11-K 1 a82574e11vk.htm FORM 11-K YEAR ENDED DECEMBER 31, 2001 Science Applications International Corporation
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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 calendar year ended December 31, 2001

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

TELCORDIA TECHNOLOGIES SAVINGS 401(k) SAVINGS PLAN


(Full Title of Plan)

Science Applications International Corporation
10260 Campus Point Drive, San Diego, California 92121


(Name of issuer of the securities held pursuant to
the Plan and the address of its principal executive office)

 


SIGNATURE
INDEPENDENT AUDITORS’ REPORT
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
NOTES TO FINANCIAL STATEMENTS
SCHEDULE H LINE 4(i) OF ASSETS HELD AT END OF YEAR
EXHIBIT 23.1


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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Science Applications International Corporation Retirement Plan Committee duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
       
 
 
  TELCORDIA TECHNOLOGIES 401(k)
SAVINGS PLAN
 
 
DATE June 25, 2002  
/S/ ELAINE R. KALIN
 

 

 
 
  Elaine R. Kalin
Vice President, SAIC
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
RETIREMENT PLANS COMMITTEE

 


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Telcordia Technologies 401(k)
Savings Plan

(Formerly Telcordia Technologies
Savings Plan for Salaried Employees)

Independent Auditors’ Report

Financial Statements
Years Ended December 31, 2001 and 2000
Supplemental Schedule
Year Ended December 31, 2001

 


Table of Contents

TELCORDIA TECHNOLOGIES
401(k) SAVINGS PLAN
(Formerly Telcordia Technologies Savings Plan for Salaried Employees)

TABLE OF CONTENTS


           
      Page
     
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 Years Ended December 31, 2001 and 2000
    3  
 
 
Notes to Financial Statements
    4-10  
 
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2001:
       
 
 
Schedule of Assets Held at End of Year
    11-13  

Other schedules required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 are omitted because of the absence of conditions under which they are required.

 


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INDEPENDENT AUDITORS’ REPORT

To the Trustees and Participants of the
Telcordia Technologies 401(k) Savings Plan
Morristown, New Jersey

We have audited the accompanying statements of net assets available for benefits of Telcordia Technologies 401(k) Savings Plan (formerly Telcordia Technologies Savings Plan for Salaried Employees) (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 as of 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 listed in the Table of Contents 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 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

Parsippany, New Jersey
June 18, 2002

 


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TELCORDIA TECHNOLOGIES
401(k) SAVINGS PLAN
(Formerly Telcordia Technologies Savings Plan for Salaried Employees)

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 AND 2000
(Dollars in Thousands)


                       
          2001   2000
         
 
ASSETS:
               
 
Investments, at fair value (Note 3):
               
   
Diversified Telephone Portfolio common shares
  $ 10,980     $ 14,009  
   
SAIC common shares
    313,365       376,030  
   
Shares in registered investment companies
    804,448       877,294  
   
Temporary cash investments
    11,870       23,428  
 
   
     
 
 
    1,140,663       1,290,761  
 
Investment contracts with insurance companies and banks, at contract value
    385,416       316,932  
 
Loans to participants
    11,167       11,858  
 
   
     
 
     
Total investments
    1,537,246       1,619,551  
Receivables:
               
 
Company contributions
    2,147       2,289  
 
Securities sold
    3,608        
 
Interest
    11       64  
 
   
     
 
     
Total assets
    1,543,012       1,621,904  
 
   
     
 
LIABILITIES:
               
 
Securities purchased
    1,694       508  
 
Trust fees payable
    22       18  
 
   
     
 
     
Total liabilities
    1,716       526  
 
   
     
 
NET ASSETS AVAILABLE FOR BENEFITS
  $ 1,541,296     $ 1,621,378  
 
   
     
 

See notes to financial statements.

