-----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, RUaD1yOMyUcPjg0CN366KnLP4jmHhRZX96CuKA/qLLr3GdE5RzutLrxo3V+AQjIY 0BAIpGBIFh7T3sUj2kpthA== 0000950152-06-005507.txt : 20060629 0000950152-06-005507.hdr.sgml : 20060629 20060629145411 ACCESSION NUMBER: 0000950152-06-005507 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060629 DATE AS OF CHANGE: 20060629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REYNOLDS & REYNOLDS CO CENTRAL INDEX KEY: 0000083588 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 310421120 STATE OF INCORPORATION: OH FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10147 FILM NUMBER: 06933313 BUSINESS ADDRESS: STREET 1: ONE REYNOLDS WAY CITY: DAYTON STATE: OH ZIP: 45430 BUSINESS PHONE: 9374852000 MAIL ADDRESS: STREET 1: P.O. BOX 2608 CITY: DAYTON STATE: OH ZIP: 45401 11-K 1 l21095ae11vk.htm REYNOLDS & REYNOLDS 11-K Reynolds & Reynolds 11-K
 

 
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
     
þ   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2005
     
o   TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 1-10147
THE REYNOLDS AND REYNOLDS COMPANY 401(K) SAVINGS PLAN
(Full Title of the Plan)
THE REYNOLDS AND REYNOLDS COMPANY
ONE REYNOLDS WAY, DAYTON, OHIO 45430
(Name of Issuer and Address of Principal Executive Offices)
 
 


 

The Reynolds and
Reynolds Company 401(k)
Savings Plan
Financial Statements as of December 31,
2005 and 2004, and for the Year Ended
December 31, 2005, Supplemental
Schedule as of December 31, 2005,
and Independent Auditors’ Report

 


 

THE REYNOLDS AND REYNOLDS COMPANY
401(K) SAVINGS PLAN
TABLE OF CONTENTS
 
         
    Page  
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    1  
         
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2005 AND 2004, AND FOR THE YEAR ENDED DECEMBER 31, 2005:
       
         
Statements of Net Assets Available for Benefits
    2  
         
Statement of Changes in Net Assets Available for Benefits
    3  
         
Notes to Financial Statements
    4-7  
         
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2005
    8  
         
Form 5500Schedule H, Part IV, Line 4iSchedule of Assets (Held at End of Year)
    9  
NOTE:   All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

 


 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Reynolds and Reynolds Company
401(k) Savings Plan:
We have audited the accompanying statements of net assets available for benefits of The Reynolds and Reynolds Company 401(k) Savings Plan (the “Plan”) as of December 31, 2005 and 2004, and the related statement of changes in net assets available for benefits for the year ended December 31, 2005. 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 standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, 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, 2005 and 2004, and the changes in net assets available for benefits for the year ended December 31, 2005, 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 of assets (held at end of year) as of December 31, 2005, 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 our audit of the basic 2005 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.
DELOITTE & TOUCHE LLP
June 16, 2006

 


 

THE REYNOLDS AND REYNOLDS COMPANY
401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2005 AND 2004
 
                 
    2005     2004  
 
               
ASSETS—Investments
  $ 374,012,140     $ 342,282,970  
 
               
LIABILITIES—Accrued expenses
    70,561       89,677  
 
           
 
               
NET ASSETS AVAILABLE FOR BENEFITS
  $ 373,941,579     $ 342,193,293  
 
           
See notes to financial statements.

-2-


 

THE REYNOLDS AND REYNOLDS COMPANY
401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2005
 
         
ADDITIONS:
       
Participant contributions
  $ 19,054,891  
Employer contributions
    5,950,663  
Participant rollover contributions
    998,013  
Interest and dividends
    1,373,589  
Net appreciation in fair value of investments
    26,608,058  
 
     
 
       
Total additions
    53,985,214  
 
     
 
       
DEDUCTIONS:
       
Distributions to participants
    21,671,362  
Administrative expenses
    565,566  
 
     
 
       
Total deductions
    22,236,928  
 
     
 
       
NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS
    31,748,286  
 
       
NET ASSETS AVAILABLE FOR BENEFITS:
       
Beginning of year
    342,193,293  
 
     
 
       
End of year
  $ 373,941,579  
 
     
See notes to financial statements.

