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 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from ________ to ________
Commission file number 0-26762
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below: PEDIATRIX MEDICAL GROUP, INC. THRIFT AND
PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
PEDIATRIX MEDICAL GROUP, INC.
1301 Concord Terrace
Sunrise, Florida 33323-2825
EXPLANATORY NOTE
Pursuant to General Instruction A.2 to Form S-8, this Annual Report on
Form 11-K is being filed concurrently with the filing of the Registration
Statement on Form S-8 of Pediatrix Medical Group, Inc. in respect of the
Pediatrix Medical Group, Inc. Amended and Restated Thrift and Profit Sharing
Plan.
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
TABLE OF CONTENTS
Report of Independent Certified Public Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits
as of December 31, 2001 and 2000 2
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 2001 and 2000 3
Notes to Financial Statements 4-10
Supplemental Schedule:
Schedule of Assets Held for Investment Purposes as of December 31, 2001 11
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Participants and Plan Administrator of the
Pediatrix Medical Group Thrift and Profit Sharing Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Pediatrix Medical Group Thrift and Profit Sharing Plan (the "Plan") at
December 31, 2001 and 2000, and the changes in net assets available for benefits
for the years then ended 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 audits. We conducted our
audits 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 audits provide a reasonable basis for our opinion.
Our audits were conducted 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 as of December 31, 2001 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. The 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, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
Ft. Lauderdale, Florida
June 14, 2002
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2001 AND 2000
ASSETS: 2001 2000
---- ----
Investments, at fair value (see Note 3) $ 41,486,275 $ 38,228,705
Receivables:
Employer contributions 2,712,870 1,748,776
Participant contributions 395,210 389,076
LIABILITIES:
Distribution payable (1,371) (1,198)
--------------- ---------------
Net assets available for benefits $ 44,592,984 $ 40,365,359
--------------- ---------------
The accompanying notes are an integral part of these financial statements.
2
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
---- ----
Additions to net assets attributed to:
Investment income:
Interest and dividend income $ 792,538 $ 3,302,715
Net depreciation in the fair value of investments (3,574,899) (3,014,943)
--------------- ---------------
Net investment (loss) income (2,782,361) 287,772
--------------- ---------------
Contributions:
Employer 2,712,870 1,748,776
Participants 6,981,240 6,590,379
--------------- ---------------
Total contributions 9,694,110 8,339,155
--------------- ---------------
Total additions 6,911,749 8,626,927
--------------- ---------------
Deductions from net assets attributed to:
Benefits paid to participants 2,684,124 1,564,585
--------------- ---------------
Total deductions 2,684,124 1,564,585
--------------- ---------------
Net increase 4,227,625 7,062,342
Net assets available for benefits:
Beginning of year 40,365,359 33,303,017
--------------- ---------------
End of year $ 44,592,984 $ 40,365,359
--------------- ---------------
The accompanying notes are an integral part of these financial statements.
3
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
1. DESCRIPTION OF PLAN
Pediatrix Medical Group, Inc. (the "Company") sponsors the Pediatrix
Medical Group Thrift and Profit Sharing Plan (the "Plan") which was
adopted January 1, 1991.
Effective January 2001, the Company amended the Plan to include the
Fidelity Management Trust Company's Income Fund, Freedom 2000 Fund,
Freedom 2010 Fund, Freedom 2020 Fund, Freedom 2030 Fund and Freedom
2040 Fund as additional investment options.
The following description of the Plan is provided for general
information purposes only. More complete information regarding items
such as vesting, benefit provisions and plan termination may be found
in the Plan document which is available to all participants upon
request.
