================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
--------------
FORM 11-K
(Mark One)
/ X / Annual Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the year ended December 31, 2001
OR
/ / Transition Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the transition period from ________ to _________
Commission File Number 001-15153
BLOCKBUSTER INVESTMENT PLAN
----------------------------------------------------------------------
(Full title of the plan)
BLOCKBUSTER INC.
----------------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan)
1201 Elm Street
Dallas, Texas, 75270
--------------------------------------------------------------------
(Address of principal executive offices)
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BLOCKBUSTER INVESTMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2001
INDEX
-----
Page
----
(a) Financial Statements:
Report of Independent Accountants ............................ 1
Statements of net assets available for benefits
at December 31, 2001 and December 31, 2000 ............... 2
Statement of changes in net assets available for benefits
for the year ended December 31, 2001 ..................... 3
Notes to financial statements ................................ 4
Schedules
---------
Supplemental Schedules:
Schedule of assets (held
at end of year) at December 31, 2001 ................ I
Schedule of reportable transactions
for the year ended December 31, 2001 ................ II
All other schedules are omitted as not applicable or not required.
(b) Exhibit:
I - Consent of Independent Accountants
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
persons who administer the Plan have duly caused this annual report to be signed
on its behalf by the undersigned, hereunto duly authorized.
BLOCKBUSTER INVESTMENT PLAN
Date: June 28, 2002 By: /s/ John Jacobs
---------------------------------
John Jacobs
Member of the Retirement Committee
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and
Administrator of the
Blockbuster Investment Plan
In our opinion, the accompanying statements 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 Blockbuster Investment Plan (the "Plan") at December 31, 2001 and 2000
and the changes in net assets available for benefits for the year ended December
31, 2001 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 audits 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 schedules of assets held
at end of year at December 31, 2001, and reportable transactions for the year
ended December 31, 2001, are presented for the purpose of additional analysis
and are not a required part of the basic financial statements but are
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. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have 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
Dallas, Texas
June 24, 2002
1
BLOCKBUSTER INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
--------------------------------------
Assets: 2001 2000
------ -------------- --------------
Investments, at fair value:
Registered investment companies ........................... $ 26,080,888 $ 27,839,883
Collective investment trusts .............................. 5,879,007 1,867,683
Viacom Inc. Class A Common Stock .......................... 95,265 111,192
Viacom Inc. Class B Common Stock .......................... 16,307,059 18,227,453
Blockbuster Inc. Class A Common Stock ..................... 9,010,698 1,345,241
Loans to participants ..................................... 2,815,931 2,561,564
Preferred Stock ........................................... 541 385
Investments, at contract value:
Plan's interest in Master Trust ........................... -- 3,086,344
-------------- --------------
Total investments ................................. 60,189,389 55,039,745
-------------- --------------
Cash and cash equivalents .................................... 1,314 --
Receivables:
Investment income ........................................ 9,692 7,549
Contributions:
Employee ............................................... 274,691 238,924
Employer ............................................... 142,331 88,825
-------------- --------------
Total assets ................................................. 60,617,417 55,375,043
Liabilities:
-----------
Plan expenses payable .................................... 1,976 4,059
-------------- --------------
Net assets available for benefits ............................ $ 60,615,441 $ 55,370,984
============== ==============
The accompanying notes are an integral part of these financial statements.
2
BLOCKBUSTER INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended
December 31, 2001
----------------
Additions to net assets attributed to:
Contributions:
Employee ........................................ $ 7,996,505
Employer ........................................ 3,876,925
Rollovers, net .................................. 480,356
Investment income ................................... 1,085,832
Plan's interest in Master Trust investment income ... 133,515
-------------
Total additions .................................. 13,573,133
-------------
Deductions to net assets attributed to:
Participants' benefits paid .......................... (6,306,843)
Plan expenses ........................................ (34,365)
Net depreciation in fair value of investments ........ (1,987,468)
-------------
Total deductions ........................................ (8,328,676)
-------------
Net increase .................................... 5,244,457
Net assets available for benefits, beginning of period .. 55,370,984
-------------
Net assets available for benefits, end of period ........ $ 60,615,441
=============
The accompanying notes are an integral part of these financial statements.
3
BLOCKBUSTER INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - PLAN DESCRIPTION
The following is a brief description of the Blockbuster Investment Plan (the
"Plan") and is provided for general information only. Participants should refer
to the Plan document for more complete information regarding the Plan.