-3-


 

THE REYNOLDS AND REYNOLDS COMPANY
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004, AND THE YEAR ENDED DECEMBER 31, 2005
 
1.   DESCRIPTION OF THE PLAN
 
    The following description of The Reynolds and Reynolds Company 401(k) Savings Plan (the “Plan”) is provided for general information purposes only. Participants should refer to the Plan document for more complete information.
 
    GeneralThe Plan is a defined contribution savings plan and is subject to provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). All salaried and non-union hourly employees of The Reynolds and Reynolds Company (the “Company”) are eligible to participate upon the first day of employment. The Plan is administered by a Committee (the “Committee”) appointed by the Company.
 
    ContributionsEligible employees may elect to become participants by contributing from 1% to 50% of their earnings through tax-deferred payroll deductions. Effective as of October 1, 2005, if a participant who is hired on or after October 1, 2005 fails to file an initial Income Deferral Election, 3% of the participant’s compensation shall automatically be deferred, which amount shall be deemed to be the participant’s Income Deferral Election. The Company contributes an amount equal to 50% of the first 6% of a participant’s contribution to the Plan. In prior years, the Company also made an additional employer discretionary contribution (“ERD”) to eligible employees, which was a flat dollar amount that was the same for each participant. These contributions were made at the Company’s discretion and were based on the Company’s return on equity. The Company discontinued providing the ERD in 2003.
 
    Participant AccountsParticipants may invest their account balances in any of the ten mutual funds, common collective trusts, investment contract portfolio, or the participant directed brokerage account offered by the Plan. Each participant’s account is credited with the participant’s contribution and their proportionate share of the Company’s contributions and the Plan’s earnings. Allocations are based on daily valuation accounting, as provided in the Plan document. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
 
    Vesting and DistributionsParticipants’ accounts, except for balances related to ERD, are fully vested at all times. Vesting in the ERD amounts is 0% until three years from the participant’s hire date, at which time they become 100% vested. A participant who has reached the age of 59-1/2 may elect to withdraw all or a portion of their account.
 
    Participants may also apply for hardship withdrawals from their vested tax-deferred contribution accounts, subject to approval by the Plan’s Committee.
 
    Distributions and withdrawals under this Plan are subject to federal income tax withholding as prescribed by Section 3405 of the Internal Revenue Code and the regulation thereunder or any other withholding required by law.

-4-


 

    Participant LoansParticipants may borrow from their account on the terms specified by the Committee. The maximum loan amount is defined in the Plan document and, in any case, cannot exceed the amount credited to the participant’s account. A loan to a participant is funded by a reduction of the participant’s 401(k) account prorated based on the current balance of each respective fund.
 
    The interest rate on loans is determined at origination using the prime rate of interest plus 1%. Interest on the loan is paid back directly into the participant’s account. Loan repayments are made through payroll deductions but can be repaid in full at any time.
 
    Forfeiture AccountFunds that are forfeited by participants are transferred to a forfeiture holding account and invested in the JP Morgan Stable Value Fund. The forfeiture holding account is used to offset employer contributions or Plan expenses. The account is also used to rebuild a rehired participant’s account if the ERISA break-in-service rules determine the participant is entitled to any previously forfeited funds.
 
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
    Basis of AccountingThe accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
 
    Use of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Plan management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
 
    Investment Valuation and Income RecognitionThe investment contracts are carried at contract value (See Note 3).
 
    The remainder of the Plan’s investments consist of mutual fund shares, a common collective trust, a participant directed brokerage account, and loans to participants. These investments (excluding loans to participants) are stated at fair value, determined by quoted prices in an active market, of the underlying assets of the funds. Loans to participants are recorded at the outstanding principal balance of the loans. Security transactions are recorded on trade dates. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Gains and losses are computed using the specific-identification method.
 
    The Plan utilizes various investment instruments. Investment securities, in general, 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 value of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits.
 
