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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 29, 1999 or
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED] for the transition period from _______ to _______
Commission File No. 1-10863
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
YORK INTERNATIONAL CORPORATION
631 South Richland Avenue
York, Pennsylvania 17403
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INDEX
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<TABLE>
<CAPTION>
Item Page
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<S> <C>
Signature.............................................................. 2
Financial Statements and Supplemental Schedule......................... 3
Exhibit Index.......................................................... 15
Exhibit................................................................ 16
</TABLE>
<PAGE>
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Pension
and Investment Committee has duly caused this annual report to be signed on its
behalf by the undersigned thereunto duly authorized.
YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Date: June 22, 2000 By: /s/ Jane G. Davis
----------------- --------------------------------------
Jane G. Davis
Member, Pension and Investment Committee
2
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YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Financial Statements
And
Supplemental Schedule
December 29, 1999 and December 31, 1998
3
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Independent Auditors' Report
To the Pension and Investment Committee of
York International Corporation:
We have audited the accompanying statements of net assets available for benefits
of the York International Corporation Investment Plan as of December 29, 1999
and December 31, 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 York
International Corporation Investment Plan as of December 29, 1999 and December
31, 1998, and the changes in 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 supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's
management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
KPMG LLP
June 9, 2000
4
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YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Statements of Net Assets Available for Benefits
(thousands of dollars)
December 29, 1999 and December 31, 1998
<TABLE>
<CAPTION>
December 29, December 31,
Assets 1999 1998
------------ ------------
<S> <C> <C>
Investments:
At fair value $ 162,018 130,943
At contract value 62,435 60,231
Participant notes receivable, at cost 3,718 3,253
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Total investments 228,171 194,427
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Receivables:
Employer's contribution 121 151
Participants' contributions 1,111 1,182
Interest 25 23
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Total receivables 1,257 1,356
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Net assets available for benefits $ 229,428 195,783
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</TABLE>
See accompanying notes to financial statements.
5
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YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Statements of Changes in Net Assets Available for Benefits
(thousands of dollars)
Years Ended December 29, 1999 and December 31, 1998
<TABLE>
<CAPTION>
December 29, December 31,
1999 1998
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<S> <C> <C>
Additions
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 15,024 20,106
Interest and dividends 16,044 11,178
Contributions:
Employer's 1,807 1,513
Participants' 17,483 16,376
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Total additions 50,358 49,173
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Deductions
Deductions from net assets attributed to:
Benefits paid to participants 16,680 20,602
Administrative expenses 33 27
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Total deductions 16,713 20,629
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Net increase prior to transfers 33,645 28,544
Transfers from affiliated plans -- 4,542
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Net increase 33,645 33,086
Net assets available for benefits:
Beginning of year 195,783 162,697
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End of year $ 229,428 195,783
========= =======
</TABLE>
See accompanying notes to financial statements.
6
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YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Notes to Financial Statements
December 29, 1999 and December 31, 1998
(1) Plan Description
The following description of the York International Corporation (Company)
Investment Plan (Plan) provides only general information. Participants
should refer to the Plan agreement for a more complete description of the
Plan's provisions.
(a) General
The Plan is a defined contribution plan covering employees of the
Company who have been employed for their respective eligibility
periods and are members of employee groups to which the Plan has been
extended. The Plan is administered by a committee appointed by the
Company's Board of Directors. The Plan assets are held by Fidelity
Management Trust Company (Fidelity), as trustee (Trustee). It is
subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
Effective December 29, 1999, the Plan Sponsor amended the Plan to
change the Plan year from the 12-month period ending December 31 to
the 12-month period beginning December 30 and ending December 29.
(b) Contributions
Each year, participants may contribute from one to sixteen percent of
pretax compensation, as defined in the Plan. Participants may also
contribute an additional one to ten percent of compensation as after-
tax contributions, but the total of both before-tax and after-tax
contributions cannot exceed sixteen percent of compensation.
Participants may also contribute amounts representing distributions
from other qualified defined benefit or contribution plans. Certain
employee groups may be eligible to receive a Company match of 25
percent of the first 4 percent of base compensation that a participant
contributes to the plan.
(c) Investment Options
Upon enrollment in the Plan, participants may direct employee
contributions in 10 percent increments in any of fifteen investment
options.
The "Fixed Income Fund", under an agreement between the Trustee and
various insurance companies, provides a guaranteed rate of interest on
contributions.
