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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 For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from ____________ to _____________
Commission File Number 1-12342
AirTouch Communications Retirement Plan
AirTouch Communications, Inc.
One California Street
San Francisco, CA 94111
Vodafone AirTouch Plc
The Courtyard, 2-4 London Road
Newbury, Berkshire RG141JX
England
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AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
TABLE OF CONTENTS
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PAGE
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INDEPENDENT AUDITORS' REPORTS 1-2
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December 31,
1999 and 1998 3
Statements of Changes in Net Assets Available for Benefits for the
Years Ended December 31, 1999 and 1998 4
Notes to Financial Statements 5-9
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 1999:
Schedule of Assets Held for Investment Purposes 10
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INDEPENDENT AUDITORS' REPORT
To the Participants of the AirTouch
Communications Retirement Plan:
We have audited the accompanying statement of net assets available for benefits
of AirTouch Communications Retirement Plan (the "Plan") as of December 31, 1999,
and the related statement of changes in net assets available for benefits for
the year 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 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 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, 1999, and the changes in net assets available for benefits for the
year then ended 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
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes 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 (ERISA). This supplemental schedule is the responsibility of the Plan's
management. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic 1999 financial statements and, in
our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
July 7, 2000
-2-
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants of the AirTouch Communications Retirement Plan and
AirTouch Communications, Inc. as Administrator
In our opinion, the accompanying statement 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 AirTouch Communications Retirement Plan (Plan) at December 31, 1998, and
the changes in net assets available for benefits for the year ended December 31,
1998 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 audit. We conducted our audit 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
audit provides a reasonable basis for the opinion expressed above. We have not
audited the financial statements of the AirTouch Communications Retirement Plan
for any period subsequent to December 31, 1998.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
June 28, 1999
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AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998 (IN THOUSANDS)
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1999 1998
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ASSETS:
Investments, at fair value:
Vodafone AirTouch Plc Common Stock $390,086 $ -
AirTouch communications, Inc. Common Stock - 179,516
Europacific Growth Fund 35,936 14,933
Fidelity Contrafund 131,578 104,512
Barclays Equity Index 124,448 112,641
Barclays US Money Market Fund 22,240 19,711
Vanguard Small Capitalization Fund 4,421 1,728
Fidelity Low Price Stock Fund 5,048 3,543
Barclays Daily US Debt Fund 12,527 15,468
Barclays LifePath 2000 608 373
Barclays LifePath 2010 5,705 5,957
Barclays LifePath 2020 31,391 31,364
Barclays LifePath 2030 47,179 44,509
Barclays LifePath 2040 8,762 5,668
INVESCO Stable Value Fund 23,756 17,608
Short-term investments 7,458 3,126
Participant loans 11,331 11,619
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Total investments 862,474 572,276
Contributions receivable 9,092 8,639
Other 1,146 1,857
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Total assets 872,712 582,772
LIABILITIES -
Accrued expenses 878 1,884
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NET ASSETS AVAILABLE FOR BENEFITS $871,834 $580,888
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See notes to financial statements.
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AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1999 AND 1998 (IN THOUSANDS)
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1999 1998
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ADDITIONS TO NET ASSETS AVAILABLE FOR BENEFITS
ATTRIBUTABLE TO:
Investment income:
Interest and dividend income $ 18 $ 4,740
Net appreciation in fair value of investments:
Corporate common stock 176,384 71,805
Registered investment companies 78,702 58,748
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Total 255,086 130,553
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Total investment income 255,104 135,293
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Contributions:
Employee 50,443 38,691
Employer 58,102 45,130
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Total contributions 108,545 83,821
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Total additions 363,649 219,114
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DEDUCTIONS FROM NET ASSETS AVAILABLE FOR
BENEFITS ATTRIBUTED TO:
Distributions to participants 72,703 31,967
Forfeitures and other adjustments, net 10,626
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Total deductions 72,703 42,593
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NET INCREASE BEFORE TRANSFERS 290,946 176,521
TRANSFER FROM MERGED PLANS 48,966
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NET INCREASE 290,946 225,487
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 580,888 355,401
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End of year $871,834 $580,888
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</TABLE>
See notes to financial statements.
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AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
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1. DESCRIPTION OF PLAN
Effective April 1, 1994, AirTouch Communications, Inc. ("AirTouch" or the
"Company") adopted the AirTouch Communications Retirement Plan ("AirTouch
Plan" or "Plan"). The Plan is a defined contribution plan covering eligible
employees of AirTouch and participating subsidiaries of AirTouch or its
separate operating units participating in the Plan ("Participating
Entities"). It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
In April 1998, AirTouch acquired the U.S. Cellular business of MediaOne
Group, formerly US WEST Media Group ("NewVector"). Effective May 1, 1998,
former NewVector employees became participants in the Plan. In May 1998,
the US West Savings Plan transferred the account balances of former
NewVector employees with a fair value of $49.0 million to the Plan.