    Payment of BenefitsBenefits are recorded when paid.
 
    Administrative ExpensesAll administrative expenses are paid by the Plan, in accordance with DOL guidelines.

-5-


 

3.   INVESTMENT CONTRACTS
 
    JP Morgan Stable Value FundThe Plan has entered into various contracts issued by a variety of insurance companies and financial institutions. JP Morgan was the investment manager for the JP Morgan Stable Value Fund as of December 31, 2005. Such investment contracts are fully benefit responsive and are carried at contract value, which approximates fair value. Contract value represents contributions made by participants and the Company, plus interest at the contract rate, less withdrawals or transfers by participants. The investment contracts are classified as either guaranteed investment contracts (“GIC”) or synthetic investment contracts (“SIC”). A SIC differs from a GIC in that the Plan owns the assets underlying the investments of a SIC. The bank or insurance company issues a contract, referred to as a “wrapper”, that guarantees the value of the underlying investment for the duration of the SIC. The wrapper contracts are valued as the difference between the contract value of the SIC and the fair value of the underlying asset. The JP Morgan Stable Value Fund is valued based on the contract value of the contracts held in aggregate by the fund as of December 31, 2005 and 2004, which is as follows:
                 
    2005     2004  
 
               
Contract value of assets
  $ 90,669,018     $ 85,734,901  
 
           
 
               
Fair value of assets
  $ 90,104,029     $ 87,109,891  
 
           
 
               
Average interest yield
    5.33 %     5.14 %
4.   INCOME TAX STATUS
 
    The Internal Revenue Service has determined and informed the Company by a letter dated July 14, 2003, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (“IRC”). Although the Plan has been amended since receiving the determination letter, the Plan administrator and the Plan’s legal counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
 
5.   RELATED-PARTY TRANSACTIONS
 
    Certain plan investments are shares of common stock of The Reynolds and Reynolds Company, the Plan sponsor, and shares of mutual funds managed by American Century (who is partially owned by JP Morgan, the recordkeeper of the Plan). These transactions qualify as party-in-interest transactions.

-6-


 

6.   INVESTMENTS
 
    The Plan’s investments that represented 5% or more of the Plan’s net assets available for benefits at December 31, 2005 and 2004, are as follows:
                                         
            December 31, 2005   December 31, 2004
            Number           Number    
            of   Fair/Contract   of   Fair/Contract
            Shares   Value   Shares   Value
                                         
  *    
JP Morgan Stable Value Fund, contract value
    718,549     $ 90,669,018       715,439     $ 85,734,901  
       
Barclays Global Investors Equity Index Fund
    849,481       32,033,925       828,919       29,824,519  
  *    
American Century Growth Fund
    1,451,923       30,112,872       1,117,166       22,175,753  
       
PIMCO Capital Appreciation Fund
    1,725,359       33,402,955       1,820,414       32,330,550  
       
Neuberger & Berman Genesis Trust
    615,455       29,880,336       494,349       21,093,886  
       
STI Small-Cap
    1,801,843       37,784,655                  
  *    
American Century Heritage Fund
                    1,967,792       23,554,476  
  *    
American Century Strategic Alloc: Moderate Fund
                    2,701,552       18,289,507  
    Those investments marked with an asterisk (*) represent permitted party-in-interest accounts.
 
    During 2005, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $26,608,058 as follows:
         
Mutual Funds
  $ 18,391,610  
Participant Directed Brokerage Accounts
    2,694,214  
JP Morgan Stable Value Fund
    3,360  
Common Collective Trusts
    5,518,874  
 
     
 
  $ 26,608,058  
 
     
7.   PLAN TERMINATION
 
    Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA. In the event of Plan termination, all benefits will be distributed to participants and beneficiaries in proportion to their respective account balances.
******

-7-


 

SUPPLEMENTAL SCHEDULE

-8-


 

THE REYNOLDS AND REYNOLDS COMPANY 401(k) SAVINGS PLAN
FORM 5500—SCHEDULE H, PART IV, LINE 4i—SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2005

 
                 
