SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER 1-14337
PENTON MEDIA, INC. 401(k) RETIREMENT SAVINGS PLAN
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(Full title of the Plan)
PENTON MEDIA, INC.
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(Name of Issuer of the Securities Held Pursuant to the Plan)
1300 East Ninth Street, Cleveland, Ohio 44114
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(Address of Issuer's Principal Executive Office)
PENTON MEDIA, INC.
INDEX TO FORM 11-K
Page(s)
(a) Financial Statements - financial statements required to be filed are listed in the 3-14
Index attached hereto, which is incorporated herein by reference.
(b) Signatures 15
(c) Exhibit:
Number Description
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23 Consent of Independent Registered Public Accounting Firm 16
2
PENTON MEDIA, INC.
401(k) RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2003 AND 2002
3
PENTON MEDIA, INC.
401(k) RETIREMENT SAVINGS PLAN
INDEX
--------------------------------------------------------------------------------
Page(s)
Report of Independent Registered Public Accounting Firm 5
Statements of Net Assets Available for Benefits 6
Statement of Changes in Net Assets Available for Benefits 7
Notes to Financial Statements 8-13
Supplemental Schedule required by ERISA: *
Form 5500, Schedule H, Part IV, Item 4i:
Schedule of Assets (Held At End Of Year) 14
* All other schedules required by 29 CFR 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under ERISA (Employee
Retirement Income Security Act of 1974) have been omitted because the conditions
under which they are required are not present.
4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Administrator of the
Penton Media, Inc. 401(k) Retirement Savings 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 Penton Media, Inc. 401(k) Retirement Savings Plan (the "Plan") at
December 31, 2003 and 2002, and the changes in net assets available for benefits
for the year ended December 31, 2003 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 the standards of the
Public Company Accounting Oversight Board (United States) and 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, 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, Schedule H,
Part IV, Item 4i, Schedule of Assets (Held At End of Year), 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. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
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Cleveland, Ohio
June 16, 2004
5
PENTON MEDIA, INC.
401(k) RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
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DECEMBER 31,
2003 2002
Investments, at fair value (See Note 6):
Registered investment companies $46,571,603 $40,913,741
Common/collective trust 1,581,940 1,961,414
Common stock 1,723,026 1,087,966
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49,876,569 43,963,121
Participant loans 1,091,128 1,232,757
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Net assets available for benefits $50,967,697 $45,195,878
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The accompanying notes are an integral part of these financial statements.
6
PENTON MEDIA, INC.
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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FOR THE YEAR ENDED
DECEMBER 31, 2003
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 618,924
Net appreciation in fair value of investments (See Note 6) 7,880,850
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Total investment income 8,499,774
Contributions:
Participants 3,416,621
Employer 599,268
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Total contributions 4,015,889
Total additions 12,515,663
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Deductions from net assets attributed to:
Withdrawals and distributions (6,736,672)
Administrative expenses (7,172)
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Total deductions (6,743,844)
------------
Net increase 5,771,819
Net assets available for benefits:
Beginning of year 45,195,878
------------
End of year $ 50,967,697
============
The accompanying notes are an integral part of these financial statements.
7
PENTON MEDIA, INC.
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
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1. PLAN DESCRIPTION
The following description of the Penton Media, Inc. 401(k) Retirement
Savings Plan (the "Plan") provides only general information. Participants
should refer to the Plan document for a more complete description of the
Plan's provisions.
GENERAL
The Plan is a defined contribution plan established to provide benefits to
qualified domestic employees of the Plan administrator, Penton Media, Inc.
("Penton" or the "Company"). The Plan allows participants to make
before-tax contributions in accordance with the provisions of Section
401(k) of the Internal Revenue Code. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA). Employees
of the Company become eligible to participate in the plan on the first day
of the month that is at least 30 days after the date on which the employee
begins employment with the Company.
CONTRIBUTIONS
Participants are able to contribute up to 25% of pre-tax annual
compensation up to a maximum of $12,000 and $11,000 for 2003 and 2002,
respectively. Unless waived, 3% of an eligible employee's compensation
will automatically be deducted and contributed to the Plan. The matching
percentage contributed by the Company is determined by the Board of
Directors of the Company. No matching contributions were made in 2003 or
2002.
Effective October 1, 2002, the Plan was amended to allow for catch-up
contributions for participants age 50 or older. Participants that meet
certain criteria are permitted to make additional contributions up to
$2,000 and $1,000 for 2003 and 2002, respectively. Catch-up contributions
are limited by federal tax legislation.
The Plan also permits rollover contributions from other qualified
retirement plans. Rollover contributions are included in participant
contributions and amounted to $85,827 and $110,758 at December 31, 2003
and 2002, respectively.
