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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 31, 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 NUMBER 0-14120
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
ADVANTA CORP. EMPLOYEE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
ADVANTA CORP.
WELSH AND MCKEAN ROADS
P.O. BOX 844
SPRING HOUSE, PA 19477-0844
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Committee which administers the Plan has duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
Advanta Corp.
Employee Savings Plan
Dated: June 28, 2000 By: /s/ Philip M. Browne
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Philip M. Browne
Member of the Committee Administering
the Plan
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ADVANTA CORP.
EMPLOYEE SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statements of Assets Available for Benefits
as of December 31, 1999 and 1998
Statement of Changes in Assets Available for Benefits
for the Year Ended December 31, 1999
Notes to Financial Statements
SCHEDULE:
I - Schedule of Assets Held for Investment Purposes as of December 31,
1999.
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Advanta Corp. Employee Savings Plan
Compensation Committee:
We have audited the accompanying statements of assets available for benefits of
Advanta Corp. Employee Savings Plan as of December 31, 1999 and 1998, and the
related statement of changes in assets available for benefits for the year ended
December 31, 1999. These financial statements and the schedule referred to below
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements and schedule 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 assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in its assets available for benefits
for the year ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
accompanying index 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. 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.
/s/ Arthur Andersen LLP
Philadelphia, PA
June 27, 2000
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ADVANTA CORP.
EMPLOYEE SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
Cash $ 77,738 $ 8,117
Investments (Note 8) 44,695,496 34,452,929
Employer Contribution Receivable 1,394,764 1,268,880
Participant Loans Receivable
(Note 4) 1,242,332 1,122,983
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Total Assets Available for
Benefits $47,410,330 $36,852,909
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</TABLE>
The accompanying notes are an integral part of these statements.
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ADVANTA CORP.
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
INCREASES:
Interest and Dividend Income $ 2,653,247
Employee Contributions 6,005,282
Employer Contributions 2,662,163
Net Increase in Fair Market
Value of Investments 6,672,400
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17,993,092
DECREASE:
Distributions to Participants 7,435,671
Net Increase 10,557,421
Assets Available for Benefits,
Beginning of Year 36,852,909
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Assets Available for Benefits,
End of Year $47,410,330
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</TABLE>
The accompanying notes are an integral part of these statements.
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ADVANTA CORP.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(1) DESCRIPTION OF PLAN:
The Advanta Corp. Employee Savings Plan (the "Plan"), as amended, was adopted
effective July 1, 1983 and is a defined contribution plan available to all
employees of Advanta Corp. ("Advanta") and certain of its subsidiaries and
affiliates who have reached age 21 with one year of service. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974, as
amended (ERISA). The following description of the Plan provides only general
information. Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
Participants may elect to defer a portion of their compensation before certain
taxes are deducted. Advanta may elect to limit the maximum percentage a
participant may contribute to the extent it determines that such limitation is
necessary in order to comply with the rules for plan qualification under
Sections 401(a) and (k) of the Internal Revenue Code. An eligible participant
may elect to contribute up to 15% of their salary subject to the limits under
Section 401 of the Internal Revenue Code. Advanta also makes matching
contributions to the Plan, a portion of which is made on a per pay period basis,
and the balance of which is made as of the end of the Plan year. Such employer
contributions are equal to 50% of each employee's contributions up to 5% of the
employee's compensation contributed to the Plan (as defined in the Plan).
Advanta may make an additional matching contribution for the benefit of
participants who are employed as of the last day of the Plan year. Total
employer contributions in 1999 were 100% of the first 5% of employees'
compensation contributed to the Plan.
The Plan is subject to certain non-discrimination standards under Section 401(k)
of the Internal Revenue Code. In order to comply with these standards, certain
participants who are "highly compensated employees" (as defined in the Internal
Revenue Code) may have a portion of their contributions refunded to them after
the end of the Plan Year.
Because contributions made under Section 401 can not be included in the income
of participants when made, they are fully taxable when distributed unless rolled
over into another qualified plan or Individual Retirement Account (IRA).
Participants are fully vested as to employer and employee contribution accounts
at all times.
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The Plan participants may invest their contributions in the following managed
investment funds and in shares of Advanta's Class B common stock.
- T. Rowe Price Stable Value Common Trust Fund: This fund invests primarily
in insurance contracts with a portion of the funds' assets in synthetic
investment contracts.
- Western Asset Core Portfolio: This fund invests in a portfolio of fixed
income securities with a duration of generally 4-6 years. Investments
include U.S. Government obligations, mortgage- and other asset-backed
securities, and U.S. dollar-denominated obligations of foreign governments
and non-governmental domestic or foreign issuers.
- Dodge & Cox Balanced Fund: This fund offers the benefit of asset allocation
and invests in a diversified portfolio of common stocks, preferred stocks
and bonds.
- Vanguard 500 Index Fund: This fund seeks to match the performance of a
benchmark index that measures the investment return of large-capitalization
stocks.
- Dodge & Cox Stock Fund: This fund invests primarily in a broadly
diversified portfolio of common stocks, investing in companies that appear
to be temporarily undervalued by the stock market, but have a favorable
outlook for long-term growth.
- Vanguard International Growth Fund: This fund invests primarily in the
stocks of seasoned companies located outside the United States with above
average growth potential.
- John Hancock Small Cap Growth Fund: This fund invests primarily in stocks
of U.S. emerging growth companies with market capitalizations of no more
than $1 billion. The John Hancock Special Equities Fund was merged into the
John Hancock Small Cap Growth Fund in December 1999.
