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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 2001
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number
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A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
INTERNATIONAL GAME TECHNOLOGY
PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
INTERNATIONAL GAME TECHNOLOGY
9295 Prototype Drive, Reno, NV 89511
(775)448-7777
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REQUIRED INFORMATION
The International Game Technology Profit Sharing Plan (the Plan) is subject to
the Employee Retirement Income Security Act of 1974 (ERISA). Therefore, in lieu
of the requirements of Items 1-3 of Form 11-K, the financial statements and
schedules of the Plan for the fiscal years ended December 31, 2001 and 2000,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America and which satisfy the financial
reporting requirements of ERISA, are filed herewith and incorporated herein by
this reference. The written consent of Deloitte & Touche LLP with respect to the
annual financial statements of the Plan is filed as Exhibit 23 to this Annual
Report.
International Game Technology
Profit Sharing Plan
Financial Statements for the Years Ended
December 31, 2001 and 2000, Supplemental
Schedule as of December 31, 2001,
and Independent Auditors' Report
International Game Technology Profit Sharing Plan
Table of Contents
Page
Independent Auditors' Report 4
Statements of Net Assets Available for Benefits 5
Statements of Changes in Net Assets Available
for Benefits 6
Notes to Financial Statements 7
Supplemental Schedule of Assets Held
for Investment Purposes 12
Independent Auditors' Report
International Game Technology Profit Sharing Plan:
We have audited the accompanying statements of net assets available for benefits
of International Game Technology Profit Sharing Plan (the "Plan") as of December
31, 2001 and 2000, and the related statements of changes in net assets available
for 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 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 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, 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.
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 on page 9 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. This supplemental schedule is the responsibility of the
Plan's management. Such schedule has been subjected to the auditing procedures
applied in our audit of the basic 2001 financial statements and, in our opinion,
is fairly stated in all material respects when considered in relation to the
basic financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
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Reno, Nevada
June 10, 2002
International Game Technology Profit Sharing Plan
Statements of Net Assets Available for Benefits
December 31, December 31,
2001 2000
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Assets
Cash $ 1,490,732 $ 515,629
Investments, at fair value 147,711,542 127,987,134
Contributions receivable 11,327 -
Loans to participants 6,396,814 5,186,122
Refunds payable (149,417) (59,073)
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Net assets available for benefits $155,460,998 $133,629,812
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The accompanying notes are an integral part of
these financial statements.
International Game Technology Profit Sharing Plan
Statements of Changes in Net Assets Available for Benefits
December 31, December 31,
2001 2000
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Additions to net assets attributed to:
Investment income:
Net increase in fair value of investments $ 2,916,063 $ 10,721,810
Interest 576,498 436,383
Dividends and capital gains 3,717,614 8,955,610
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7,210,175 20,113,803
Contributions:
Employer 15,752,627 11,005,558
Participant 6,425,468 7,440,191
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Total additions 29,388,270 38,559,552
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Deductions from net assets attributed to:
Benefits paid to participants 7,481,429 7,931,887
Administrative expenses 75,655 74,397
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Total deductions 7,557,084 8,006,284
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Net increase 21,831,186 30,553,268
Net assets available for benefits:
Beginning of year 133,629,812 103,076,544
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End of year $155,460,998 $133,629,812
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The accompanying notes are an integral part of
these financial statements.
International Game Technology Profit Sharing Plan
Notes to Financial Statements
1. Description of Plan
The International Game Technology Profit Sharing Plan (the Plan) is sponsored by
International Game Technology (referred throughout these notes as IGT, we, our
and us) and consists of two programs: the Profit Sharing Program and the 401(k)
Program. The following is a brief description of the Plan and provides general
information. Participants should refer to the IGT Plan Document and Summary Plan
Description for a more complete description of the Plan's provisions.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA), as amended, and other provisions of the Internal Revenue
Code.
