SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
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FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999 Commission File Number 33-46530
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THE FINOVA GROUP INC. SAVINGS PLAN
(Full title of the plan and the address of the
plan, if different from that of the issuer named below.)
THE FINOVA GROUP INC.
(Name of the issuer of securities held
pursuant to the plan.)
4800 N. Scottsdale Rd.
Scottsdale, AZ 85251-7623
(Address of its principal executive office.)
<PAGE>
THE FINOVA GROUP INC. SAVINGS PLAN
TABLE OF CONTENTS
FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
Page(s)
-------
Independent Auditors' Report
Ernst & Young LLP 1
Deloitte & Touche LLP 2
Statements of Net Assets Available for
Benefits - December 31, 1999 and 1998 3
Statements of Changes in Net Assets Available for
Benefits - for the Years Ended December 31, 1999
and 1998 4
Notes to Financial Statements 5 - 7
Supplemental Schedule 8
Signatures 9
Exhibits 10 - 12
<PAGE>
Report of Independent Auditors
To the Administration Committee and
Plan Participants of
The FINOVA Group Inc. Savings Plan
Scottsdale, Arizona
We have audited the accompanying statement of net assets available for benefits
of The FINOVA Group Inc. Savings Plan as of December 31, 1999, and the related
statement of changes in net assets available for benefits for the year 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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides 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 at
December 31, 1999, and the changes in its net assets available for benefits for
the year then ended in conformity with its accounting principles generally
accepted in the United States.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at end of year December 31, 1999 is presented for
the purpose of additional analysis and is not a required part of the 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 our audit of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
Phoenix, Arizona
June 6, 2000
1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Administration Committee and Plan Participants of
The F1NOVA Group Inc. Savings Plan
Phoenix, Arizona
We have audited the accompanying statements of net assets available for benefits
of The FINOVA Group Inc. Savings Plan (the "Plan") as of December 31, 1998, and
the related statements of changes in net assets available for plan benefits for
the year then ended. These financial statements are the responsibility of Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides 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 December 31,
1998, and the changes in net assets available for benefits for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.
/s/ Deloitte & Touche LLP
Phoenix, Arizona
June 18, 1999
2
<PAGE>
THE FINOVA GROUP INC. SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31,
--------------------------
ASSETS 1999 1998
----------- -----------
INVESTMENTS, at fair value:
Shares of registered investment companies:
T. Rowe Price Equity Index Fund $12,948,972 $ 7,958,034
Vanguard Windsor Fund 9,101,053 8,476,503
T. Rowe Price New America Growth Fund 7,103,729 6,533,244
T. Rowe Price Growth & Income Fund 7,037,742 6,595,663
T. Rowe Price Stable Value Common Trust Fund 6,098,898 5,696,318
T. Rowe Price International Stock Fund 4,521,593 3,540,731
T. Rowe Price Small-CAP Value Fund 1,950,188 1,770,194
T. Rowe Price Spectrum Income Fund 1,859,431 2,062,571
T. Rowe Price Prime Reserve Fund 1,850,216 2,357,859
Vanguard Bond Index Fund 1,663,590 1,425,016
T. Rowe Price International Bond Fund 162,491 116,272
Common Stock:
The FINOVA Group Inc. Common Stock 9,978,591 12,268,435
Participant notes receivable 2,098,370 1,565,228
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Total investments 66,374,864 60,366,068
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CONTRIBUTIONS RECEIVABLE 210,336 186,704
DIVIDENDS RECEIVABLE 51,036 39,622
CASH 0 524
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $66,636,236 $60,592,918
=========== ===========
See Notes to Financial Statements
3
<PAGE>
THE FINOVA GROUP INC. SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31,
-----------------------------
ADDITIONS: 1999 1998
------------ -----------
Contributions:
Employee wage reductions $ 6,052,822 $ 4,896,597
Employer contributions 1,959,297 1,496,531
------------ -----------
Total contributions 8,012,119 6,393,128
Rollover deposits 1,028,246 710,842
Investment income:
Dividends and interest income 4,212,471 3,105,225
Net appreciation (depreciation) in fair
value of investments:
Mutual Funds 1,720,281 1,320,671
Common Stock (4,588,205) 1,055,451
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Total investment income 1,344,547 5,481,347
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Total additions 10,384,912 12,585,317
DEDUCTIONS - distributions to participants 4,341,594 3,397,748
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NET INCREASE 6,043,318 9,187,569
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 60,592,918 51,405,349
------------ -----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 66,636,236 $60,592,918
============ ===========
See Notes to Financial Statements
4
<PAGE>
THE FINOVA GROUP INC. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1. DESCRIPTION OF THE PLAN
The following brief description of The FINOVA Group Inc. Savings Plan (the
"Plan") is provided for general information purposes only. Participants
should refer to the Plan documents for a more complete description of the
Plan's provisions.
