-----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, K136f+0ebAZVnwnOjo0w8o2yflNYwDfZPHgLEyJqMdZ9hRl1jPP+IpCzvC5v/S0z TgZKIK+MLjwM3ydO46KloQ== 0001021408-98-000421.txt : 19980701 0001021408-98-000421.hdr.sgml : 19980701 ACCESSION NUMBER: 0001021408-98-000421 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980630 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYLVAN LEARNING SYSTEMS INC CENTRAL INDEX KEY: 0000912766 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 521492296 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-22844 FILM NUMBER: 98658334 BUSINESS ADDRESS: STREET 1: 1000 LANCASTER ST CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 4108438000 MAIL ADDRESS: STREET 1: 1000 LANCASTER ST CITY: BALTIMORE STATE: MD ZIP: 21202 10-K/A 1 AMENDMENT TO FORM 10-K FOR FYE 12/31/97 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A [X] Annual Report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 for the fiscal year ended DECEMBER 31, 1997 ----------------- or [_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ____________to ______________ . COMMISSION FILE NUMBER 0-22844 -------- SYLVAN LEARNING SYSTEMS, INC. - ----------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MARYLAND 52-1492296 -------- ---------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 1000 LANCASTER STREET, BALTIMORE, MARYLAND 21202 - ------------------------------------------ ----- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (410)843-8000 ------------ SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NAME OF EACH EXCHANGE ON TITLE OF EACH CLASS WHICH REGISTERED ------------------- ----------------- COMMON STOCK, PAR VALUE $.01 NASDAQ SECURITIES REGISTERED PURSUANT TO THE SECTION 12(g) OF THE ACT: NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]. No [_]. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [_] The aggregate market value of voting Common Stock held by non-affiliates of the registrant was approximately $1.2 billion as of March 17, 1998. The registrant had 29,670,910 shares of Common Stock outstanding as of March 17, 1998. 1 ITEM 14(a)(1) OF THE REGISTRANT'S FORM 10-K IS HEREBY AMENDED TO READ AS FOLLOWS: ITEM 14(a)(1) INDEX TO FINANCIAL STATEMENTS
PAGE REFERENCE FROM FORM 10-K -------------- THE COMPANY: Report of Independent Auditors 29 Consolidated Balance Sheets as of December 31, 1996 and December 31, 1997 30 Consolidated Statements of Operations for the years ended December 31, 1995, 1996 and 1997 32 Consolidated Statements of Stockholders' Equity for the years ended December 31, 1995, 1996 and 1997 33 Consolidated Statements of Cash Flows for the years ended December 31, 1995, 1996 and 1997 34 Notes to Consolidated Financial Statements 35 Audited Financial Statements of Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan for the years ended December 31, 1996 and 1997 56
2 Report of Independent Auditors Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Baltimore, Maryland We have audited the accompanying statements of net assets available for benefits of the Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan as of December 31, 1997 and 1996, 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 generally accepted auditing standards. 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 net assets available for benefits of the Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan as of December 31, 1997 and 1996, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1997 and reportable transactions for the year then ended, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Ernst & Young LLP Ernst & Young LLP June 15, 1998 3 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Statements of Net Assets Available for Benefits
DECEMBER 31 1997 1996 -------------------------------- ASSETS Investments, at fair value: Sylvan Learning Systems, Inc. common stock $ 2,367,764 $1,165,770 Mutual funds: Putnam Growth and Income Fund 3,026,732 714,295 Putnam Income Fund 502,654 212,707 Putnam Vista Fund 1,422,560 649,587 Putnam OTC and Emerging Growth Fund 1,451,242 781,279 Putnam International Growth Fund 1,093,749 562,922 Putnam Stable Value Fund 821,854 622,222 Participant loans 132,026 43,708 -------------------------------- Total investments 10,818,581 4,752,490 Receivables: Employer's contribution 315,022 247,953 Participants' contributions 233,990 168,185 -------------------------------- Total receivables 549,012 416,138 -------------------------------- Net assets available for benefits $11,367,593 $5,168,628 ================================
