SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(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 1-8002
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below: Thermo Electron Corporation
MoneyMatch Plus Plan.
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office: Thermo Electron
Corporation, 81 Wyman Street, Waltham, Massachusetts 02454-9046.
<PAGE>
THERMO ELECTRON CORPORATION
MONEY MATCH PLUS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH AUDITORS' REPORT
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
INDEX
PAGE
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1998 AND 1997 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998 3
NOTES TO FINANCIAL STATEMENTS 4-13
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Pension Committee of
Thermo Electron Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of the Thermo Electron Corporation Money Match Plus Plan (the Plan) as
of December 31, 1998 and 1997, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1998. 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 the
Plan's 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 as
of December 31, 1998 and 1997, and the changes in its net assets available for
plan benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were performed for 0the purpose of forming an opinion on the basic
financial statements taken as a whole. The fund information included in Note 7
is presented for the purpose of additional analysis only. The fund information
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.
Boston, Massachusetts
May 10, 1999
1
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
ASSETS:
Investments, at quoted market value-
Thermo Electron Corporation Master Trust $331,861,803 $319,382,417
------------ ------------
Total investments 331,861,803 319,382,417
------------ ------------
Receivables-
Employer contributions 1,013,457 726,766
Employee contributions 2,337,725 1,785,400
------------ ------------
Total receivables 3,351,182 2,512,166
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $335,212,985 $321,894,583
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS, BEGINNING OF YEAR $321,894,583
ADDITIONS:
Interest and dividend income 6,964,513
Realized and unrealized depreciation, net (11,762,451)
Employer contributions 12,790,580
Employee contributions 22,738,509
Participant roll-over transfers, net 18,756,561
------------
Total additions 49,487,712
------------
DEDUCTIONS:
Distributions to participants 34,561,402
Administrative expenses 1,607,908
------------
Total deductions 36,169,310
------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS, END OF YEAR $335,212,985
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(1) PLAN DESCRIPTION
General
The Thermo Electron Corporation Money Match Plus Plan (the Plan) is a
defined contribution plan and is an amendment and restatement of the
variable retirement benefit portion of the Thermo Electron Corporation
Retirement Plan, effective January 1, 1986. The Plan covers eligible
full-time and part-time employees of Thermo Electron Corporation and
subsidiaries (the Company) who have completed two months of service.
The Plan is a qualified defined contribution plan under Section 401(k) of
the Internal Revenue Code (IRC) and complies with the requirements of the
Employee Retirement Income Security Act of 1974 (ERISA).
Benefits
The Plan provides for the payment of an individual's vested account upon
termination of employment, retirement, permanent disability or death. The
normal retirement benefits consist of a monthly annuity or lump-sum payment
based on the individual's vested account.
Contributions
Participants may contribute, at their option, 1% to 15% (in increments of
1%) of their compensation to the Plan. Participants are eligible to receive
a matching contribution from the Company upon completion of one year of
service. The Company makes a matching contribution for each participant
equal to 200% of the first 2% of compensation plus 25% of the second 2% of
compensation, as contributed by the participant (the maximum company
matching contribution is 4.5% of compensation). Contributions to the Plan
are made monthly.
Vesting
All participant contributions vest immediately. Employer contributions vest
according to the following schedule:
Years of Service Vested
Percentage
Less than 3 0%
3 20
4 40
5 60
6 80
7 years or more 100
4
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
Active participation in the Plan may be terminated by a participant at any
time.
A participant is automatically 100% vested upon the attainment of age 65,
upon becoming permanently disabled or upon death while still an active
participant.
Administrative Expenses
All administrative expenses are paid by the Plan.
Participant Accounts
The Company's Pension Committee maintains separate accounts for each
participant representing the participant and matching employer
contributions made and the net earnings allocated thereon. The plan
administrator and Mellon Trust (the Trustee) are responsible for
determining that all allocations are made in accordance with the provisions
of the Plan. Income earned on assets of the Plan, as well as unrealized
appreciation or depreciation of investments, is allocated based on the
ratio that a participant's interest in the fund bears to the total fund
balance as of the valuation date.
Withdrawals and Loans
Participants may withdraw their employee contributions under certain
conditions with prior written notice and approval of the plan
administrator. Participants may also borrow up to 50% of their vested
accounts, not to exceed $50,000 (loans may be taken against participant
contributions only). The term of the loan is generally five years except
when the use of the proceeds is for the purchase of a primary residence,
for which the term can be up to 30 years. Interest is determined based on
the market rate of interest charged for similar loans in the surrounding
community.
