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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
COMMISSION FILE NO. 1-13093
MERITOR AUTOMOTIVE, INC. SAVINGS PLAN
(Full title of the plan)
MERITOR AUTOMOTIVE, INC.
2135 WEST MAPLE ROAD
TROY, MICHIGAN 48084
(Name of issuer of the securities held pursuant
to the plan and the address of ts principal executive office)
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<TABLE>
<CAPTION>
Table of Contents
<S> <C>
Financial Statements:
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits, as of
September 30, 1999 and 1998 2
Statements of Changes in Net Assets Available
For Benefits for the years ended September 30, 1999
and 1998 3
Notes to Financial Statements 4
Schedule of Assets Held for Investment Purposes,
September 30, 1999 9
Schedule of Reportable Transactions for the
year ended September 30, 1999 10
Signatures 11
Exhibit:
Independent Auditors' Consent 12
</TABLE>
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INDEPENDENT AUDITORS' REPORT
To the Meritor Automotive, Inc. Savings Plan and to Participants therein:
We have audited the financial statements of the Meritor Automotive, Inc.
Savings Plan (the "Plan") as of and for the years ended September 30, 1999 and
1998, as listed in the accompanying Table of Contents. 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of September 30,
1999 and 1998, and the changes in net assets available for benefits for the
years ended September 30, 1999 and 1998 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 (1) assets held for investment purposes as of September 30, 1999 and (2)
reportable transactions for the year ended September 30, 1999 are presented for
the purpose of additional analysis and are not a required part of the basic
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 the audit
of the basic 1999 financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
Deloitte & Touche LLP
Detroit, Michigan
March 27, 2000
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<TABLE>
<CAPTION>
MERITOR AUTOMOTIVE, INC. SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED SEPTEMBER 30, 1999 AND 1998
- ---------------------------------------------------------------------------------------------------
1999 1998
<S> <C> <C>
ASSETS - Investments (Note 3) $ 36,187,082 $ 14,907,190
LIABILITIES - Accrued expenses - 16,000
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NET ASSETS AVAILABLE FOR BENEFITS $ 36,187,082 $ 14,891,190
============= =============
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
MERITOR AUTOMOTIVE, INC. SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED SEPTEMBER 30, 1999 AND 1998
- ------------------------------------------------------------------------------------------------------------------
1999 1998
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income (loss):
Net appreciation (depreciation) in fair value of investments
(Note 3) $ 3,234,157 $ (3,699,829)
Interest and dividends 641,874 249,895
Other income - 77,995
Contributions:
Employer (Note 1) 6,089,135 5,899,604
Participants (Note 1) 10,705,399 9,900,753
Total additions 20,670,565 12,428,418
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants or beneficiaries (1,533,718) (455,438)
Administrative expenses (431,361) (175,687)
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Total deductions (1,965,079) (631,125)
--------------- -------------
TRANSFERS INTO THE PLAN (Note 1) 2,590,406 3,093,897
--------------- -------------
NET INCREASE 21,295,892 14,891,190
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 14,891,190 -
--------------- -------------
End of year $ 36,187,082 $ 14,891,190
=============== =============
See accompanying notes to financial statements.
</TABLE>
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MERITOR AUTOMOTIVE, INC. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1999 AND 1998
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1. DESCRIPTION OF THE PLAN
The following general description of the Meritor Automotive, Inc. Savings
Plan (the "Plan"), as in effect at September 30, 1999, is provided for
general information purposes only. Participants should refer to the Plan
document for more complete information.
GENERAL - The Plan was established October 1, 1997. The Plan is a defined
contribution savings plan covering all eligible employees of Meritor
Automotive, Inc. and certain affiliated companies (the "Company").
Eligible employees may participate in the Plan as of the first day of the
month following the completion of one month of employment. The Plan is
administered by the Company's Employee Benefit Plan Committee and the Plan
Administrator. At September 30, 1999, the Trustee for the Plan assets was
T. Rowe Price Trust Company. The Plan is subject to the provisions of the
Employment Retirement Income Security Act of 1974.
MERGER - Effective May 1, 1999 the York Employees Retirement Savings Plan
and Asheville Employees Retirement Savings Plan were merged into the
Meritor Automotive Savings Plan. Assets were transferred in at fair value.