The following description of the Plan provides only general information and
includes certain changes to the Plan effective January 1, 1999.
Participants should refer to the Summary Plan Description and Prospectus
for a more complete description of the Plan's provisions, including the
income tax consequences of participation and restrictions on early
withdrawals from the Plan.
ELIGIBILITY - An employee is eligible to participate in the Plan if he or
she is an employee of a Participating Entity and has completed three
consecutive months with at least 250 hours of service. Employees are not
eligible to participate if they are (a) covered by a collective bargaining
agreement that does not provide for Plan participation, (b) employed by an
AirTouch company that does not participate, (c) leased employees or (d)
nonresident aliens with no United States source income.
SALARY DEFERRALS AND EMPLOYEE CONTRIBUTIONS - New employees (after they
meet the service requirements) are automatically enrolled in the Plan at a
2% of pay before-tax contribution level unless they elect otherwise. The 2%
before-tax deduction is invested in the LifePath 2030 Fund if the
participant does not affirmatively elect another investment fund.
A participant may elect to contribute to the Plan in the amount of any
whole percentage (not to exceed 16% (and not to exceed 10% on an after-tax
basis for participants who qualify as highly compensated employees)) of
compensation. Contributions may be designated as before-tax deductions
("Salary Deferrals") or as after-tax deductions ("Employee Contributions").
Salary Deferrals were limited to $10,000 for 1999 and 1998. This maximum
allowable before-tax limit is subject to annual revision for cost-of-living
increases.
PARTICIPATING ENTITY CONTRIBUTIONS - There are four types of participating
Entity contributions:
- Basic Contributions - Each participant may receive an allocation of
basic contributions equal to a percentage between zero and 6% of
compensation, depending on the rate selected by his or her
Participating Entity.
- Matching Contributions - Each participant receives matching
contributions to 100% of his or her
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Salary Deferrals and Employee Contributions. For this purpose, monthly
Salary Deferrals and Employee Contributions on behalf of each
participant in excess of 6% of his or her compensation for such month
are disregarded.
- Variable Contributions - If a Participating Entity elects to make a
variable contribution for a calendar year, each participant who was
employed at the end of the calendar year or who has died, attained
retirement status or incurred a disability during such year will
receive a variable contribution equal to a percentage of compensation
determined by the Compensation and Personnel Committee of the Board of
Directors of AirTouch. "Retirement status" means attaining any age
with 30 years of service, age 50 with 25 years of service, age 55 with
20 years of service, or age 65 with 10 years of service.
- QNEC Contributions - Until December 31, 1998, Participating Entities
may elect to make contributions for non-highly compensated
participants in the form of qualified nonelective contributions
("QNEC") to meet Internal Revenue Code ("IRC") nondiscrimination
requirements. The QNEC may be a percentage of the participant's
compensation or a fixed dollar amount per eligible participant.
INVESTMENT DIRECTIONS - Contributions are remitted to The Northern Trust
Company, as Trustee, for investment under the Plan. A participant may
direct the investment of his or her account balance, other than unvested
matching contributions, in increments of one percent, in one or more of
various investment funds. Matching contributions are invested entirely in
the Vodafone AirTouch Plc Common Stock Fund. A participant may, on a daily
basis, change investment directions as to future deductions and allocations
of AirTouch contributions and may redirect the investment of his or her
total account among the investment funds. Amounts may be transferred in one
percent increments from a fund. No amounts may be transferred from the
Vodafone AirTouch Plc Common Stock Fund until fully vested.
The participant's interest in the investment funds is valued daily at the
closing price of the funds on the New York Stock Exchange (Note 2).
VESTING - Salary Deferrals, Employee Contributions, the first 4% of
matching contributions (effective January 1, 1999) and QNECs are always
fully vested.
Basic contributions, matching contributions and variable contributions vest
on the earliest of the completion of three years of service, death,
disability, attainment of age 65 while employed, or Plan termination.
A participant receives credit for a year of service for each calendar year
in which at least 1,000 hours of service are completed. Contributions which
are not yet vested are forfeited when the participant terminates
employment.
PARTICIPANT LOANS - Participants who are active AirTouch employees may
borrow against their account balance subject to the limitations and
restrictions set forth in the Plan's prospectus and the IRC. All loans bear
a fixed interest rate equal to the Prime Rate plus one percentage point.