General
The Plan is a defined contribution plan covering substantially all of
the Company's eligible employees and the employees of the professional
associations whose operations are consolidated with the Company. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Contributions
The Company may, at the discretion of its Board of Directors, make
contributions to the Plan. Participants may make voluntary pre-tax
contributions, not to exceed 20 percent of the participant's
compensation. Such contributions are excluded from the participant's
taxable income for federal income tax purposes until received as a
withdrawal or distribution from the Plan. Contributions are subject to
certain limitations. The maximum pre-tax contribution allowed during
2001 and 2000 was $10,500. Effective April 2000, the Company amended
the Plan to include after tax contributions. In addition to any pre-tax
contributions, participants may make after tax contributions, not to
exceed 10 percent of the participant's compensation.
Participant Accounts
Contributions to the Plan are invested at participants' discretion in
22 separate Fidelity Management Trust Company ("Fidelity") investment
funds as follows:
o Fidelity Fund - invests in common stock of large companies.
o Puritan Fund - invests in diversified portfolio of domestic and
foreign common stocks, preferred stocks and bonds.
o Contrafund - invests in common stocks of undervalued companies.
o Investment Grade BD Fund - invests in investment-grade, fixed-income
securities.
o Growth and Income Fund - invests in U.S. and foreign stocks.
o Overseas Fund - invests in foreign securities.
4
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
o Blue Chip Fund - invests in diversified portfolio of common stocks of
established domestic and foreign companies considered industry
leaders.
o Worldwide Fund - invests in securities issued anywhere in the world.
o Equity Income II Fund - invests in income-producing domestic and
foreign equity securities.
o Ginnie Mae Fund - invests in U.S. Government securities and
instruments related to U.S. Government securities.
o Managed Income Portfolio - invests in investment contracts offered by
major insurance companies and other approved financial institutions
and in certain types of fixed income securities.
o Spartan U.S. Equity Index Fund - invests mainly in common stocks
included in the S&P 500 and lending securities.
o Retirement Money Market Fund - invests in high quality, short-term
money market securities.
o Pediatrix Stock Fund - invests in the Company's common stock
purchased in the open market.
o Neuberger & Berman Genesis Trust Fund - invests mainly in common
stocks of companies of any size focusing on specific sections.
o Invesco Dynamics Fund - invests primarily in common stocks of U.S.
companies traded on national securities exchanges and over-the
counter.
o Freedom Income Fund - invests in Fidelity stock, bond, and money
market mutual funds.
o Freedom 2000 Fund - invest approximately 41%, 44% and 15% in Fidelity
stock, bond, and money market mutual funds, respectively.
o Freedom 2010 Fund - invests approximately 65%, 33% and 2% in Fidelity
stock and bond mutual funds, respectively.
o Freedom 2020 Fund - invests approximately 80% and 20% in Fidelity
stock and bond mutual funds, respectively.
o Freedom 2030 Fund - invests approximately 84% and 16% in Fidelity
stock and bond mutual funds, respectively.
o Freedom 2040 Fund - invests approximately 90% and 10% in Fidelity
stock mutual funds and bond mutual funds, respectively.
Each participant's account is credited with the participant's
contribution and an allocation of Company's contributions, investments
earnings less expenses and forfeitures. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Payment of Benefits
Upon normal retirement, death, disability or termination, participants
may elect to receive their vested account balance as a lump-sum
distribution; or have their account balance transferred to an
individual retirement account or other qualified plan.
5
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the portion of their accounts related to
the Company's contribution plus related earnings is based on years of
credited service. A participant is fully vested after three years of
credited service as follows:
Vested
Years of Service Percentage
---------------- ----------
Less than 1 0%
1 30%
2 60%
3 100%
Participants Loans
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum equal to the lesser of 50 percent of their account balance
or $50,000 reduced by the highest outstanding loan balance in their
account during the prior twelve month period. The loans are
collateralized by the balance in the participant's account and bear
interest at nine percent, which is commensurate with local prevailing
rates as determined by the Plan Administrator. Principal and interest
is paid ratably through at least quarterly payroll deductions and are
required to be paid within five years.