The Plan is a defined contribution 401(k) plan, which was adopted on February 8,
1999 and became effective on May 1, 1999. The Plan is offered on a voluntary
basis to all eligible full-time and part-time employees of Blockbuster Inc. (the
"Company" or "Blockbuster") and its participating subsidiaries. The Company is a
majority owned subsidiary of Viacom Inc. ("Viacom").
Eligibility
-----------
Full-time employees are generally eligible to participate in the Plan on the
first day of the month in which they have both (i) reached age 21 and (ii)
completed one year of eligibility service. Eligibility service is generally
based on the number of days for which a full-time employee is given service
credit. Part-time employees are generally eligible to participate in the Plan on
the first day of the month following the month in which they have both (i)
reached age 21 and (ii) completed one year of eligibility service, with
eligibility service generally being defined as a consecutive 12-month period in
which a part-time employee works at least 1,000 hours. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and is administered by a committee (the "Retirement
Committee") appointed by the Board of Directors of the Company. Although the
Company anticipates that the Plan will continue indefinitely, it reserves the
right to amend the Plan at any time through action of the Retirement Committee
and to terminate the Plan at any time through action of its Board of Directors,
provided that such action is in accordance with applicable law.
Investment and Participant Accounts
-----------------------------------
Putnam Fiduciary Trust Company (the "Trustee") is the trustee and custodian of
Plan assets.
Plan participants have the option of investing their contributions or existing
account balances among the following:
Growth
------
Putnam S&P 500 Index Fund
Putnam Investors Fund
Putnam Voyager Fund
EuroPacific Growth Fund
Viacom Class B Stock Fund
Blockbuster Stock Fund
Growth and Income
-----------------
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Income
------
Putnam Income Fund
Capital Preservation
--------------------
Putnam Stable Value Fund (available after August 31, 2001)
Certus Interest Income Fund (available until August 31, 2001)
4
BLOCKBUSTER INVESTMENT
NOTES TO FINANCIAL STATEMENTS--(cont.)
Each of the funds, except for the EuroPacific Growth Fund, the Viacom Class B
Stock Fund, the Viacom Class A Stock Fund (not a current investment option) and
the Blockbuster Stock Fund, are managed by either Putnam Management Company,
Inc. or the Trustee. Each of the funds, except for the EuroPacific Growth Fund,
are identified as parties-in-interest.
Through March 24, 2002, investment elections were required to be in multiples of
5%. Effective March 25, 2002, the Plan was amended to provide that such
elections may be in multiples of 1%. The Plan is intended to meet the
requirements of ERISA Section 404(c). Thus, to the extent participants exercise
control over the investment of contributions in accordance with the requirements
of Section 404(c), neither the Plan nor any other Plan fiduciary will be
responsible for any losses that may occur as a result of the participant's
investment decisions.
Since July 1, 2000, matching employer contributions have been automatically
invested in the Blockbuster Stock Fund, which is invested solely in shares of
Blockbuster Class A Common Stock. Until March 25, 2002, these contributions
could not be transferred to any other investment fund offered under the Plan.
Prior to July 1, 2000, employer matching contributions under the Plan were
automatically invested in the Viacom Class B Stock Fund. Until March 25, 2002,
these contributions could not be transferred to any other investment fund
offered under the Plan except the Blockbuster Stock Fund. Effective March 25,
2002, the Plan was amended to permit the transfer of employer matching
contributions invested in the Blockbuster or Viacom stock funds into any other
investment fund offered by the Plan.
Investment in Master Trust
--------------------------
Effective January 1, 1996, Viacom entered into a master trust agreement (the
"Master Trust") with the Trustee to combine certain assets of the Viacom
Investment Plan (the "VIP"), currently known as the Viacom 401(k) Plan, and
affiliated companies' plans for the purpose of permitting such assets to be
managed by Certus. The Plan, upon its establishment, was included in the Master
Trust. Effective September 1, 2001, the Plan ceased to participate in the Master
Trust, and the Master Trust investment balances associated with the participants
in the Plan were transferred to the Putnam Stable Value Fund. Prior to September
1, 2001, net investment assets and net investment earnings on the investments of
the Master Trust were allocated daily to the plans participating in the Master
Trust. Such allocation was based on the ratio of net investment assets of each
of the participating plans to total net investment at the time the Master Trust
was formed, adjusted for any contributions, disbursements, or spinoffs
attributable to specific participating plans. Note 7 sets forth the Plan's
proportionate interest in the Master Trust and certain financial information of
the Master Trust.