PARTICIPANT ACCOUNTS
Fidelity Investments Institutional Operations Company, Inc., the trustee
of the Plan ("Fidelity" or the "Trustee"), maintains an individual account
for each participant. This account is credited with participant
contributions, employer matching contributions and Plan earnings.
Employees elect to allocate their contributions and any employer
contributions to various investment options as specified in the Plan.
There were 1,647 and 2,072 participants in the Plan at December 31, 2003
and 2002, respectively.
VESTING
Participants are immediately vested in both employee and employer matching
contributions, plus actual earnings thereon.
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employee and
matching employer contributions in one quarter percent increments to any
of the investment options. Two of the investment options are no longer
available for future investment purposes, as noted in the descriptions
which follow.
Northern Trust Company ("Northern Trust") is the trustee for the
AptarGroup Inc. Stock Fund and the Penton Media, Inc. Stock Fund. Northern
Trust reports all activity of these funds to Fidelity. Fidelity manages
the following remaining funds: Retirement Government Money Market
Portfolio, Managed
8
PENTON MEDIA, INC.
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Income Portfolio, Growth & Income Portfolio, Aggressive Growth Fund,
Magellan Fund, Spartan 500 Index Fund, Diversified International Fund,
Fidelity Mid-Cap Stock Fund, PIMCO Total Return Fund II, Neuberger Berman
Genesis, Morgan Stanley Value Added Equity, and the Fidelity Freedom
Funds.
Fidelity Retirement Government Money Market Portfolio is a money market
mutual fund that invests in obligations, issued or guaranteed as to
principal and interest by the U.S. Government.
Fidelity Managed Income Portfolio is a stable value fund (common or
collective trust). It invests primarily in high-quality, short and long
term insurance company investment contracts (GICs), bank investment
contracts (BICs), short term money market instruments and "synthetic" GICs
(debt obligations issued by one institution and insured by another as to
the payment of principal at maturity).
Fidelity Growth & Income Portfolio is a growth and income mutual fund,
which seeks long-term capital growth, current income, and growth of income
consistent with reasonable investment risk. It invests primarily in U.S.
and foreign stocks, focusing on those that pay dividends and show
potential earnings growth. It may also invest in bonds.
Fidelity Aggressive Growth Fund is a growth mutual fund and invests
primarily in stocks of small and medium size developing companies that
have the potential to grow rapidly. Such stocks may be subject to abrupt
or erratic price changes.
Fidelity Magellan Fund is a growth mutual fund and seeks long-term capital
appreciation by investing in the stocks of both well known and lesser
known companies with potentially above-average growth potential and a
correspondingly higher level of risk. Securities held by the fund may
include both foreign and domestic companies.
Spartan 500 Index Fund is a growth mutual fund and invests primarily in
the stocks that are included in the Standard & Poor's Composite Index of
500 stocks ("S&P 500") and other securities that are based on the value of
the index.
Fidelity Diversified International Fund is a growth mutual fund that
invests primarily in stocks of companies located outside of the U.S. that
are included in the Morgan & Stanley EAFE Index (Europe, Australia, Far
East Index). It seeks stocks of larger companies that are considered
undervalued in their countries.
Fidelity Mid-Cap Stock Fund is a long-term growth mutual fund that invests
primarily in domestic and foreign stocks of companies with medium market
capitalization.
PIMCO Total Return Fund II is a growth mutual fund that seeks total fund
return with an average portfolio duration between three and six years. The
fund invests primarily in investment grade fixed income securities, which
may include U.S. government obligations, mortgage and asset backed
securities, variable and floating debt securities and convertible
securities.
Neuberger Berman Genesis Trust is a growth mutual fund that seeks long
term capital appreciation. The fund primarily invests in common stocks of
small companies.
Morgan Stanley Value Added Equity Fund is a growth mutual fund that seeks
capital appreciation and current income. The fund primarily invests in
common stocks listed on the S&P 500.
9
PENTON MEDIA, INC.
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Fidelity Freedom Funds are growth and income mutual funds that provide
investing opportunities for both short and long term goals by allowing
investors to choose from the following fund options based on the
participants' targeted retirement date: Fidelity Freedom Income Fund,
Fidelity Freedom 2000 Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom
2020 Fund, Fidelity Freedom 2030 Fund and Fidelity Freedom 2040 Fund. The
funds invest in a combination of Fidelity equity, fixed income and money
market funds which are allocated differently based on the retirement goal.
AptarGroup, Inc. Stock Fund is a fund which invested exclusively in shares
of AptarGroup, Inc. Effective July 1, 2003, the AptarGroup, Inc. Stock Fund
was no longer available as an investment option. Participants were given
the option to transfer their account balance to other funds within the Plan
or have the funds transferred automatically to the Fidelity Retirement
Government Money Market Portfolio.
