11-K 1 0001.txt FORM 11-K Financial Statements and Supplemental Schedules AmeriSource Corporation Employee Investment Plan December 31, 1999 and 1998 and for the year ended December 31, 1999 with Report of Independent Auditors AmeriSource Corporation Employee Investment Plan Financial Statements and Supplemental Schedules December 31, 1999 and 1998 and for the year ended December 31, 1999 Contents
Report of Independent Auditors............................................. 1 Audited Financial Statements Statements of Assets Available for Benefits................................ 2 Statement of Changes in Assets Available for Benefits...................... 3 Notes to Financial Statements.............................................. 4 Supplemental Schedules Schedule of Nonexempt Transactions......................................... 8 Schedule of Assets Held for Investment Purposes at End of Year............. 9 Signatures................................................................. 10 Exhibit Index.............................................................. 11 Exhibits Consent of Independent Auditors............................................ 12
Report of Independent Auditors Trustees of the AmeriSource Corporation Employee Investment Plan We have audited the accompanying statements of assets available for benefits of the AmeriSource Corporation Employee Investment Plan as of December 31, 1999 and 1998, and the related statement of changes in assets available for benefits for the year ended December 31, 1999. 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. 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, the financial statements referred to above present fairly, in all material respects, the assets available for benefits of the Plan at December 31, 1999 and 1998, and the changes in its assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes at end of year as of December 31, 1999 and of nonexempt transactions for the year ended December 31, 1999 are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Philadelphia, Pennsylvania May 17, 2000 AmeriSource Corporation Employee Investment Plan Statements of Assets Available for Benefits December 31 1999 1998 ------------------------- Assets Investments $53,068,412 $47,331,738 Receivables: Participants' contribution 265,859 280,385 Employer's contribution 1,225,303 1,441,534 ------------------------- Total receivables 1,491,162 1,721,919 ------------------------- Assets available for benefits $54,559,574 $49,053,657 ========================= See accompanying notes. AmeriSource Corporation Employee Investment Plan Statement of Changes in Assets Available for Benefits Year ended December 31, 1999 Additions: Investment income: Net appreciation in fair value of investments $ 2,867,979 Interest and dividends 4,105,439 ----------- 6,973,418 Contributions: Participants 5,850,880 Employer 1,225,303 ----------- 7,076,183 ----------- Total additions 14,049,601 Deductions: Benefits paid to participants 8,543,684 ----------- Net increase 5,505,917 Assets available for benefits: Beginning of year 49,053,657 ----------- End of year $54,559,574 =========== See accompanying notes. AmeriSource Corporation Employee Investment Plan Notes to Financial Statements December 31, 1999 1. Description of Plan The following description of the AmeriSource Corporation Employee Investment Plan (Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan. Participation is limited to salaried office or sales employees and certain hourly personnel of the Company who have at least six months of continuous employment or 1,000 hours of service during twelve consecutive months beginning with the first hour of service and are age twenty-one or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Contributions Each year, participants may contribute between 2% and 18% of pretax annual compensation, as defined by the Plan. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. The Company contributed an amount equal to 50% of the participants' contributions up to 6% to the Plan during 1999. Additional amounts may be contributed at the option of the Company's Board of Directors. Upon enrollment, a participant may direct employee and employer contributions in 5% increments to any of the Plan's fund options. Participants may change their investment options at any time. Participant Accounts Each participant's account is credited with the participant's contributions and allocations of (a) the Company's contributions and (b) Plan earnings. Allocations are based on participant earnings or account balances, as defined. Forfeited balances of terminated participants' nonvested accounts are used to reduce future company contributions. The balance of forfeited nonvested accounts was not material as of December 31, 1999. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. 4 AmeriSource Corporation Employee Investment Plan Notes to Financial Statements (continued) 1. Description of Plan (continued) Vesting Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. Participants vest 25% per year after two years of credited service in the Company's contribution until they are 100 percent vested after five years of credited service. Payment of Benefits On termination of service, if the participant's account is less than $5,000, a participant will receive a lump-sum amount equal to the vested value of his or her account. The participant will have the option to leave his or her account in the Plan if the balance is greater than $5,000. 