See accompanying notes. 4 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31 1997 1996 ------------------------------- Investment income: Interest $ 5,158 $ 15,088 Dividends 618,831 244,033 ------------------------------- 623,989 259,121 Transfers from merged plans 1,728,244 804,381 Employee salary deferral contributions 2,708,641 2,059,745 Employer contribution 315,022 247,953 Employee rollover contributions 414,717 262,750 ------------------------------- Total additions 5,790,613 3,633,950 Participant withdrawals (384,206) (237,393) Net realized and unrealized appreciation in fair value of investments 792,558 191,134 ------------------------------- Net increase 6,198,965 3,587,691 Net assets available for benefits at beginning of year 5,168,628 1,580,937 ------------------------------- Net assets available for benefits at end of year $11,367,593 $5,168,628 ===============================
See accompanying notes. 5 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Notes to Financial Statements 1. ASSET TRANSFER Effective July 1, 1996, Sylvan Learning Systems, Inc. (the "Company") appointed a new trustee, Putnam Investments, to hold all plan assets. The net assets of Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan (the "Plan") held by ATR, Inc., the previous trustee, totaling $3,641,426, were transferred to Putnam Investments as of July 1, 1996. Certain plan provisions were amended and restated in accordance with this transfer. 2. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Company's Plan are prepared using the accrual method 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 increases and decreases in net assets during the period. Actual results could differ from those estimates. INVESTMENT VALUATION Investments are stated at fair value. Sylvan Learning Systems, Inc. common stock is valued at the last reported sales price on the last business day of the plan year. Mutual funds are reported at current redemption value. Participant loans are carried at their unpaid principal balance which represents fair value. Realized gains or losses on the sale of investments are computed as the difference between the proceeds received and the average cost of investments held. The change in the difference between cost and fair value, including realized gains and losses, is included in the statements of changes in net assets available for benefits as net appreciation or depreciation in the fair value of investments. 6 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Notes to Financial Statements (continued) 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ADMINISTRATION EXPENSES All costs and expenses incurred in connection with the administration of the Plan are paid by the Company. 3. PLAN DESCRIPTION The following description of the Plan provides only general information. Participants should refer to the Summary Plan Description for a more complete ------------------------ description of the Plan's provisions. Copies of this summary are available from the Company's Human Resources Department. GENERAL The Plan is a defined contribution plan covering substantially all employees of the Company and, effective November 1, 1996, of Caliber Learning Network, Inc. (a corporate joint venture 10% owned by the Company) who are age twenty-one or older and have completed one year of service. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). PLAN MERGERS In connection with the Company's acquisitions of Inroads, Inc. and Carter Holdings, The ICST Savings & Investment Plan (the "ICST Plan") and the Carter Holdings 401(k) Plan (the "Carter Plan") were merged into the Plan effective November 1, 1997 and October 1, 1997, respectively. The ICST Plan's net assets of $1,628,807 and the Carter Plan's net assets of $99,437 were transferred into the Plan on November 5, 1997 and October 2, 1997, respectively. In connection with the Company's acquisition of Remedial Education Diagnostic Corporation, Inc., the Remedial Education Diagnostic Corporation Retirement Plan (the "READS Plan") was merged into the Plan effective October 1, 1995. The READS Plan's net assets of $804,381 were transferred into the Plan on February 1, 1996. 