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 for the fiscal year ended December 31, 1998 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from _____________ to _____________.
Commission file number 1-4837
Tektronix, Inc. 401(k) Plan
---------------------------
(Full title of Plan)
TEKTRONIX, INC.
26600 SW Parkway
Wilsonville, Oregon 97070
--------------------------------------------------
(Name of issuer of the securities held pursuant to
the plan and the address of its principal
executive office)
<PAGE>
REQUIRED INFORMATION
Tektronix, Inc.
Tektronix 401(k) Plan
December 31, 1998 and 1997
Index
Page
----
Report of Independent Accountants 1
Financial Statements
Statements of Net Assets Available for Benefits
at December 31, 1998 and 1997 2
Statements of Changes in Net Assets Available for Benefits
at December 31, 1998 and 1997 3
Notes to Financial Statements 4-8
Note: All other schedules have been omitted because the
information required is included in the financial statements
or the notes thereto or they are not applicable.
Signature 10
Exhibit 23 Consent of Independent Accountants
<PAGE>
INDEPENDENT AUDITORS' REPORT
Investment and Administrative Committee
Tektronix 401(k) Plan:
We have audited the accompanying financial statements of the Tektronix 401(k)
Plan (the "Plan") as of December 31, 1998 and 1997, listed in the Table of
Contents. 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1998
and 1997, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
May 21, 1999
1
<PAGE>
TEKTRONIX 401(k) PLAN
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
(In Thousands)
- ----------------------------------------------------------------------------------------------
1998 1997
<S> <C> <C>
ASSETS:
Investment in Tektronix Master Retirement Trust (Note 3) $ 895,254 $ 794,505
Employer contributions receivable 599 86
Employee contributions receivable 717 1
--------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $ 896,570 $ 794,592
========= =========
See notes to financial statements.
</TABLE>
2
<PAGE>
TEKTRONIX 401(k) PLAN
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
(In Thousands)
- ----------------------------------------------------------------------------------------------
1998 1997
<S> <C> <C>
NET INVESTMENT INCOME $ 108,122 $ 129,280
CONTRIBUTIONS:
Employer 18,924 14,788
Employee 28,290 26,983
WITHDRAWALS (53,358) (45,003)
--------- ---------
NET INCREASE 101,978 126,048
NET ASSETS AVAILABLE FOR BENEFITS AT
BEGINNING OF YEAR 794,592 668,544
--------- ---------
NET ASSETS AVAILABLE FOR BENEFITS AT
END OF YEAR $ 896,570 $ 794,592
========= =========
See notes to financial statements.
</TABLE>
3
<PAGE>
TEKTRONIX 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following brief description of the Tektronix 401(k) Plan (the "Plan") is
provided for general information purposes only. Participants should refer to the
Summary Plan Description for more complete information regarding amount and type
of benefits, vesting, and other provisions of the Plan.
General - The Plan is a defined contribution plan covering all regular employees
of a participating Tektronix, Inc. company. It is subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA").
Contributions - Participants can elect to have Tektronix, Inc. contribute from
1% to 15% of their eligible pay to the Plan. Tektronix, Inc. makes a basic
contribution of 2% of eligible pay for all participants each year to the
Tektronix Stock Fund plus a matching contribution of 100% of the first 4% of
elective contributions which is allocated according to the participant's
allocation election.
Participant Accounts - Each participant account is credited with contributions
and an allocation of the Plan's earnings. Contributions are allocated based on
the participant's election and earnings are allocated based on participant
account balances. The Plan allows for loans to active participants on such terms
as the Investment and Administrative Committee approves.
Vesting and Benefits - Participants are immediately 100% vested in all
contributions to the Plan and are eligible to receive benefits upon termination,
retirement, or disability. Benefits can be received by electing a lump-sum
settlement, installment payments, annuity contracts, or a combination thereof.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The Plan's financial statements are prepared on the
accrual basis of accounting.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of investment income
during the reporting period. Actual results could differ from those estimates.
4
<PAGE>
Administrative Expense - Certain expenses for administration and servicing of
the Plan, including facilities, equipment and supplies, and payroll expenses of
administrative and clerical personnel, are provided by Tektronix, Inc. without
charge to the Plan. Tektronix, Inc. also pays certain professional fees related
to the Plan.