- Putnam New Opportunities Fund: This fund invests mainly in U.S. common
stocks, with a focus on growth stocks in sectors of the economy with high
growth potential.
The Plan invests funds related to pending trades in a short-term money market
fund.
While it is Advanta's intention to continue the Plan in operation indefinitely,
any termination of the Plan or discontinuance of contributions will not result
in the use or diversion of Plan assets for any purposes other than the exclusive
benefit of Plan participants and their beneficiaries.
(2) BASIS OF ACCOUNTING:
The accompanying financial statements have been prepared using the accrual basis
of accounting.
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(3) USE OF ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets available for benefits and changes
therein. Actual results could differ from those estimates.
(4) PARTICIPANT LOANS:
As provided for in the Plan document, loans are available to participants under
certain specified conditions. The principal amount of a Plan loan to a
participant may not exceed the lesser of $50,000 (reduced by the maximum amount
of any Plan loans outstanding anytime during the preceding year) or 50% of a
participant's accrued equity in the Plan. Plan loans are generally limited to a
term of five years (or, in the case of a loan used to finance the acquisition of
a principal residence, fifteen years) and bear an interest rate charged by
commercial lenders for a comparable loan on the date the loan request is
approved. Plan loans are collateralized by the participant's accrued benefit in
the Plan.
(5) PARTICIPANT ACCOUNTS:
Effective July 1, 1997, the Plan was amended. Pursuant to the amendments to the
Plan, the investment options that existed at December 31, 1996 were replaced
with new investment options. Plan participants may invest their contributions
and employer contributions in one or more of the investment options described in
Note 1. In addition, in July 1997, Wilmington Trust Company replaced PW Trust
Company as Trustee of the Plan.
Separate accounts are maintained for each participant in each investment fund.
Investment gains and losses in each of the funds described above are allocated
to the participants in the ratio of each participant's account balance
(including employee contributions and employer matching contributions) to the
total account balance in each fund.
(6) ADMINISTRATIVE EXPENSES:
All administrative expenses of the Plan and other fees incident to the
management of the Plan are paid for by Advanta, except for brokerage
commissions, investment advisory fees and transfer taxes, if any.
(7) DISTRIBUTIONS TO PARTICIPANTS:
There were no distributions payable as of year-end 1999 or 1998.
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(8) INVESTMENTS:
The carrying values of individual investments that represent more than 5% of the
Plan's net assets were as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
T. Rowe Price Stable Value Fund $ 5,101,869 $ 5,365,337
Dodge & Cox Balanced Fund 3,650,567 3,693,383
Vanguard 500 Index Fund 13,170,520 10,211,235
Dodge & Cox Stock Fund 4,596,327 4,180,879
Vanguard International Growth Fund 2,728,201 2,169,424
John Hancock Small Cap Growth Fund 2,818,382 1,937,267
Putnam New Opportunities Fund 7,555,145 3,977,650
Advanta Corp. Common Stock,
Class A & B 4,345,721 2,240,713
</TABLE>
All investments are stated at market value on the statement of net assets.
Market value for the investments is based on quoted market prices.
The net increase (decrease) in fair market value of investments, including gains
and losses on investments bought and sold, as well as held during the year, was
as follows for the year ended December 31, 1999:
<TABLE>
<S> <C>
Western Asset Core Portfolio $ (55,038)
Dodge & Cox Balanced Fund 64,549
Vanguard 500 Index Fund 2,070,981
Dodge & Cox Stock Fund 506,022
Vanguard International Growth Fund 449,230
John Hancock Small Cap Growth Fund 372,179
Putnam New Opportunities Fund 2,454,390
Advanta Corp. Common Stock,
Class A & B 810,087
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Total $ 6,672,400
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</TABLE>
(9) FEDERAL INCOME TAXES:
The Internal Revenue Service issued a determination letter dated December 30,
1994 stating that the Plan was designed in accordance with applicable Internal
Revenue Code requirements as of that date. The Plan has been amended since
receiving the determination letter. However, the Plan administrator and
management believe that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Internal Revenue Code.
Therefore, they believe that the Plan was qualified and the related trust was
tax-exempt for the year ended December 31, 1999.
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SCHEDULE I
ADVANTA CORP.
EMPLOYEE SAVINGS PLAN
EIN 23-1462070
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
MARKET
COST VALUE
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<S> <C> <C>
Cash $ 77,738 $ 77,738
T. Rowe Price Stable Value Fund:
Market value per share $1.00 5,101,869 5,101,869
Western Asset Core Portfolio:
Market value per share $10.28 788,883 728,764
Dodge & Cox Balanced Fund:
Market value per share $65.71 3,792,833 3,650,567
Vanguard 500 Index Fund:
Market value per share $135.33 9,842,013 13,170,520
Dodge & Cox Stock Fund:
Market value per share $100.52 4,505,770 4,596,327
Vanguard International Growth Fund:
Market value per share $22.49 2,289,697 2,728,201
John Hancock Small Cap Growth Fund:
Market value per share $15.21 2,460,588 2,818,382
Putnam New Opportunities Fund:
Market value per share $90.96 4,693,889 7,555,145
Advanta Corp. Common Stock* 4,837,978 4,345,721
Class A: market value $18.25 per share
Class B: market value $14.06 per share
Participant Loans Receivable,
bearing interest from 7.5% to 11.5% 1,242,332 1,242,332
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$39,633,590 $46,015,566
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</TABLE>
*Party-in-interest to the Plan
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EXHIBIT INDEX
EXHIBIT NO. DOCUMENT
1 Consent of Independent Public Accountants
12