Penton Media, Inc. Stock Fund invests exclusively in shares of Penton
Media, Inc. stock. Shares in the Penton Media, Inc. Stock Fund are acquired
on the open market at fair market value on the date purchased. On June 17,
2003, the Company was notified by the New York Stock Exchange (NYSE) that
the Company's common stock did not meet the NYSE's listing criteria and as
such, the common stock was delisted. The Plan was amended, effective June
13, 2003, to remove the Penton Media, Inc. Stock Fund ("Stock Fund") as an
investment option. Participants will be able to retain their holdings in
the Stock Fund or liquidate their holdings, but participants will not be
able to allocate future contributions or transfer existing assets to the
Stock Fund.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000, up
to, but not to exceed the lesser of $50,000 or 50% of the participant's
account balance. Participant loans are reflected as a transfer from the
respective investment funds to the Loan Fund. Loan repayments are treated
as a transfer to the investment funds from the Loan Fund. Loan terms may
not exceed five years unless for purchase of a principal residence, which
allows for repayment over a 10 year period. The loans are secured by the
balance in the participant's vested account and carry an interest rate
equal to the prime rate plus one percent on the date of the loan. Interest
rates range from 5.00% to 11.50%. Principal and interest are paid ratably
through payroll deductions.
PAYMENT OF BENEFITS AND WITHDRAWALS
A participant may withdraw their account balance upon termination of
employment or upon reaching age 59 1/2 by calling Fidelity directly.
Hardship withdrawals are available if requirements are met as outlined in
the Plan document.
Upon termination of employment or death, the accumulated benefits will be
paid to the participant or beneficiary based on their payment election.
Participants may elect to receive either a lump sum payment, a series of
installment payments over a period of time as determined by the Plan
document, or a combination of the two.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared on the accrual
basis of accounting in accordance with accounting principles generally
accepted in the United States of America ("GAAP").
10
PENTON MEDIA, INC.
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires the plan administrator to
make significant estimates and assumptions that affect the reported amounts
of assets, liabilities, and changes therein, and disclosures of contingent
assets and liabilities. Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
stocks and mutual funds. Investment securities are exposed to various
risks, such as interest rate, market and credit risk. Due to the level of
risk associated with certain investments and the level of uncertainty
related to changes in the value of investments, 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.
INVESTMENT VALUATION AND INCOME RECOGNITION
Common stock investments in the AptarGroup, Inc. Stock Fund and Penton
Media, Inc. Stock Fund are valued at quoted market prices at year-end.
Registered investment company investments include the Fidelity Growth and
Income Portfolio, Fidelity Aggressive Growth Fund, Fidelity Magellan Fund,
Spartan 500 Index Fund, Fidelity Diversified International Fund, Fidelity
Mid-Cap Stock Fund, PIMCO Total Return Fund II, Neuberger Berman Genesis
Trust, Morgan Stanley Value Added Equity Fund, and Fidelity Freedom Funds
and are valued at quoted market prices which represent the net asset value
of shares held by the Plan at year-end. Money market mutual funds include
investments in the Fidelity Retirement Government Money Market Portfolio
and are reflected in the statements of net assets available for benefits as
a registered investment companies investment and are stated at fair value
as determined by the trustee. Common/collective trust investments include
the Fidelity Managed Income Portfolio and are stated at fair value as
determined by the trustee.
Purchases and sales of securities, including related gains and losses, are
recorded as of the trade date. Interest income is recorded when earned.
Dividend income is recorded on the ex-dividend date.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation or depreciation in the fair value of its
investments, which consists of the realized gains or losses and the
unrealized appreciation or depreciation on those investments.
PAYMENT OF BENEFITS
Benefits are recorded when paid by the Plan.
ADMINISTRATIVE EXPENSES
The costs to administer the Plan are paid by the Plan with the exception of
audit and legal fees, which are paid by the Company.
3. UNREGISTERED SALE OF PENTON COMMON STOCK
In March 2003, the Company discovered that participants in the Plan from
May 2001 through March 2003 had made purchases in the Penton Media, Inc.
Stock Fund that were not registered under the federal securities laws. As a
result, certain Plan participants had the right to rescind their purchases
for an amount equal to the purchase price paid for the shares, plus
interest from the date of purchase. On March 31, 2003, the Company filed a
Form S-8 to register 6.0 million additional shares to be offered under the
Plan.
11
PENTON MEDIA, INC.