The "Puritan Fund" is a mutual fund which seeks to obtain as much
income as possible, consistent with the preservation and conservation
of capital, by investing in a broadly diversified portfolio of high-
yielding securities, including common stocks, preferred stocks, and
bonds.
The "Magellan Fund" is a mutual fund which invests primarily in common
stock, and securities convertible into common stock, of U.S.,
multinational, and foreign companies of all sizes that offer potential
for growth.
7
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YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Notes to Financial Statements
December 29, 1999 and December 31, 1998
The "Equity Income Fund" is a growth and income fund. It seeks reasonable
income with the potential for capital appreciation. The fund tries to
achieve a yield that exceeds the composite yield of the S&P 500. It also
considers the potential for capital appreciation when selecting
investments. It invests primarily in income-producing equity securities
(common and preferred stocks) but can also invest in bonds and convertible
securities.
The "Growth & Income Fund" is a growth and income fund. It seeks high
total return through a combination of current income and capital
appreciation. It invests in securities of companies that pay current
dividends and offer potential growth of earnings, such as common stocks,
securities convertible into common stocks, preferred stocks and fixed-
income securities.
The "OTC Portfolio Fund" is a growth fund. It seeks long-term capital
appreciation by investing primarily in securities traded on the over-the-
counter securities market. Securities in which the Portfolio Fund may
invest include common stocks, preferred stocks, securities convertible into
common stocks and debt securities. Companies whose securities trade on the
OTC market generally are smaller or newer companies than those on the New
York Stock Exchange.
The "Overseas Fund" is an international growth fund. It seeks long-term
capital growth primarily through investments in foreign securities. These
investments may include common stock and securities convertible into common
stock, as well as debt instruments. Normally at least 65% of the fund's
total assets will be invested in securities of issuers from at least three
different countries outside of North America.
The "Freedom Income Fund" is an asset allocation fund designed for
investors who want a simple approach to investing for retirement by
investing in a collection of other Fidelity mutual funds. It seeks high
current income and, as a secondary objective, some capital appreciation for
those already in retirement.
The "Freedom 2000 Fund" is an asset allocation fund designed for investors
who want a simple approach to investing for retirement by investing in a
collection of other Fidelity mutual funds. It seeks high total returns for
those planning to retire in approximately 1-10 years.
The "Freedom 2010 Fund" is an asset allocation fund designed for investors
who want a simple approach to investing for retirement by investing in a
collection of other Fidelity mutual funds. It seeks high total returns for
those planning to retire in approximately 10-20 years.
The "Freedom 2020 Fund" is an asset allocation fund designed for investors
who want a simple approach to investing for retirement by investing in a
collection of other Fidelity mutual funds. It seeks high total returns for
those planning to retire in approximately 20-30 years.
The "Freedom 2030 Fund" is an asset allocation fund designed for investors
who want a simple approach to investing for retirement by investing in a
collection of other Fidelity mutual funds. It seeks high total returns for
those planning to retire in approximately 30-40 years.
8
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YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Notes to Financial Statements
December 29, 1999 and December 31, 1998
The "Spartan U.S. Equity Index Fund" is a growth and income fund. It seeks
investment results that try to duplicate the composition and total return
of the S&P 500. The fund invests primarily in the 500 companies that make
up the S&P 500 and in other securities that are based on the value of the
Index.
The "U.S. Bond Index Portfolio Fund" is an income fund. It seeks investment
results that correspond to the aggregate price and interest performance of
the debt securities in the Lehman Brothers Aggregate Bond Index. The Lehman
Brothers Aggregate Bond Index is a market value weighted performance
benchmark investment-grade fixed-rate debt index, including government,
corporate, asset-backed, and mortgage-backed securities, with maturities of
at least one year. The fund invests in investment grade (medium to high
quality) securities or above with maturities of at least one year,
including U.S. Treasury or government securities and corporate bonds,
asset-backed and mortgage-backed securities and U.S. dollar-denominated
foreign securities.
The "York International Stock Fund" is an unmanaged non-diversified
investment option consisting primarily of York International Corporation
common stock, with a small portion of short-term money market instruments
for liquidity. The liquidity is necessary to allow for daily transfers in
and out of the fund. Also, participants do not receive shares of York
International Corporation common stock for their investment; instead their
balance is reported in units of participation. The fund's share price will
vary in relation to the market price of York International Corporation
common stock. If participants choose to invest in the York International
Stock Fund, the following restrictions will apply to their investment:
. Limitation on New Contributions - participants will only be permitted
to invest up to 20% of any new contributions to the Plan in the York
International Stock Fund.
