11-K 1 g70036ee11-k.txt POPULAR, INC. 1 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 0-13818 GMG RETIREMENT & SAVINGS PLAN (Full title of the Plan and address of the Plan, if different from that of the issuer named below) POPULAR, INC. 209 MUNOZ RIVERA AVENUE HATO REY, PUERTO RICO 00918 (Name of issuer of the securities held pursuant to the plan and the address of principal executive office) 2 GMG RETIREMENT & SAVINGS PLAN TABLE OF CONTENTS
PAGE Financial Statements and Schedules Independent Auditors' Report.............................. 1 Statements of Net Assets Available for Benefits as of December 31, 2000 and 1999............................. 2 Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 2000 and 1999......... 3 Notes to Financial Statements............................. 4 Schedule of Assets Held for Investment Purposes as of December 31, 2000 and 1999............................. 8 Schedule of Reconciliation of Form 5500 as of December 31, 2000 and 1999.......................................... 9 Signature................................................... 10 Consent of Independent Accountants.......................... 11
3 (Logo) HipoLito Torres Rivera & Co. CPA's P.S.C. Certified Public Accountants & Consultants INDEPENDENT AUDITORS' REPORT To the Board of Directors of GMG Retirement & Savings Plan We have audited the accompanying statements of net assets available for benefits of GMG Retirement & Savings Plan (formerly GM Group, Inc. CODA Profit Sharing 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 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 GMG Retirement & Savings 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 generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reconciliation of Form 5500 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are 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 schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ HipoLito Torres Rivera & CPA's, P.S.C. San Juan, Puerto Rico June 7, 2001 Stamp number was affixed to the original report. GM Group Plaza Suite 104A-Box 8 1590 Ponce de Leon Ave., San Juan, PR 00926 T(787) 281-0088 F(787) 281-0087 E-mail htrpa@prtc.net 1 4 GMG RETIREMENT & SAVINGS PLAN FORMERLY GM GROUP, INC. CODA PROFIT SHARING PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2000 AND 1999
2000 1999 ---------- ---------- ASSETS INVESTMENTS, at fair value: Equity fund $2,280,368 $1,038,725 Fixed income 113,997 146,101 Stock 1,843,651 -- Money market 1,010 275,218 ---------- ---------- Total investments 4,239,026 1,460,044 ---------- ---------- CONTRIBUTIONS RECEIVABLE: Participants 35,453 -- Employer 13,453 -- ---------- ---------- Total contributions receivable 48,906 -- ---------- ---------- DIVIDEND RECEIVABLE 95,242 -- ---------- ---------- TOTAL NET ASSETS AVAILABLE FOR BENEFITS $4,383,174 $1,460,044 ========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. 2 5 GMG RETIREMENT & SAVINGS PLAN FORMERLY GM GROUP, INC. CODA PROFIT SHARING PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999 ------------ ------------ ADDITIONS TO NET ASSETS ATTRIBUTED TO INVESTMENT INCOME: Unrealized gain (loss) on trust funds $ (164,719) $ 8,018 Realized gain (loss) on distributions (3,299) 28,329 Dividends 204,937 -- Interest 9,960 8,172 ------------ ------------ Total investment income 46,879 44,519 ------------ ------------ CONTRIBUTIONS: Participants 1,049,137 447,951 Employer 356,826 22,977 Rollover 1,651,709 -- ------------ ------------ Total contributions 3,057,672 470,928 ------------ ------------ Total additions 3,104,551 515,447 ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO BENEFITS PAID DIRECTLY TO PARTICIPANTS 181,421 189,740 ------------ ------------ NET INCREASE 2,923,130 325,707 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 1,460,044 1,134,337 ------------ ------------ End of year $ 4,383,174 $ 1,460,044 ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. 3 6 GMG RETIREMENT & SAVINGS PLAN FORMERLY GM GROUP, INC. CODA PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 ================================================================================ 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION - The GMG Retirement & Savings Plan (the "Plan") was effective on January 1, 1996. The Plan was created for the benefit of the employees of GM Group, Inc., a corporation organized under the laws of the Commonwealth of Puerto Rico (the "Sponsor"). In January 2000, the Plan changed its name from GM Group, Inc. CODA Profit Sharing Plan to GMG Retirement & Savings Plan. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The most significant accounting policies followed by the Plan are summarized below: METHOD OF ACCOUNTING - The financial statements of the Plan have been prepared following the accrual basis of accounting except for benefit payments, which are recorded on the cash basis. INVESTMENTS - The investments are carried at market value. Investments which do not have a quoted market value are carried at the lower of cost or net realizable value. Gains and losses on sale of securities are determined using the average cost method. All investments are held in a bank administered trust fund. 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 and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. DESCRIPTION OF THE PLAN GENERAL - The Plan is a defined contribution cash or deferred arrangement profit sharing plan covering substantially all employees of the Sponsor. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. The Plan provides for retirement, death and disability benefits. ELIGIBILITY - Employees become eligible to participate in the Plan upon attaining the age of eighteen (18) years old and completing one-year of service. 