7 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Notes to Financial Statements (continued) 3. PLAN DESCRIPTION (CONTINUED) CONTRIBUTIONS Participants may contribute up to 15% of their pretax annual compensation, subject to certain annual limitations imposed by the Internal Revenue Code. In addition, employees may rollover distributions received from other plans. The Company makes a discretionary matching contribution equal to a percentage of the amount of the compensation that the participant elected to contribute up to a maximum of 6% of the participant's compensation. Additional discretionary contributions may be made at the option of the Company. The matching contribution percentage for 1997 and 1996 was 25% of the participant contribution. Each participant account is credited with the participant's contribution and an allocation of (a) the Company's contribution, (b) Plan earnings, and (c) forfeitures of terminated participants' nonvested accounts. Allocations are based on participant earnings or account balances, as defined. VESTING Participants are immediately vested in their contributions plus earnings thereon. Vesting in the Company's discretionary contributions, if any, plus earnings thereon is based on years of continuous service at a rate of 25 percent per year in years two through five. A participant is 100 percent vested after five years of credited service. INVESTMENTS Upon enrollment in the Plan, a participant may direct employee contributions in any of the available investment options. At December 31, 1997, the following investment options were available: Sylvan Learning Systems, Inc. common stock and the following Putnam Funds: Growth and Income Fund, Income Fund, Vista Fund, OTC and Emerging Growth Fund, International Growth Fund, and Stable Value Fund. Participants have the opportunity to change their investment options daily. PARTICIPANT LOANS Participants may borrow from their account balances a minimum of $1,000 up to a maximum of $50,000 or 50% of their vested account balance. Principal and interest are repaid ratably through payroll deductions over loan terms which generally do not exceed five years. Hardship distributions are also permitted from a participant's account. 8 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Notes to Financial Statements (continued) 3. PLAN DESCRIPTION (CONTINUED) PAYMENT OF BENEFITS On termination of service, a participant may receive a lump sum amount equal to the vested value of his or her account, or upon death, disability, or retirement, elect to receive periodic installments in accordance with plan provisions. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right 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. 4. INVESTMENTS During 1997 and 1996 the Plan's investments (including investments bought, sold and held during the year) appreciated in fair value by $792,558 and $191,134 respectively, as follows:
YEAR ENDED DECEMBER 31, 1997 ------------------------------------ NET APPRECIATION (DEPRECIATION) IN FAIR VALUE FAIR VALUE AT DURING YEAR END OF YEAR ------------------------------------ Fair value as determined by quoted market price: Sylvan Learning Systems, Inc. common stock $ 610,263 $ 2,367,764 Mutual funds: Putnam Growth and Income Fund (102,191) 3,026,732 Putnam Income Fund 4,735 502,654 Putnam Vista Fund 100,861 1,422,560 Putnam OTC and Emerging Growth Fund 127,075 1,451,242 Putnam International Growth Fund 51,815 1,093,749 Putnam Stable Value Fund - 821,854 Fair value as estimated by Plan Administrator: Participant loans - 132,026 ------------------------------------ $ 792,558 $10,818,581 ====================================
9 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Notes to Financial Statements (continued) 4. INVESTMENTS (CONTINUED)
YEAR ENDED DECEMBER 31, 1996 ------------------------------------ NET APPRECIATION (DEPRECIATION) IN FAIR VALUE FAIR VALUE OF DURING YEAR END OF YEAR ------------------------------------ Fair value as determined by quoted market price: Sylvan Learning Systems, Inc. common stock $103,896 $1,165,770 Mutual funds: Putnam Growth and Income Fund (25,752) 714,295 Putnam Income Fund (1,686) 212,707 Putnam Vista Fund (31,676) 649,587 Putnam OTC and Emerging Growth Fund (66,898) 781,279 Putnam International Growth Fund 11,655 562,922 Putnam Stable Value Fund - 622,222 Net appreciation of assets through date of transfer 201,595 Fair value as estimated by Plan Administrator: Participant loans - 43,708 ------------------------------------ $191,134 $4,752,490 ====================================