a. GENERAL - The Plan was established March 18, 1992 (date of inception)
in connection with the spin-off of The FINOVA Group Inc. and its
subsidiaries (the "Company" or "FINOVA") by The Dial Corp ("Dial").
The assets of the Plan were formerly held in the Dial Companies
Capital Accumulation Plan ("Dial Plan") and The Dial Corp Employee
Stock Ownership Plan ("Dial ESOP") for the benefit of employees of the
Company participating in the Dial Plan and the Dial ESOP. These
amounts were transferred to the Plan in 1992. Employees of the Company
are eligible to become a participant in the Plan in the month
following employment with FINOVA. Employees are able to reduce their
salaries on a pre-tax basis which the Company contributes to the Plan.
After-tax contributions were permitted through December 31, 1996;
after-tax contributions were not allowed after December 31, 1996. The
Plan is subject to various regulations, particularly those under
Internal Revenue Code Section 401(k) and the Employee Retirement
Income Security Act of 1974 ("ERISA").
b. INVESTMENT PROGRAMS - Receipts of the Plan are invested by the Plan's
trustee, T. Rowe Price, at the designation of the participants into 11
mutual fund investment choices or FINOVA common stock. All dividends
or income generated by the investments are generally reinvested
according to the participant's investment elections.
c. PARTICIPANT NOTES RECEIVABLE - The Plan allows participants to borrow
up to 50% of their vested account balance, subject to certain
restrictions. Such loans have terms of one to five years, except
residential mortgage loans, which may have terms up to 25 years. The
Plan allows participants to have two loans outstanding concurrently.
The loan repayments are reinvested according to the participants'
current investment elections.
d. CONTRIBUTIONS - Employees may elect Voluntary pre-tax wage reductions.
These pre-tax reductions are contributed to the Plan by the Company
and may range from 1% to 15% of taxable compensation ("as defined").
Employees of the Company are eligible to receive matching
contributions beginning in the month following the first twelve
consecutive month period during which they have at least 1,000 hours
of service with the Company. The matching contributions are based on
employee pre-tax salary reductions to the Plan, up to a maximum of
100% of the first 6% of salary reduction. For the first 3% of salary
reduction, the Company's matching contributions are made in FINOVA's
common stock under FINOVA's Employee Stock Ownership Plan ("ESOP").
5
<PAGE>
THE FINOVA GROUP INC. SAVINGS PLAN
The remaining matching contribution is made to this Plan and can be
invested in any of the Plan's qualified investments, including FINOVA
common stock.
The Company's contributions are at the discretion of the Company's
Board of Directors. All contributions are limited to the applicable
amounts as prescribed by the Internal Revenue Code.
e. DISTRIBUTIONS - Distributions of Plan assets primarily occur from
participant termination from the Company, financial hardship,
disability, retirement or death. Other distributions may occur in
accordance with the Plan documents and current ERISA regulations.
f. VESTING - Contributions to the Plan are 100% vested and nonforfeitable
at all times.
g. PARTICIPANT ACCOUNTS - For each participant, various accounts are
maintained to record employee wage reductions, Company matching
contributions and participant rollover deposits transferred to the
Plan. The benefit to which a participant is entitled is the total
benefit which can be provided from the combined amount of these
participant accounts.
h. PLAN ADMINISTRATION - The Plan is administered by a committee of at
least three persons appointed by the Board of Directors of the
Company. At the Company's option, the Company paid expenses of
maintaining the Plan in 1999 and 1998.
i. PLAN TERMINATION - While it is the Company's intention to continue the
Plan, the Company has the right to terminate or amend the Plan at any
time.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF ACCOUNTING - The financial statements of the Plan are
prepared under the accrual basis of accounting.
b. INVESTMENT VALUE AND INCOME RECOGNITION - The Plan's investments are
stated at fair value. Shares of registered investment companies
(mutual funds) are valued at quoted market prices, which represent the
net asset value of shares held by the Plan at year-end. Common stock
is valued at its quoted market price. Participant notes receivable are
valued at cost, which approximates fair value.
