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 December 31, 1999
Commission file number 1-13300
CAPITAL ONE FINANCIAL CORPORATION ASSOCIATE SAVINGS PLAN
2980 Fairview Park Drive
Suite 1300
Falls Church, Virginia 22042-4525
-----------------------------
CAPITAL ONE FINANCIAL CORPORATION
2980 Fairview Park Drive
Suite 1300
Falls Church, Virginia 22042-4525
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Financial Statements and Exhibits
(a) Financial Statements
The Capital One Financial Corporation Associate Savings Plan (the "Plan") became
effective as of January 1, 1995. Filed as a part of this report on Form 11-K are
the audited financial statements of the Plan as of and for the years ended
December 31, 1999 and 1998.
(b) Exhibit
(1) Consent of Independent Auditors
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
CAPITAL ONE FINANCIAL
CORPORATION ASSOCIATE
SAVINGS PLAN
---------------------
(Name of Plan)
By:
Name: David M. Willey
----------------------
on behalf of the Benefits
Committee, as Plan
Administrator
Dated: June 21, 2000
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Capital One Financial Corporation
Associate Savings Plan
Financial Statements
and Supplemental Schedule
Years Ended December 31, 1999 and 1998
with Report of Independent Auditors
<PAGE>
Capital One Financial Corporation Associate Savings Plan
Financial Statements
and Supplemental Schedule
Years Ended December 31, 1999 and 1998
Contents
Report of Independent Auditors........................ ........................1
Audited Financial Statements
Statements of Net Assets Available for Benefits................................2
Statements of Changes in Net Assets Available for Benefits.....................3
Notes to Financial Statements..................................................4
Supplemental Schedule
Schedule of Assets Held for Investment Purposes...............................10
<PAGE>
Report of Independent Auditors
Benefits Committee
Capital One Financial Corporation
We have audited the accompanying statements of net assets available for benefits
of Capital One Financial Corporation Associate Savings Plan ("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 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 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 at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes as of December 31, 1999 is presented for
purposes 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 audits 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.
ERNST & YOUNG LLP
McLean, VA
June 21, 2000
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Capital One Financial Corporation Associate Savings Plan
Statements of Net Assets Available for Benefits
December 31,
1999 1998
--------------------------
Assets
Investments, at fair value:
Units of Capital One Pooled Company Stock Fund $ 87,131,276 $ 60,034,430
Units of American Express Trust Money Market
Fund II 18,423,567 14,152,910
Shares of registered investment companies 76,880,962 41,968,509
Participant notes receivable 6,929,473 4,230,131
----------------------------
Total investments 189,365,278 120,385,980
Receivables:
Employer's contributions 3,274,039 1,935,778
Participants' contributions 1,053
Accrued income 82,218 53,374
----------------------------
Total receivables 3,356,257 1,990,205
Cash and cash equivalents 554,289
----------------------------
Total assets 192,721,535 122,930,474
----------------------------
Liabilities
Administrative expenses payable 71,258 49,681
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Net assets available for benefits $ 192,650,277 $122,880,793
============================
See accompanying notes
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Capital One Financial Corporation Associate Savings Plan
Statements of Changes in Net Assets Available for Benefits
Year Ended December 31,
1999 1998
----------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair value of:
Units of Capital Pooled Company Stock $16,420,767 $ 29,219,337
Units of American Express Trust Money Market II (5,312) 14
Shares of registered investment companies 10,177,875 4,239,435
Interest 451,949 292,036
Dividends 4,420,346 2,350,375
--------------------------
31,465,625 36,101,197
Contributions:
Employer's 23,328,337 13,740,605
Participants' 19,337,862 10,865,811
Rollovers 5,060,788 2,925,831
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47,726,987 27,532,247
--------------------------
Total additions 79,192,612 63,633,444
Deductions from net assets attributed to:
Benefits paid to participants (10,041,648) (4,937,678)
Administrative expenses (248,285) (178,556)
--------------------------
Total deductions (10,289,933) (5,116,234)
Net increase prior to transfers 68,902,679 58,517,210
Plan transfers 866,805
--------------------------
Net increase 69,769,484 58,517,210
Net assets available for benefits:
Beginning of year 122,880,793 64,363,583
--------------------------
End of year $192,650,277 $122,880,793
==========================
See accompanying notes.
<PAGE>
Capital One Financial Corporation Associate Savings Plan
Notes to Financial Statements
Note 1--Description of Plan
Effective January 1, 1995, Capital One Financial Corporation (the "Corporation")
established and adopted the Capital One Financial Corporation Associate Savings
Plan (the "Plan") for the benefit of its eligible associates. American Express
Trust Company (the "Trustee") serves as the administrator and trustee for the
Plan and its assets.