Plan Termination
The Company expects to maintain the Plan indefinitely but reserves the
right to amend or terminate the Plan at any time. In the event of
termination, the right of all participants to benefits will become
nonforfeitable to the extent funded. The priorities for determining the
allocation of plan assets, as defined by the Plan, will be governed by
ERISA.
Forfeitures
Upon a participant's break in service, as defined, the nonvested portion of
the participant's account is forfeited and is used to reduce the Company's
future funding requirements. If a participant who has terminated employment
is rehired by the Company before the greater of a five-year break in
service or the number of the participant's years of service prior to the
participant's break in service, the participant shall be reinstated in such
forfeited amount.
5
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Plan's financial statements are maintained 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 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 revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Investments
Contributions to the Plan are held under provisions of the Thermo Electron
Corporation Master Trust (the Master Trust) with the Trustee. The Master
Trust pools the Plan's assets with those of other Company benefit plans and
makes investments in various types of equity funds and fixed-income
securities, as well as in Company common stock funds. The Plan is issued
units representing its share in each Master Trust fund in which it invests.
The plan administrator has received a copy of the most recent annual
financial statements of the Master Trust and has submitted such financial
statements directly to the Department of Labor. Accordingly, the financial
statements of the Master Trust are not included herein.
Participants may direct their participant and employer contributions among
the following investment options, which are provided under the Master
Trust:
General Stock Fund
The fund objective is to obtain long-term capital appreciation, primarily
by investing in a diversified portfolio of equity securities of public
companies. Up to 10% of fund assets may be invested in the stock of the
Company's public subsidiaries. None of the General Stock Fund assets may
be invested in the Company's stock, since the Thermo Electron Stock Fund
invests exclusively in the shares of the Company. Fund performance is
subject to market fluctuations, and the investment is not protected
against loss. The fund is currently managed by seven independent
professional fund managers, whose performance is regularly reviewed by the
Company's Pension Committee.
6
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
Fixed Income Fund
The fund invests primarily in fixed-income securities and fixed rate of
return contracts. Fund assets are invested in several fixed rate of return
contracts issued by insurance companies, with the repayment of the
principal and interest guaranteed by the financial strength and condition
of the insurance company. The fund assets are managed by Bankers Trust
Company.
Thermo Electron Stock Fund
The fund objective is to obtain long-term capital appreciation by
investing solely in the common stock of the Company. Fund performance is
subject to market fluctuations and the performance of the Company's stock,
and the investment is not protected against loss. The fund is managed by
H.G. Wellington, whose performance is regularly reviewed by the Company's
Pension Committee.
Balanced Investment Fund
The fund's objective is to seek income and capital appreciation by
investing principally in bonds and preferred stock that are convertible
into common stock. The fund is managed by Pecks Management Partners, Ltd.
and Invesco Capital Management, whose performance is regularly reviewed by
the Company's Pension Committee. Fund performance is subject to market
fluctuations, and the investment is not protected against loss.
Thermo Subsidiary Stock Fund
The fund objective is to obtain long-term capital appreciation by
investing solely in a combination of the common stock of the Company's
subsidiaries. Fund performance is subject to market fluctuations and the
performance of the Company's subsidiaries' stocks, and the investment is
not protected against loss. The fund is managed by H.G. Wellington, whose
performance is regularly reviewed by the Company's Pension Committee.
Investments in each of the above funds are valued at market value in the
accompanying financial statements.
Presentation
Certain amounts in 1997 have been reclassified to conform to the 1998
financial statement presentation.
7
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
(3) FEDERAL INCOME TAXES
The Plan has received a favorable determination letter from the Internal
Revenue Service dated May 15, 1995. The plan administrator believes that
the Plan is designed and operated in accordance with the IRC and is exempt
from federal income taxes, and that the participants in the Plan are not
subject to taxes on either the income or the Company's contributions until
such time as a distribution is made. Accordingly, no provision for income
taxes has been made in the accompanying financial statements.
(4) YEAR 2000
Plan management is currently in the process of evaluating the Plan's
information technology infrastructure for Year 2000 compliance. Substantial
doubt exists as to whether the Plan's recordkeeping system will be Year
2000 compliant. Plan management is currently preparing a plan to remedy
this issue by outsourcing the Plan's recordkeeping function before December
31, 1999. Plan management does not anticipate that the Year 2000 issue will
cause any material disruptions in the administration of the Plan.
(5) RECONCILIATION TO FORM 5500
Payments due to participants who have requested to withdraw their funds
prior to December 31, 1998 and 1997 amounted to $8,400,084 and $8,986,846,
respectively. These amounts are recorded as a liability in the Plan's Form
5500; however, these amounts are not recorded as a liability in the
accompanying statements of net assets available for plan benefits in
accordance with generally accepted accounting principles.
