-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QoT3+ihPpQA3HMBP7oD85MNEa83z4NRrQk1rBXL0cWSuKxeQ/+QfaoHZPf++KNQx kBfIqvuM8WxhW4YKMGWTfA== /in/edgar/work/20000627/0000950144-00-008207/0000950144-00-008207.txt : 20000920 0000950144-00-008207.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950144-00-008207 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POPULAR INC CENTRAL INDEX KEY: 0000763901 STANDARD INDUSTRIAL CLASSIFICATION: [6022 ] IRS NUMBER: 660416582 STATE OF INCORPORATION: PR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 002-96018 FILM NUMBER: 661661 BUSINESS ADDRESS: STREET 1: 209 MUNOZ RIVERA AVE STREET 2: POPULAR CENTER BUILDING CITY: HATO REY STATE: PR ZIP: 00918 BUSINESS PHONE: 7877659800 MAIL ADDRESS: STREET 1: P.O. BOX 362708 CITY: SAN JUAN STATE: PR ZIP: 00936-2708 FORMER COMPANY: FORMER CONFORMED NAME: BANPONCE CORP DATE OF NAME CHANGE: 19920703 11-K 1 e11-k.txt POPULAR LEASING & RENTAL, INC. RET. & SAV. PLAN 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 11-K (X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 or [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________to __________ Commission file number 0-13818 POPULAR LEASING & RENTAL, INC. RETIREMENT & SAVINGS PLAN (Full title of the Plan and address of the Plan, if different from that of the issuer named below) POPULAR, INC. 209 MUNOZ RIVERA AVENUE HATO REY, PUERTO RICO 00918 (Name of issuer of the securities held pursuant to the plan and the address of principal executive office) 2 POPULAR LEASING & RENTAL, INC. RETIREMENT AND SAVINGS PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE DECEMBER 31, 1999 AND 1998
PAGE Financial Statements: Report of Independent Accountants ...................... 1 Statements of Net Assets Available for Benefits as of December 31, 1999 and 1998 ............. 2 Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 1999 ..... 3 Notes to Financial Statements .......................... 4-9 Supplemental Schedule:* Exhibit I - Schedule of Assets Held for Investment Purposes as of December 31, 1999............ 10 Signature................................................... 11 Consent of Independent Accountants.......................... 12
* Other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable. 3 [PRICEWATERHOUSECOOPERS LOGO] PRICEWATERHOUSECOOPERS LLP PO Box 363566 San Juan PR 00936-3566 Telephone (787) 754 9090 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of Popular Leasing & Rental, Inc. Retirement and 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 Popular Leasing & Rental, Inc. Retirement and Savings Plan (the "Plan") at December 31, 1999 and 1998, and the changes in net assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. 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, which 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 the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of Assets Held for Investment Purposes as of December 31, 1999 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. This supplemental schedule has been subjected to the auditing procedures applied in the audit 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 June 5, 2000 CERTIFIED PUBLIC ACCOUNTANTS (OF PUERTO RICO) License No. 216 Expires Dec. 1, 2001 Stamp 1644756 of the P.R. Society of Certified Public Accountants has been affixed to the file copy of this report 1 4 POPULAR LEASING & RENTAL, INC. RETIREMENT AND SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1999 AND 1998
1999 1998 ASSETS Investments, at fair value $ 4,113,608 $ 3,616,855 ------------ ------------ Receivables: Contribution receivable -- 36,593 Profit sharing receivable 209,835 198,306 Dividend and interest receivable 133,747 95,425 ------------ ------------ 343,582 330,324 ------------ ------------ Cash and cash equivalents 20,471 19,496 ------------ ------------ Total assets 4,477,661 3,966,675 ------------ ------------ LIABILITIES Investments purchased payable 14,123 -- ------------ ------------ Total liabilities 14,123 -- ------------ ------------ Net assets available for benefits $ 4,463,538 $ 3,966,675 ------------ ------------
The accompanying notes are an integral part of these financial statements. 2 5 POPULAR LEASING & RENTAL, INC. RETIREMENT AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 1999
Additions (deductions) to net assets: Investment income Net depreciation in fair value of investments $ (465,373) Interest 10,745 Dividends 193,540 ------------ Total investment loss (261,088) ------------ Contributions: Employer 439,910 Participants 559,702 Rollover from other qualified plans 2,553 ------------ Total contributions 1,002,165 ------------ Total additions 741,077 ------------ Deductions from net assets - Benefits paid to participants 244,214 ------------ Net increase 496,863 Assets available for benefits: Beginning of year 3,966,675 ------------ End of year $ 4,463,538 ------------