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TELCORDIA TECHNOLOGIES
401(k) SAVINGS PLAN
(Formerly Telcordia Technologies Savings Plan for Salaried Employees)

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2001 AND 2000
(Dollars in Thousands)


                       
          2001   2000
         
 
ADDITIONS:
               
 
Investment income:
               
   
Dividends
  $ 40,742     $ 69,389  
   
Interest
    1,075       1,014  
   
Net (depreciation) appreciation of investments (Note 3)
    (91,571 )     75,048  
 
   
     
 
     
Total investment (loss) income
    (49,754 )     145,451  
 
   
     
 
 
Contributions:
               
   
Employee contributions
    56,226       57,980  
   
Employer contributions
    21,240       21,329  
 
   
     
 
     
Total contributions
    77,466       79,309  
 
   
     
 
     
Total additions
    27,712       224,760  
 
   
     
 
DEDUCTIONS:
               
 
Distributions to participants
    116,798       107,393  
 
Administrative expenses (Note 6)
    221       215  
 
   
     
 
     
Total deductions
    117,019       107,608  
 
   
     
 
NET (DECREASE) INCREASE BEFORE TRANSFER
    (89,307 )     117,152  
TRANSFER FROM THE TELCORDIA TECHNOLOGIES SAVINGS AND SECURITY PLAN (Note 1)
    9,225        
NET ASSETS AVAILABLE FOR BENEFITS:
               
 
Beginning of year
    1,621,378       1,504,226  
 
   
     
 
 
End of year
  $ 1,541,296     $ 1,621,378  
 
   
     
 

See notes to financial statements.

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TELCORDIA TECHNOLOGIES
401(k) SAVINGS PLAN
(Formerly Telcordia Technologies Savings Plan for Salaried Employees)

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000
(Dollars in Thousands, Except Share Amounts)


1.    DESCRIPTION OF PLAN
 
     The Telcordia Technologies 401(k) Savings Plan (formerly Telcordia Technologies Savings Plan for Salaried Employees) (the “Plan”) was established by Telcordia Technologies, Inc. (“Telcordia” or the “Company”) to provide a convenient way for employees to save on a regular and long-term basis. Telcordia is a wholly owned subsidiary of Science Applications International Corp. (“SAIC”). The following description of the Plan provides only general information. Participants should refer to the Plan Prospectus for a more complete description of the Plan’s provisions.
 
     General - The Plan is a defined contribution plan covering employees of the Company who have one month of service. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). Effective October 1, 2001, the Plan merged with the Telcordia Technologies Savings and Security Plan. As a result of the merger of the two Telcordia savings plans, the Plan has been renamed the Telcordia Technologies 401(k) Savings Plan. Effective January 1, 2001, the Company enacted a provision allowing Company discretionary and matching contributions to mirror each participant’s directed allocations. Also effective January 1, 2000, the Plan was amended to allow two new investment options, the Vanguard U.S. Growth Fund and the Vanguard Extended Market Index Fund.
 
     Contributions - Each year, participants may contribute up to 16 percent of their annual compensation, on a pre- or post-tax basis, as defined in the Plan. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. After one year of service, the Company will make a matching contribution equal to 70 percent of the first 6 percent of compensation that a participant contributes to the Plan. In addition, after one year of service, the Company may make an annual discretionary contribution of a 1/2 percent of compensation on behalf of each participant. The discretionary contribution is made during the first quarter based on participant earnings of the previous calendar year. The Company’s discretionary and matching contributions are invested 100 percent in accordance with each participant’s directed allocation. Contributions are subject to certain IRS limitations.
 
     Effective August 2, 2001, participants of the Plan who have combined balances in the SAIC Stock Funds (Exchangeable and Non-Exchangeable) of less than $50, will be permitted to invest up to 100% of their payroll contributions in the SAIC Exchangeable Stock Fund.
 
     Participants who have, or accumulate, combined SAIC Stock Fund balances in excess of $50 may allocate no more than 25% of their payroll contributions to the SAIC Exchangeable Stock Fund. Company matching contributions will continue to be invested in the same way as participant payroll contributions in all cases. If the value of a participant’s combined SAIC Stock Funds’ balance reaches $50, he will not be permitted to allocate more than 25% of his payroll contributions to the SAIC Exchangeable Stock Fund, even if the value of his combined SAIC Stock Funds’ balance thereafter falls below $50.