Through a November 12, 1998 amendment to the Plan effective January 1, 1999, all
employees of Summit Acceptance Corporation (a Texas corporation which was
acquired by the Corporation on July 31, 1998) who were eligible participants of
the Summit 401(k) Savings Plan (the "Summit Plan") became eligible participants
in the Plan. Additionally, the Plan accepted the transfer of all assets and
liabilities attributable to participants of the Summit Plan, effective January
1, 1999. Net assets of $866,805 were transferred from the Summit Plan to the
Plan as of January 1, 1999.
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
General
The Plan is a defined contribution plan covering substantially all associates of
the Corporation and provides for pension, disability, death and termination
benefits. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Contributions
Each year, participants may contribute 1% to 15% of pre-tax annual compensation,
as defined in the Plan. Such contributions may be pre-tax dollars, or a
combination of pre-and after-tax dollars. Participants may also contribute
amounts representing distributions from other qualified plans ("rollover
contributions"). The Corporation contributes 50% of the first 6% of the
participant's annual compensation that a participant contributes to the Plan.
The Corporation contributes 3% of participants' eligible salaries, regardless of
participation in the Plan. Additional amounts equal to 3% of the participants'
eligible salaries for those participants making pre-tax contributions to the
Plan at year end may be contributed at the option of the Corporation's Board of
Directors.
Participant Accounts
Each participant's account is credited with the participant's contributions and
allocations of the Corporation's contributions and Plan earnings. Allocations
are based upon the number of units of the Plan in each participant's account.
Forfeited balances of terminated participants' nonvested accounts are used to
pay administrative expenses of the Plan, to the extent available. Plan expenses
in excess of forfeitures, if any, are absorbed by the Corporation. Excess
forfeitures, if any, are applied as employer contributions made in advance, and
reduce the Corporation's future contributions. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's account.
Vesting
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Corporation's contribution portion of their accounts
plus actual earnings thereon is based on years of continuous service. A
participant is 100% vested after two years of service.
Investment Options
Upon enrollment in the Plan, a participant may direct employer and employee
contributions in any of ten investment options. Participants may change their
investment options at any time. Investment options are described below.
Capital One Pooled Company Stock - Monies are invested by the Trustee in a
unitized trust fund which invests in shares of the Corporation's common
stock. The Trustee shall also be permitted to invest in short-term
temporary investments, including pooled funds which bear interest at market
rates.
American Express Trust Money Market Fund II - Monies are invested primarily
in short-term debt securities.
American Express Trust Equity Index Fund II - Ninety percent of the monies
held by this fund are invested in common stock and the balance is invested
in S&P 500 stock index futures.
American Express Federal Income Fund - Monies are invested in U.S.
government agency securities.
American Express Mutual Fund - Monies are invested in common stocks and
senior securities, such as bonds and preferred stocks.
American Express Stock Fund - Monies are invested in large capitalization,
blue chip stocks and investment grade bonds.
AIM Constellation Fund - Monies are invested in the common stock of
primarily small and medium-sized companies.
Templeton Foreign Fund - Monies are invested primarily in the common stock
of companies outside the U.S.
Baron Asset Fund - Monies are invested in common stocks of small and medium
-sized companies.
Davis New York Venture (A) - Monies are invested in common stocks of medium
to large-sized companies.
Cash and Cash Equivalents
Cash and cash equivalents represent contributions received from plan
participants not yet invested in participant-designated investment funds by the
Trustee. Cash balances are the result of timing differences between contribution
date and trade date.
Participant Notes Receivable
Participants may elect to borrow from their fund accounts a minimum of $1,000;
up to a maximum of the lesser of $50,000, or 50% of their account balance. Loan
transactions are treated as a transfer from (to) the investment fund to (from)
the loan fund. Loan terms range from 1 to 5 years or up to 10 years 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 Benefits Committee. Principal and interest
are paid ratably through monthly payroll deductions.
Payment of Benefits
On termination of service, a participant may elect to receive an amount equal to
the vested value of his or her account through a lump-sum distribution or equal,
or nearly equal, payments made at least annually for a period not to exceed 15
years. If the participant has invested in the Capital One Pooled Company Stock
fund, he or she may elect to receive distributions of whole shares of common
stock with fractional shares paid in cash.
Note 2--Summary of Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under 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 amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Valuation and Income Recognition
The Plan's investments are stated at fair value. Units in the Capital One Pooled
Company Stock fund are valued based upon the stock price at the last reported
sales price on the last business day of the plan year. The shares of registered
investment companies are valued at quoted market prices, which represent the net
asset values of shares held by the Plan as of year-end. Money market funds and
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. Realized gains and losses from security transactions are
reported on a first-in, first-out basis.