The accompanying notes are an integral part of these financial statements. 3 6 POPULAR LEASING & RENTAL, INC. RETIREMENT AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 1. DESCRIPTION OF PLAN The following description of Popular Leasing & Rental, Inc. Retirement and Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of its provisions. General The Plan is a defined contribution plan, which became effective on January 1, 1995, covering substantially all employees of Popular Leasing and Rental, Inc. (the "Company") (a wholly-owned subsidiary of Popular, Inc.) who have one year of service (work at least 365 days in aggregate), are at least eighteen years old, and are residents of the Commonwealth of Puerto Rico. The Plan was created for the purpose of providing retirement benefits to employees and to encourage and assist them in adopting a regular savings plan that qualifies under the applicable laws of the Commonwealth of Puerto Rico. The Plan is subject to the provisions of Employee Retirement Security Act of 1974 ("ERISA"). Prior to 1995 Popular Leasing and Velco (affiliated company) employees were part of the Banco Popular de Puerto Rico (direct parent company of Popular Leasing and Rental, Inc.) Retirement Plan. Upon the restructuring and consolidation of Popular Leasing and Velco, the Plan was created. All benefits belonging to the Company's employees on the Banco Popular de Puerto Rico Retirement Plan were frozen. Contributions Plan participants may authorize the Company to make payroll deductions under the Plan ranging from 1% to 10% of their monthly compensation before overtime. At no time may participant contributions exceed the lesser of 10% of the participant's compensation, as defined, or $8,000. The Company matches participant's pre-tax contributions at the rate of 50 cents for each dollar saved on the first 8% of participant's compensation. In addition, the Company may make other contributions out of its net profits in such amounts as the Company may determine. Participant Accounts Each participant account is credited with its contribution and allocation of (a) the Company's matching and profit sharing contribution, (b) plan earnings, and (c) forfeitures of terminated participants' nonvested accounts with at least five periods of consecutive breaks in service. For purposes of the above, a break in service with respect to an employee, means an eligibility computation period (one year) during which such employee does not complete more than 183 days of service. During the break in service period, if the terminated participant is re-employed by the Company, the current value of such forfeited amounts shall be restored to the participant's account. As of December 31, 1999, no forfeitures have occurred since the Plan is less than five years old. Allocations are based on the proportion that each participant's compensation during the Plan year bears to the total compensation during such Plan year or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. The net change in the value of the Plan is posted to the participants accounts on a monthly basis. 4 7 POPULAR LEASING & RENTAL, INC. RETIREMENT AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 VESTING Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Vesting in the Company's matching and discretionary contributions plus actual earnings thereon is based on years of service. The Company's contributions vest in accordance with the following schedule:
YEARS OF SERVICE VESTING % Less than 1 0 At least 1 20 At least 2 40 At least 3 60 At least 4 80 At least 5 100
Investment Options Upon enrollment in the Plan, a participant may elect to have its contributions invested in one or more of the following funds:
FUND DESCRIPTION Dreyfus Emerging Leaders Fund An open-end fund whose investment objective seeks capital growth. The Fund seeks to achieve its objective by investing at least 65% of the value of its total assets in equity securities of domestic and foreign issuers. Vanguard-Windsor II Fund An open-end, growth and income fund. The investment objective of the Fund is to provide long-term growth of capital and income. A secondary objective is to provide current income. The fund follows a flexible investment strategy, emphasizing income producing stocks which are believed to be under-valued by the market at the time of purchase. Vanguard Total Bond Market Index An open-end fund whose investment Fund objective seeks a high level of interest income. The Fund pursues its objective by investing in fixed-income securities with prescribed maturity and credit quality standards. Banker's Trust International Equity An open-end, no-load fund whose Fund investment objective seeks long-term capital appreciation. The Fund seeks to achieve its objective by investing in foreign equity securities or other securities with equity characteristics. The Fund changed its name to Deutsche International Equity Fund effective January 31, 2000. Fidelity Advisors Equity The Fund invests primarily in the Growth Institutional Fund common and preferred stock and securities convertible into common stock of companies with above average earnings or sales growth. Emphasis is placed on smaller less well-known companies. Popular, Inc. Common Stock Investment in Popular, Inc.'s common stock. Popular, Inc. is the Company's ultimate parent.