Contributions
-------------
Through December 31, 2000, the Plan permitted participants to contribute up to
15% of annual compensation (as defined by the Plan) on a before-tax, after-tax
or combination basis, subject to the Internal Revenue Code ("IRC") limitations
set forth below. Effective January 1, 2001, the Plan was amended to provide that
participants could no longer make after-tax contributions to the Plan. Through
December 31, 2000, the employer's matching contribution was equal to (i) 50% of
the first 6% of annual compensation that was contributed by the participant on a
before-tax basis if base pay was $65,000 or less at a specified date or (ii) 50%
of the first 5% of annual compensation contributed by the participant on a
before-tax basis if base pay was greater than $65,000. Effective January 1,
2001, the Plan was amended to provide that for future periods, the employer's
matching contribution will be equal to (i) 100% of the first 3% of annual
compensation contributed and 50% of the next 2% of annual compensation
contributed if the participant is not a "highly compensated employee," as
determined under Internal Revenue Service ("IRS") rules; or (ii) 50% of the
first 5% of annual compensation contributed if the participant is a "highly
compensated employee." For the 2001 Plan year, any employee whose prior year's
earnings (as defined under the Plan) exceeded $85,000 was a highly compensated
employee for Plan purposes. Pursuant to IRC limits, total compensation
considered under the Plan for purposes of determining contribution limits could
not exceed $170,000 for both 2001 and 2000.
An employee is permitted to rollover into the Plan at any time part or all of
the employee's eligible distributions from other tax-qualified savings plans,
including profit-sharing plans, pension plans and certain individual retirement
arrangements.
The IRC limits the amount of annual participant contributions that can be made
on a before-tax basis; the limit was $10,500 for both 2001 and 2000. The IRC
also contains an annual limit on aggregate participant and employer
contributions to defined contribution plans maintained by the Company and
certain related entities, which (i) for 2001 was equal to the lesser of $35,000
or 25% of earnings (as defined under the Plan) and (ii) for 2000 was equal to
the lesser of $30,000 or 25% of earnings.
All contributions made to the Plan on an annual basis prior to 2001 were subject
to potential further limitations due to certain non-discrimination tests
prescribed by the IRC. The amendments to the Plan, effective
5
BLOCKBUSTER INVESTMENT
NOTES TO FINANCIAL STATEMENTS--(cont.)
January 1, 2001, were effected in part in order to satisfy a "safe harbor" plan
design approved by the IRS. Plans that satisfy the safe harbor requirements are
not required to pass these contribution discrimination tests.
Loans to Participants
---------------------
Participants are eligible to receive loans based on their account balances. The
maximum loan available to a participant is the lesser of 50% of the
participant's vested account balance or $50,000, reduced by the highest
outstanding balance of any Plan loan made to the participant during the
twelve-month period ending on the day before the loan is made. The minimum loan
available to a participant is $500. Loans are secured by the participant's
remaining account balance. The interest rate on participant loans is established
on the first day of the calendar quarter at a rate of 1% above the annual prime
commercial rate, and a participant can only have one loan outstanding at any
time. Participants may elect repayment periods from twelve to sixty months
through payroll deductions commencing as soon as administratively possible
following the distribution of the loan. The Plan allows participants to elect a
repayment term of up to 300 months for loans used for the acquisition of a
principal residence. Transfers of participant balances for loan disbursements
and repayments of loan principal and interest are specifically identified in the
respective participants' accounts and allocated in accordance with their current
investment elections.
Vesting
-------
Effective January 1, 2001, the Plan was amended to provide that all employer
contributions are 100% vested at the time of contribution. Through December 31,
2000, subject to certain exceptions, the employer's matching contribution vested
at 20% per year of vesting service, and became fully vested after five years of
vesting service. If participants terminated employment prior to being vested in
their employer matching contributions and received a distribution of the vested
portion of their account, the non-vested portion of their account was forfeited
and used to pay administrative expenses and to fund future employer matching
contributions; provided that re-employed participants could request that
forfeited amounts be restored to their accounts under certain circumstances.
