
acting as custodian of the investments of the Plan, were paid by United
Industrial Corporation (the "Company") in 1996 and 1995.
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 increases and decreases in net assets during the period.
Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The Plan is a defined contribution plan. The purpose of the Plan is to encourage
employees to save regularly and to provide additional funds upon retirement.
Contributions are made by employees through payroll deductions and submitted to
Fidelity Management Trust Company Cash Reserve Fund, then subsequently deposited
in the investment option account(s) selected by the employee. The Company
matches employees' contributions and has a profit sharing provision as specified
in the Plan document. Employer contributions are vested after five years of
service. The Company is the named fiduciary which controls and manages the
operations of the Plan and acts as Administrator.
4
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
All employees aged 21 or more who have completed one year of continuous
employment, consisting of at least 1,000 hours, with the Company (including its
participating subsidiaries) are eligible to participate in the Plan.
Participating employees contribute to the Plan through payroll deductions in
amounts ranging from 2% to 15% of their earnings up to the annual IRS limit.
Contributions to the Plan are invested in the available investment options in
accordance with the participants' elections. All employee contributions to the
Plan are immediately vested.
The Company has the right to terminate the Plan at any time. In the event of a
termination, the participants accounts shall be distributed to them in cash or
in property or in any combination of cash and property.
Additional information about the Plan and the vesting and benefit provisions is
contained in the Summary Plan Description of the UIC 401(k) Retirement Savings
Plan. Copies are available from the Human Resources Department of the Company.
3. INVESTMENTS
The fair value of individual investments that represent 5% or more of the Plan's
net assets available for Plan benefits was as follows:
DECEMBER 31
1996 1995
-------------------------------------
Fidelity Magellan Fund $25,130,876 $23,897,306
Fidelity Managed Income Portfolio 18,669,141 18,627,395
Fidelity Growth & Income Fund 9,519,034 5,945,845
Contrafund 5,183,449
4. INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Plan by a letter
dated January 16, 1996 that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC), and is
therefore not subject to tax under present income tax laws. The Plan sponsor
believes that the Plan continues to qualify and operate as designed.
5
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
5. RECONCILIATION TO FORM 5500
Total Plan earnings on investments, as reported on Form 5500 lines 32 b (1)
through (10), has been reported as Net realized and unrealized appreciation in
aggregate fair value of investments and as investment income in the accompanying
financial statements.
6
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
6. STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1996
-----------------------------------------------------------------------------------------------------------------
FIDELITY
FIDELITY RETIREMENT FIDELITY
FIDELITY MANAGED GOVERNMENT FIDELITY INVESTMENT UIC
MAGELLAN INCOME MONEY MARKET GROWTH & FIDELITY GRADE BOND COMMON
FUND PORTFOLIO FUND INCOME FUND CONTRAFUND FUND STOCK FUND LOAN FUND TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash $ - $ - $ - $ - $ - $ - $ 36,697 $ - $ 36,697
Investments at 25,130,876 18,669,141 1,532,499 9,519,034 5,183,449 481,517 281,075 60,797,591
fair value
Participant loans - - - - - - - 1,553,359 1,553,359
===============================================================================================================
Net assets
available for $ $18,669,141 $1,532,499 $9,519,034 $5,183,449 $ 481,517 $ 317,772 $1,553,359 $62,387,647
Plan benefits 25,130,876
===============================================================================================================
DECEMBER 31, 1995
---------------------------------------------------------------------------------------------------------------
FIDELITY
FIDELITY RETIREMENT FIDELITY
FIDELITY MANAGED GOVERNMENT FIDELITY INVESTMENT UIC
MAGELLAN INCOME MONEY MARKET GROWTH & FIDELITY GRADE BOND COMMON
FUND PORTFOLIO FUND INCOME FUND CONTRAFUND FUND STOCK FUND LOAN FUND TOTAL
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Investments at $23,897,306 $18,627,395 $1,181,631 $5,945,845 $2,377,157 $407,306 $231,465 $ - $52,668,105
fair value
Participant loans - - - - - - - 1,276,836 1,276,836
===============================================================================================================
Net assets
available for $23,897,306 $18,627,395 $1,181,631 $5,945,845 $2,377,157 $407,306 $231,465 $1,276,836 $53,944,941
Plan benefits
===============================================================================================================
</TABLE>
7
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
7. STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1996
-----------------------------------------------------------------------------------------------------------------
FIDELITY
FIDELITY RETIREMENT FIDELITY
FIDELITY MANAGED GOVERNMENT FIDELITY INVESTMENT UIC
MAGELLAN INCOME MONEY GROWTH & FIDELITY GRADE BOND COMMON
FUND PORTFOLIO MARKET FUND INCOME FUND CONTRAFUND FUND STOCK FUND LOAN FUND TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Employee $1,842,868 $1,153,351 $172,518 $878,040 $542,811 $110,817 $46,287 $ - $4,746,692
contributions
Employer 504,701 358,276 74,249 239,219 144,180 39,429 14,099 - 1,374,153
contributions
Rollover 28,486 7,215 1,476 63,806 24,061 12,687 5,240 - 142,971
contributions
Investment income 3,881,615 1,067,628 65,489 432,968 342,958 32,184 9,350 131,151 5,963,343
---------------------------------------------------------------------------------------------------------------
