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, 2000
[ ] 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
SAVINGS-INVESTMENT PLAN
OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Financial Statements and Schedule
December 31, 2000 and 1999
(With Independent Auditors' Report Thereon)
2
SAVINGS-INVESTMENT PLAN
OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Index to Financial Statements and Schedule
December 31, 2000 and 1999
Pages
-----
Independent Auditors' Report 4
Statements of Net Assets Available for Benefits
December 31, 2000 and 1999 5
Statements of Changes in Net Assets Available for Benefits for
the Years Ended December 31, 2000 and 1999 6
Notes to Financial Statements 7
Schedule
--------
Schedule of Assets Held (at End of Year)
as of December 31, 2000 1
Other schedules not filed herewith are omitted because of the absence of
conditions under which they are required.
3
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, 2000 and 1999, 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 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 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, 2000 and 1999, and the changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
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
(at end of year) as of December 31, 2000 included in Schedule 1 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.
/s/ KPMG LLP
- ------------------
KPMG LLP
Richmond, Virginia
May 11, 2001
4
SAVINGS-INVESTMENT PLAN OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Statements of Net Assets Available for Benefits
December 31
(In thousands) 2000 1999
- ------------------------------------------------------------------------------
Assets
Investments (Note 8)
Common stock $ 52,533 51,733
Mutual funds 153,621 158,389
Participant notes receivable 12,831 13,224
- ------------------------------------------------------------------------------
Total investments 218,985 223,346
Receivables:
Participant contributions 1,485 1,378
Employer contributions 560 650
Interest 74 70
- ------------------------------------------------------------------------------
Total receivables 2,119 2,098
- ------------------------------------------------------------------------------
Total assets $ 221,104 225,444
- ------------------------------------------------------------------------------
Liabilities
Accrued liabilities $ 359 195
- ------------------------------------------------------------------------------
Total liabilities 359 195
- ------------------------------------------------------------------------------
Net assets available for benefits
(includes benefits payable to participants:
2000 - $2,831; 1999 - $4,833) $ 220,745 225,249
- ------------------------------------------------------------------------------
See accompanying notes to financial statements.
5
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) 2000 1999
- ------------------------------------------------------------------------------
Income:
Dividends $ 13,173 10,200
Interest 961 954
Net depreciation in fair value of
investments (Note 8) (20,789) (10,220)
Contributions:
Participant 18,290 16,805
Employer 8,993 8,815
Rollover 1,052 1,350
- ------------------------------------------------------------------------------
Total additions $ 21,680 27,904
- ------------------------------------------------------------------------------
Distributions to participants
or beneficiaries $ (26,184) (25,078)
- ------------------------------------------------------------------------------
Net increase (decrease) (4,504) 2,826
Net assets available for benefits:
Beginning of year 225,249 222,423
- ------------------------------------------------------------------------------
End of year $ 220,745 225,249
- ------------------------------------------------------------------------------
See accompanying notes to financial statements.
6
SAVINGS-INVESTMENT PLAN
OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Notes to Financial Statements
December 31, 2000 and 1999
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 collective bargaining agreement provides specifically for and the
Administrative Committee has approved 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.
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 ("the Exchange") of Pittston BAX Group
Common Stock ("BAX Stock") and Pittston Minerals Group Common Stock
("Minerals Stock") for shares of Pittston Brink's Group Common Stock
("Brink's Stock"). 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
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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. The formula provided that shareholders of BAX Stock and
Minerals Stock were 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.
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 Pittston Common
Stock and mutual fund investments is 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.
Use of Estimates
----------------
In accordance with accounting principles generally accepted in the United
States of America, 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 materially
from those estimates.
Vesting Policy
--------------
A participant is 100% vested in the market value of his or her pre-tax
contributions. 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
$249,233 and $90,418 at December 31, 2000 and 1999, respectively. Also, in
2000 and 1999, employer contributions on the Statement of Changes in Net
Assets Available for Benefits were reduced by $614,081 and $418,139,
respectively from forfeited non-vested accounts.