5. TAX STATUS The Internal Revenue Service has determined and informed the Plan by a letter dated June 2, 1997 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC), and are therefore not subject to tax under present income tax laws. The Plan management believes that the Plan continues to qualify and to operate as designed. 6. RECONCILIATION OF FORM 5500 The financial statements at December 31, 1997 and 1996 differ from Form 5500 filed with the IRS in that net realized gains (losses) and unrealized appreciation (depreciation) in fair value of investments have been summarized in the financial statements rather than shown as several categories of net investment gain (loss) per line 32b of the Form 5500. 10 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Notes to Financial Statements (continued) 7. TRANSACTIONS WITH PARTIES-IN-INTEREST For the years ended December 31, 1997 and 1996, the Plan earned investment income of $618,831 and $244,033, respectively, on its investments administered by trustees. 8. YEAR 2000 ISSUE (UNAUDITED) The Plan Sponsor has developed a plan to be ready for the year 2000 and has begun determining whether third party service providers have reasonable plans in place to become year 2000 compliant. The Plan Sponsor currently expects the project to be substantially complete by early 1999. The Plan Sponsor does not expect this project to have a significant effect on Plan operations. 11 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Notes to Financial Statements (continued) 9. ALLOCATION OF NET ASSETS AVAILABLE FOR BENEFITS TO INVESTMENT PROGRAMS
DECEMBER 31, 1997 ------------------------------------------------------------------------------- SYLVAN LEARNING PUTNAM PUTNAM PUTNAM SYSTEMS, INC. FUND FOR PUTNAM PUTNAM OTC AND INTERNATIONAL COMMON GROWTH INCOME VISTA EMERGING GROWTH STOCK AND INCOME FUND FUND GROWTH FUND FUND ------------------------------------------------------------------------------- Assets Investments, at fair value $2,367,764 $3,026,732 $502,654 $1,422,560 $1,451,242 $1,093,749 Employer's contributions receivable 315,022 -- -- -- -- -- Participants' contributions receivable 38,248 47,361 10,993 41,492 50,629 32,066 ------------------------------------------------------------------------------- Net assets available for benefits $2,721,034 $3,074,093 $513,647 $1,464,052 $1,501,871 $1,125,815 =============================================================================== PUTNAM STABLE VALUE PARTICIPANT FUND LOANS TOTAL -------------------------------------------- Assets Investments, at fair value $821,854 $132,026 $10,818,581 Employer's contributions receivable - - 315,022 Participants' contributions receivable 13,201 - 233,990 -------------------------------------------- Net assets available for benefits $835,055 $132,026 $11,367,593 ============================================
DECEMBER 31, 1996 ------------------------------------------------------------------------------- SYLVAN LEARNING PUTNAM PUTNAM PUTNAM SYSTEMS, INC. FUND FOR PUTNAM PUTNAM OTC AND INTERNATIONAL COMMON GROWTH INCOME VISTA EMERGING GROWTH STOCK AND INCOME FUND FUND GROWTH FUND FUND ------------------------------------------------------------------------------- Assets Investments, at fair value $1,165,770 $714,295 $212,707 $649,587 $781,279 $562,922 Employer's contributions receivable 247,953 -- -- -- -- -- Participants' contributions receivable 28,609 31,497 7,000 29,085 37,546 22,551 ------------------------------------------------------------------------------- Net assets available for benefits $1,442,332 $745,792 $219,707 $678,672 $818,825 $585,473 =============================================================================== PUTNAM STABLE VALUE PARTICIPANT FUND LOANS TOTAL -------------------------------------------- Assets Investments, at fair value $622,222 $43,708 $4,752,490 Employer's contributions receivable -- -- 247,953 Participants' contributions receivable 11,897 -- 168,185 -------------------------------------------- Net assets available for benefits $634,119 $43,708 $5,168,628 ============================================
12 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Notes to Financial Statements (continued) 10. ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS TO INVESTMENT PROGRAMS
