SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
COMMISSION FILE NO. 1-15983
ARVINMERITOR, INC. HOURLY EMPLOYEES SAVINGS PLAN
(Full title of the plan)
ARVINMERITOR, INC.
2135 WEST MAPLE ROAD
TROY, MICHIGAN 48084
(Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office)
Table of Contents
Independent Auditors' Report 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 Year ended December 31, 2001 3
Notes to Financial Statements 4-8
Supplemental Schedules as of and for the Year
ended December 31, 2001:
Schedule of Assets Held at End of Year 9
Schedule of Reportable Transactions 10
Signatures 11
Exhibit:
Independent Auditors' Consent 12
INDEPENDENT AUDITORS' REPORT
To ArvinMeritor, Inc.
Hourly Employees Savings Plan and Participants:
We have audited the accompanying statements of net assets available for benefits
of ArvinMeritor, Inc. Hourly Employees Savings Plan (formerly the Arvin
Industries, Inc. Employee Savings Plan) (the "Plan") as of December 31, 2001 and
2000, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2001. 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 as of 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.
As discussed in Note 2 to the financial statements, in 2001 the Plan changed its
basis of accounting from the modified cash basis, which is a comprehensive basis
of accounting other than generally accepted accounting principles, to accounting
principles generally accepted in the United States of America. The 2000
Statement of Net Assets Available for Benefits has been restated in accordance
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 schedules listed in the
Table of Contents 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. These supplemental schedules have been subjected to the auditing
procedures applied in our audit of the basic 2001 financial statements and, in
our opinion, are fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
Deloitte & Touche LLP
Detroit, Michigan
June 26, 2002
ARVINMERITOR, INC.
HOURLY EMPLOYEES SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------
2001 2000
(AS RESTATED)
ASSETS:
Investments (Note 3) $57,729,957 $ -
Value of interest in Master Trust (Note 4) - 9,547,954
Due from other Plans (Note 2) - 57,909,415
----------- -----------
TOTAL ASSETS 57,729,957 67,457,369
----------- -----------
LIABILITIES - Accrued expenses 34,475 -
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $57,695,482 $67,457,369
=========== ===========
See accompanying notes to financial statements.
- 2 -
ARVINMERITOR, INC.
HOURLY EMPLOYEES SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2001
--------------------------------------------------------------------------
2001
----
ADDITIONS:
Employee contributions $ 2,337,839
Employer contributions 761,705
------------
3,099,544
Dividends and interest 2,230,290
------------
Total additions 5,329,834
DEDUCTIONS:
Benefits paid to participants (9,063,092)
Net depreciation in fair value of investments (Note 3) (1,306,848)
Transfers out (Note 1) (4,606,561)
Administrative expenses (115,220)
------------
Total deductions (15,091,721)
------------
Net decrease in net assets available for benefits (9,761,887)
------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year $ 67,457,369
------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $ 57,695,482
============
See accompanying notes to financial statements.
-3-
ARVINMERITOR, INC.
HOURLY EMPLOYEES SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000
-------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following general description of the ArvinMeritor, Inc., Hourly
Employees Savings Plan (formerly the Arvin Industries, Inc. Employee Savings
Plan) (the "Plan") is provided for general information purposes only.
Participants should refer to the Plan document for complete information.
On July 7, 2000, Meritor Automotive, Inc. merged with Arvin Industries,
Inc. to become ArvinMeritor, Inc. ("ArvinMeritor" or the "Company").
ArvinMeritor is now the Plan sponsor and administrator.
GENERAL - The Plan is a defined contribution retirement savings plan
covering all eligible hourly employees of ArvinMeritor, Inc. The Plan is
administered by the Company's Employee Benefit Plan Committee and the Plan
Administrator. The trustee for the Plan assets is T. Rowe Price Trust Company.
The Northern Trust Company was the trustee in 2000. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
On December 31, 2000, all or a portion of six plans were merged into
the Plan. These plans included: Arvin Savings Plan, Meritor Heavy Vehicle
Braking Systems Savings Plan, Meritor Heavy Vehicle Braking Systems Savings Plan
for Represented Employees, Meritor Automotive, Inc. Gordonsville, Tennessee
Employee Savings Plan, Euclid Industries 401(k) Plan and the Euclid Industries
Profit Sharing Plan. This transfer was reflected as a receivable of $57,909,415
due from other plans on the statement of assets available for benefits at
December 31, 2000 in the Plan's Form 5500, but was not accrued at December 31,
2000 in the financial statements as the Plan's financial statements were
prepared on a modified cash basis (see Note 2). Effective January 1, 2001, the
name of the Plan was changed to the ArvinMeritor, Inc. Hourly Employees Savings
Plan.