The Plan, adopted December 10, 1980, is a defined contribution plan covering all
eligible employees of IGT. On June 1, 1993, Plan administration was transferred
to a third-party administrator, and on April 1, 1999, the Plan's third-party
administrator became Fidelity Investments (Fidelity). Refer to "Investment
Options" below for further information on available investment funds with
Fidelity.
In September 1999, IGT purchased Sodak Gaming, Inc. (Sodak), a South Dakota
distributor of casino gaming products. On October 1, 1999, Sodak employees
became eligible to participate in the 401(k) program. For Plan year 2000, Sodak
employees became eligible for the Profit Sharing Program.
On December 30, 2001, IGT completed a merger with Anchor Gaming (Anchor)
pursuant to which Anchor became a wholly-owned subsidiary of IGT in a stock for
stock exchange. On April 2, 2002, Anchor employees became eligible to
participate in the 401(k) program, and all net assets of the Anchor 401(k) Plan
were transferred to the Plan at that time. For Plan year 2002, Anchor employees
will become eligible for the Profit Sharing Program.
Profit Sharing Program
IGT may make an annual profit sharing contribution, as determined by its Board
of Directors, based on operating profits. The contribution is then allocated to
participant's accounts proportionately based on annual eligible compensation.
Refer to "Benefit Payments and Vesting" below for the Profit Sharing Program
vesting schedule.
Our employees are eligible to participate in the Profit Sharing Program after
completing 1,000 hours of service in a calendar year and reaching the age of 18.
Once eligible, a Plan participant must be employed on the last day of the Plan
year (December 31) to receive their annual profit sharing allocation.
Participation in the Plan is retroactive to January 1 of the year in which the
employee became eligible.
401(k) Program
Effective January 1, 1989, the Plan was amended to allow participants to defer
up to 20% of their annual salary as contributions to their accounts, as governed
by IRC Section 401(k). On January 1, 1995, IGT again amended the Plan to lower
the elective deferrals from 20% to 15%. On January 1, 1998, IGT amended the Plan
to lower the elective deferrals for highly compensated employees to 7%.
An employee may begin contributing pre-tax contributions to their accounts upon
completion of 90 days of full time employment, or one year or 1,000 hours as a
part-time employee. A participant may stop contributing to the Plan at any time
by notifying the third-party administrator.
On January 1, 1993, we began a 401(k) contribution matching program whereby IGT
matches 100% of an employee's contributions up to $500 and an additional 50% of
the next $500 contributed by the employee. This allows for maximum annual
matching contributions of $750 to each employee's account. Employees are 100%
vested in all 401(k) contributions.
The Plan also allows for rollover contributions from other qualified retirement
plans. If the rollover is from an individual retirement arrangement, all assets
in the prior retirement plan must have originated as contributions made under a
qualified plan.
Participant Accounts
Each participant's account is credited with employee 401(k) and employer
matching contributions, allocations of IGT's profit sharing contribution and
forfeitures of non-vested portions of terminated participants' account balances,
net of Plan expenses. Additionally, participants' accounts are affected by
earnings and losses on investments. Each participant is provided a quarterly
account statement detailing the account activity by investment fund.
Investment Options
IGT has selected thirteen investment options that have a variety of growth and
risk characteristics. Plan participants are able to elect how their
contributions are invested. A participant may allocate all contributions to one
investment fund or split them between any combination of funds in increments of
1%. A participant may change how current and/or future contributions are
invested at any time during the Plan year. The Plan's investment options are:
Retirement Money Market Portfolio
PIMCO Total Return Fund
Fidelity Puritan Fund
Fidelity Equity-Income II
Spartan U.S. Equity Index Fund
Baron Asset Fund
Fidelity Dividend Growth Fund
Fidelity OTC Portfolio
UAM: FMA Small Company Portfolio
Fidelity Diversified International Fund
IGT Unitized Stock Fund
Invesco Growth Fund
Franklin Small Cap Growth Fund
We invest employer profit sharing contributions in the Spartan Money Market Fund
until they are allocated to participants and distributed.