CONTRIBUTIONS - Eligible employees may elect to contribute from 1% to 11%
of their base compensation, by electing to defer receipt of compensation
(pre-tax contribution) or authorizing deductions from compensation
(after-tax contribution). Participants can elect to have their
contributions invested in 5% increments in various investment funds.
After a participant has completed 52 weeks of employment with the Company,
the Company matches 75% of the participant's contributions up to 8% of the
participant's base compensation. Company contributions may be in the form
of Meritor Automotive, Inc. ("Meritor") common stock or cash invested in
Meritor Common Stock, included in Meritor Stock Fund A.
VESTING - Amounts attributable to participant contributions are fully
vested at all times. Company contributions are fully vested after the
participant has completed five years of service, or may vest sooner as
described in the Plan document under certain circumstances.
PLAN WITHDRAWALS - An active participant may withdraw amounts attributable
to the participant contributions made through payroll deductions and the
vested portion of Company contributions related to those participant
contributions. In addition, amounts contributed by the participant through
compensation deferrals may be withdrawn upon a demonstration of financial
hardship. All amounts that have vested may be withdrawn upon termination
of employment or attaining age 59-1/2.
LOANS TO PARTICIPANTS - Participants may borrow from the Plan an amount
not less than $1,000 and not greater than the least of (i) $50,000 less
the amount of loans outstanding during the preceding 12-month period,
(ii)amounts in the participant's accounts attributable to participant
contributions, or (iii) one-half of the participant's vested account
balance.
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Interest is charged at 1% over the prime rate, which is defined as
the base rate on corporate loans posted by at least 75% of the 30 largest
U.S. banks. The loans are repaid through payroll deductions over periods
generally not to exceed 60 months. Payments of principal and interest are
reinvested under the participant's current investment election for new
contributions.
FORFEITURES - When certain terminations of participation in the
Plan occur, the nonvested portion of the participant's account represents
a forfeiture. Forfeitures shall be used to reduce future Company
contributions to the Plan.
INVESTMENT OPTIONS -
Effective April 1, 1999, the investment alternatives were revised and
expanded. A Participant may now elect to invest his contributions in any
one or more of the following nine funds (the "Investment Funds"), in
multiples of 5%:
- STOCK FUND B: invested in Meritor Automotive, Inc. Common Stock.
- STABLE VALUE FUND: invested in insurance company investment
contracts, bank investment contracts and fixed income securities (or
in funds invested in such contracts or securities). The assets in
this fund are currently invested in the T. Rowe Price Stable Value
Common Trust Fund.
- INTERMEDIATE BOND FUND: invested in intermediate-term U.S.
government and agency obligations, including investments
collateralized by such obligations, and other investment grade fixed
income securities (or in funds invested in such instruments). The
assets in this fund are currently invested in the T. Rowe Price U.S.
Treasury Intermediate Fund.
- BALANCED FUND: invested in a diversified portfolio of equity
securities, fixed income securities and cash reserves (or in funds
invested in such instruments). The assets in this fund are currently
invested in the T. Rowe Price Balanced Fund.
- EQUITY INDEX FUND: invested in equity securities representative of a
market index selected by the Employee Benefit Plan Committee (or in
funds invested in such instruments). The assets in this fund are
currently invested in the T. Rowe Price Equity Index 500 Fund.
- LARGE-CAP EQUITY FUND (FORMERLY CALLED THE EQUITY FUND): invested in
equity securities of companies of large-and medium-sized
capitalization, which may include preferred stock and foreign
securities, as well as convertible debt. The assets in this fund are
currently invested in the T. Rowe Price Growth and Income Fund.
- MID-CAP EQUITY FUND: invested in equity securities of companies of
medium-size capitalization, as well as convertible debt (or in funds
invested in such instruments). The assets in this fund are currently
invested in the T. Rowe Price Mid-Cap Growth Fund.
- SMALL-CAP EQUITY FUND: invested in equity securities of companies of
small- and medium-sized capitalization, as well as convertible debt
(or in funds invested in such instruments). The assets in this fund
are currently invested in the T. Rowe Price Small-Cap Stock Fund.
- INTERNATIONAL EQUITY FUND: invested in equity securities of companies
located outside the United States (or in funds invested in such
instruments). The assets in this fund are currently invested in the
T. Rowe Price International Stock Fund.
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The Money Market Fund and the prior Stable Value fund (which consisted
of two guaranteed investment contracts) have been discontinued.
