<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _______________
Commission file number 1-9148
SAVINGS-INVESTMENT PLAN OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
(Full title of the Plan)
THE PITTSTON COMPANY
(Name of the issuer of securities held pursuant to the Plan)
P.O. BOX 18100
1801 BAYBERRY COURT
RICHMOND, VIRGINIA 23226-8100
(Address of issuer's principal (Zip Code)
executive offices)
1
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SAVINGS-INVESTMENT PLAN
OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Financial Statements and Schedules
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
2
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SAVINGS-INVESTMENT PLAN
OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Index to Financial Statements and Schedules
December 31, 1999 and 1998
Pages
-----
Independent Auditors' Report 4
Statements of Net Assets Available for Benefits
as of December 31, 1999 and 1998 5
Statements of Changes in Net Assets Available for Benefits for
the Years Ended December 31, 1999 and 1998 6
Notes to Financial Statements 7
Schedules
---------
Schedule of Assets Held for Investment Purposes
as of December 31, 1999 1
Other schedules not filed herewith are omitted because of the absence of
conditions under which they are required.
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INDEPENDENT AUDITORS' REPORT
The Compensation and Benefits Committee of
the Board of Directors
The Pittston Company:
We have audited the accompanying statements of net assets available for
benefits of the Savings-Investment Plan of The Pittston Company and its
Subsidiaries (the "Plan") as of December 31, 1999 and 1998, 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 Plan as
of December 31, 1999 and 1998, and the changes in net assets available for
plan 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 supplementary schedules of assets
held for investment as of December 31, 1999 and reportable transactions
included in Schedules 1 and 2 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 audits 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/ KPMG LLP
------------------
KPMG LLP
Richmond, Virginia
June 16, 2000
4
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<TABLE>
<CAPTION>
SAVINGS-INVESTMENT PLAN OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Statements of Net Assets Available for Benefits
December 31
(In thousands) 1999 1998
------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments (Note 8)
Common stock $ 51,733 64,012
Mutual funds 158,389 143,182
Participant notes receivable 13,224 13,215
------------------------------------------------------------------------------
Total investments 223,346 220,409
Receivables:
Participant contributions 1,378 1,424
Employer contributions 650 643
Interest 70 80
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Total receivables 2,098 2,147
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Total assets $ 225,444 222,556
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Liabilities
Accrued liabilities $ 195 133
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Total liabilities 195 133
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Net assets available for benefits
(includes $4,833 for benefits payable
to participants) $ 225,249 222,423
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</TABLE>
See accompanying notes to financial statements.
5
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<TABLE>
<CAPTION>
SAVINGS-INVESTMENT PLAN OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Statements of Changes in Net Assets Available for Benefits
Year Ended December 31
(In thousands) 1999 1998
------------------------------------------------------------------------------
<S> <C> <C>
Income:
Dividends $ 10,200 8,328
Interest 954 1,005
Net depreciation in fair value
of investments (Note 8) (10,220) (23,137)
Contributions:
Participant 16,805 15,427
Employer 8,815 7,727
Rollover 1,350 1,187
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Total additions $ 27,904 10,537
------------------------------------------------------------------------------
Distributions to participants
or beneficiaries $ (25,078) (21,636)
------------------------------------------------------------------------------
Net increase (decrease) 2,826 (11,099)
Plan merger (Note 1) - 1,302
Net assets available for benefits:
Beginning of year 222,423 232,220
------------------------------------------------------------------------------
End of year $ 225,249 222,423
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</TABLE>
See accompanying notes to financial statements.
6
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SAVINGS-INVESTMENT PLAN
OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Notes to Financial Statements
December 31, 1999 and 1998
1. Plan Information and Summary of Significant Accounting Policies
Description of Plan
-------------------
The Savings-Investment Plan of The Pittston Company and Its
Subsidiaries (the "Plan") is a voluntary defined contribution plan
sponsored by The Pittston Company and participating subsidiaries (the
"Company"). Employees of the Company who are not members of a
collective bargaining unit (unless the agreement provides specifically
for participation) are eligible to participate after six months of full
time service in which they have at least 1,000 hours of service or at
least 1,000 hours of service in any twelve month period. Participants
should refer to the Plan document for a more complete description of
the Plan's provisions. The Plan is subject to the Employee Retirement
Income Security Act of 1974 ("ERISA") and is a defined contribution
plan.
A participant may withdraw the following at any time without being
suspended from the Plan:
(a) All or a portion of Company matching contributions made prior to
January 1, 1985;
(b) all or a portion of after-tax contributions made prior to
January 1, 1987; or
(c) any rollover contributions.
Any withdrawals of vested Company matching contributions made after
January 1, 1985 require the employer to suspend making matching
contributions on behalf of the participant for a period of six months.