CONTRIBUTIONS AND VESTING - Eligible employees may elect to contribute
up to 20% of pay, both before and after tax or a combination of both. The
participants are immediately eligible for company matching contributions and
these matching contributions are immediately vested. The Company's match
calculation varies by location within the Plan. All Company match contributions
are payable in Company stock, except for a joint venture whereby the
contribution match for employees is made in cash.
PLAN WITHDRAWALS - Amounts contributed may be withdrawn by, or
distributed to, a participant only upon (1) termination of employment or (2)
attaining the age of 59 1/2. Withdrawals prior to attaining age 59 1/2 are not
permitted except in the event of retirement, disability or as a hardship
distribution. Certain income tax penalties may apply to withdrawals or
distributions prior to age 59 1/2.
PAYMENT OF BENEFITS - On termination of service due to death,
disability or retirement, a participant generally receives an amount equal to
the value of the participant's vested interest in their account in a lump-sum
amount. For termination of service due to other reasons, a participant may
receive the value of the vested interest in their account as a lump-sum
distribution.
LOANS TO PARTICIPANT - A participant may obtain a loan in an amount as
defined by the Plan document (not less than $1,000 and not greater than the
lesser of $50,000 or 50% of the participants' vested account balance) from the
balance of his/her account. Interest is charged at a rate, which is comparable
to rates charged by commercial lending institutions. The loans are repaid
through payroll deductions generally over periods not to exceed 60 months.
Payments of principal and interest are reinvested into the participants' current
investment options. Participants may have only one outstanding loan at a time.
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contribution and an allocation of the Company's contribution and
Plan earnings and charged with an allocation of administrative expenses.
Allocations are based on a participant's earnings or account balances as
defined. The benefit to which a participant is entitled is the benefit that can
be provided from the participant's vested account.
PLAN TERMINATION - Although the Company has not expressed any intent to
terminate the Plan, it reserves the right to do so at any time.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements of the Plan
as of December 31, 2001 and 2000 and for the year ended December 31, 2001 have
been prepared on the accrual basis of accounting. The Statement of Net Assets
Available for Benefits of the Plan as of December 31, 2000 has been restated to
the accrual basis of accounting from the modified cash basis of accounting.
Under the modified cash basis, investment income is recognized when received
rather than when earned and administrative expenses are recognized when paid
rather than when incurred.
The transfer of $57,909,415 relating to the merger of the plans (as
disclosed in Note 1) occurred in January, 2001. This item was reflected on the
restated December 31, 2000 Statement of Net Assets Available for Benefits as a
receivable from other Plans as a result of the change in basis of accounting
described above.
TRANSFERS - For the year ended December 31, 2001, various transfers out
of the Plan occurred as a result of additional employees being transferred to
the ArvinMeritor, Inc. Savings Plan. These have been reflected as transfers out
on the Statement of Changes in Net Assets.
INVESTMENT VALUATION - Investments, other than benefit-responsive
investment contracts, are stated at fair value as measured by readily available
market prices. The T. Rowe Price Stable Value Common Trust Fund is comprised of
individual investment contracts, including synthetic investment contracts and
are stated at contract value. The investment contracts are nontransferable, but
provide for benefit-responsive withdrawals by plan participants at contract
value. Benefit-responsive withdrawals are provided for on a proportional basis
by the issuers of the investment contracts. The trustee's valuation committee
primarily considers factors such as the benefit responsiveness of the investment
contract and the ability of the parties to the investment contract to perform in
accordance
with the terms of the contract. Generally, contract value approximates fair
value (contributions made plus interest accrued at the contract rate, less
withdrawals and fees). If, however, an event has occurred that may impair the
ability of the contract issuer to perform in accordance with the contract terms,
fair value may be less than contract value.
ALLOCATION OF MASTER TRUST ASSETS AND TRANSACTIONS - The investment
income and expenses of the Master Trust were allocated to the Plan based on a
method established by the former Arvin Industries, Inc. Pension Committee.
SECURITY TRANSACTIONS AND INVESTMENT INCOME - Purchases and sales of
securities are reported on the trade date basis. Dividends are recorded on the
ex-dividend date and interest income is recorded on the accrual basis.
PLAN EXPENSES - Administrative expenses of the Plan are paid by either
the Company or the Plan, as provided by the Plan document.