5 8 POPULAR LEASING & RENTAL, INC. Retirement and Savings Plan NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 Participants may change their investment options quarterly. Payment of Benefits Plan participants are permitted to make withdrawals from the Plan, subject to provisions in the Plan agreement and only from after-tax contributions. If a participant suffers financial hardship, as defined in the Plan agreement, the participant may request a withdrawal from his or her contributions. On termination of service due to disability, retirement or other reasons, a participant may elect to receive either a lump sum amount equal to the value of the vested interest in his or her account or installment payments. In the case of participant termination because of death, the entire vested amount is paid to the person or persons legally entitled thereto. Effective on June 1, 1997, an amendment was made to the Puerto Rico Internal Revenue Code Section 1165(b) which requires that a 20% tax be withheld from termination payments in excess of after-tax participant contributions. Plan Expenses and Administration The Company is responsible for the general administration of the Plan and for carrying out the provisions thereof. Contributions are held and managed by a trustee appointed by the Board of Directors of the Company, which invests cash received, interest and dividend income and makes distributions to participants. Banco Popular de Puerto Rico is the trustee and recordkeeper of the Plan. Banco Santander de Puerto Rico is the trustee for the investment in Popular, Inc. stock. All expenses of the Plan are borne by the Company. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The Plan's financial statements are prepared on the accrual basis of accounting. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION Plan investments are presented at fair value. Shares of registered investment companies are presented at quoted market prices which represent the net asset value of shares held by the Plan at the reporting date. Popular, Inc.'s common stock is valued at its quoted market price. The plan presents in the statement of changes in assets available for benefits the net appreciation 6 9 POPULAR LEASING & RENTAL, INC. RETIREMENT AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 (depreciation) in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation (depreciation) on them. Purchases and sales of securities are recorded on the trade date basis. Dividends and interest earned are recorded on the accrual basis and credited to each participant's account, as appropriate, based on proportional shares held at the date of record. Contributions Employee and Company matching contributions are recorded in the year in which the Company makes the payroll deductions from the participants earnings. Transfer of Assets to Other Plans Company employees or retirees may elect to transfer their savings to other plans qualified by the Puerto Rico Department of the Treasury or by the Internal Revenue Service (the "IRS"). Payment of Benefits Benefits are recorded when paid. Other Certain amounts reflected in the 1998 financial statements have been reclassified to conform to the 1999 presentation. 3. INVESTMENTS The following table presents the Plan's investments that represent five percent or more of the Plan's assets at December 31:
DECEMBER 31, 1999 1998 # OF # OF SHARES VALUE SHARES VALUE Mutual Funds: Vanguard Windsor II 20,131.969 $ 502,695 13,895.218 $ 414,772 Fidelity Advisor Equity Growth Institutional 11,528.416 $ 841,805 7,629.342 $ 442,807 Common stock - Popular, Inc. 90,407.159 $2,525,705 77,274.103 $2,627,319
During 1999, the Plan's investments (including gains and losses on investments bought and sold) appreciated (depreciated) in value as follows: Mutual funds $ 66,841 Common stock (532,214) ---------- $ (465,373) ----------