There are two types of loans available. General purpose loans must be
repaid over a maximum 4 1/2 year term, and principal residence loans must
be repaid over a maximum 10 year term. Payments of principal and interest
are made by participants through payroll deductions, which may not exceed
25% of a participant's base pay per pay period. The loans are secured by
the participant's account balance. The loans can be paid in full at any
time without penalty. As of December 31, 1999 there were 2,103 such loans
outstanding with maturity
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dates ranging from 1-10 years and interest rates ranging from 8.75% to
9.50%.
IN-SERVICE WITHDRAWALS - The Plan provides for four types of participant
withdrawals:
- Employee Contributions Account and/or Rollover Account - Participants
may withdraw all or part of their Employee Contributions account
and/or rollover account for any reason. No basic contributions are
allocated for six months following withdrawal.
- Company Matching Contributions Account - Participants who are 100%
vested may withdraw all or part of their matching contributions
account (except for the portion of their matching contributions
account attributable to the first 4% of matching contributions made on
or after January 1, 1999, which may not be withdrawn until the
participant attains age 59 1/2). No basic contributions are allocated
for six months following withdrawal.
- Age 59 1/2 Withdrawal - Participants may withdraw from their Salary
Deferral account and their investment earnings after they reach age 59
1/2. This is permitted only after the participant has withdrawn the
maximum from his or her Employee Contributions account, rollover
account, and vested matching contributions account. No suspension of
basic contributions applies.
- Hardship Withdrawal - Participants with financial hardship may
withdraw from their Salary Deferral account. Such withdrawals are
permitted only after the participant has first taken a loan and has
withdrawn the maximum from his or her Employee Contributions account,
rollover account, and vested matching contributions account (except
for the first 4% made on or after January 1, 1999). No basic
contributions are allocated for six months following withdrawal.
In addition, all withdrawals are made pro rata from the various investment
funds. Other than withdrawals from the participant's Salary Deferral
Account, a participant may not make more than two withdrawals in any
calendar year. Withdrawals made before the age of 59 1/2 are subject to tax
penalty.
DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT - If a participant terminates
employment after he or she is fully vested, his or her account balance will
be distributed in a single sum. In the case of the participant's death, a
single sum will be distributed to the participant's beneficiary. If a
participant terminates employment before he or she is fully vested, the
vested portion of his or her account balance will be distributed in a
single sum and the nonvested portion will be forfeited.
A participant or beneficiary may elect to receive the single sum
distribution as of the 15th or last day of the month in which termination
of employment or death occurs. If a participant's account balance exceeds
$5,000, the participant or beneficiary may elect to receive the
distribution on any later date but not later than April 1 following the
calendar year the participant reaches the age of 70 1/2. A beneficiary may
elect to receive the distribution on any later date but not later than five
years after the participant's death. However, if the beneficiary is the
participant's spouse, the beneficiary may elect to receive the distribution
on the latest date that the participant could have elected to receive the
distribution. If a participant's account balance does not exceed $5,000,
the participant or his or her beneficiary will receive the distribution as
of the close of the calendar month in which termination of employment or
death occurs.
FORMS OF DISTRIBUTION - A participant's vested account balance will be
distributed in the form of a single lump sum in cash except that, if any
portion of the account balance is invested in the Vodafone AirTouch Plc
Common Stock Fund, the participant may elect to receive that portion in
whole shares of Vodafone AirTouch Plc American Depository Shares ("ADS")
and cash for any fractional ADS.
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If a participant ceases to be an employee before becoming 100% vested, the
vested portion of his or her account balance is forfeited during the Plan
year in which employment terminates. Forfeitures arising from Participating
Entity contributions other than the variable contributions are applied in
the following order:
- To restore allocations for participants improperly excluded from such
allocations;
- To restore forfeitures for reinstated employees; and
- To reduce future Participating Entity contributions.
Forfeitures arising from the variable contribution are reallocated when the
variable contribution is credited to participants' accounts. Effective
January 1, 1999, forfeitures arising from the variable contributions are
reallocated to reduce future basic and matching contributions.
RESTORATION OF FORFEITED AMOUNTS - Forfeitures will be restored to a
participant's account if the participant is reemployed before incurring a
permanent service break (five consecutive calendar years during which the
participant does not complete more than 500 hours of service in each
calendar year). Reinstatement is made from other forfeitures of former
employees of the Participating Entity which reemployed the participant.
ACCEPTANCE OF TAX-FREE ROLLOVERS - Eligible participants may rollover the
taxable portion of an eligible rollover distribution from another
tax-qualified plan or IRA by contributing all or part of that distribution
in cash to the Plan. The rollover does not qualify for matching
contributions.