Investments as of April 1, 1999 in discontinued funds are reinvested
in the new Investment Funds as follows:
<TABLE>
<CAPTION>
DISCONTINUED FUND NEW INVESTMENT FUND
<S> <C>
Money Market Fund Stable Value Fund
Stable Value Fund Funds invested in guaranteed investment contracts prior
to April 1, 1999 will remain so invested until
expiration of the contracts or an interest guarantee
under those contracts. At that time, they will be
reinvested in the new Stable Value Fund. These
contracts guarantee the principal and fixed interest
thereon for a specified period of time, and accrue
such fixed interest on a monthly basis. Such contracts
guarantee the following annual returns:
</TABLE>
<TABLE>
<CAPTION>
CONTRACT CONTRACT
GUARANTEED VALUE AT VALUE AT
ISSUING PERIODS OF ANNUAL MATURITY SEPTEMBER 30, SEPTEMBER 30,
COMPANY CONTRIBUTION RETURN DATE 1999 1998
<S> <C> <C> <C> <C> <C>
John Hancock October 1, 1997- 6.70 % March 31, 2000 $ 179,216 $ 202,552
March 31, 1998
Prudential April 1, 1998 - 5.82 % April 2, 2001 507,369 262,677
March 31, 1999
</TABLE>
The crediting interest rate for the guaranteed investment contracts
equals the guaranteed annual return for the years ended September 30,
1999 and 1998.
PARTICIPANT ACCOUNTS - Each participant's account is credited or charged
with the participant's contributions and withdrawals, as applicable,
and allocations of the Company's contributions. Investment earnings and
expenses are allocated to participant's accounts.
PLAN TERMINATION - Although the Company has not expressed any intent
to terminate the Plan, it reserves the right to do so at any time. In
the event of termination, the interests of each participant with
respect to Company contributions will vest immediately and be
nonforfeitable.
RECLASSIFICATIONS - Certain reclassifications were made to conform
with September 30, 1999 classifications.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are
prepared under the accrual method of accounting.
NEW ACCOUNTING PRONOUNCEMENTS - The plan has adopted Statement of
Position 99-3, Accounting for and Reporting of Certain Defined
Contribution Plan Investments and Other Disclosure Matters, which
eliminated the requirement for by-fund disclosures in the footnotes to
the financial statements.
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INVESTMENT VALUATION - Investments, other than benefit-responsive
investment contracts, are stated at fair value as measured by readily
available market prices. Investments in contracts with insurance
companies included in general accounts are stated at contract value,
which approximates fair value. Contract value represents contributions
made under the investment contracts, plus interest, less withdrawals
or administrative expenses charged by the issuer of the contract. Upon
complete or partial termination of the Plan, investments held with
insurance companies are subject to certain limitations, as provided by
the investment contracts.
SECURITY TRANSACTIONS AND INVESTMENT INCOME - Purchases and sales of
securities are reported on a trade date basis. Dividends are recorded
on the ex-dividend date and interest income is recorded on the accrual
basis.
PLAN EXPENSES - Administrative expenses of the Plan are paid by the
Plan or the Company, as provided by the Plan document.
BENEFIT PAYMENTS - Benefits are recorded when paid.
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 changes therein, and disclosure
of contingent assets and liabilities. Actual results could differ from
those estimates.
3. INVESTMENTS
The following presents investments that represent 5 percent or
more of the Plan's net assets.
<TABLE>
<CAPTION>
SEPTEMBER 30
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1999 1998
<S> <C> <C>
Mutual Funds:
T. Rowe Price Growth and Income Fund $ 10,059,240 $ 5,538,070
T. Rowe Price Summit Cash Reserves Fund -- 1,853,554
Common Stock:
Meritor * 11,280,040 3,868,278
Meritor 6,269,509 2,281,951
T. Rowe Price Stable Value Common Trust Fund 4,582,463 --
* Nonparticipant - directed
</TABLE>
For the years ended September 30, 1999 and 1998, the Plan's
investments (including gains and losses on investments bought and
sold, as well as held during the year) appreciated (depreciated) in
value as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30
-------------------------------------------
1999 1998
<S> <C> <C>
Mutual Funds $ 717,825 $ (334,281)
Common Stock 2,516,332 (3,365,548)
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Net appreciation (depreciation) $ 3,234,157 $ (3,699,829)
============ ============
</TABLE>
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4. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed
investments is as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------------------------
1999 1998
<S> <C> <C>
Net assets - Meritor Common Stock Fund A $ 11,280,040 $ 3,868,278
Changes in net assets - Meritor Common Stock Fund A:
Employer contributions $ 6,089,135 $ 5,899,604
Net appreciation (depreciation) 1,671,795 (1,912,123)
Interest and dividends 136,465 57,543
Benefits paid to participants or beneficiaries (327,143) (1,581)
</TABLE>
5. TAX STATUS
Management of the Plan believes that the Plan, as it is proposed to
be amended, qualifies under Section 401(a) of the Internal Revenue
Code and is exempt from federal income taxes as of September 30,
1999. Management of the Plan will request a determination letter
from the Internal Revenue Service. Therefore, no provision for
income taxes has been included in the Plan's financial statements.