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     Participant Accounts - Each participant’s account is credited with the participant’s contribution and allocations of the Company’s contribution and fund earnings, and each participant’s account is charged with an allocation of administrative expenses. Allocations are based on participant 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.
 
     Vesting - Participants are immediately vested in their contributions and the Company’s discretionary contributions, plus actual earnings thereon. Vesting in the Company’s matching contributions plus actual earnings thereon is based on years of continuous service. A participant is fully vested after five years of service.
 
     Participant Loans Receivable - Participants may borrow from their fund accounts a minimum of $1 up to a maximum $50 or 50 percent of their vested account balance, whichever is less, excluding amounts invested in the SAIC Stock Fund. The maximum loan term is generally 56 months. The loans are secured by the balance in the participant’s account and bear interest at a rate commensurate with local prevailing rates as determined quarterly by the Plan administrator. Principal and interest are paid ratably through monthly payroll deductions.
 
     Payment of Benefits - On termination of service other than by death, a participant may elect to receive either a lump-sum amount equal to the value of the participant’s vested interest in his or her account, or annual installments not to exceed the life expectancy of the participant and spouse, if applicable. For termination of service due to death, a beneficiary may receive the value of the vested interest in his or her account as a lump-sum distribution, or in two annual installments, if the participant has so elected.
 
     Forfeited Accounts - Forfeited accounts are used to reduce future Company contributions. Company contributions were reduced by $600 and $1,539 in 2001 and 2000, respectively.
 
     Investment Options - The Plan is comprised of the following investments:

          Vanguard Total Bond Market Index Fund - This participant directed fund invests in United States treasury obligations, federal agency mortgage backed obligations and investment grade corporate obligations.
 
          Vanguard Explorer Fund - This participant directed fund invests in the common stock of a diversified group of small capitalization companies.
 
          Vanguard Extended Market Index Fund - This participant directed fund invests in small and medium capitalization companies that make up the Wilshire 4500 Completion Index.
 
          Vanguard 500 Index Fund - This participant directed fund invests in all of the 500 stocks that make up the Standard & Poor’s 500 Composite Stock Price Index.
 
          Vanguard International Growth Fund - This participant directed fund invests in the common stocks of companies based outside of the United States.
 
          Vanguard PRIMECAP Fund - This participant directed fund invests in the common stock of medium capitalization companies.
 
          Vanguard U.S. Growth Fund - This participant directed fund invests in the common stock of large capitalized companies.

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          Vanguard Wellington Fund - This participant directed fund invests approximately 65 percent of its assets in common stocks and the remaining 35 percent in bonds.
 
          Vanguard Windsor II - This participant directed fund invests in the common stock of large capitalization companies.
 
          SAIC Exchangeable Stock Fund - This fund invests primarily in SAIC class A common stock and is participant directed to the extent that participant contributions were used to purchase SAIC stock. Effective October 1999, the Company announced the closing of SAIC stock funds to all inactive participants of the Plan. Inactive participants would have until July 2000 to move assets held in these funds. Remaining funds were moved to the interest income fund.
 
          SAIC Non-Exchangeable Stock Fund - This is a non-participant directed fund created to invest 50% of the Company’s matching contributions and the Company’s annual discretionary contributions in SAIC class A common stock. Effective October 1999, the Company announced the closing of SAIC stock funds to all inactive participants of the Plan. Inactive participants would have until July 2000 to move assets held in these funds. Remaining funds were moved to the Interest Income Fund.
 
          The SAIC Stock Purchase Fund - This is not a participant directed investment option; it is a temporary holding fund designed to hold respective participant and Company contributions until the following SAIC common stock quarterly trade date. Pending the quarterly trade, the respective contributions are invested in the Vanguard Prime Money Market Fund.
 
          Telcordia Technologies, Inc. - Interest Income Fund - This participant directed fund invests primarily in investment contracts issued by insurance companies and banks.
 