        (c) Description of Investment Including      
    (b) Identity of Issuer, Borrower,   Maturity Date, Rate of Interest, Collateral,   (e) Current  
(a)   Lessor or Similar Party   Par or Maturity Value   Value  
   
Mutual Funds:
           
*  
American Century
  Small Cap Value, 1,628,148 shares   $ 15,711,625  
*  
American Century
  Growth, 1,451,923 shares     30,112,872  
*  
American Century
  Strategic Alloc: Aggr, 436,471 shares     3,439,390  
*  
American Century
  Strategic Alloc: Cons, 342,166 shares     1,881,914  
*  
American Century
  Strategic Alloc: Mod, 2,690,020 shares     18,130,733  
   
Lord Abbett
  Affiliated—Class A, 815,855 shares     11,462,756  
   
STI
  Classic Small-Cap, 1,801,843 shares     37,784,655  
   
Neuberger & Berman
  Genesis Trust, 615,455 shares     29,880,336  
   
PIMCO
  Capital Appreciation, 1,725,359 shares     33,402,955  
   
PIMCO
  Total Return, 1,212,979 shares     12,736,284  
   
 
         
   
Total Mutual Funds
        194,543,520  
   
 
         
   
Common Collective Trusts:
           
*  
JP Morgan
  EAFE Plus, 1,029,520 shares     16,692,741  
   
Barclays
  EAFE Equity Index, 679,518 shares     8,065,880  
   
Barclays
  Extended Equity Market, 603,551 shares     10,495,758  
   
Barclays
  Equity Index, 849,481 shares     32,033,925  
   
Barclays
  Lehman Aggregate Bond Index, 372,478 shares     4,834,758  
   
 
         
   
Total Common Collective Trusts
        72,123,062  
   
 
         
   
JP Morgan Stable Value Fund:
           
   
U.S. Government and Agency Securities:
           
   
U.S. Government
  Treasury Note (4%, due 8/31/2007, 4%, due 9/30/2007)     64,564  
   
Guaranteed Investment Contracts:
           
   
GE Life Annuity
  Contract GS3546; various due dates     2,647,418  
   
GE Life Annuity
  Contract GS3548; various due dates     1,259,056  
   
Ohio National Life Insurance Company
  Contract GP5345; various due dates     1,783,645  
   
Travelers
  Contract 18045; various due dates     1,370,556  
   
Synthetic Investment Contracts:
           
*  
JP Morgan
  Liquidity Fund, 2,162,491 shares     2,162,491  
*  
JP Morgan
  Intermediate Bond Fund 6,614,642 shares     80,816,299  
*  
JP Morgan
  Synthetic Contract Wrapper     564,989  
   
 
         
   
Total JP Morgan Stable Value Fund
        90,669,018  
   
 
         
   
Brokerage Accounts:
           
*  
JP Morgan Investment Trust
  Various investments     5,504,431  
*  
The Reynolds and Reynolds Company
  Common stock, 4,284 shares     120,252  
   
 
         
   
Total Brokerage Accounts
        5,624,683  
   
 
         
   
Participant Loans
  Interest rates ranging from 5% to 10%, maturity dates ranging from 1/9/2006 to 4/23/2015     11,051,857  
   
 
         
   
TOTAL
      $ 374,012,140  
   
 
         
 
*   Party-in-interest.
Column (d) has been omitted because it is not applicable.

-9-


 

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit Plan) have caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
     
 
  THE REYNOLDS AND REYNOLDS
 
 
  COMPANY 401(K) SAVINGS PLAN
 
   
June 28, 2006
  /s/ Salvatore Incanno
 
   

EX-23 2 l21095aexv23.htm EX-23 CONSENT OF DELOITTE & TOUCHE EX-23
 

Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-122933 of The Reynolds and Reynolds Company on Form S-8 of our report dated June 16, 2006, appearing in this Annual Report on Form 11-K of The Reynolds and Reynolds Company 401(k) Savings Plan for the year ended December 31, 2005.
DELOITTE & TOUCHE LLP
Dayton, Ohio
June 27, 2006

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