Income Tax Status - The Plan obtained its latest determination letter dated June
1995, in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the Internal
Revenue Code ("IRC"). The Plan has been subsequently amended since receiving the
determination letter. However, the Plan Administrator believes that the Plan is
currently designed and is being operated in compliance with the applicable
requirements of the IRC.
Withdrawals - Payments to participants are recorded when paid.
3. INVESTMENT IN TEKTRONIX MASTER RETIREMENT TRUST
All of the Plan's investment assets are held in a master trust established by
Tektronix, Inc. (the "Trust"). Use of the Trust permits the commingling of
assets, for investment and administrative purposes, of a number of retirement
plans of Tektronix, Inc. and its subsidiaries. Supporting records are maintained
for the purpose of allocating net earnings of the Trust to the various
participating plans. The following plans participate in the Trust:
Tektronix 401(k) Plan
Tektronix Cash Balance Plan
For investment purposes, the assets of the Trust are divided among nine
different funds. Six of these funds are investment options that are available to
participants under the Plan. Employer basic contributions are invested in the
Tektronix Stock Fund. The Pension Fund is used to segregate the investments of
the Tektronix Cash Balance Plan. The funds available in the 401(k) Plan are as
follows:
Stable Fund invests in insurance company investment contracts and a money
market mutual fund.
Balanced Fund invests in a balanced mix of common stocks and U.S.
government and corporate debt obligations.
Stock Index Fund invests in common stocks of large U.S. companies.
Small and Medium Company Stock Fund invests in the stocks of small and
medium-sized companies.
5
<PAGE>
International Stock Fund invests in stocks of companies that are located
outside the United States.
Tektronix Stock Fund II invests in the common stock of Tektronix, Inc., the
Plan Sponsor.
Tektronix Stock Fund invests in the common stock of Tektronix, Inc., the
Plan sponsor.
Loan Fund accounts for participant loan balances.
Pension Fund invests in a diversified portfolio of assets.
The Trust values marketable securities at the closing quoted market price on the
valuation date. Commercial paper and temporary cash investments are valued at
cost, which approximates fair value. The fair value of real estate investments
and notes receivable have been estimated on the basis of future income expected
from such investments discounted at interest rates commensurate with the risks
involved or at appraised value. Insurance company guaranteed deposits are valued
at contract value which approximates fair value (see Note 7). The fair value of
limited partnership investments, for which no public market exists, is based
upon the estimates made by the general partner of those partnerships. The
general partners consider the financial condition and operating results of each
limited partnership and such other factors deemed appropriate. Limited
partnerships that invest in publicly-traded securities are valued at quoted
market prices, less a discount applicable to the general partner's share of the
unrealized gain on the investment.
At December 31, 1998 and 1997, the Plan's interest in the net assets of the
master trust was approximately 65% and 64%, respectively.
The net assets of the Trust at December 31, 1998 and 1997 are summarized as
follows (in thousands):
6
<PAGE>
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Accrued income $ 1,116 $ 3,274
Noninterest-bearing cash 31 6
Interest-bearing cash 33,877 40,761
U.S. government securities 125,145 90,821
Corporate debt - preferred 43,430 32,445
Corporate debt - other 137,997 53,282
Preferred stock 2,351 3,861
Common stock 538,207 489,483
Partnerships and joint ventures 50,226 60,905
Real estate - income-producing 682 660
Real estate - non-income-producing 1,834 3,252
Participant loans 20,906 16,578
Common and collective trusts 223,705 186,059
Pooled separate accounts 22,549 15,381
Registered investments 114,107 95,490
Insurance contracts 133,851 153,795
Due from broker 6,819 10,319
Due to broker (82,204) (13,796)
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Total $ 1,374,629 $ 1,242,576
=========== ===========
</TABLE>
The components of the Trust's total investment return for the years ended
December 31, 1998 and 1997 are as follows (in thousands):
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Net appreciation in fair value of investments $ 130,657 $ 167,533
Interest 26,510 25,871
Dividends 14,272 10,925
Other 272 282
----------- -----------
Total investment income $ 171,711 $ 204,611
=========== ===========
</TABLE>
4. CONCENTRATION OF RISK
The Trust's assets consist primarily of financial instruments including cash,
government and agency securities, corporate debt, preferred stock, common stock,
partnerships and joint ventures, real estate, loans, common and collective
funds, and investment contracts and notes. The financial instruments may subject
the Plan to concentrations of risk as, from time to time, cash balances exceed
amounts insured by the Federal Deposit Insurance Corporation; market value of
securities are dependent on the ability of the issuer to honor its contractual
commitments; and investments in common stock are subject to changes in market
values of the stock.