Benefit Payments and Vesting
Participants are immediately vested in their tax deferred 401(k) contributions,
401(k) matching contributions, and rollover contributions from other qualified
plans, and the related earnings. Contributions to each participant's profit
sharing account vest based upon years of continuous service. A participant is
fully vested after seven consecutive years of service, based on the following
vesting schedule:
Completed Years
of Service Vested Portion
0 0%
1 10%
2 20%
3 30%
4 45%
5 60%
6 80%
7 100%
A participant earns one year of vesting service for each Plan year (January 1 to
December 31) in which he or she worked at least 1,000 hours.
Upon termination of employment, a participant may receive a lump sum payment
equal to the value of his or her account. If the termination of employment is by
normal retirement (retirement after age 65), by death or by reason of total
disability, the participant is 100% vested and has the right to receive payment
in full. If a participant leaves IGT for any other reason, he or she is entitled
to a distribution from the vested portion of his or her account.
If a terminating participant's vested account balance totals $5,000 or more, he
or she may voluntarily defer payment of benefits until the normal retirement
date. In any case, he or she may not defer payment past the age of 70 1/2. The
only form of benefit payments are lump-sum payments, however, a terminating
participant may take a partial lump-sum payment and defer the balance of his or
her account as long as the remaining balance is at least $5,000.
Hardship Withdrawals
The Plan allows for hardship withdrawals under defined circumstances. The
necessity of the hardship withdrawal is reviewed by IGT's Benefits Committee and
includes allowance for major medical expenses, purchase of a primary residence,
college expenses for a family member, and prevention of eviction from or
foreclosure on a principal residence. A participant must stop making pre-tax
401(k) contributions for a year following the hardship withdrawal.
Plan Termination
In the event of Plan termination, participants will become 100% vested in their
accounts. Although IGT has not expressed any intent to do so, IGT has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
Loans
The Plan allows for loans to be taken against a participant's vested account,
subject to the following restrictions: the loan amount may be no less than
$1,000 and no more than the lesser of 50% of the participant's vested account
balance or $50,000; interest is charged on a simple interest basis at the prime
rate plus 1%; and repayment must be over a period not to exceed 60 months.
Payments are made by payroll deduction on a bi-weekly basis.
Administrative Expenses
Plan administrative expenses totaling $ 75,655 and $74,397 in 2001 and 2000,
were paid by the Plan. These include management and trustee fees. Consulting
fees and recordkeeping fees are paid by IGT.
2. Summary of Significant Accounting Policies
Basis of Accounting
The Plan is accounted for on the accrual basis of accounting.
Cash
Cash represents interest bearing cash held for the purpose of providing
liquidity and satisfying daily participant requests related to the IGT Unitized
Stock Fund and is maintained in accordance with the Trust Agreement between IGT
and Fidelity.
Investments, at Fair Value
All investments of the Plan are valued at quoted market prices as of December
31, 2001 and 2000. Investments include employer profit sharing contributions not
yet distributed and participant investment options.
Benefits Payable
As of December 31, 2001 and 2000, net assets available for benefits included
$15,367,406 and $14,077,539 due to participants who have withdrawn from
participation in the Plan.
3. Investments
All investments of the Plan are administered by an investment management agent.
The following table presents the fair value of investments at quoted market
prices.