Forfeitures
Forfeitures of the nonvested portion of participant's accounts related
to the Company's contribution are used to offset future Company
contributions.
Plan Termination
While the Company has not expressed any intent to terminate the Plan,
it reserves the right at any time to amend, modify or terminate the
Plan without the consent of any participant or beneficiary. In the
event of such termination, the Plan provides that the participants
shall become 100 percent vested in their accounts, including all
employer contributions.
Plan Administration
The Plan is administered by certain employees of the Company (the "Plan
Administrator"). The Plan's assets are maintained by Fidelity, as
trustee.
6
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
Investments
Investments are reported at fair value as determined by the trustee. If
available, quoted market prices are used to value investments. The Plan
presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in fair value of
investments which consists of realized gains or losses and the
unrealized appreciation (depreciation) on those investments. All
investment transactions are recorded by the Plan as of the trade date.
Gains or losses on sale of investments are determined by the specific
identification method. Interest income is recorded as earned on an
accrual basis. Dividends are recorded on the ex-dividend rate.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 additions and deductions to net assets available
for benefits during the reporting period. Actual results could differ
from those estimates.
Risks and Uncertainties
The Plan provides for various investment options. Investment securities
are exposed to various risks, such as interest rate, market and credit.
Due to the level of risk associated with certain investment securities
and the level of uncertainty related to changes in the value of
investment securities, it is at least reasonably possible that changes
in risks in the near term would materially affect participants' account
balances and the amounts reported in the statements of net assets
available for benefits and the statement of changes in net assets
available for benefits.
Other
All costs incurred in administering the Plan are paid by the Company
except for certain broker fees that are paid out of the various
Fidelity funds.
7
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
3. INVESTMENTS
The following presents investments that represent 5 percent or more of
the Plan's net assets at December 31 as follows at fair value:
DESCRIPTION OF INVESTMENT 2001 2000
------------------------- --------- ----------
Fidelity Fund $2,768,955 $2,966,712
Puritan Fund 2,507,730 2,180,848
Contrafund 5,008,107 4,924,068
Growth and Income Fund 6,019,300 5,705,192
Blue Chip Fund 6,420,095 6,925,660
Equity Income II Fund 3,284,039 3,151,181
Retirement Money Market Fund 2,595,797 *
Pediatrix Stock Fund 3,603,714 2,653,832
* Did not represent 5 percent or more of the Plan's net assets at
December 31, 2000.
4. INFORMATION CERTIFIED BY TRUSTEE
The Plan Administrator has received certification from Fidelity,
trustee for the Plan for the years ending December 31, 2001 and 2000,
as to all data appearing in the financial statements and supplemental
schedule (including data regarding investments appearing in Note 3)
except for the following:
o Determination of amounts to be contributed by the Company and the
participants;
o Determination of the amounts of benefits and distributions paid to
participants;
o Tax status; and
o Plan description and Plan amendments.
5. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated April 16, 1997, that the Plan is designed in accordance
with applicable sections of the Internal Revenue Code ("IRC"). The Plan
has been amended since receiving the determination letter. However, the
Plan Administrator and the Plan's tax counsel believe that the Plan is
designed and currently being operated in compliance with the applicable
provisions of the IRC.
8
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
6. DISTRIBUTION PAYABLE
Distribution payable pertains to participant pre-tax contributions
which exceed the maximum annual dollar limit as established by the IRC.
During the years ending December 31, 2001 and 2000, the Plan failed one
of the discrimination tests and at December 31, 2001 and 2000,
respectively, the Plan had a liability for excess contributions of
$1,371 and $1,198, respectively. Such amounts were refunded to the
participants by April 15, 2002 and April 15, 2001, respectively, in
order to bring the Plan into compliance with the IRC.
7. PARTY-IN-INTEREST TRANSACTIONS
The Plan's investments are shares of mutual funds administered by
Fidelity. Fidelity is the trustee as defined in the Plan and,
therefore, these transactions qualify as party-in-interest.