          Telcordia Technologies, Inc. - Diversified Telephone Portfolio Stock Fund - This fund invests primarily in common stock and has been frozen to new participant directed contributions since 1984.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     Basis of Presentation - The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
 
     Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of additions to and deductions from net assets during the reporting period. Actual results could differ from those estimates.
 
     Investment Valuation and Income Recognition - The Plan’s investments are valued at fair value, except for its investment contracts which are valued at contract value.
 
     Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. Quoted market prices for the value of the common shares of each company in the Diversified Telephone Portfolio are obtained on the basis of the closing price on the New York Stock Exchange on the year-end date or, if no sales were made on that date, at the closing price on the New York Stock Exchange on the next preceding day on which sales were made.
 
     Participant notes receivable are valued at outstanding principal balance which approximates fair value.

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     A general public market for SAIC’s common stock does not exist; therefore, the fair value of the common stock is determined pursuant to a stock price formula and valuation process which includes an appraisal prepared by an independent appraisal firm. Periodic determinations of fair value of the common stock are made by the SAIC Board of Directors, with the assistance of the independent appraisal firm. The SAIC Board of Directors reserves the right to alter the formula. As of December 31, 2001, the fair value of SAIC’s class A common stock was $31.37 per share and the Plan held approximately 9,710,737 shares.
 
     The gains or losses realized on distributions of investments and the increases or decreases in unrealized appreciation are calculated as the difference between the current fair value and the fair value of the investments at the beginning of the year, or purchase price if purchased during the year.
 
     It is the policy of the Company to keep the SAIC Common Stock Fund invested primarily in common stock, except for estimated cash reserves for use in distributions and investment exchanges by participants. Such reserves are invested in the Vanguard Prime Money Market fund. If reserves in the SAIC Common Stock Fund are less than the amount required at any given time to make required distributions and investment changes, investment exchanges out of the SAIC Common Stock Fund by participants may have to be deferred.
 
     Purchases and sales of securities are reflected as of the trade date. Investments are valued on a daily basis. Dividend income is recorded on the ex-dividend date. Interest earned on investments is recorded on the accrual basis.
 
     Benefit Payments - Benefits are recorded when paid.
 
     Plan Termination - The Company intends to continue the Plan indefinitely, but reserves the right to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of the termination of the Plan, participants would become fully vested in their accounts; Company contributions would not be subject to forfeiture.
 
     Reclassifications - Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation.

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3.    INVESTMENTS
 
     Investments are summarized in the following schedule. Investments that represent five percent or more of the Plan’s net assets are separately identified and all remaining investments are included in other.

                   
      December 31,
     
      2001   2000
     
 
SAIC common shares:
               
 
SAIC Exchangeable Stock Fund
  $ 282,108     $ 335,941  
 
Other
    31,257       40,089  
 
   
     
 
Total
    313,365       376,030  
 
   
     
 
Shares in registered investment companies:
               
 
Vanguard 500 Index Fund
    308,756       361,402  
 
Vanguard Wellington Fund
    79,231       68,771  
 
Vanguard Windsor II Fund
    94,733       90,186  
 
Vanguard PRIMECAP Fund
    165,461       197,400  
 
Other
    156,267       159,535  
 
   
     
 
 
    804,448       877,294  
 
   
     
 
Investment contracts with insurance companies and banks, at contract value
    385,416       316,932  
Other
    34,017       49,295  
 
   
     
 
Total investments
  $ 1,537,246     $ 1,619,551  
 
   
     
 

     During 2001 and 2000, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) (depreciated) appreciated in value as follows:

                 
    December 31,
   
    2001   2000
   
 
Mutual funds
  $ (105,198 )   $ (70,418 )
Common stock
    (1,769 )     (7,907 )
SAIC stock funds
    13,981       154,003  
Interest income fund
    1,415       (630 )
 
   
     
 
Total (depreciation) appreciation of investments
  $ (91,571 )   $ 75,048  
 
   
     
 

4.    NON-PARTICIPANT DIRECTED INVESTMENTS
 
     Information about the net assets and the significant components of changes in net assets relating to the non-participant directed investments, is as follows:

                     
        December 31,
       
        2001   2000
       
 
Investments, at fair value:
               