Because of the Plan's special income tax advantages, the Internal
Revenue Service ("IRS") generally requires that pre-tax savings remain
in the Plan while the participant is actively employed. However, there
are currently two exceptions to this rule:
(a) If the participant is age 59 1/2 or older, he or she may withdraw
all or a portion of his or her pre-tax contributions, or
(b) If the participant has a "financial hardship" (as that term is
defined by IRS guidelines) it is possible to withdraw all or a
portion of his or her pre-tax contributions in the Plan up to the
amount needed to satisfy the hardship, regardless of age.
The first exception results in a suspension of Company matching
contributions for a period of six months. A hardship withdrawal results
in a suspension of employee pretax contributions for twelve months.
Basis of Presentation
---------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting and present net assets available for benefits and
changes in those assets at fair values. The fair value of Company
common stocks and mutual fund investments was determined by using
quoted market prices. Participant notes receivable are valued at cost
which approximates fair value. The cost of securities sold is
determined principally on the basis of specific identification.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded on the ex-dividend date. Benefits are recorded
when paid.
7
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Use of Estimates
----------------
In accordance with generally accepted accounting principles, management
of the Company has made a number of estimates and assumptions relating
to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial
statements. Actual results could differ from those estimates.
Vesting Policy
--------------
A participant is 100% vested in the market value of his or her pre-tax
contributions and vesting in the Company matching contributions is
based on years of service as follows:
Less than 3 years None
3 but less than 4 years 50%
4 but less than 5 years 75%
5 or more years 100%
If a participant ends his or her employment with the Company and is
subsequently rehired, his or her prior service with the Company is
counted for vesting purposes. Once a participant reaches normal
retirement age, he or she is 100% vested in Company matching
contributions regardless of years of service.
Forfeitures, the nonvested portion of a participant's account upon
withdrawal from the Plan, are used to offset future contributions of
the Company to the Plan. Employer contributions receivable on the
Statements of Net Assets Available for Benefits are net of forfeitures
equal to $90,418 and $114,346 at December 31, 1999 and 1998,
respectively.
Plan Merger
-----------
Effective October 1, 1998, a portion of the net assets held under the
Air Transport International 401(k) Plan of Air Transport International
Limited Liability Company ("ATI"), a contributory defined contribution
plan covering substantially all salaried and hourly employees of ATI,
was merged with the Plan. As a result, net assets of $1,301,696 were
transferred into the Plan during 1998.
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% vested in their
accounts.
2. Participant Notes Receivable
Participants can borrow up to the lesser of $50,000 or 50% of their
aggregate vested account balance in the Plan, including rollovers,
subject to certain maximum limits designated by the IRS. Each note is
secured by a pledge of the participant account balance in the Plan to
the extent of the unpaid balance. The interest rate charged is
generally equal to the prime interest rate plus 1%. Repayments are made
through level monthly payroll deductions and cannot exceed 4 1/2 years
for general purpose loans and 15 years for principal residence loans.
8
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3. Contributions
Each participant could designate a basic contribution of up to the
lesser of $10,000 or 15% of pre-tax earnings during 1999 and 1998,
subject to limitations under IRS non-discrimination tests. For purposes
of determining Plan contributions, earnings are defined as regular pay
including commissions and bonuses, but excluding overtime, premium pay
and allowances. Employee contributions may be divided among investment
funds, in multiples of 1%, based upon the participant's election.
Participants have the option to change their contribution percentages
on a bi-monthly basis.
During 1999 and 1998, participant contributions to the Plan could be
invested in one of eleven T. Rowe Price investment funds. Additionally,
the Plan permitted participants to invest their own contributions in
the Company's three issues of common stock: Pittston Brink's Group
Common Stock ("Brink's Stock"), Pittston BAX Group Common Stock ("BAX
Stock") and Pittston Minerals Group Common Stock ("Minerals Stock").
See also Note 9 below.
From time to time, some of the available monies in each of the funds is
invested in short-term investments to increase liquidity for making
loans and distributing funds to participants.
Participant contributions up to 5% were matched by the Company at rates
ranging from 50% to 100% in 1999 and 1998. Participants who were
employees of the following wholly-owned subsidiaries of the Company
were matched at the following rates in 1999 and 1998:
Brink's, Incorporated 100%
Brink's Home Security 75%
BAX Global Inc. 75%
ATI 50%
Pittston Coal Company 50%
Pittston Minerals Ventures 50%
Employees of Pittston Administrative Services and The Pittston Company
were matched at a rate of 100% in 1999 and 1998. The Company may adjust
the rate at which contributions are matched.