7 10 POPULAR LEASING & RENTAL, INC. RETIREMENT AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 4. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event the Plan terminates, the interest of each participant in the Plan shall be fully vested and such termination shall not reduce the interest of any participating employee or their beneficiaries accrued under the Plan up to the date of such termination. 5. TAX STATUS The Puerto Rico Department of Treasury has determined and informed the Company that the Master Plan and the related trust are designed in accordance with the applicable Puerto Rico income tax law and, therefore, the Plan is exempt from income taxes. The Plan and the income tax law have 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 income tax law. Therefore, no provision for income taxes has been included in the Plan's financial statements. During 1999, the Plan did not comply with the highly compensated and non-highly compensated employees discrimination test required by ERISA. Management determined that to correct this non-compliance event, the Company will have to make additional contributions to the Plan of approximately $3,600 for the non-highly compensated employees. Management believes, based on legal counsel opinion, that this non-compliance event will not have an effect in the Plan's tax status. 6. PROFIT SHARING CONTRIBUTION RECEIVABLE The Board of Directors of the Company approved a profit sharing contribution of $209,835 and $198,306 based on 1999 and 1998 Company profits, respectively. These amounts are presented in the accompanying financial statements as a receivable as of December 31, 1999 and 1998, respectively. These amounts were subsequently collected in February 2000 and February 1999, respectively. 7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
1999 1998 Net Assets available for benefits: Net Assets available for benefits per the financial statements $ 4,463,538 $ 3,966,675 Amounts allocated to withdrawing participants (2,472) -- ------------ ------------ Assets available for benefits per the Form 5500 $ 4,461,066 $ 3,966,675 ------------ ------------ Benefits paid to participants: Benefits paid to participants per the financial statements $ 244,214 $ 136,208 Amounts allocated to withdrawing participants at December 31, 1999 2,472 -- Amounts allocated to withdrawing participants at December 31, 1998 -- (4,952) ------------ ------------ Benefits paid to participants per the Form 5500 $ 246,686 $ 131,256 ------------ ------------
8 11 POPULAR LEASING & RENTAL, INC. RETIREMENT AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 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 not yet paid as of that date, whereas for financial statement purposes these amounts are not recognized until disbursed. 9 12 SUPPLEMENTAL SCHEDULE EXHIBIT 1 POPULAR LEASING & RENTAL, INC. RETIREMENT AND SAVINGS PLAN LINE 29 A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES FORM 5500 DECEMBER 31, 1999
IDENTITY OF ISSUE DESCRIPTION CURRENT OF INVESTMENT VALUE Vanguard Total Bond Market Index Fund Mutual Fund 13,858.374 Units $ 132,486 Vanguard Windsor II Fund Mutual Fund 20,131.969 Units 502,695 Dreyfus Emerging Leaders Fund Mutual Fund 2,221.259 Units 81,587 Fidelity Advisor Equity Growth Mutual Fund Institutional Fund 11,528.416 Units 841,805 Banker's Trust International Equity Fund Mutual Fund 917.411 Units 29,330 Popular, Inc. * Common stock 90,407.159 shares 2,525,705 ----------- $ 4,113,608 ===========
*Party in-interest 10 13 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the persons who administer the employee benefit plan have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. POPULAR LEASING & RENTAL, INC. RETIREMENT & SAVINGS PLAN (Name of Plan) By: /s/ Maria Isabel Burckhart ----------------------------------- Maria Isabel Burckhart Authorized Representative By: /s/ Jorge A. Junquera ----------------------------------- Jorge A. Junquera Authorized Representative in the United States Date: June 27, 2000 11 EX-23 2 ex23.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 PricewaterhouseCoopers (Logo) PricewaterhouseCoopers LLP P.O. Box 363566 San Juan, PR 00936-3566 Telephone (787) 754-9090 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-80169) of Popular, Inc. of our report dated June 5, 2000 relating to the financial statements of Popular Leasing & Rental, Inc. Retirement & Savings Plan, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP PRICEWATERHOUSECOOPERS LLP San Juan, Puerto Rico June 27, 2000 12 -----END PRIVACY-ENHANCED MESSAGE-----