******
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<TABLE>
<CAPTION>
MERITOR AUTOMOTIVE, INC. SAVINGS PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1999
- -------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF INVESTMENT
IDENTITY OF ISSUER, INCLUDING MATURITY DATE,
BORROWER, LESSOR RATE OF INTEREST, COLLATERAL, CURRENT
OR SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE
<S> <C> <C> <C>
* T. Rowe Price International Stock Fund $ 76,513 $ 78,521
* T. Rowe Price Equity Index 500 Fund 958,976 921,330
* T. Rowe Price Growth and Income Fund 10,084,740 10,059,240
* T. Rowe Price Mid-Cap Growth Fund 490,817 471,200
* T. Rowe Price Small-Cap Stock Fund 63,225 65,077
* T. Rowe Price U.S. Treasury Intermediate Fund 791,927 773,595
* T. Rowe Price Balanced Fund 89,252 86,763
* T. Rowe Price Stable Value Common Trust Fund 4,582,463 4,582,463
* Prudential Life Insurance Guaranteed Investment Contract 507,369 507,369
Company of America April 2, 2001, 5.82%
* John Hancock Mutual Guaranteed Investment Contract 179,216 179,216
Life Insurance Company March 31, 2000, 6.70%
Meritor Stock 18,136,084 17,549,549
Cash 11,000 11,000
Participant loans Rates recorded at 1% over prime
rate, and maturities up to 120 months 901,759 901,759
---------------- ----------------
$ 36,873,341 $ 36,187,082
================= ================
* Party-in-interest
</TABLE>
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<TABLE>
<CAPTION>
MERITOR AUTOMOTIVE, INC. SAVINGS PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED SEPTEMBER 30, 1999
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(f) (g)
(a) CURRENT VALUE NET
IDENTITY (c) (d) (e) OF ASSET ON GAIN
OF PARTY (b) PURCHASE SELLING COST OF TRANSACTION OR
INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET DATE (LOSS)
<S> <C> <C> <C> <C> <C> <C>
SINGLE
TRANSACTIONS
T. Rowe Price Stable Value Common Trust Fund $ 2,230,634 $ 2,230,634
T. Rowe Price Summit Cash Reserves $ 2,296,649 $ 2,296,649 2,296,649
SERIES OF
TRANSACTIONS
T. Rowe Price Stable Value Common Trust Fund 2,832,117 2,832,117
T. Rowe Price Equity Index 500 Fund 1,014,598 1,014,598
T. Rowe Price Meritor Common Stock Fund 9,608,291 9,608,291
T. Rowe Price Meritor Common Stock Fund 881,318 865,284 881,318 $ 16,034
T. Rowe Price Growth and Income Fund 5,892,475 5,892,475
T. Rowe Price Growth and Income Fund 1,965,868 1,411,504 1,965,868 554,364
</TABLE>
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Plan Administrator has duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
MERITOR AUTOMOTIVE, INC. SAVINGS PLAN
By:/s/ Richard D. Greb
-----------------------------------
Richard D. Greb, Plan Administrator
March 27, 2000
11
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EXHIBIT
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Meritor Automotive, Inc. Savings Plan on Form S-8 (registration number
333-35403) of our report dated March 27, 2000, appearing in this Annual Report
on Form 11-K of the Meritor Automotive, Inc. Savings Plan for the year ended
September 30, 1999.
DELOITTE & TOUCHE LLP
Detroit, Michigan
March 27, 2000
12