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
In April 2003, the Company offered to reimburse participants who had
purchased Company common stock through the Plan between March 25, 2002 and
March 25, 2003. Employees who signed a release of federal securities law
claims were reimbursed the amount by which the price paid for the common
stock exceeded the closing price of the stock on the date they executed
the release, or if the stock had been sold, the amount by which the price
paid by the employee exceeded the sales price. In July 2003, a total of
$599,268 was deposited by the Company into the accounts of participants
who accepted the offer and executed the release. Employees who did not
sign the release by May 22, 2003, retained their rights under the Federal
securities laws. All rescissionary rights expired on March 14, 2004.
4. PARTY-IN-INTEREST TRANSACTIONS
Plan investments managed by and fees paid to the Trustee qualify as a
party-in-interest transaction. Party-in-interest transactions also include
loans made to participants and investments made in the Penton Media, Inc.
Stock Fund and the Aptar Group Inc. Stock Fund.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to amend or terminate the Plan subject to the
provisions of ERISA. In the event the Plan is terminated, the participants
are immediately entitled to the full value of their account. The Company
also has the right under the Plan to discontinue its contributions at
anytime.
6. INVESTMENTS
The following are investments that represent 5% or more of the Plan's net
assets at December 31:
INVESTMENTS, AT FAIR VALUE: 2003 2002
Fidelity Retirement Government Money Market Portfolio, $ 10,048,354 $ 11,201,427
10,048,354 and 11,201,427 shares, respectively
Fidelity Growth & Income Portfolio, $ 8,209,679 $ 7,102,956
230,415 and 234,344 shares, respectively
Fidelity Magellan Fund, $ 13,756,652 $ 12,060,814
140,747 and 152,746 shares, respectively
Fidelity Aggressive Growth Fund, $ 4,308,132 $ 3,138,507
288,555 and 280,474 shares, respectively
Fidelity Diversified International Fund, $ 2,962,615 $ -
122,828 shares
12
PENTON MEDIA, INC.
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
The Plan's investments appreciated in value for the year ended December 31,
as follows:
2003
Registered investment companies $ 6,900,630
Common Stock 980,220
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Total $ 7,880,850
=============
7. FEDERAL INCOME TAX STATUS
The Plan received a favorable determination letter from the Internal
Revenue Service dated September 26, 2002. The plan administrator believes
that the Plan is designed and is currently being operated in compliance
with the applicable requirements of the Internal Revenue Code, therefore,
no provision for income taxes has been included in the Plan's financial
statements.
8. SUBSEQUENT EVENTS
In March 2004, the Company amended the Plan to change the Plan name to the
Penton Media, Inc. Retirement and Savings Plan. In addition, the Company
established an employer contribution account for each domestic employee in
which the Company will make monthly contributions to each account equal to
between 3% and 6% of the employee's annual salary, based on age and years
of service. The Company's contributions become fully vested once the
employee completes five years of service.
13
PENTON MEDIA, INC. 401(k) RETIREMENT SAVINGS PLAN E.I.N. 36-2875386
SCHEDULE H, PART IV, ITEM 4i PLAN NUMBER 005
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
IDENTITY OF ISSUE, BORROWER,
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENTS FAIR VALUE
---------------------------------------- ----------------------------------------------------------- ---------------
Mutual Funds:
* Fidelity Investments Fidelity Magellan Fund $ 13,756,652
Fidelity Retirement Government Money Market Portfolio 10,048,354
Fidelity Growth & Income Portfolio 8,209,679
Fidelity Aggressive Growth Fund 4,308,132
Fidelity Diversified International Fund 2,962,615
Spartan 500 Index Fund 2,423,536
Fidelity Freedom Funds 779,130
Fidelity Mid-Cap Stock Fund 653,878
PIMCO Advisors PIMCO Total Return Fund II 1,619,765
Morgan Stanley Morgan Stanley Value Added Equity Fund 935,301
Neuberger Berman Management Neuberger Berman Genesis Trust 874,561
Common/Collective Trust:
* Fidelity Investments Fidelity Managed Income Portfolio 1,581,940
Common Stock:
* Penton Media, Inc. Penton Media, Inc. Stock 1,723,026
Varying maturity dates and interest
* Participant Loans ranging from 5.0% to 11.50% 1,091,128
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$ 50,967,697
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* Represents a party-in-interest
Note: This information has been certified as complete and accurate by the
trustee and custodian in accordance with 20 CFR 2520.103-5 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
14
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.
PENTON MEDIA, INC. 401(k) RETIREMENT SAVINGS PLAN
BY: /s/ PRESTON L. VICE
------------------------------
Preston L. Vice
Chief Financial Officer and
Member of Administrative Committee of
Penton Media Inc., 401(k) Retirement and Savings Plan
Date: June 18, 2004
15