YEAR ENDED DECEMBER 31, 1997 ---------------------------------------------------------------------------------------------- SYLVAN PUTNAM LEARNING PUTNAM OTC AND PUTNAM PUTNAM SYSTEMS, INC. FUND FOR PUTNAM PUTNAM EMERGING INTERNATIONAL STABLE COMMON GROWTH INCOME VISTA GROWTH GROWTH VALUE STOCK AND INCOME FUND FUND FUND FUND FUND ---------------------------------------------------------------------------------------------- Investment income: Interest $ -- $ -- $ -- $ -- $ -- $ -- $ -- Dividends -- 391,330 22,024 106,770 36 63,648 35,023 ---------------------------------------------------------------------------------------------- -- 391,330 22,024 106,770 36 63,648 35,023 Transfers from merged plans -- 1,367,648 173,932 71,417 -- 13,646 101,601 Employee salary deferral contributions 442,756 548,246 127,252 480,311 586,072 371,193 152,811 Employer contribution 315,022 -- -- -- -- -- -- Employee rollover contributions 21,625 136,619 12,715 73,579 87,360 82,569 250 ---------------------------------------------------------------------------------------------- Total additions 779,403 2,443,843 335,923 732,077 673,468 531,056 289,685 Participant withdrawals (65,715) (57,490) (15,414) (62,561) (73,735) (47,419) (61,872) Net realized and unrealized appreciation/ (depreciation) in fair value of investments 610,263 (102,191) 4,735 100,861 127,075 51,815 -- Interfund transfers (45,249) 44,139 (31,304) 15,003 (43,762) 4,890 (26,877) ---------------------------------------------------------------------------------------------- Net increase 1,278,702 2,328,301 293,940 785,380 683,046 540,342 200,936 Net assets available for benefits at beginning of year 1,442,332 745,792 219,707 678,672 818,825 585,473 634,119 ---------------------------------------------------------------------------------------------- Net assets available for benefits at end of the year $2,721,034 $3,074,093 $513,647 $1,464,052 $1,501,871 $1,125,815 $835,055 ============================================================================================== -------------------------- PARTICIPANT LOANS TOTAL -------------------------- Investment income: Interest $ 5,158 $ 5,158 Dividends -- 618,831 -------------------------- 5,158 623,989 Transfers from merged plans -- 1,728,244 Employee salary deferral contributions -- 2,708,641 Employer contribution -- 315,022 Employee rollover contributions -- 414,717 -------------------------- Total additions 5,158 5,790,613 Participant withdrawals -- (384,206) Net realized and unrealized appreciation/ (depreciation) in fair value of investments -- 792,558 Interfund transfers 83,160 -- -------------------------- Net increase 88,318 6,198,965 Net assets available for benefits at beginning of year 43,708 5,168,628 -------------------------- Net assets available for benefits at end of the year $132,026 $11,367,593 ==========================
13 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan Notes to Financial Statements (continued) 10. ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS TO INVESTMENT PROGRAMS (CONTINUED)
YEAR ENDED DECEMBER 31, 1996 ---------------------------------------------------------------------------------- SYLVAN FIDELITY FIDELITY LEARNING MFS ADVISOR ADVISOR SYSTEMS, INC. EMERGING EURO PACIFIC EQUITY GROWTH AMERICAN COMMON GROWTH GROWTH PORTFOLIO OPPORTUNITIES BALANCED STOCK FUND FUND GROWTH FUND PORTFOLIO FUND ----------------------------------------------------------------------------------- Investment income: Interest $ 1,752 $ -- $ -- $ 2,030 $ -- $ 1,178 Dividends 1,624 -- 5,735 -- -- 6,687 ----------------------------------------------------------------------------------- 3,376 -- 5,735 2,030 -- 7,865 Employee salary deferral contributions 339,758 173,683 96,528 181,952 173,934 107,823 Employer contribution 247,953 -- -- -- -- -- Employee rollover contributions 22,770 9,458 584 3,654 810 853 ----------------------------------------------------------------------------------- Total additions 613,857 183,141 102,847 187,636 174,744 116,541 Withdrawals (16,197) (4,651) (3,426) (2,912) (1,952) (4,400) Net appreciation/(depreciation) in fair value of investments 196,730 41,767 9,207 29,525 22,648 5,614 READS Transfer 29,379 110,981 39,315 135,278 131,017 153,808 Interfund transfers 258,089 26,299 (1,347) (687) (361) (5,373) ----------------------------------------------------------------------------------- Net increase (decrease) 1,081,858 357,537 146,596 348,840 326,096 266,190 Net assets available for benefits at beginning of year 360,474 220,979 123,339 229,503 236,967 174,202 ----------------------------------------------------------------------------------- Net assets available for benefits 1,442,332 578,516 269,935 578,343 563,063 440,392 Transfer from ATR to Putnam -- (578,516) (269,935) (578,343) (563,063) (440,392) ----------------------------------------------------------------------------------- Net assets available for benefits at end of the year $1,442,332 $ -- $ -- $ -- $ -- $ -- =================================================================================== YEAR ENDED DECEMBER 31, 1996 ------------------------------------------------------------------------------------- SHORT ALEX BROWN FIRST COLONY TERM PUTNAM CASH GROUP DEPOSIT MONEY FUND FOR PUTNAM PUTNAM RESERVE ADMINISTRATION MARKET GROWTH INCOME VISTA FUND CONTRACT ACCOUNT AND INCOME FUND FUND ------------------------------------------------------------------------------------- Investment income: Interest $ 920 $ 6,307 $ -- $ -- $ -- $ -- Dividends 3,379 -- 73,849 48,658 2,580 37,384 ------------------------------------------------------------------------------------- 4,299 6,307 73,849 48,658 2,580 37,384 Employee salary deferral contributions 54,185 49,803 -- 183,871 42,763 181,257 Employer contribution -- -- -- -- -- -- Employee rollover contributions -- 584 -- 44,492 7,022 45,962 ------------------------------------------------------------------------------------- Total additions 58,484 56,694 73,849 277,021 52,365 264,603 Withdrawals (2,606) (1,666) -- (14,143) (5,795) (4,049) Net appreciation/(depreciation) in fair value of investments -- -- -- (25,752) (1,686) (31,676) READS Transfer 148,705 55,898 -- -- -- -- Interfund transfers (22,594) (2,123) (3,002,048) 508,666 174,823 449,794 ------------------------------------------------------------------------------------- Net increase (decrease) 181,989 108,803 (2,928,199) 745,792 219,707 678,672 Net assets available for benefits at beginning of year 61,470 145,688 -- -- -- -- ------------------------------------------------------------------------------------- Net assets available for benefits 243,459 254,491 (2,928,199) 745,792 219,707 678,672 Transfer from ATR to Putnam (243,459) (254,491) 2,928,199 -- -- -- ------------------------------------------------------------------------------------- Net assets available for benefits at end of the year $ -- $ -- $ -- $745,792 $219,707 $678,672 ===================================================================================== YEAR ENDED DECEMBER 31, 1996 ---------------------------------------------------------------------- PUTNAM PUTNAM PUTNAM OTC AND INTERNATIONAL STABLE EMERGING GROWTH VALUE PARTICIPANT GROWTH FUND FUND FUND LOANS TOTAL ---------------------------------------------------------------------- Investment income: Interest $ -- $ -- $ -- $ 2,901 $ 15,088 Dividends 51,277 7,632 5,228 -- 244,033 ---------------------------------------------------------------------- 51,277 7,632 5,228 2,901 259,121 Employee salary deferral contributions 249,660 138,123 86,405 -- 2,059,745 Employer contribution -- -- -- -- 247,953 Employee rollover contributions 67,682 53,948 4,931 -- 262,750 ---------------------------------------------------------------------- Total additions 368,619 199,703 96,564 2,901 2,829,569 Withdrawals (14,051) (8,662) (152,883) -- (237,393) Net appreciation/(depreciation) in fair value of investments (66,898) 11,655 -- -- 191,134 READS Transfer -- -- -- -- 804,381 Interfund transfers 531,155 382,777 690,438 12,492 -- ---------------------------------------------------------------------- Net increase (decrease) 818,825 585,473 634,119 15,393 3,587,691 Net assets available for benefits at beginning of year -- -- -- 28,315 1,580,937 ---------------------------------------------------------------------- Net assets available for benefits 818,825 585,473 634,119 43,708 5,168,628 Transfer from ATR to Putnam -- -- -- -- -- ---------------------------------------------------------------------- Net assets available for benefits at end of the year $ 818,825 $ 585,473 $ 634,119 $43,708 $5,168,628 ======================================================================