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. PAYMENT OF BENEFITS - Benefits are recorded when paid.
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
6
<PAGE>
THE FINOVA GROUP INC. SAVINGS PLAN
amounts of assets and liabilities and disclosures at the date of the
financial statements and the reported amounts of additions and
deductions during the reporting period. Actual results could differ
from those estimates.
3. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by T. Rowe
Price. T. Rowe Price also serves as the trustee as defined by the
Plan.
4. FEDERAL INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue
Service that the Plan is in compliance with the applicable
requirements of the Internal Revenue Code. The Plan Administrator
believes that the Plan is operating in compliance with all
requirements of Section 401(a) of the Internal Revenue Code and is
exempt from federal income tax under Section 501(a) of the Code.
7
<PAGE>
THE FINOVA GROUP INC. SAVINGS PLAN
SUPPLEMENTAL SCHEDULE
DECEMBER 31, 1999
EMPLOYER IDENTIFICATION NUMBER: 86-0695381 PLAN NUMBER: 003
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT
END OF YEAR
<TABLE>
<CAPTION>
Column B Column C Column D Column E
-------- -------- -------- --------
Description of Investment Including
Identity of Issue, Collateral, Rate of
Borrower, Lessor Interest, Maturity
or Similar Party Date, Par or Maturity Value Cost Current Value
---------------- --------------------------- ---- -------------
<S> <C> <C> <C>
T. Rowe Price Equity Index Fund Common Stock Fund (327,325 shares) $ 8,758,948 $ 12,948,972
Vanguard Windsor Fund Common Stock Fund (599,938 shares) 9,518,054 9,101,053
T. Rowe Price New America
Growth Fund Common Stock Fund (147,810 shares) 5,998,422 7,103,729
T. Rowe Price Growth & Income
Fund Common Stock Fund (287,960 shares) 6,742,447 7,037,742
T. Rowe Price Stable
Value Common Trust Fund GIC Fund (6,098,898 shares) 6,098,898 6,098,898
T. Rowe Price
International Stock Fund Common Stock Fund (237,603 shares) 3,365,651 4,521,593
T. Rowe Price Small-CAP Value
Fund Common Stock Fund (110,680 shares) 2,257,930 1,950,188
T. Rowe Price Spectrum
Income Fund Bond Fund (173,616 shares) 1,938,445 1,859,431
T. Rowe Price Prime Reserve
Fund Money Market Fund (1,850,216 shares) 1,850,216 1,850,216
Vanguard Bond Index Fund Bond Fund (174,016 shares) 1,727,572 1,663,590
T. Rowe Price
International Bond Fund Bond Fund (17,739 shares) 172,828 162,491
The FINOVA Group Inc.
Common Stock Common Stock (281,087 shares) 9,890,377 9,978,591
Participant Notes Receivable Participant Loans (rate of interest
6.0% to 10.0%), maturing in 2000 to 2024 0 2,098,370
------------
$ 66,374,864
============
</TABLE>
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee has duly caused this annual report to be signed on its
behalf by the undersigned thereunto duly authorized.
THE FINOVA GROUP INC. SAVINGS PLAN
Dated: June 22, 2000 Signature: /s/ William C. Roche
------------------------------
William C. Roche
Senior Vice President -
Human Resources
Dated: June 22, 2000 Signature: /s/ Bruno A. Marszowski
------------------------------
Bruno A. Marszowski
Senior Vice President -
Controller and Chief
Financial Officer
9
<PAGE>
THE FINOVA GROUP INC. SAVINGS PLAN
COMMISSION FILE NUMBER 33-46530
EXHIBIT INDEX
Page No. in
Sequentially
numbered Form
No. Title 11-K Report
--- ----- -----------
23.1 Independent Auditors' Consent of Ernst & Young LLP 11
23.2 Independent Auditors' Consent of Deloitte & Touche LLP 12
10