During 1999 and 1998, Company matching contributions were used to
purchase Brink's Stock, BAX Stock or Minerals Stock depending on
whether a participant was employed by one of the companies in the
Brink's Group, BAX Group or Minerals Group, respectively. Company
matching contributions for those participants not employed by a
specific subsidiary of the Company were allocated between Brink's
Stock, BAX Stock and Minerals Stock based upon the proportion that the
total fair value of each stock at the previous year end bears to the
total combined fair value of these three stocks.
4. Distributions
Upon leaving the Company for any reason and after a formal disbursement
request is made by the participant, the full fair value of the
employee's contributions and related investment income and all vested
Company matching contributions and related investment income will be
distributed in cash, except payouts from the Company stock funds which
will be made in shares of the Company's stock unless cash payment is
specifically requested. The value of any fractional shares will be
distributed in cash. Additionally, if a participant's employment with
the Company terminates and he or she has a vested account balance of
more than $5,000, he or she may (1) elect to leave all of his or her
contributions and related investment income and the vested portion of
Company contributions and related investment income in the Plan for an
unlimited period of time, or (2) make an irrevocable election to
receive the payout in installments for a period of up to five years.
Participants who retire on their normal retirement date may elect to
defer distribution until the later of age 70 1/2 or their retirement date.
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5. Administration
Substantially all costs incurred in the administration of the Plan are
paid by the Company. The balance of such costs, if any, is paid by the
Plan.
6. Related Party Transactions
Certain Plan investments are shares of mutual funds managed by T. Rowe
Price Trust Company, the Trustee. Additionally, the Plan invests in
shares of Company common stock. Such transactions are deemed to be
party-in-interest transactions.
7. Federal Income Taxes
The Plan obtained its latest determination letter on March 24, 1998, in
which the Internal Revenue Service stated that the Plan, as designed,
was in compliance with Section 401(a) of the Internal Revenue Code
("IRC") and accordingly, the Plan is exempt from income tax under
Section 501(a) of the IRC. Although the Plan has been amended since
receiving the determination letter, the Plan administrator and the
Plan's tax counsel believe that the Plan is designed and is currently
being operated in compliance with the applicable requirements of the
IRC.
8. Investments
During 1999 and 1998, the Plan's investments (including investments
bought, sold and held during the year) appreciated (depreciated) in
value as follows:
<TABLE>
<CAPTION>
Year Ended December 31
1999 1998
------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Investments at fair value as determined
by quoted market prices:
Mutual funds $ 6,221 7,605
Common stocks (16,441) (30,742)
------------------------------------------------------------------------
$ (10,220) (23,137)
------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Investments at fair value which represent 5% or more of the net assets
available for plan benefits are as follows:
December 31
1999 1998
------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Investment:
Pittston Brink's Group Common Stock (a) $36,225 51,058
Pittston BAX Group Common Stock (b) 13,426 11,315
T. Rowe Price Stable Value Fund 53,451 52,534
T. Rowe Price Equity Index Fund 25,636 19,295
T. Rowe Price New America Growth Fund 31,665 28,904
T. Rowe Price Personal Strategy Balanced Fund 20,033 20,285
Participant notes receivable 13,224 13,215
------------------------------------------------------------------------
</TABLE>
(a) Includes nonparticipant-directed investments (employer contributions)
of $33,287 and $46,967 in 1999 and 1998, respectively.
(b) Includes nonparticipant-directed investments (employer contributions)
of $11,941 and $10,495 in 1999 and 1998, respectively.
10
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9. 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>
December 31
1999 1998
-------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Net Assets:
Common stock $ 47,096 58,993
Employer contributions receivable 650 643
-------------------------------------------------------------------------
$ 47,746 59,636
-------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31
1999 1998
-------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Changes in Net Assets:
Contributions $ 8,815 7,727
Dividends 412 490
Net depreciation (15,214) (28,387)
Distributions to participants or beneficiaries (4,988) (6,444)
Transfers to participant-directed investments (915) (1,137)
-------------------------------------------------------------------------
$ (11,890) (27,751)
-------------------------------------------------------------------------
</TABLE>
10. Reconciliation to Form 5500
The Form 5500 for the Plan includes a liability for benefits payable in
the statements of net assets available for benefits for the years ended
December 31, 1999 and 1998. The accompanying financial statements
disclose this liability parenthetically on the statements of net assets
available for benefits. In addition, the 1999 Form 5500 for the Plan
reflects a reduction in net assets for cumulative deemed distributions
of participant loans in the statements of net assets available for
benefits for the year ended December 31, 1999. The accompanying
financial statements do not include this reduction as the participants