14 Supplemental Schedules Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan EIN: 52-1492296 Plan # 001 Line 27a--Schedule of Assets Held for Investment Purposes December 31, 1997
DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, PAR OR MATURITY CURRENT LESSOR OR SIMILAR PARTY VALUE COST VALUE - ----------------------------------------------------------------------------------------------------------------------- Sylvan Learning Systems, Inc.** 60,712 shares of Common Stock $1,494,214 $ 2,367,764 Mutual Funds:** Putnam Growth and Income Fund 154,899 shares 3,159,522 3,026,732 Putnam Income Fund 70,697 shares 500,109 502,654 Putnam Vista Fund 119,845 shares 1,359,513 1,422,560 Putnam OTC and Emerging Growth Fund 90,083 shares 1,377,817 1,451,242 Putnam International Growth Fund 65,612 shares 1,038,804 1,093,749 Putnam Stable Value Fund 821,854 shares 821,854 821,854 Participant loans $132,026 principal balance, various rates and maturities -- 132,026 --------------------------------------- Total investments $9,751,833 $10,818,581 =======================================
** Party-in-interest 15 Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan EIN: 52-1492296 Plan # 001 Line 27d--Schedule of Reportable Transactions Year ended December 31, 1997
(H) CURRENT VALUE OF ASSET ON (A) IDENTITY OF PARTY (C) PURCHASE (D) SELLING (G) COST OF TRANSACTION (I) NET GAIN INVOLVED (B) DESCRIPTION OF ASSETS PRICE PRICE ASSET DATE OR (LOSS) - --------------------------------------------------------------------------------------------------------------------------------- Category (i)--series of transactions in excess of 5% of plan assets - ------------------------------------------------------------------- Putnam** Growth & Income $1,221,276 $ -- $1,221,276 $1,221,276 $ -- Putnam** Growth & Income -- 171,760 166,500 171,760 5,260 Putnam** Income 199,197 -- 199,197 199,197 -- Putnam** Income -- 87,101 86,572 87,101 529 Putnam** Vista 715,380 -- 715,380 715,380 -- Putnam** Vista -- 113,768 107,388 113,768 6,380 Putnam** OTC & Emerging Growth 713,065 -- 713,065 713,065 -- Putnam** OTC & Emerging Growth -- 170,177 181,974 170,177 (11,797) Putnam** International Growth 572,436 -- 572,436 572,436 -- Putnam** International Growth -- 107,069 98,439 107,069 8,630 Putnam** Stable Value 413,065 -- 413,065 413,065 -- Putnam** Stable Value -- 309,019 309,019 309,019 -- * Sylvan Learning Systems common stock 801,372 -- 801,372 801,372 -- * Sylvan Learning Systems common stock -- 209,637 141,998 209,637 67,639
* Transactions made on the market. There were no category (i), (ii), or (iv) reportable transactions during 1997. Columns (e) and (f) are not applicable. ** Party-in-interest 16 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Sylvan Learning Systems, Inc. By /s/ B. Lee McGee -------------------------------------. B. Lee McGee, Chief Financial Officer Date June 29, 1998 ------------- EXHIBIT INDEX Exhibit No. Description - ----------- ------------------------------- 23.01 Consent of Independent Auditors EX-23.01 2 CONSENT OF INDENPENDENT AUDITORS EXHIBIT 23.01 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the incorporation by reference in the following Registration Statements of our report dated June 15, 1998, with respect to the financial statements of Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan included in this Annual Report (Form 10-K/A), as amended, for the year ended December 31, 1997. REGISTRATION STATEMENTS ON FORM S-3 Registration Number Date Filed - ------------------- ---------- 33-92014 May 8, 1995 33-92852 May 30, 1995 333-1674 February 26, 1996 333-16111 November 14, 1996 333-21261 February 6, 1997 333-26633 May 7, 1997 333-31273 July 15, 1997 333-39535 November 5, 1997 333-43355 December 29, 1997 333-46747 February 23, 1998 333-48997 March 31, 1998 333-50993 April 24, 1998 REGISTRATION STATEMENTS ON FORM S-8 Name Registration Number Date Filed - ---- ------------------- ---------- 1987 - 1991 Employee Stock Option Plan 33-77384 April 6, 1994 1993 Director Stock Option Plan 33-77386 April 6, 1994 1993 Employee Stock Option Plan 33-77390 April 6, 1994 1993 Management Stock Option Plan 33-77388 April 6, 1994 1997 Employee Stock Purchase Plan 333-21963 February 18, 1997 /s/ Ernst & Young LLP - --------------------- Ernst & Young LLP Baltimore, Maryland June 29, 1998 -----END PRIVACY-ENHANCED MESSAGE-----