The following table reconciles amounts per the financial statements to the
Form 5500 as filed by the Company for the year ended December 31, 1998 and
1997:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Benefits Net Assets Available
Payable to Benefits for Plan Benefits
Participants Paid 1998 1997
Per financial statements $ - $34,561,402 $335,212,985 $321,894,583
1998 pending benefit payments 8,400,084 8,400,084 (8,400,084) -
1997 pending benefit payments - (8,986,846) - (8,986,846)
---------- ---------- ---------- ----------
Per Form 5500 $8,400,084 $33,974,640 $326,812,901 $312,907,737
========== =========== ============ ============
</TABLE>
8
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
(6) MASTER TRUST ALLOCATION
The Plan's interest in the assets of Thermo Electron Corporation Master
Trust (Master Trust) is included in the accompanying statements of net
assets available for benefits. A summary of the assets of the Master Trust
as of December 31, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
Investments, at market-
Interest-bearing cash $ - $ 29,934
U.S. government securities 485,520 -
Corporate debt instruments 27,437,113 40,127,935
Corporate stock-
Preferred 8,448,012 6,063,267
Common 198,809,033 191,496,243
Unallocated insurance contracts 3,606,990 9,834,340
Common/collective short-term trust 43,193,245 40,440,840
Registered investment companies 71,609,238 50,269,708
Real estate and other 3,250 3,250
Loans to participants 6,361,496 5,592,273
----------- -----------
Total investments 359,953,897 343,857,790
Securities sold 1,775,792 1,518,127
Receivables 910,314 958,000
Securities purchased (1,437,438) (362,932)
Payables (479,398) -
----------- -----------
Total assets $360,723,167 $345,970,985
============ ============
</TABLE>
9
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
Plan assets are invested in Master Trust funds in an allocation determined
by the plan administrator. Allocations of assets of the Master Trust to
participating plans as of December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
Amount Percentage Amount Percentage
Eberline Instrument Corporation Pension $ - 0.00% $1,414,317 0.41%
Plan for Bargaining Unit Employees
Thermo Web Systems, Inc. Profit Sharing 6,325,815 1.75 5,447,536 1.57
Plan
Thermo Web Systems, Inc. Retirement 19,485,284 5.40 16,880,454 4.88
Plan
Metallurgical Inc. Pension Plan 936,402 0.26 916,158 0.27
Thermo Electron Corporation Fixed 2,113,863 0.59 1,930,103 0.56
Retirement Benefit Plan
Thermo Electron Corporation Money 331,861,803 92.00 319,382,417 92.31
Match Plus Plan ----------- --------- ----------- ---------
Total $360,723,167 100.00% $345,970,985 100.00%
============ ========= ============ =========
</TABLE>
Master Trust income allocated to the participating plans for the years
ended December 31, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
Interest income $ 7,654,362 $ 6,783,271
Dividends 2,282,642 1,746,952
Realized gains 16,257,418 20,722,920
Unrealized (depreciation) (26,906,557) 23,795,251
appreciation
Other 453,622 -
Administrative expenses (2,686,313) (1,551,756)
---------- ----------
Net investment (loss) $(2,944,826) $51,496,638
income
</TABLE>
10
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
Unrealized appreciation (depreciation) by investment classification for the
Master Trust for the year ended December 31, 1998 is as follows:
Corporate debt instruments $(2,947,612)
Corporate stock-
Preferred (2,833,946)
Common (23,099,517)
Registered investment companies 1,966,236
Other 8,282
------------
Unrealized depreciation $(26,906,557)
=============
11
<PAGE>
THERMO ELECTRON CORPORATION MONEY MATCH PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
(7) FUND INFORMATION
<TABLE>
<CAPTION>
____________________________________________ Participant Directed___________________________
General Stock Fund Fixed Income Fund Thermo Electron Stock Fund
<S> <C> <C> <C> <C> <C> <C>
Employer Employee Employer Employee Employer Employee
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
BEGINNING OF YEAR $60,241,815 $94,110,992 $6,725,583 $42,333,872 $29,391,370 $24,333,823
ADDITIONS:
Interest and dividend income 23,793 41,389 501,133 2,750,849 33,387 28,971
Realized and unrealized appreciation
(depreciation), net 10,549,874 18,355,066 - - (17,381,273) (15,082,496)
Employer contributions 6,053,917 - 244,743 - 3,021,937 -
Employee contributions - 11,105,230 - 2,669,299 - 2,632,068