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 net assets available for benefits as of December 31, 2001
and 2000, and the reported amounts of changes in net assets available for
benefits for the year ended December 31, 2001. Actual results could differ from
those estimates. The Plan utilizes various investments which are exposed to
various risks such as interest rate, credit, and overall market volatility. Due
to the level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect the amounts
reported in the Statement of Net Assets Available for Benefits.
3. INVESTMENTS
The following presents investments that represent 5 percent or more of
the Plan's net assets:
December 31, 2001
-------------------
Mutual Funds - at fair value:
T. Rowe Price Balanced Fund 4,601,813
ArvinMeritor Stock (includes $5,565,360 of non-participant directed stock) 6,893,988
T. Rowe Price Stable Value Common Trust Fund - at contract value 26,831,496
T. Rowe Price Equity Index Trust Fund 12,781,922
During 2001, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) depreciated in value as
follows:
Year Ended
December 31, 2001
-----------------
Mutual Funds $(4,421,049)
Common Stock 3,114,201
-----------
Net depreciation $(1,306,848)
===========
4. INVESTMENT IN MASTER TRUST
The Plan's investments as of and for the year ended December 31, 2000
were held in the Arvin Savings Trust ("Master Trust"), which maintained the
assets of both the Plan and the Arvin Savings Plan. The assets of the Master
Trust were held by the Northern Trust Company. The following table presents the
fair value of investments for the Master Trust at December 31, 2000:
2000
------------
Participant loans $ 986,225
Common Stock 18,300,839
Collective trusts 52,784,056
Registered investment companies 87,696,770
------------
Total $159,767,890
============
At December 31, 2000 the Master Trust held 1,608,865 shares of Company
common stock. At December 31, 2000 the Plan's interest in the net assets of the
Master Trust was 6.0%.
5. TAX STATUS
The Internal Revenue Service determined and informed the Company by a
letter dated May 9, 1996, that the Plan was designed in accordance with
applicable sections of the Internal Revenue Code ("IRC"). The Plan has been
amended since receiving the determination letter.
The Plan has requested an updated determination letter based on current
year Plan amendments. The Company believes that the Plan qualifies under Section
401(a) of the IRC and is exempt from federal income taxes as of December 31,
2001. Therefore, no provision for income taxes has been included in the Plan's
financial statements.
6. RELATED PARTY TRANSACTIONS
Plan investments are shares of mutual funds managed by T. Rowe Price.
T. Rowe Price is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest transactions.
ARVINMERITOR, INC.
HOURLY EMPLOYEES SAVINGS PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2001
--------------------------------------------------------------------------------
DESCRIPTION OF INVESTMENT
IDENTITY OF ISSUER, INCLUDING MATURITY DATE,
BORROWER, LESSOR RATE OF INTEREST, COLLATERAL, CURRENT
OR SIMILAR PARTY PAR OR MATURITY VALUE VALUE
* T. Rowe Price Stable Value Common Trust Fund $ 26,831,496
Franklin Small-Cap Stock Fund 1,625,133
* T. Rowe Price Equity Index Trust Fund 12,781,922
* T. Rowe Price International Stock Fund 867,505
* T. Rowe Price Growth and Income Fund 667,086
* T. Rowe Price Mid-Cap Growth Fund 555,762
Janus Fund Large-Cap Growth Fund 1,258,064
Pimco U.S. Treasury Intermediate Fund 997,089
* T. Rowe Price Balanced Fund 4,601,813
* ArvinMeritor Stock 6,893,988
* Participant loans Rates ranging from 6.5% to 10.5%,
maturities up to 60 months 650,099
------------
$ 57,729,957
============
* Party-in-interest.
ARVINMERITOR, INC. HOURLY EMPLOYEES SAVINGS PLAN
SCHEDULE H, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
--------------------------------------------------------------------------------
Series of transactions, when aggregated, involving an amount in excess of 5% of
beginning plan net assets.
(h)
(a) CURRENT VALUE
IDENTITY (c) (d) (g) OF ASSET ON
OF PARTY (b) PURCHASE SELLING COST OF TRANSACTION (l)
INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET DATE LOSS
T. Rowe Price ArvinMeritor Common Stock $ 7,295,133 $ 7,295,133
(49 purchases)
T. Rowe Price ArvinMeritor Common Stock $ 844,007 $ 1,072,070 $ 844,007 $ (228,063)
(111 sales)
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Plan Administrator has duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
ARVINMERITOR, INC. HOURLY
EMPLOYEES SAVINGS PLAN
By: /s/ Richard D. Greb
-------------------
Richard D. Greb, Plan Administrator
June 26, 2002
EXHIBIT INDEX
EXHIBIT
23 INDEPENDENT AUDITORS' CONSENT