 
SAIC common shares in the SAIC
       
   
Non-exchangeable Stock Fund
  $ 31,257     $ 40,089  
   
Temporary cash investments
    142       232  
 
   
     
 
Total net assets available for benefits
  $ 31,399     $ 40,321  
 
   
     
 

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      December 31,
     
      2001   2000
     
 
Changes in net assets:
               
 
Net appreciation of investments
  $ 1,525     $ 11,883  
 
Dividends
          11  
 
Employer contributions
    163       131  
 
Net transfers of participants’ balances
    (10,314 )     8,032  
 
Distributions to participants
    (296 )     (699 )
 
   
     
 
Net (decrease) increase in net assets
    (8,922 )     19,358  
Net assets available for benefits:
               
 
Beginning of year
    40,321       20,963  
 
   
     
 
 
End of year
  $ 31,399     $ 40,321  
 
   
     
 

5.    INVESTMENT CONTRACTS WITH INSURANCE COMPANIES
 
     The Plan maintains investments in fully benefit-responsive investment contracts with a number of insurance companies and banks. Benefit responsiveness is the extent to which contract terms permit and require withdrawals at contract value for benefit payments, loans, or transfers to other investment options offered to the participants by the Plan. The accounts are credited with earnings of the underlying investments (principally bank certificates of deposit and other fixed income products) and charged for Plan withdrawals and administrative expenses. The contracts are included in the financial statements at contract value, which approximates fair value, as reported to the Plan by the respective provider.
 
     Contract value represents contributions made under the contract, plus earnings, less plan withdrawals and administrative expenses.
 
     Approximately 25 percent and 20 percent of total net assets at both December 31, 2001 and 2000, were invested in investment contracts. These contracts are subject to credit risk. If any of the companies fail to perform on the contracts held, the asset value of the Interest Income Fund, and therefore the Plan, could be adversely impaired.
 
6.    PARTIES-IN-INTEREST
 
     Transactions involving cash, securities or assets of the Company, the Trustee or other affiliated persons are considered to be party-in-interest transactions under Section 2520.103-10 of the Department of Labor Rules and Regulations for Reporting and Disclosure. Reportable party-in-interest transactions for the years ended December 31, 2001 and 2000 are summarized as follows:

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      Year Ended December 31, 2001
     
      Number of   Number of        
      Shares   Transactions   Cost
     
 
 
Investment sales:
                       
 
SAIC Class A Common Stock
    3,262,403       4     $ 104,680  
Investment sales:
                       
 
SAIC Class A Common Stock
    2,340,618       4     $ 70,002  
Investment purchases:
                       
 
SAIC Class A Common Stock
    255,343       4       7,457  

     Certain Plan investments are investment funds and are shares of mutual funds managed by The Vanguard Group. Vanguard Fiduciary Trust Company is the trustee as defined by the Plan, and therefore these transactions qualify as party-in-interest.
 
     There were no known prohibited transactions with known parties in interest as defined in ERISA Section 3(14) and regulations thereunder, including those transactions set forth in ERISA Sections 406 and 407(a) and Internal Revenue Code Section 4975(c). There was no known relationship in which The Vanguard Fiduciary Trust Company had any direct or indirect financial interest which would affect its capacity to perform the necessary calculations.
 
     Fees paid by the Plan for administrative expenses and investment management services amounted to $221 and $215 for 2001 and 2000, respectively. All other Plan expenses are paid by the Company.
 
7.    TAX STATUS
 
     The Internal Revenue Service has determined and informed the Company by letter dated February 24, 1999 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (the “Code”). The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan’s tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code. An application for determination with respect to the continued qualification of the Plan has been filed on February 28, 2002.
 