Participants' loans are granted and administered by Fidelity and,
therefore, these loans transactions qualify as party-in-interest. The
Pediatrix Stock Fund invests in the Company's common stock and,
therefore, these investment transactions qualify as party-in-interest.
All fees and expenses of the Plan for legal, accounting, recordkeeping
and other administrative services are paid by the Company.
8. RECONCILIATIONS OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan
benefits per the financial statements to the Form 5500:
2001 2000
---- ----
Net assets available for benefits per the
financial statements $44,592,984 $40,365,359
Less: Benefit claims payable (4,871) (198,117)
----------- -----------
Net assets available for benefits per the Form 5500 $44,588,113 $40,167,242
=========== ===========
Benefit claims payable are recorded on the Form 5500 for distribution
requested by participants prior to year-end, but not yet returned as of
that date.
9
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
9. SUBSEQUENT EVENT
Effective January 1, 2002, the 401(k) Plan of Magella Healthcare, Inc.
(the "Magella Plan") merged with the Plan. As a result, all assets of
the Magella Plan were transferred to the Plan on such date. All
participants of the Magella Plan received full carryover of service
upon the merger.
10
PEDIATRIX MEDICAL GROUP THRIFT AND PROFIT SHARING PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
AS OF DECEMBER 31, 2001
(a) (b)IDENTITY OF ISSUER, BORROWER, (c) DESCRIPTION OF INVESTMENT INCLUDING MATURITY (d) FAIR
LESSOR OR SIMILAR PARTY DATE, RATE OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE VALUE
--- --------------------------------------------- --------------------------------------------------------- -----------
* Fidelity Management Trust Company Fidelity Fund $ 2,768,955
* Fidelity Management Trust Company Puritan Fund 2,507,730
* Fidelity Management Trust Company Contrafund 5,008,107
* Fidelity Management Trust Company Investment Grade BD Fund 2,001,055
* Fidelity Management Trust Company Growth and Income Fund 6,019,300
* Fidelity Management Trust Company Overseas Fund 1,271,086
* Fidelity Management Trust Company Blue Chip Fund 6,420,095
* Fidelity Management Trust Company Worldwide Fund 1,472,499
* Fidelity Management Trust Company Equity Income II Fund 3,284,039
* Fidelity Management Trust Company Retirement Money Market Fund 2,595,797
* Fidelity Management Trust Company Pediatrix Stock Fund 3,603,714
* Fidelity Management Trust Company Invesco Dynamics Fund 1,385,696
* Fidelity Management Trust Company Neuberger & Berman Genesis Trust Fund 1,255,906
* Fidelity Management Trust Company Ginnie Mae Fund 115,531
* Fidelity Management Trust Company Managed Income Portfolio 257,671
* Fidelity Management Trust Company Spartan U.S. Equity Index Fund 461,391
* Fidelity Management Trust Company Freedom Income Fund 4,009
* Fidelity Management Trust Company Freedom 2000 Fund 1,667
* Fidelity Management Trust Company Freedom 2010 Fund 71,004
* Fidelity Management Trust Company Freedom 2020 Fund 93,494
* Fidelity Management Trust Company Freedom 2030 Fund 198,611
* Fidelity Management Trust Company Freedom 2040 Fund 13,391
* Participants' loans receivable Loans to participants, 9%, various maturities through 2006 675,527
-----------
$41,486,275
===========
* Represents a party-in-interest.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
PEDIATRIX MEDICAL GROUP
THRIFT AND PROFIT SHARING PLAN
Date: November 14, 2002 By: /s/ Karl B. Wagner
--------------------------------
Name: Karl B. Wagner
Title: Chief Financial Officer,
Sponsor
12
EXHIBIT INDEX
Exhibit No. Document Description
----------- --------------------
23.1* Consent of PricewaterhouseCoopers LLP
-------
* Filed herewith.
13