to which the deemed distributions relate continue to retain their net
assets within the Plan. The following reconciles net assets available
for benefits and benefits paid to participants from the Form 5500 to
the Plan financial statements:
<TABLE>
<CAPTION>
December 31
-------------------------------------------------------------------------
1999 1998
-------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Assets available for benefits
per the Form 5500 $220,341 217,362
Current and prior years deemed distributions 75 -
Benefits payable to participants at end of year 4,833 5,061
-------------------------------------------------------------------------
Assets available for plan benefits
per the Statements of Net Assets
Available for Benefits $225,249 222,423
-------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
Year Ended December 31
1999 1998
-------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Distributions to participants per the
Form 5500 $24,925 24,990
Deemed distributions of participant
loans (cumulative) (75) -
Benefits payable to participants at
beginning of year 5,061 1,707
Benefits payable to participants at
end of year (4,833) (5,061)
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Distributions paid to participants per the
Statements of Changes in Net Assets
Available for Benefits $25,078 21,636
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</TABLE>
11. Subsequent Event
On December 6, 1999, the Company announced that its Board of Directors
approved the elimination of the tracking stock capital structure by an
exchange of all outstanding shares of BAX Stock and Minerals Stock for
shares of Brink's Stock (the "Exchange"). The Exchange took place on
January 14, 2000 (the "Exchange Date"). On the Exchange Date, holders
of BAX Stock received 0.4848 shares of Brink's Stock for each share of
their BAX Stock; and holders of Minerals Stock received 0.0817 shares
of Brink's Stock for each share of Minerals Stock. The Exchange ratios
for the BAX Stock and the Minerals Stock were calculated pursuant to
the formula fixed and approved by shareholders of the Company at the
creation of the three classes of tracking stock in 1993 and 1996. The
formula provides that shareholders of BAX Stock and Minerals Stock are
entitled to receive Brink's Stock with a Fair Market Value equal to
115% of the Fair Market Value of BAX Stock and Minerals Stock, as
applicable. The "Fair Market Value" of each class of common stock was
determined by taking the average of the closing prices of that class of
common stock on the New York Stock Exchange for the 10 trading days
beginning 30 business days prior to the first public announcement of
the exchange proposal, which occurred on December 6, 1999. From and
after the Exchange Date, Brink's Stock is the only outstanding class of
common stock of the Company and continues to trade under the symbol
"PZB". Shares of Brink's Stock after the Exchange are referred to as
"Pittston Common Stock".
Pursuant to the Exchange, the Plan was amended to provide that all
future Company matching contributions will be used to purchase Pittston
Common Stock and that all shares of BAX Stock and Minerals Stock held
in the Plan would be converted to shares of Pittston Common Stock
pursuant to the provisions of the Exchange.
12
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<TABLE>
<CAPTION>
Schedule 1
SAVINGS-INVESTMENT PLAN
OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Schedule of Assets Held for Investment Purposes
As of December 31, 1999
(In thousands, except share amounts)
Identity of Issue, Borrower, Description of Investment Including Maturity Date, Cost Current
Lessor or Similar Party Rate of Interest or Maturity Value (non-participant only) Value
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Pittston Company 1,646,577 shares Pittston Brink's Group Common
Stock; $1 par value $ 33,287 36,225
The Pittston Company 1,263,613 shares Pittston BAX Group Common
Stock; $1 par value 11,941 13,426
The Pittston Company 1,281,784 shares Pittston Minerals Group Common
Stock; $1 par value 1,868 2,083
------
T. Rowe Price 53,540,714 shares in the Stable Value Fund 53,451
T. Rowe Price 87,331 shares in the Spectrum Income Fund 935
T. Rowe Price 259,144 shares in the Equity Income Fund 6,429
T. Rowe Price 647,876 shares in the Equity Index Fund 25,636
T. Rowe Price 272,302 shares in the International Stock Fund 5,182
T. Rowe Price 120,298 shares in the Small Cap Value Fund 2,120
T. Rowe Price 658,856 shares in the New America Growth Fund 31,665
T. Rowe Price 243,136 shares in the New Horizons Fund 6,694
T. Rowe Price 155,499 shares in the Personal Strategy Income Fund 2,026
T. Rowe Price 1,233,555 shares in the Personal Strategy
Balanced Fund 20,033
T. Rowe Price 216,501 shares in the Personal Strategy Growth Fund 4,217
Participant notes
receivable Participant notes receivable at interest rates
ranging from 6.8% to 11%, repayment not to exceed
4 1/2 years for general purpose and 15
years for principal residence 13,224
-------------------------------------------------------------------------------------------------------------------
$ 223,346
-------------------------------------------------------------------------------------------------------------------
</TABLE>
The cost of participant-directed investments is not required. Number of shares
and current value include both participant and nonparticipant-directed
investments.
13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustee (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Savings-Investment Plan
of The Pittston Company
and Its Subsidiaries
-----------------------
(Name of Plan)
/s/ Frank T. Lennon
------------------------------
(Frank T. Lennon
Vice President-Human Resources
And Administration)
Date: June 27, 2000
14