8.    SUBSEQUENT EVENTS
 
     Matching contributions of the Plan for the plan years beginning on and after January 1, 2002 will be invested as follows: 50% shall be invested in the SAIC Non-Exchangeable Stock Fund and 50% shall be invested in accordance with participant elections for their salary deduction contributions and after-tax contributions. A participant’s salary deduction and after-tax contributions of the Plan for the plan years beginning on and after January 1, 2002, to the extent directed to be invested in the SAIC Exchangeable Stock Fund will be limited to 50% of such salary reduction and after-tax contributions after aggregate balance of all SAIC Stock funds under the Plan for such participant equals or exceeds $50. Rollover contributions of the Plan for plan years beginning January 1, 2002, to the extent directed to be invested in the SAIC Exchangeable Stock Fund, will be limited to 50% of such contributions.

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TELCORDIA TECHNOLOGIES
401(k) SAVINGS PLAN
(Formerly Telcordia Technologies Savings Plan for Salaried Employees)

SCHEDULE H LINE 4(i) OF ASSETS HELD AT END OF YEAR
DECEMBER 31, 2001
(Dollars in Thousands)


DIVERSIFIED TELEPHONE PORTFOLIO
                             
        Number           Fair
Name of Issuer and Title of Issue   of Shares   Cost   Value

 
 
 
Common Shares:
                       
 
AT&T Corporation
    78,935     $ 561     $ 1,432  
 
AT&T Wireless
    25,989             373  
 
Avaya
    4,433       89       54  
 
BellSouth Corporation
    57,437       315       2,191  
 
Lucent Technologies Corporation
    52,713       195       332  
 
NCR Corporation
    2,550       24       94  
 
Qwest Communications
    18,927       530       267  
 
SBC Communications, Inc.
    95,988       467       3,760  
 
Verizon Communications
    40,708       390       1,932  
 
Vodafone-Airtouch
    21,211       45       545  
 
           
     
 
   
Total common shares
            2,616       10,980  
Temporary cash investments
            87       87  
 
           
     
 
Total Diversified Telephone Portfolio Investments
          $ 2,703     $ 11,067  
 
           
     
 
SAIC FUNDS
                       
SAIC Exchangeable Stock Fund:*
                       
 
SAIC Class A Common Stock
    8,742,125     $ 101,512     $ 282,108  
 
Temporary Cash Investments
            1,717       1,717  
 
           
     
 
Total SAIC Exchangeable Stock Fund
          $ 103,229     $ 283,825  
 
           
     
 
SAIC Non-Exchangeable Stock Fund*
                       
SAIC Class A Common Stock
    968,612     $ 17,572     $ 31,257  
 
Temporary Cash Investments
            142       142  
 
           
     
 
Total SAIC Non-Exchangeable Stock Fund
          $ 17,714     $ 31,399  
 
           
     
 
SAIC Stock Purchase Fund*
                       
Temporary Cash Investments
          $ 1,710     $ 1,710  
 
           
     
 

* Represents party-in-interest (Continued)

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Table of Contents

TELCORDIA TECHNOLOGIES
401(k) SAVINGS PLAN
(Formerly Telcordia Technologies Savings Plan for Salaried Employees)

SCHEDULE H LINE 4(i) OF ASSETS HELD AT END OF YEAR
DECEMBER 31, 2001
(Dollars in Thousands)


INTEREST INCOME FUND
                             
        Principal   Contract   Fair
Name of Issuer and Title of Issue   Amount   Value   Value

 
 
 
Contracts with Insurance Companies and Banks:
                       
 
AIG - 5.56%, due 10/15/02
  $ 20,230     $ 20,230     $ 20,230  
 
AIG FP - 5.19%, due 9/30/04
    4,079       4,079       4,079  
 
AIG FP - 4.74%, due 3/31/06
    6,036       6,036       6,036  
 
Allstate - 7.76%, due 1/15/05
    5,371       5,371       5,371  
 
Allstate - 5.55%, due 1/15/03
    12,304       12,304       12,304  
 
Bayerische - 6.87%, due 7/15/04
    8,390       8,390       8,390  
 
Bayerische - 5.81%, due 8/15/05
    8,414       8,414       8,414  
 
CDC Capital, Inc.:
                       
   
4.98%, due 9/29/06
    9,103       9,103       9,103  
   
5.67%, due 12/29/06
    5,009       5,009       5,009  
   
5.07%, due 11/15/03
    12,075       12,075       12,075  
 
GE Life and Annuity:
                       