8
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, in exchange for a promissory note, 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. The term of a loan
cannot exceed 4 1/2 years for general purpose loans and 15 years for
principal residence loans.
3. Contributions
Each participant could designate a basic contribution of up to the lesser
of $10,500 and $10,000 or 15% of pre-tax earnings during 2000 and 1999,
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 2000 and 1999, participant contributions to the Plan could be
invested in one of twelve T. Rowe Price investment funds. During 2000, the
Plan also permitted participants to invest their own contributions in
Pittston Common Stock. During 1999, the Plan permitted participants to
invest their own contributions in Brink's Stock, BAX Stock and Minerals
Stock. See also Note 8 below.
From time to time, some of the available monies in each of the funds is
invested in short-term investments to provide liquidity for making loans
and distributing funds to participants.
Participant contributions up to 5% of pre-tax earnings were matched by the
Company at rates ranging from 50% to 100% in 2000 and 1999. Participants
who were employees of the following wholly-owned subsidiaries of the
Company were matched at the following rates in 2000 and 1999:
Brink's, Incorporated 100%
Brink's Home Security 75%
BAX Global Inc. 75%
Air Transport International, LLC 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 2000 and 1999. The Company may adjust
the rate at which contributions are matched.
During 2000, Company matching contributions were used to purchase Pittston
Common Stock. During 1999, 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. During 1999, Company matching
contributions for those participants not employed by a specific subsidiary
of the Company were allocated among 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 bore to the total combined fair value of these three
stocks.
9
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 an 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.
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. The Plan did not incur any costs during the year ended December 31,
2000 or 1999.
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 2000 and 1999, the Plan's investments (including investments
bought, sold and held during the year) appreciated (depreciated) in value
as follows:
Year Ended December 31
2000 1999
-------------------------------------------------------------------------
(In thousands)
Investments at fair value
as determined by quoted market prices:
Mutual funds $ (17,035) 6,221
Common stocks (3,754) (16,441)
-------------------------------------------------------------------------
$ (20,789) (10,220)
-------------------------------------------------------------------------
10
Investments at fair value which represent 5% or more of the net assets
available for plan benefits are as follows:
December 31
2000 1999
-------------------------------------------------------------------------
(In thousands)
Investment:
Pittston Common Stock (a) $52,533 36,225
Pittston BAX Group Common Stock (b) - 13,426
T. Rowe Price Stable Value Fund 51,367 53,451
T. Rowe Price Equity Index Fund 22,505 25,636
T. Rowe Price New America Growth Fund 25,621 31,665
T. Rowe Price Personal Strategy Balanced Fund 18,742 20,033
Participant notes receivable 12,831 13,224
-------------------------------------------------------------------------
(a) Includes nonparticipant-directed investments (employer contributions)
of $48,673 in 2000 and former Pittston Brink's Group Common Stock
nonparticipant-directed investments (employer contributions) of
$33,287 in 1999.
(b) Includes nonparticipant-directed investments (employer contributions)
of $11,941 in 1999.