Participant roll-over transfers, net 1,217,730 6,488,825 1,560,816 3,360,793 228,760 1,138,130
----------- ----------- ----------- ----------- ----------- ------------
Total additions 17,845,314 35,990,510 2,306,692 8,780,941 (14,097,189) (11,283,327)
----------- ----------- ----------- ----------- ----------- ------------
DEDUCTIONS:
Distributions to participants 4,506,191 9,880,260 1,130,755 8,608,900 1,706,140 2,182,743
Administrative expenses 381,885 635,362 8,520 86,583 21,414 16,922
----------- ----------- ----------- ----------- ------------ ------------
Total deductions 4,888,076 10,515,622 1,139,275 8,695,483 1,727,554 2,199,665
----------- ----------- ----------- ----------- ----------- ------------
LOANS ISSUED TO PARTICIPANTS - (1,482,379) - (596,063) - (285,276)
LOAN PRINCIPAL REPAYMENTS 4,154 1,084,603 532 368,666 1,705 287,465
NET FUND TRANSFERS (6,815,538) 1,499,153 1,341,047 9,076,865 (2,246,165) (945,325)
----------- ----------- ----------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
END OF YEAR $66,387,669 $120,687,257 $9,234,579 $51,268,798 $11,322,167 $9,907,695
=========== ============ ========== =============== ============= ============
</TABLE>
12
<PAGE>
(7) FUND INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
____________________ Participant Directed__________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Investment Fund Thermo Subsidiary
Stock Fund
Employer Employee Employer Employee Loan Fund Receivables Total
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
BEGINNING OF YEAR $12,127,964 $37,078,573 $ 313,057 $7,133,095 $5,592,273 $2,512,166 $321,894,583
ADDITIONS:
Interest and dividend income 661,523 2,364,978 1,097 20,195 537,198 - 6,964,513
Realized and unrealized appreciation
(depreciation), net (1,276,044) (4,568,218) (121,598) (2,237,762) - - (11,762,451)
Employer contributions 3,141,489 - 41,803 - - 286,691 12,790,580
Employee contributions - 4,571,942 - 1,207,645 - 552,325 22,738,509
Participant roll-over transfers, net 543,022 3,046,380 104,793 593,366 473,946 - 18,756,561
---------- ----------- --------- ----------- -------- --------- -----------
Total additions 3,069,990 5,415,082 26,095 (416,556) 1,011,144 839,016 49,487,712
---------- ----------- --------- ----------- -------- --------- -----------
DEDUCTIONS:
Distributions to participants 801,821 4,346,841 13,314 900,382 484,055 - 34,561,402
Administrative expenses 192,183 254,782 - 10,257 - - 1,607,908
---------- ----------- --------- ----------- -------- --------- -----------
Total deductions 994,004 4,601,623 13,314 910,639 484,055 - 36,169,310
---------- ----------- --------- ----------- -------- --------- -----------
LOANS ISSUED TO PARTICIPANTS - (567,001) - (104,181) 3,034,900 - -
LOAN PRINCIPAL REPAYMENTS 3,341 409,380 555 95,169 (2,255,570) - -
NET FUND TRANSFERS (707,186) (20,406) (70,260) (574,989) (537,196) - -
---------- --------- --------- ----------- --------- -------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
END OF YEAR $13,500,105 $37,714,005 $256,133 $5,221,899 $6,361,496 $3,351,182 $335,212,985
=========== ============ ========== ============ ============ ============ ============
</TABLE>
13
<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 hereunto
duly authorized.
THERMO ELECTRON CORPORATION
MONEYMATCH PLUS PLAN
By: Thermo Electron Corporation, Plan
Administrator
By: /s/ Kenneth J. Apicerno
---------------------------------
Kenneth J. Apicerno
Treasurer
Date: June 30, 1999
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K into Thermo Electron Corporation's previously
filed Registration Statement File No. 33-54347, Metrika Systems Corporation's
previously filed Registration Statement File No. 333-58255, Thermedics Detection
Inc.'s previously filed Registration Statement File No. 333-80463, Thermo
BioAnalysis Corporation's previously filed Registration Statement File No.
333-61949, Thermo Optek Corporation's previously filed Registration Statement
File No. 333-67869, ThermoRetec Corporation's previously filed Registration
Statement File No. 33-80747, Thermo Sentron Inc.'s previously filed Registration
Statement File No. 333-66909, Thermo Vision Corporation's previously filed
Registration Statement File No. 333-67853, ONIX Systems Inc.'s previously filed
Registration Statement File No. 333-79977 and Thermo Fibertek Inc.'s previously
filed Registration Statement File No. 33-80751.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
June 30, 1999