   
6.06%, due 9/15/03
    11,760       11,760       11,760  
   
6.56%, due 2/15/03
    12,687       12,687       12,687  
 
John Hancock:
                       
   
6.17%, due 4/17/06
    10,373       10,373       10,373  
   
6.35%, due 8/15/02
    7,789       7,789       7,789  
 
JP Morgan - 6.47% no maturity date
    14,828       14,828       14,828  
 
Massachusetts Mutual - 7.23%, due 12/31/04
    10,002       10,002       10,002  
 
Metropolitan Life:
                       
   
5.68%, due 4/15/05
    7,793       7,793       7,793  
   
7.02%, due 12/15/03
    10,028       10,028       10,028  
   
5.57%, due 8/15/06
    10,184       10,184       10,184  
 
New York Life Insurance Company:
                       
   
5.79%, due 8/15/05
    7,323       7,323       7,323  
   
4.80%, due 10/16/06
    10,062       10,062       10,062  
   
7.36%, due 6/15/04
    10,587       10,587       10,587  
 
Principal Mutual Life Insurance:
                       
   
5.93%, due 7/15/03
    11,808       11,808       11,808  
   
7.35%, due 10/15/05
    10,846       10,846       10,846  
 
Rabobank Nederland:
                       
   
6.04% no maturity date
    23,401       23,401       23,401  
   
4.44% no maturity date
    10,090       10,090       10,090  
   
5.57% no maturity date
    14,409       14,409       14,409  
 
Security Life of Denver - 5.83%, due 7/17/06
    6,136       6,136       6,136  
 
State Street Bank -
                       
   
6.29%, due 12/30/05
    10,645       10,645       10,645  
   
5.76%, due 3/31/06
    15,650       15,650       15,650  
   
5.43%, due 6/30/06
    9,198       9,198       9,198  
 
Sun Life Insurance Company of America - 6.14%, due 1/2/04
    1,835       1,835       1,835  
 
Union Bank of Switzerland:
                       
   
7.31% no maturity date
    13,046       13,046       13,046  
   
7.32% no maturity date
    12,991       12,991       12,991  
   
5.96% no maturity date
    30,934       30,934       30,934  
 
   
     
     
 
Total Contracts with Insurance Companies and Banks
    385,416       385,416       385,416  
Temporary Cash Investments
    8,214       8,214       8,214  
 
   
     
     
 
Total Interest Income Fund Investments
  $ 393,630     $ 393,630     $ 393,630  
 
   
     
     
 

(Continued)

-12-


Table of Contents

TELCORDIA TECHNOLOGIES
401(k) SAVINGS PLAN
(Formerly Telcordia Technologies Savings Plan for Salaried Employees)

SCHEDULE H LINE 4(i) OF ASSETS HELD AT END OF YEAR
DECEMBER 31, 2001
(Dollars in Thousands)


VANGUARD MUTUAL FUNDS
                         
    Number           Fair
Name of Issuer and Title of Issue   of Shares   Cost   Value

 
 
 
Vanguard 500 Index Fund *
    2,915,816     $ 232,776     $ 308,756  
Vanguard Explorer Fund *
    715,808       45,090       43,170  
Vanguard Extend Mkt Index Fund *
    513,595       16,091       11,859  
Vanguard International Growth Fund *
    2,876,872       49,249       43,182  
Vanguard PRIMECAP Fund *
    3,211,596       168,895       165,461  
Vanguard Total Bond Market Index *
    4,336,733       43,680       43,975  
Vanguard U.S. Growth *
    746,979       24,000       14,081  
Vanguard Wellington Fund *
    2,906,492       80,269       79,231  
Vanguard Windsor II Fund *
    3,701,973       94,948       94,733  
 
           
     
 
 
          $ 754,998     $ 804,448  
 
           
     
 
LOAN FUND
                       
Participant Loans (Interest rates range from 5.75 to 10.5%
with maturities between 12 and 56 months)
          $ 11,167     $ 11,167  
 
           
     
 

* Represents party-in-interest (Concluded)

-13-