7
<PAGE>
5. BENEFIT PRIORITIES UPON TERMINATION
Tektronix intends the Plan to be permanent but, if the Plan were terminated,
Plan assets would be allocated among participants in proportion to their account
balances.
6. FUND INFORMATION
Net investments, net investment income, employer contributions, employee
contributions, and withdrawals by fund are as follows for the years ended
December 31, 1998 and 1997 (in thousands):
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Net Investments:
Stable Fund $ 173,667 $ 162,031
Balanced Fund 319,806 277,383
Stock Index Fund 222,975 177,825
Small and Medium Company Stock Fund 49,015 44,620
International Stock Fund 19,773 19,559
Tektronix Stock Fund II 11,691 -
Tektronix Stock Fund 77,544 96,509
Loan Fund 20,783 16,578
----------- -----------
Total $ 895,254 $ 794,505
=========== ===========
Net Investment Income:
Stable Fund $ 9,913 $ 9,961
Balanced Fund 51,657 55,230
Stock Index Fund 49,720 43,111
Small and Medium Company Stock Fund 4,853 5,698
International Stock Fund 1,588 992
Tektronix Stock Fund II 4,492 -
Tektronix Stock Fund (21,017) 13,007
Loan Fund 6,916 1,281
----------- -----------
Total $ 108,122 $ 129,280
=========== ===========
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Employer Contributions:
Stable Fund $ 2,110 $ -
Balanced Fund 2,954 -
Stock Index Fund 3,969 -
Small and Medium Company Stock Fund 1,528 -
International Stock Fund 697 -
Tektronix Stock Fund II 137 -
Tektronix Stock Fund 7,529 14,788
----------- -----------
Total $ 18,924 $ 14,788
=========== ===========
Employee Contributions:
Stable Fund $ 4,824 $ 4,850
Balanced Fund 7,190 6,519
Stock Index Fund 9,950 9,393
Small and Medium Company Stock Fund 4,013 4,258
International Stock Fund 1,806 1,963
Tektronix Stock Fund II 507 -
----------- -----------
Total $ 28,290 $ 26,983
=========== ===========
Withdrawals:
Stable Fund $ 13,413 $ 11,832
Balanced Fund 17,708 13,811
Stock Index Fund 12,506 9,674
Small and Medium Company Stock Fund 3,260 3,119
International Stock Fund 1,472 1,851
Tektronix Stock Fund II 30 -
Tektronix Stock Fund 3,965 3,943
Loan Fund 1,004 773
----------- -----------
Total $ 53,358 $ 45,003
=========== ===========
</TABLE>
7. CONTRACTS WITH INSURANCE COMPANIES
The Trust has entered into various guaranteed investment contracts with
insurance companies. These contracts are included in the financial statements at
contract value (which represents contributions made under the contracts, plus
earnings, less withdrawals and related expenses) because the contracts are fully
benefit responsive. For example, participants may ordinarily direct the
withdrawal or transfer of all or a portion of their investment at contract
value. Plan management has asserted that contract value approximates fair value
for these contracts. There are no reserves against the contract values for
credit risk of the issuers or otherwise. The average yields and crediting
interest rates ranged approximately from 5.52% to 8.23% and 5.27% to 8.23% for
the years ended December 31, 1998 and 1997, respectively. The crediting interest
rates are based on agreed upon formulas with each issuer.
9
<PAGE>
SIGNATURE
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 on its behalf by the undersigned
thereunto duly authorized.
TEKTRONIX, INC. 401(k) PLAN
Date: June 25, 1999 By: KAREN B. STRAL
-------------------------------------
Karen B. Stral, Secretary
Tektronix 401(k) Plan
Administrative Committee
10
<PAGE>
Exhibit Index
Exhibit
Document Number
- -------- -------
Consent of Independent Accountants 23
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-42413 of Tektronix, Inc. on Form S-8 of our report dated May 21, 1999,
appearing in this Annual Report on Form 11-K of the Tektronix 401(k) Plan for
the year ended December 31, 1998.
DELOITTE & TOUCHE LLP
June 24, 1999