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:
December 31
2000 1999
-------------------------------------------------------------------------
(In thousands)
Net Assets:
Common stock $ 48,516 47,096
Employer contributions receivable 560 650
-------------------------------------------------------------------------
$ 49,076 47,746
-------------------------------------------------------------------------
Year Ended December 31
2000 1999
-------------------------------------------------------------------------
(In thousands)
Changes in Net Assets:
Contributions $ 8,993 8,815
Dividends 229 412
Net depreciation (3,259) (15,214)
Distributions to participants
or beneficiaries (3,742) (4,988)
Transfers to participant-directed
investments (891) (915)
-------------------------------------------------------------------------
$ 1,330 (11,890)
-------------------------------------------------------------------------
11
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, 2000 and 1999. The accompanying financial statements disclose
this liability parenthetically on the statements of net assets available
for benefits. In addition, the 2000 and 1999 Form 5500 for the Plan
reflects a reduction in net assets for deemed distributions of participant
loans in the statements of net assets available for benefits for the year
ended December 31, 2000 and December 31, 1999, respectively. 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:
December 31
2000 1999
-------------------------------------------------------------------------
(In thousands)
Net assets available for benefits
per the Form 5500 $217,856 220,341
Current year deemed distributions (a) 58 75
Benefits payable to participants at end of year 2,831 4,833
-------------------------------------------------------------------------
Net assets available for benefits
per the Statements of Net Assets
Available for Benefits $220,745 225,249
-------------------------------------------------------------------------
Year Ended December 31
2000 1999
-------------------------------------------------------------------------
(In thousands)
Distributions to participants per the
Form 5500 $24,240 24,925
Deemed distributions of participant loans (a) (58) (75)
Benefits payable to participants at
beginning of year 4,833 5,061
Benefits payable to participants at
end of year (2,831) (4,833)
-------------------------------------------------------------------------
Distributions paid to participants per the
Statements of Changes in Net Assets
Available for Benefits $26,184 25,078
-------------------------------------------------------------------------
(a) Deemed distributions for 1999 include amounts from current and prior
years.
12
Schedule 1
SAVINGS-INVESTMENT PLAN
OF THE PITTSTON COMPANY AND ITS SUBSIDIARIES
Schedule of Assets Held (at End of Year)
As of December 31, 2000
(In thousands, except share amounts)
Identity of Issue, Borrower, Description of Investment Including Maturity Date, Cost Current
Lessor or Similar Party Rate of Interest, Collateral, Par or Maturity Value (non-participant directed only) Value
- -----------------------------------------------------------------------------------------------------------------------------------
The Pittston Company* 2,643,172 shares Pittston Common Stock; $1 par value $ 48,673 52,533
T. Rowe Price* 51,366,526 shares in the Stable Value Fund 51,367
T. Rowe Price* 99,326 shares in the Spectrum Income Fund 1,070
T. Rowe Price* 225,596 shares in the Equity Income Fund 5,565
T. Rowe Price* 633,952 shares in the Equity Index Fund 22,505
T. Rowe Price* 319,263 shares in the International Stock Fund 4,636
T. Rowe Price* 139,860 shares in the Small Cap Value Fund 2,677
T. Rowe Price* 715,397 shares in the New America Growth Fund 25,621
T. Rowe Price* 355,002 shares in the New Horizons Fund 8,481
T. Rowe Price* 151,174 shares in the Personal Strategy Income Fund 1,992
T. Rowe Price* 1,177,285 shares in the Personal Strategy Balanced Fund 18,742
T. Rowe Price* 268,551 shares in the Personal Strategy Growth Fund 5,089
T. Rowe Price* 165,208 shares in the Science & Technology Fund 5,876
Participant notes
receivable Participant notes receivable at interest rates ranging from 6.8% to
11%, maturities not to exceed 41/2years for general purpose and
15 years for principal residence 12,831
- -----------------------------------------------------------------------------------------------------------------------------------
$ 218,985
- -----------------------------------------------------------------------------------------------------------------------------------
The cost of participant-directed investments is not required. Number of shares
and current value of Pittston Common Stock include both participant and
nonparticipant-directed investments.
*Indicates a party-in-interest investment.
See accompanying independent auditor's report.
13
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 21, 2001
14
CONSENT OF INDEPENDENT AUDITORS
We consent to incorporation by reference in the registration statements (Nos.
333-02219 and 333-78633) on Forms S-8 of The Pittston Company of our report
dated May 11, 2001, relating to the statements of net assets available for
benefits of the Savings-Investment Plan of The Pittston Company and its
Subsidiaries as of December 31, 2000 and 1999, and the related statements of
changes in net assets available for benefits for the years then ended, which
report appears in the December 31, 2000 Annual Report on Form 11-K of the
Savings-Investment Plan of The Pittston Company and its Subsidiaries.
/s/ KPMG LLP
- ------------------
KPMG LLP
Richmond, Virginia
June 21, 2001
15