Participants with vested account balances exceeding $5,000 who did not receive a
distribution of the vested portion of their account after termination of
employment forfeited the non-vested portion after incurring a five year
break-in-service (calculated in accordance with the Plan), with forfeited
amounts being used as discussed above. All active participants on January 1,
2001 became fully vested in any employer contributions made previously to their
account. Participants whose employment terminated prior to January 1, 2001
continued to be subject to the forfeiture provisions in place prior to January
1, 2001. Employer matching contributions of $58,077 for the year ended December
31, 2001 were forfeited in connection with these provisions. During 2001,
$44,310 of this amount was used to offset employer contributions and
administrative expenses.
Payment of Benefits Upon Termination of Employment or Disability
----------------------------------------------------------------
Subject to certain IRC limitations, participants in the Plan, or their
beneficiaries, may receive their account balances, in a lump sum or in
installments over a period of up to 20 years, in the event of retirement,
termination of employment, disability or death. Participants must receive a
required minimum distribution upon attainment of age 70 1/2 unless they are
still employed.
Withdrawals During Employment
-----------------------------
Participants in the Plan who are still actively employed may elect to withdraw
part or all of their after-tax and rollover contributions. Upon attainment of
age 59 1/2, participants may also elect to withdraw all or part of their
before-tax contributions and matching contributions and earnings thereon.
Through December 31, 2000, participants who were in the Plan or the VIP at least
five years could elect to withdraw up to 100% of their vested employer matching
contributions and earnings thereon, while those who had participated less than
five years were limited to withdrawing vested employer matching contributions
made at least two years prior to the withdrawal, including earnings thereon.
Effective January 1, 2001, participants who have been in the Plan or the VIP at
least five years may elect to withdraw up to 100% of their employer matching
contributions contributed prior to January 1, 2001. Participants who have not
been in the Plan or the VIP at least five years may elect to withdraw up to 100%
of their employer matching contributions contributed prior to January 1, 2001
that were remitted at least two years previously.
6
BLOCKBUSTER INVESTMENT
NOTES TO FINANCIAL STATEMENTS--(cont.)
Through December 31, 2000, a participant could obtain a hardship withdrawal of
the vested portion of his or her employer matching contributions and before-tax
contributions, irrespective of age, provided that the requirements for hardship
were met. Effective January 1, 2001, a participant may not obtain any withdrawal
of employer matching contributions contributed after December 31, 2000,
including for hardship, until the participant reaches age 59 1/2. Participants
can still obtain hardship withdrawals of any before-tax contributions,
irrespective of age.
With the exception of hardship withdrawals, participants are limited to one
withdrawal in any calendar year. There is no restriction on the number of
hardship withdrawals permitted.
Termination Priorities
----------------------
In the event that the Plan is terminated, subject to conditions set forth in
ERISA, the Plan provides that the net assets of the Plan will be distributed to
participants in proportion to their respective vested interests in such net
assets at that date.
Plan Expenses
-------------
The Company pays for expenses incurred in connection with the administration of
the Plan, to the extent not covered by forfeitures.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
-----------------
The accrual method of accounting is used for financial statement presentation.
Investment Valuation and Income Recognition
-------------------------------------------
Short-term money market obligations are carried at cost, which approximates fair
value due to the short-term maturity of these investments. Viacom Class A Common
Stock and Class B Common Stock, Blockbuster Class A Common Stock, and the
Preferred Stock are reported at fair value based on the quoted market price of
the stock on the New York Stock Exchange. Investments with registered investment
companies and the Putnam S&P 500 Index Fund are reported at fair value based
upon the market value of the underlying securities as priced by national
security exchanges. The Putnam Stable Value Fund invests primarily in investment
contracts, including guaranteed and security-backed investment contracts, and is
reported at the book value, or cost plus accrued interest, of the underlying
investment contracts. Participant loans consist of the outstanding principal of
loans to Plan participants at December 31, 2001 and 2000. The loans outstanding
as of December 31, 2001 carry interest rates ranging from 7.0% to 10.5%. Cash
and cash equivalents are valued at cost plus accrued interest, which
approximates market value. Interest income is accrued as earned and dividend
income is recorded on the ex-dividend date.
Security Transactions
---------------------
Purchases and sales of securities are recorded on the trade date. The historical
average cost basis is used to determine gains or losses on security
dispositions.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Payment of Benefits
-------------------
Benefits are recorded when paid.
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the Plan to make
estimates and assumptions, such as those regarding fair value, 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 changes in net assets available for benefits during the reporting period.
Actual results could differ from those estimates.
7
BLOCKBUSTER INVESTMENT
NOTES TO FINANCIAL STATEMENTS--(cont.)