6,257,670 2,586,470 313,732 1,614,033 1,054,010 195,117 74,976 131,151 12,227,159
DEDUCTIONS
Withdrawals (1,701,167) (1,548,454) (148,654) (257,805) (191,953) (50,787) (2,015) (68,279) (3,969,114)
Net realized and
unrealized
(depreciation)
appreciation in (1,199,157) - - 988,863 405,381 (17,121) 6,695 - 184,661
aggregate fair
value of
investments
Interfund transfers (2,123,776) (996,270) 185,789 1,228,098 1,538,855 (52,998) 6,651 213,651 -
---------------------------------------------------------------------------------------------------------------
Net increase 1,233,570 41,746 350,868 3,573,189 2,806,292 74,211 86,307 276,523 8,442,706
Net assets available
for Plan benefits 23,897,306 18,627,395 1,181,631 5,945,845 2,377,157 407,306 231,465 1,276,836 53,944,941
at beginning of
year
===============================================================================================================
Net assets available
for Plan benefits $25,130,876 $18,669,141 $1,532,499 $9,519,034 $5,183,449 $481,517 $317,772 $1,553,359 $62,387,647
at end of year
===============================================================================================================
</TABLE>
8
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
7. STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
--------------------------------------------------------------------------------------------------------------
FIDELITY
FIDELITY RETIREMENT FIDELITY
FIDELITY MANAGED GOVERNMENT FIDELITY INVESTMENT UIC
MAGELLAN INCOME MONEY GROWTH & FIDELITY GRADE BOND COMMON
FUND PORTFOLIO MARKET FUND INCOME FUND CONTRAFUND FUND STOCK FUND LOAN FUND TOTAL
--------------------------------------------------------------------------------------------------------------
ADDITIONS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Employee contributions $ 1,784,582 $ 1,371,997 $ 154,438 $ 719,572 $ 336,221 $ 99,987 $ 28,706 $ - $ 4,495,503
Employer contributions 453,605 378,525 50,821 187,476 86,331 32,277 8,877 - 1,197,912
Rollover contributions 444,335 577,324 338,381 434,188 285,378 123,958 26,385 28,112 2,258,061
Investment income 1,385,264 1,096,507 64,807 287,152 180,475 18,903 7,990 90,846 3,131,944
--------------------------------------------------------------------------------------------------------------
4,067,786 3,424,353 608,447 1,628,388 888,405 275,125 71,958 118,958 11,083,420
DEDUCTIONS
Withdrawals (1,108,839) (1,241,677) (74,133) (378,642) (81,932) (68,298) (3,387) (63,267) (3,020,175)
Net realized and
unrealized
appreciation
(depreciation) in 4,883,316 - - 1,113,626 242,807 17,337 (7,374) - 6,249,712
aggregate fair
value of investments
Interfund transfers (503,032) (1,321,735) (73,936) 593,884 681,414 136,514 103,243 383,648 -
--------------------------------------------------------------------------------------------------------------
Net increase 7,339,231 860,941 460,378 2,957,256 1,730,694 360,678 164,440 439,339 14,312,957
Net assets available for
Plan benefits at 16,558,075 17,766,454 721,253 2,988,589 646,463 46,628 67,025 837,497 39,631,984
beginning of year
--------------------------------------------------------------------------------------------------------------
Net assets available for
Plan benefits at $23,897,306 $18,627,395 $1,181,631 $5,945,845 $2,377,157 $407,306 $231,465 $1,276,836 $53,944,941
end of year
==============================================================================================================
</TABLE>
9
<PAGE>
Department of Labor Schedules
10
<PAGE>
UIC 401(k) Retirement Savings Plan
Item 27a--Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
DESCRIPTION CURRENT
IDENTITY OF ISSUE OF INVESTMENT COST VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fidelity Magellan Fund 311,604 shares $22,584,148 $25,130,876
Fidelity Managed Income Portfolio 18,669,141 shares 18,669,141 18,669,141
Fidelity Retirement Government Money Market
Fund 1,532,499 shares 1,532,499 1,532,499
Fidelity Growth & Income Fund 309,764 shares 7,695,929 9,519,034
Fidelity Contrafund 122,976 shares 4,611,005 5,183,449
Fidelity Investment Grade Bond Fund 67,629 shares 481,063 481,517
United Industrial Corporation Common Stock
47,843 shares 289,793 281,075
Participant loans $1,553,359 principal
balance; interest
rates from 7% to
14.5%; maturities
to October, 2011 1,553,359 1,553,359
---------------------------------------
Total assets held for investment purposes
$57,416,937 $62,350,950
=======================================
</TABLE>
11
<PAGE>
UIC 401(k) Retirement Savings Plan
Item 27d--Schedule of Reportable Transactions
Year Ended December 31, 1996
<TABLE>
<CAPTION>
TOTAL DOLLAR TOTAL DOLLAR
IDENTITY OF PARTY INVOLVED NUMBER OF VALUE OF NUMBER OF SALES VALUE OF
DESCRIPTION OF ASSETS PURCHASES PURCHASES SALES NET GAIN
- ------------------------------------------------------------------------------------------------------------------------------------
Category (iii)--Series of transactions in excess of 5% of plan assets
<S> <C> <C> <C> <C> <C> <C>
Fidelity Investments Magellan Fund 219 purchases $7,054,105
171 sales $4,621,378 $375,470
Fidelity Investments Contrafund 190 purchases 2,818,287
70 sales 417,376 25,620
Fidelity Investments Growth & Income Fund 208 purchases 3,395,248
106 sales 810,922 129,711
Fidelity Investments Managed Income Portfolio 190 purchases 3,487,463
169 sales 3,445,717 -
</TABLE>
There were no category (i), (ii) or (iv) reportable transactions during 1996.
12
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
23.1 Consent of Independent Auditors
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8, Reg. No. 33-57065) pertaining to the UIC 401(k) Retirement Savings Plan of
United Industrial Corporation and in the related Prospectus of our report dated
May 23, 1997, with respect to the financial statements and supplemental
schedules of the UIC 401(k) Retirement Savings Plan included in this Annual
Report (Form 11-K) for the year ended December 31, 1996.
/s/ Ernst & Young LLP
Baltimore, Maryland
June 24, 1997