Note 3--Investments
The Plan's investments are held in a trust fund administered by American Express
Trust Company. The fair values of the following individual investments
represented 5% or more of the Plan's net assets as of December 31, 1999 or 1998:
December 31,
1999 1998
---------------- -------------
Capital One Pooled Company Stock Fund $87,131,276 $60,034,430
American Express Trust Equity Index Fund II 25,855,077 14,817,046
American Express Trust Money Market Fund II 18,423,567 14,152,910
AIM Constellation Fund 19,418,127 10,127,899
American Express Stock Fund 11,164,089 7,495,353
Note 4--Plan Termination
Although it has not expressed any intent to do so, the Corporation has the right
to terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100% vested in their accounts.
Note 5--Tax Status
The Internal Revenue Service ruled on April 10, 1997 that the Plan qualifies
under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the
related trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Benefits Committee is not aware of any course of
action or events that have occurred that might adversely affect the Plan's
qualified status.
Note 6--Transactions with Parties-in-Interest
During 1999 and 1998, certain Plan investments included shares of mutual funds
managed by the Trustee. In addition, the Plan had invested $87,131,276 and
$60,034,430, at fair value, in the Capital One Pooled Company Stock Fund as of
December 31, 1999 and 1998, respectively. Transactions involvong these
investments are considered to be party-in-interest transactions for which a
statutory exception exists.
<PAGE>
Supplemental Schedule
<PAGE>
Capital One Financial Corporation Associate Savings Plan
Employer Identification Number 54-1719854; Plan Number 002
Schedule of Assets Held for Investment Purposes
December 31, 1999
Units/ Fair
Shares value
Capital One Pooled Company Stock Fund* 1,486,021 $ 87,131,276
Registered Investment Companies:
American Express Trust Money Market Fund II* 18,423,567 18,423,567
American Express Trust Equity Index Fund II* 647,717 25,855,077
American Express Federal Income Fund* 663,064 3,151,727
American Express Mutual Fund* 312,469 3,965,273
American Express Stock Fund* 403,928 11,164,089
AIM Constellation Fund 479,379 19,418,127
Templeton Foreign Fund 571,795 6,413,646
Baron Asset Fund 52,845 3,104,117
Davis New York Venture (Class A) 132,146 3,808,906
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95,304,529
Participant Notes Receivable 6,929,473 6,929,473
------------
Total $189,365,278
============
* Parties-in interest
<PAGE>
EXHIBITS INDEX
Exhibit
Number Description
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23 Consent of Independent Auditors
<PAGE>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the following Registration
Statements of our report dated June 21, 2000, with respect to the financial
statements and schedule of the Capital One Financial Corporation Associate
Savings Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 1999.
Registration Statement
Number Form Description
---------------------- -------- ---------------------------------
33-80263 Form S-8 Marketing and Management
Services Agreement
33-86874 Form S-8 Employee Stock Purchase Plan
33-86876 Form S-8 Employee Savings Plan
33-86986 Form S-8 1994 Stock Incentive Plan
33-91790 Form S-8 1995 Non-Employee Directors
Stock Incentive Plan
33-97032 Form S-8 Amendment to 1994 Stock
Incentive Plan
33-99748 Form S-3 Dividend Reinvestment and
Stock Purchase Plan
333-3580 Form S-3 Debt Securities, Preferred Stock and
Common Stock in the amount of
$200 million
333-42853 Form S-8 1994 Stock Incentive Plan
333-45453 Form S-8 Associate Savings Plan
333-51637 Form S-8 1994 Stock Incentive Plan
333-51639 Form S-8 1994 Stock Incentive Plan,
Tier 5 Special Option Program
333-57317 Form S-8 1994 Stock Incentive Plan,
1998 Special Option Program
333-58577 Form S-3 Debt Securities, Preferred Stock
and Common Stock in the amount of
$500 million
333-60831 Form S-3 Acquisition of Summit Acceptance
Corporation
333-70305 Form S-8 1994 Stock Incentive Plan,
Supplemental Special Option Program
333-78067 Form S-8 1994 Stock Incentive Plan
333-78383 Form S-8 1994 Stock Incentive Plan, 1999
Performance-Based Option Program and
Supplemental Special Option Program
333-78609 Form S-8 1999 Stock Incentive Plan
333-78635 Form S-8 1999 Non-Employee Directors Stock
Incentive Plan
333-84693 Form S-8 1994 Stock Incentive Plan, Supplemental
Special Option Program
333-85227 Form S-3 Debt Securities, Preferred Stock and
Common Stock in the amount of
$1 billion
333-91327 Form S-8 1994 Stock Incentive Plan
333-92345 Form S-8 1994 Stock Incentive Plan
ERNST & YOUNG LLP
McLean, VA
June 21, 2000
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