. No Rollover Purchase - participants will not be permitted to invest
any portion of a rollover contribution in the York International Stock
Fund.
. No Transfers from Other Funds into the York International Stock Fund -
although participants will be able to continue to make exchanges
between other investment funds, participants will not be permitted to
transfer amounts that are invested in another investment fund into the
York International Stock Fund.
. Sales of York International Stock Fund must occur during window
period -although participants will be permitted to sell any portion of
their investment in the York International Stock Fund and invest the
proceeds of that sale into another investment fund, any sale can only
occur during a "window" period that will be established by the
Company. Throughout the year, participants will be notified of
upcoming window periods.
Participants may change their investment options once a month.
9
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YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Notes to Financial Statements
December 29, 1999 and December 31, 1998
(d) Participant Notes Receivable
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to the lesser of $50,000 or 50 percent of their vested
account balance. Loan transactions are treated as a transfer to (from) the
investment fund from (to) the Participants Notes Receivable fund. Loan
terms range from 1-5 years or up to a reasonable amount of time for the
purchase of a primary residence. The loans are secured by the balance in
the participant's account and bear interest at a rate commensurate with
local prevailing rates as determined by the Plan Administrator. Interest
rates range from 7 percent to 11 percent. Principal and interest are paid
through monthly payroll deductions.
(e) Participants' Accounts
Each participant's account is credited with the participant's contribution
and allocations of (a) the Company's contribution and, (b) Plan earnings,
and charged with an allocation of administrative expenses paid by the Plan.
Allocations are based on participant earnings or account balances, as
defined. The benefit to which a participant is entitled is the benefit that
can be provided from the participant's vested account.
(f) Vesting
Participants are immediately vested in their contributions and their
employer matching contributions plus actual earnings thereon. Vesting in
the Company's matching contribution portion of their account plus actual
earnings thereon is based on years of continuous service. A participant is
100 percent vested after four years of credited service, as follows:
Years of Service Vested %
Less than 2 0%
2 33%
3 67%
4 or more 100%
(g) Payment of Benefits
On termination of service due to death, disability or retirement, a
participant may elect to receive either a lump-sum amount equal to the
value of the participant's vested interest in his or her account, annual
installments, or an annuity. For the York International Stock Fund,
participants may elect to receive cash or shares of York International
Corporation stock and cash with cash representing the value of any
fractional share. For termination of service due to other reasons, a
participant may receive the value of the vested interest in his or her
account.
10
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YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Notes to Financial Statements
December 29, 1999 and December 31, 1998
(h) Forfeitures
At December 29, 1999 and December 31, 1998, forfeited nonvested
accounts totaled $401,208 and $317,004, respectively. These accounts
may be used first to pay any expenses payable for the plan year and
then shall be used to reduce future employer contributions. In 1999,
employer contributions were not reduced by forfeited nonvested
accounts.
(2) Summary of Accounting Policies
(a) Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
(b) Investment Valuation and Income Recognition
Investments in the Magellan Fund, Puritan Fund, Equity Income Fund,
Growth & Income Fund, OTC Portfolio Fund, Overseas Fund, Freedom
Income Fund, Freedom 2000 Fund, Freedom 2010 Fund, Freedom 2020 Fund,
Freedom 2030 Fund, Spartan U.S. Equity Index Fund, U.S. Bond Index
Portfolio Fund, and York International Stock Fund are stated at fair
value as reported by the Trustee.
Participant Notes Receivable are valued at cost which approximates
fair value.
The Fixed Income Fund is fully benefit-responsive and in accordance
with Statement of Position No. 94-4 "Reporting of Investment Contracts
Held by Health and Welfare Benefit Plans and Defined Contribution
Plans" is recorded at contract value, which approximates fair value.
Contract value represents contributions made under the contract, plus
earnings, less Plan withdrawals and administrative expenses. The
average yield for the years ended December 29, 1999 and December 31,
1998 was 6.06% and 6.33%, respectively. The crediting interest rate at
December 29, 1999 and December 31, 1998 was 6.32% and 6.23%,
respectively. Crediting interest rates for traditional bank and
insurance company contracts are primarily fixed for the life of the
contract. Crediting interest rates for synthetic contracts are reset
monthly or quarterly, depending on contract terms.