PLAN EXPENSES - Expenses of the Plan are paid directly by the Participating
Entity and the Plan's participants and, as such, are not reflected in the
accounts of the Plan. However, brokerage fees, transfer taxes and other
fees incident to the purchase and sales of securities held by the Plan are
reflected in the accounts of the Plan.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF PRESENTATION - The financial statements of the Plan are prepared
in accordance with accounting principles generally accepted in the United
States of America ("GAAP"). Accordingly, revenues are recognized when
earned and expenses are recognized when incurred on an accrual basis.
INVESTMENTS AND INVESTMENT INCOME - The fair value of investments is
determined as follows:
- Shares or equivalent shares in the Vodafone AirTouch Plc Common Stock
Fund are valued based on the daily closing price as reported on the
New York Stock Exchange composite tape.
- For those investments which represent an ownership of units of
investment funds held by an investment manager, the underlying
investments are valued based on published sources where available or,
if not available, from other sources considered reliable.
- Short-term investments are valued by the Trustee at cost, which
approximates market value.
Purchases and sales of securities and units of investment funds are
reflected as of the trade date.
Dividend income is recorded on the ex-dividend date. Interest earned on
investments is recorded on the accrual basis.
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Realized gains or losses and the change in unrealized appreciation
(depreciation) of the investments of the Plan are presented in the
statement of changes in net assets available for benefits as net
appreciation (depreciation) of investments.
USE OF ESTIMATES - GAAP requires the use of estimates and assumptions that
affect the reported amount of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amount of increases in and deductions from net assets
available for benefits during the reporting period. Actual results could
differ from those estimates.
NEW ACCOUNTING PRONOUNCEMENT - In 1999, the Plan adopted Statement of
Position 99-3, Accounting for and Reporting of Certain Defined Contribution
Plan Investments and Other Disclosure Matters, issued by the Accounting
Standards Executive Committee of the American Institute of Certified Public
Accountants. As a result, the Plan's financial statements do not include
the by-fund disclosures.
RECLASSIFICATIONS - Certain items in these financial statements have been
reclassified to conform to the current period presentation.
3. PLAN TERMINATION
Although the Company has not expressed any intent to do so, it has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan at any time subject to the provisions of ERISA. In the
event of any termination of the Plan, or upon complete or partial
discontinuance of contributions, the accounts of each affected participant
shall become fully vested.
4. TAX-QUALIFIED STATUS
AirTouch received a favorable determination letter on March 26, 1996 from
the Internal Revenue Service as to the tax-qualified status of the Plan.
The Plan has been amended since receiving the determination letter.
AirTouch believes that the Plan, as amended, is designed and is currently
being operated in compliance with the applicable requirements of the IRC
and ERISA, and that the trust, which forms a part of the Plan, is exempt
from income tax. Accordingly, no provision has been made for federal or
state income taxes.
******
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AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999 (IN THOUSANDS)
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DESCRIPTION OF CURRENT
INVESTMENT VALUE
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INVESTMENTS AT FAIR VALUE:
Corporate common stock:
Vodafone AirTouch Plc Common Stock Common Stock $390,086
Registered investment companies:
Europacific Growth Fund International Equity Fund 35,936
Fidelity Contrafund Growth Fund 131,578
Barclays Equity Index Equity Fund 124,448
Barclays US Money Market Fund Short-term Fund 22,240
Vanguard Small Capitalization Fund Small Cap Stock Fund 4,421
Fidelity Low Price Stock Fund Low Priced Fund 5,048
Barclays Daily US Debt Fund Bond Fund 12,527
Barclays LifePath 2000 Asset Allocation Fund 608
Barclays LifePath 2010 Asset Allocation Fund 5,705
Barclays LifePath 2020 Asset Allocation Fund 31,391
Barclays LifePath 2030 Asset Allocation Fund 47,179
Barclays LifePath 2040 Asset Allocation Fund 8,762
INVESCO Stable Value Fund Diversified Pooled Fund 23,756
Common collective trusts:
The Northern Trust Company Short-term Investment Fund 7,458
Loans to participants:
Participant loans 2,103 loans issued for terms of 1-10
years bearing interest at 8.75%-9.5%
during 1999 11,331
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TOTAL $862,474
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
administrator has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
AirTouch Communications Retirement Plan
By: AirTouch Communications, Inc.
(Plan Administrator)
By: /s/ Jack Lester
-----------------------------------
Chief Financial Officer
Date: July 13, 2000
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EXHIBIT INDEX
Exhibit No. Description
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23.2 Consent of PricewaterhouseCoopers LLP