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 investment securities and the level of uncertainty
related to changes in the value of such securities, it is at least reasonably
possible that changes in risks in the near term could materially affect
participants' account balances and the amounts reported in the statements of net
assets available for benefits and the related statement of changes in net assets
available for benefits.
NOTE 3 - INVESTMENTS
Individual investments that represent greater than 5% of net assets available
for benefits are identified below:
At December 31,
-------------------------------------------------------
2001 2000
---- ----
Units Net Assets Units Net Assets
----- ---------- ----- ----------
Viacom Inc. Class B Common Stock ........ 369,356 $16,307,059 389,892 $18,227,453
Blockbuster Inc. Class A Common Stock ... 357,567 $ 9,010,698 160,626 $ 1,345,241
Putnam Voyager Fund ..................... 443,617 $ 7,883,070 387,062 $ 9,254,648
Putnam Investors Fund ................... 498,407 $ 5,811,429 451,659 $ 6,987,158
The Putnam Fund for Growth and Income ... 274,341 $ 4,872,303 238,974 $ 4,674,334
Putnam Stable Value Fund ................ 3,564,975 $ 3,564,975 -- $ --
EuroPacific Growth Fund ................. 118,377 $ 3,180,796 104,234 $ 3,267,749
Plan's Interest in Master Trust ......... -- $ -- 3,086,344 $ 3,086,344
During the year ended December 31, 2001, the Plan's investments (including
investments bought, sold and held during the year) appreciated (depreciated), as
follows:
Registered Investment Companies:
--------------------------------
Putnam Voyager Fund ........................ $ (2,403,834)
The Putnam Fund for Growth and Income ...... (443,080)
EuroPacific Growth Fund .................... (473,343)
The George Putnam Fund of Boston ........... (59,675)
Putnam Investors Fund ...................... (1,746,073)
Putnam Income Fund ......................... 26,240
--------------
(5,099,765)
Collective Investment Trusts:
-----------------------------
Putnam S&P 500 Index Fund .................. (227,469)
Putnam Stable Value Fund ................... --
--------------
(227,469)
Other Investments:
------------------
Viacom Inc. Class A Common Stock ........... (5,505)
Viacom Inc. Class B Common Stock ........... (747,802)
Blockbuster Inc. Class A Common Stock ...... 4,092,604
Preferred Stock ............................ 469
--------------
3,339,766
Net depreciation ....................... $ (1,987,468)
==============
8
BLOCKBUSTER INVESTMENT
NOTES TO FINANCIAL STATEMENTS--(cont.)
NOTE 4 - NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments are as
follows:
At December 31,
----------------------------------------
Net Assets: 2001 2000
---- ----
Viacom Inc. Class A Common Stock ....................................... $ 4,738 $ 5,032
Viacom Inc. Class B Common Stock ....................................... $ 9,731,588 $ 11,682,691
Blockbuster Inc. Class A Common Stock .................................. $ 8,201,391 $ 1,169,392
Year Ended December 31, 2001
----------------------------------------
Changes in Net Assets:
Contributions .............................................................. $ 3,876,925
Net appreciation ........................................................... 3,215,190
Benefits paid to participants .............................................. (1,954,600)
Other ...................................................................... (56,913)
----------------
$ 5,080,602
================
NOTE 5 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31,
----------------------------------------
2001 2000
---- ----
Net assets available for benefits per the financial statements ............... $ 60,615,441 $ 55,370,984
Amounts allocated to withdrawing participants ........................... (24,799) (39,910)
----------------- ----------------
Net assets available for benefits per the Form 5500 .......................... $ 60,590,642 $ 55,331,074
================= ================
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for the year ended December 31, 2001:
Benefits paid to participants per the financial statements .............. $ 6,306,843
Add: Amounts allocated to withdrawing participants
at December 31, 2001 ................................................. 24,799
Less: Amounts allocated to withdrawing participants
at December 31, 2000 ................................................. (39,910)
----------------
Benefits paid to participants per the Form 5500 ......................... $ 6,291,732
================
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, but are not paid as of that date.
NOTE 6 - INCOME TAX STATUS
The Company has filed an application for an initial favorable determination
letter from the IRS with respect to the qualified status of the Plan under
Section 401(a) of the IRC. That application is pending. The Plan administrator
and the Plan's tax counsel believe that the Plan is currently designed and is
being operated in compliance with the applicable requirements of the IRC.