December 31, December 31,
2001 2000
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Retirement Money Market Portfolio $ 24,771,420 $ 16,469,861
PIMCO Total Return Fund 9,206,783 6,958,109
Fidelity Puritan Fund 2,165,335 1,476,447
Fidelity Equity-Income II 12,582,255 14,069,707
Spartan U.S. Equity Index Fund 3,107,599 2,848,466
Baron Asset Fund 8,823,798 9,392,356
Fidelity Dividend Growth Fund 20,573,016 19,653,917
Fidelity OTC Portfolio 7,235,286 7,125,136
UAM: FMA Small Company Portfolio 996,664 438,780
Fidelity Diversified International Fund 5,058,303 5,824,604
IGT Unitized Stock Fund 35,117,516 31,598,577
Invesco Growth Fund 1,355,058 784,985
Franklin Small Cap Growth Fund 2,123,264 1,294,380
Spartan Money Market Fund 14,595,245 10,051,809
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Total Investments $147,711,542 $127,987,134
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4. Fund Information
Changes in fair value of investments by fund are as follows:
Years Ended
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December 31, December 31,
2001 2000
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Increase (Decrease) in Fair Value of Investments
PIMCO Total Return Fund $ 51,034 $ 286,547
Fidelity Puritan Fund (131,316) 16,130
Fidelity Equity-Income II (1,682,720) (1,603,697)
Spartan U.S. Equity Index Fund (412,345) (283,263)
Baron Asset Fund (1,703,289) (660,143)
Fidelity Dividend Growth Fund (1,156,998) 681,705
Fidelity OTC Portfolio (1,893,405) (4,537,643)
UAM: FMA Small Company Portfolio 26,427 81,488
Fidelity Diversified International Fund (765,698) (952,926)
IGT Unitized Stock Fund 11,599,774 18,367,324
Invesco Growth Fund (652,350) (381,708)
Franklin Small Cap Growth Fund (363,051) (292,004)
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Total Increase in Fair Value of Investments $ 2,916,063 $10,721,810
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5. Federal Income Taxes
The Plan received a determination letter dated January 21, 2000 from the
Internal Revenue Service qualifying it as an exempt organization under Sections
401(a) and 501(a) of the Internal Revenue Code. Accordingly, no provision for
federal income taxes has been made in the accompanying financial statements.
******
International Game Technology Profit Sharing Plan
Supplemental Schedule of Assets Held For Investment Purposes
December 31, 2001
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(b) (c) (d) (e)
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Maturity Interest Current
Description Date Rate Units Cost Value
Retirement Money Market Portfolio 24,771,420 $ 24,771,420 $ 24,771,420
PIMCO Total Return Fund 880,190 9,143,827 9,206,783
Fidelity Puritan Fund 122,543 2,265,199 2,165,335
Fidelity Equity-Income II 598,300 16,135,622 12,582,255
Spartan U.S. Equity Index Fund 76,467 3,534,752 3,107,599
Baron Asset Fund 198,466 10,444,956 8,823,798
Fidelity Dividend Growth Fund 726,192 21,433,605 20,573,016
Fidelity OTC Portfolio 232,123 11,366,265 7,235,286
UAM: FMA Small Company Portfolio 53,845 917,592 996,664
Fidelity Diversified International Fund 265,110 5,522,337 5,058,303
IGT Unitized Stock Fund 828,201 16,390,255 35,117,516
Invesco Growth Fund 521,176 2,057,895 1,355,058
Franklin Small Cap Growth Fund 68,119 2,599,160 2,123,264
Spartan Money Market Fund 14,595,245 14,595,245 14,595,245
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Total Investments 141,178,130 147,711,542
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Loan Fund 6.50-10.50 6,396,814 6,396,814
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Total Investments and Loan Fund $147,574,944 $154,108,356
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Notes on columns (a) through (e):
(a) Omitted from the Department of Labor format because the answer is none
(b) General description of investments
(c) Where omitted maturity dates and stated rates of interest are not
applicable due to the nature of these investments
(d) Purchase price of investments
(e) Fair market value of investments
The Plan. 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.
INTERNATIONAL GAME TECHNOLOGY PROFIT SHARING PLAN
By:International Game Technology Profit Sharing Plan Committee
By: /s/ Randall J. Kirner Date: June 27, 2002
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Randall J. Kirner
Vice President Human Resources and
Chairman, International Game Technology
Profit Sharing Plan Committee