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 of Plan termination, participants will become 100 percent vested in their accounts. Administrative Expenses Administrative expenses of the Plan are paid by the Company. 2. Summary of Accounting Policies Investment Valuation and Income Recognition The Plan's investments are stated at fair value. The shares of registered investment companies are valued at quoted market prices which represent the net asset values of shares held by the Plan at year end. The common stock is valued at the closing value of the last day of the Plan year. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex- dividend date. 5 AmeriSource Corporation Employee Investment Plan Notes to Financial Statements (continued) 2. Summary of Accounting Policies (continued) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Reclassification Certain amounts in the 1998 financial statements have been reclassified to conform to the 1999 presentation. 3. Investments During 1999, the Plan's investments (including purchased, sold, as well as held during the year) appreciated (depreciated) in fair value as determined by quoted market prices as follows: Net Realized and Unrealized Appreciation (Depreciation) in Fair Value of Investments ---------------- Common stock $(1,330,501) Shares of registered investment companies 4,198,480 ---------------- $ 2,867,979 ================ Investments that represent 5% or more of fair value of the Plan's net assets are as follows: December 31 1999 1998 ---------------------------- Fidelity Investments: Magellan Fund $24,158,443 $21,430,570 Equity-Income Fund 8,870,513 9,082,813 Intermediate Bond Fund 2,653,560* 2,726,839 OTC Portfolio 4,383,627 2,145,492* Retirement Money Market Portfolio 7,845,700 6,801,071 * Investment is not 5% or more of the Plan's fair value, but included for comparative purposes. 6 AmeriSource Corporation Employee Investment Plan Notes to Financial Statements (continued) 4. Income Tax Status The Plan has received a determination letter from the Internal Revenue Service dated February 16, 1995, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code ("the Code") and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Sponsor has indicated that it will take the necessary steps, if any, to maintain the Plan's qualified status. 5. Subsequent Event Effective January 1, 2000, the AmeriSource Corporation Board of Directors approved the merger of the C.D. Smith Drug Company 401(k) Plan into the Plan. The effect of the merger increased the Plan assets $2,539,766. Effective March 1, 2000, the AmeriSource Corporation Board of Directors approved the merger of the C.D. Smith Drug Company Employee Stock Ownership Plan into the Plan. The effect of the merger increased the Plan assets $22,377,200. 7 AmeriSource Corporation Employee Investment Plan EIN-23-2353106 Plan-010 Schedule G, Part III - Schedule of Nonexempt Transactions Year ended December 31, 1999 (c) Description of transactions (b) including maturity date, Relationship to plan, rate of interest, (a) employer or other collateral, par or maturity Identity of party involved party-in-interest value -------------------------------------------------------------------------------- AmeriSource Corporation Employer/Plan Sponsor Participant contributions of $280,384 were withheld from participants' pay during the month of December 1998 but were not remitted to the Plan's Trust within 15 business days following the month in which such amounts were withheld. This constituted a $280,384 loan from the Plan to the Plan Sponsor for the period January 25, 1999 until January 27, 1999, the date the withholdings were deposited to the Plan's Trust. The Plan Sponsor intends to make an additional contribution to the Plan during Plan year 2000 which will represent lost earnings as a result of the late deposit to the Plan's Trust. Columns (d) through (j) are not applicable. 8 AmeriSource Corporation Employee Investment Plan EIN-23-2353106 Plan-010 Schedule H, Line 4i Schedule of Assets Held for Investment Purposes at End of Year December 31, 1999
Description of Investment, Including Maturity Date, Rate of Interest, Par or Identity of Issue, Borrower, Maturity Value Current Lessor, or Similar Party Value ------------------------------------------------------------------------------------------- *Fidelity Investments Magellan Fund 176,817 shares $24,158,443 Equity-Income Fund 165,866 shares 8,870,513 Intermediate Bond Fund 271,881 shares 2,653,560 OTC Portfolio 64,494 shares 4,383,627 Asset Manager Fund 91,861 shares 1,688,397 Retirement Money Market Portfolio 7,845,700 shares 7,845,700 Overseas Fund 2,953 shares 141,772 Spartan U.S. Equity Index Fund 15,100 shares 786,558 Freedom Income Fund 465 shares 5,265 Freedom 2000 Fund 2,229 shares 28,950 Freedom 2010 Fund 11,008 shares 163,685 Freedom 2020 Fund 5,003 shares 81,943 Freedom 2030 Fund 6,414 shares 108,267 *AmeriSource Corporation Stock 115,681 shares Fund of common stock 1,756,964 IKON Corporation Stock 57,943 shares of Fund common stock 394,768 ----------- $53,068,412 ===========
* Indicates party-in-interest to the Plan. "Cost" is not applicable as all investments are participant directed. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. AMERISOURCE CORPORATION EMPLOYEE INVESTMENT PLAN (Name of Plan) By:/s/ John A. Aberant ------------------- John A. Aberant Benefits Committee Dated: June 27, 2000 Exhibit Index Exhibit Page ------- ---- 23 Consent of Ernst & Young LLP.................. 1