Therefore, they believe that the Plan was qualified and the related trust was
tax-exempt as of the financial statement date.
9
BLOCKBUSTER INVESTMENT
NOTES TO FINANCIAL STATEMENTS--(cont.)
NOTE 7 - INVESTMENT IN MASTER TRUST
The value of the Plan's interest in the total investments of the Master Trust
was 5.8% at September 1, 2001 and 5.6% at December 31, 2000, and the allocated
share of investment income for the eight-month period ended September 1, 2001
was 5.6%. The allocated share of investment income percentage reflects the
income earned over the period that the Plan was part of the Master Trust over
the total amount earned by the Master Trust during the period.
The following table presents the fair value of investments of the Master Trust:
At September 1, At December 31,
--------------- ---------------
2001 2000
---- ----
Certus Interest Income Fund:
Guaranteed investment contracts ........................... $ 17,676,915 $ 16,563,962
Synthetic investment contracts ............................ 38,608,650 35,832,613
Putnam short-term investment fund ......................... 3,168,830 2,576,896
--------------- ---------------
Net Investments in Master Trust ..................... $ 59,454,395 $ 54,973,471
=============== ===============
Investment income of the Master Trust for the eight-month period ended September
1, 2001 is as follows:
Certus Interest Income Fund:
Guaranteed investment contracts ........................... $ 730,916
Synthetic investment contracts ............................ 1,529,546
Putnam short-term investment fund ......................... 144,695
Investment manager fees ................................... (13,589)
--------------
Net Investment Income ........................... $ 2,391,568
==============
The guaranteed investment contracts and synthetic investment contracts are fully
benefit-responsive and are therefore presented in the financial statements at
contract value. At September 1, 2001 and December 31, 2000, the fair value of
such assets in the aggregate was $60,945,385 and $55,572,187, respectively, with
an average yield of 6.28% and 6.61% for the eight-month period ended September
1, 2001 and the year ended December 31, 2000, respectively. The return on assets
for the eight-month period ended September 1, 2001 was 6.44%.
10
SCHEDULE I
BLOCKBUSTER INVESTMENT PLAN
SCHEDULE OF ASSETS (HELD AT END OF YEAR) AT
DECEMBER 31, 2001
-----------------
Unit/ Principal
Amount/Shares/
Maturity and Current
Identity of issue, borrowing lessor or similar party Interest Rates Value
---------------------------------------------------- -------------- -----
Registered Investment Companies:
* Putnam Voyager Fund .......................................... 443,617 $ 7,883,070
* The Putnam Fund for Growth and Income ........................ 274,341 4,872,303
EuroPacific Growth Fund ...................................... 118,377 3,180,796
* The George Putnam Fund of Boston ............................. 151,567 2,541,770
* Putnam Investors Fund ........................................ 498,407 5,811,429
* Putnam Income Fund ........................................... 274,773 1,791,520
Collective Investment Trusts:
* Putnam S&P 500 Index Fund .................................... 83,089 2,314,032
* Putnam Stable Value Fund ..................................... 3,564,975 3,564,975
Other Investments:
* Viacom Inc. Class A Common Stock ............................. 2,153 95,265
* Viacom Inc. Class B Common Stock ............................. 369,356 16,307,059
* Blockbuster Inc. Class A Common Stock ........................ 357,567 9,010,698
Preferred Stock .............................................. 4 541
* Loans to participants ........................................... Various maturities 2,815,931
and interest rates -------------
ranging from 7.0% to 10.5%
Total investments ............................................ $ 60,189,389
=============
* Identified as a party-in-interest to the Plan.
S-1
SCHEDULE II
BLOCKBUSTER INVESTMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
------------------------------------
Current
Expenses Value
Incurred of Asset on
Purchase Selling Lease With Cost of Transaction Net Gain
Description of Asset Price Price Rental Transaction Asset Date (Loss)
-------------------- ----- ----- ------ ----------- ----- ---- ------
Single Transactions:
--------------------
None
Series Transactions:
--------------------
Blockbuster Inc. Class A
Common Stock ............... 216,751 Units $3,839,030 n/a n/a n/a $3,839,030 $3,839,030 n/a
The above transactions and series of transactions are in excess of 5 percent of
the fair value of the Plan's assets as of December 31, 2000, as defined in
section 2520.103-6 of the Department of Labor Rules and Regulations for
Reporting and Disclosure under ERISA.
All of the above are parties-in-interest.
S-2