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.
(c) Administrative Expenses
Certain administrative expenses are paid by the Company.
(d) 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,
liabilities and changes therein, and disclosure of contingent assets
and liabilities. Actual results could differ from those estimates.
11
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YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Notes to Financial Statements
December 29, 1999 and December 31, 1998
(e) Payment of Benefits
Benefits are recorded when paid.
(3) Investments
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, Accounting for and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters (SOP 99-
3). SOP 99-3 simplifies the disclosure for certain investments and is
effective for plan years ending after December 15, 1999. Accordingly,
information previously required to be disclosed about participant-directed
fund investment programs is not presented in the Plan's 1999 financial
statements. The Plan's 1998 financial statements have been reclassified to
conform with the current year's presentation.
The following table separately identifies those investments which represent
5 percent or more of the Plan's net assets.
<TABLE>
<CAPTION>
December 29, December 31,
(in thousands) 1999 1998
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<S> <C> <C>
Mutual Funds:
Fixed Income Fund (1) $ 62,435 60,231
Puritan Fund 19,173 20,298
Magellan Fund 71,453 57,110
Growth & Income Fund 23,916 22,094
OTC Portfolio Fund 17,574 9,347
Other 29,902 22,094
Participant Notes Receivable 3,718 3,253
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$ 228,171 194,427
================= ===============
</TABLE>
(1) Includes nonparticipant-direct unallocated forfeited nonvested
accounts of $401,208 and $317,004 at December 29, 1999 and
December 31, 1998, respectively. Tne increase is attributable to
additional forfeited nonvested accounts of $84,204 for the year
ending December 29, 1999.
During 1999 and 1998, the Plan's investments in mutual funds (including
gains and losses on investments bought and sold, as well as held during the
year) appreciated in value by $15,024,000 and $20,106,000, respectively.
12
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YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Notes to Financial Statements
December 29, 1999 and December 31, 1998
(4) Related Party Transactions
Certain Plan investments are shares of mutual funds managed by the Trustee
and therefore, these transactions qualify as party-in-interest. Fees paid
by the Plan for investment management services amounted to $33,044 and
$27,451 for 1999 and 1998, respectively.
In addition, the plan invests in a fund containing common stock of the Plan
sponsor, York International Corporation, and therefore, these transactions
qualify as party-in-interest transactions.
(5) 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.
(6) Tax Status of the Plan
The Internal Revenue Service has determined and informed the Company by
letter dated September 26, 1996, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC). The Plan has been amended since receiving the determination
letter. However, the Plan administrator believes that the Plan is designed
and is being operated in compliance with the applicable requirements of the
IRC.
13
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Schedule 1
YORK INTERNATIONAL CORPORATION
INVESTMENT PLAN
Schedule of Assets Held for Investment Purposes
(in thousands)
December 29, 1999
<TABLE>
<CAPTION>
Current
Identity of Issuer Description of Investment value
------------------------------------ ------------------------------------- ---------
<S> <C> <C>
* York International Corporation York International Stock Fund $ 8
* Fidelity Investments Fixed Income Fund (1) 62,435
* Fidelity Investments Puritan Fund 19,173
* Fidelity Investments Magellan Fund 71,453
* Fidelity Investments Equity Income Fund 10,151
* Fidelity Investments Growth & Income Fund 23,916
* Fidelity Investments OTC Portfolio Fund 17,574
* Fidelity Investments Overseas Fund 6,484
* Fidelity Investments Freedom Income Fund 89
* Fidelity Investments Freedom 2000 Fund 1,070
* Fidelity Investments Freedom 2010 Fund 2,916
* Fidelity Investments Freedom 2020 Fund 1,865
* Fidelity Investments Freedom 2030 Fund 1,358
* Fidelity Investments Spartan U.S. Equity Index Fund 4,947
* Fidelity Investments U.S. Bond Index Portfolio Fund 1,014
Participant Notes Receivable
(interest of 7% - 11% ) 3,718
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$ 228,171
=========
</TABLE>
* Party-in-interest
(1) Includes nonparticipant-directed amounts at cost and current value of
$401,000.
14
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EXHIBIT INDEX
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Exhibit No. Document
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23 Consent of Independent Auditors
15