4 7 GMG RETIREMENT & SAVINGS PLAN FORMERLY GM GROUP, INC. CODA PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 AND 1999 ================================================================================ 2. DESCRIPTION OF THE PLAN (CONTINUED) CONTRIBUTIONS - The participants may make contributions, pre-tax contributions and/or after-tax contributions, at the election of the participant. The pre-tax contributions in a Plan year may not exceed 10% of compensation or $8,000 (or such higher limit as may be in effect under the Puerto Rico Internal Revenue Code of 1994, as amended). The after-tax contributions in a Plan year, if authorized, may not exceed 10% of the aggregate compensation paid to the employee during all the years he or she has been a Plan participant. The Sponsor will make a matching contribution equal to .50 cents for each $1 of a participant's pre-tax contributions. However, the Sponsor will not make matching contributions above 6% of the participant's basic compensation nor in excess of 30% of the participant's maximum allowable pre-tax contribution. INVESTMENT OPTIONS - The participants can make direct employee contributions in any of these four investment options: Fixed income fund - Funds are invested mainly in obligations issued or guaranteed by the United States Government, or any of its agencies or instrumentality's. The fund is Vanguard Total Bond Market Index. Equity fund - Funds are invested mainly in a diversified portfolio of equity and fixed income securities with income, growth of income and capital appreciation potential. The funds are Fidelity Advisor Growth Institutional, Federated Equity-Income A, Deutsche International Equity and Dreyfus Emerging Leaders. Stock - Funds are invested mainly in common stock of Popular, Inc., a corporation engaged in the business of providing bank and financing services. Money market fund - Funds are invested mainly in bank deposit. VESTING - Vesting in the Sponsor's contribution portion plus earnings is as follow:
Completed Vested Years of Service Percentage ---------------- ---------- Less than 1 0 At least 1 20 At least 2 40 At least 3 60 At least 4 80 At least 5 100
5 8 GMG RETIREMENT & SAVINGS PLAN FORMERLY GM GROUP, INC. CODA PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 AND 1999 ================================================================================ 2. DESCRIPTION OF THE PLAN (CONTINUED) EARLY RETIREMENT AGE - A participant will be fully vested and may retire prior to normal retirement age (reaching age 65 or the fifth anniversary of the first day of the Plan year in which he/she commenced in the Plan) upon reaching age 55 and completing 10 years of service. PAYMENTS OF BENEFITS - Upon termination of services due to death, disability or retirement, a participant may elect to receive an amount equal to the value of the participant's vested interest in his or her account in either a lump-sum payments or installment payments. Upon termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution. FORFEITURES - Forfeitures will be allocated to the accounts of participant during such Plan year in the proportion that each such participant's compensation during such Plan year bears to the total compensation during such Plan year of all such participants. No forfeitures will occur solely as a result of an employee's withdrawal of employee contributions. Before January 1, 2000, the most significant provisions of the Plan were as follows: Eligibility - Employees become eligible to participate in the Plan upon attaining the age of twenty-one (21) years old and completing three (3) months of service. Contributions - The annual contributions to the Plan are composed of an employee contribution and an employer matching contribution. Participants may contribute the lesser of: (i) $7,500 (or such higher limit as may be in effect under the Puerto Rico Internal Revenue Code of 1994, as amended), or (ii) 10% of the participant's qualified compensation, as defined. The Sponsor contributes to the Plan a matching contribution equal to 25% percent of each $1 contributed by the participant up to $400 per participant. Voluntary contributions, on after-tax-basis, by participants directly to the Plan are also permitted subject to certain amount limit and conditions. A participant's contributions may be increased, decreased or revoked at any time by the participant. The Sponsor may increase, decrease or eliminate its matching contributions to the Plan at any time. Vesting - Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Vesting in the Sponsor's contribution portion plus earnings thereon is based on years of continuous service. A participant is 100% vested after five (5) years of credited services. 6 9 GMG RETIREMENT & SAVINGS PLAN FORMERLY GM GROUP, INC. CODA PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 AND 1999 ================================================================================ 2. DESCRIPTION OF THE PLAN (CONTINUED) Forfeitures - All forfeitures shall be used to pay for the Plan expenses and any remaining part, to reduce employer matching contributions, or distribute such amounts among the remaining participants matching contributions accounts in the same proportion as originally allocated. The above description of the Plan provides only general information. Participants should refer to the Plan agreement for a complete description of the Plan's provisions. 3. PLAN ADMINISTRATION On January 10, 1996, the Sponsor agreed with Oriental Federal Savings Bank ("Oriental") for the record keeping and plan administration. On December 31, 1999, Oriental ended is duty as trustee and record keeper of the Plan. Effective January 1, 2000, the Sponsor appointed Banco Popular de Puerto Rico ("BPPR") as successor trustee and record keeper of the Plan. In addition, the Adoption Agreement of the Plan was amended to adopt the Banco Popular de Puerto Rico Master Defined Contribution Retirement Plan and its Master Trust. The Plan's trustee has been designated to hold and invest the Plan assets for the benefits of all participants. These assets are included in the financial statements at their market value as reported to the Plan by the trustee. The Sponsor pays an administration fee without reimbursement by the Plan to BPPR for these services and other administrative matters. 4. RELATED PARTY TRANSACTION Effective July 1, 1999, Popular, Inc. acquired 100% of the outstanding common stock of the Sponsor. BPPR is also a wholly owned subsidiary of Popular, Inc. As stated in Note 3, BPPR was appointed successor trustee and record keeper of the Plan effective January 1, 2000. 5. INCOME TAX STATUS This plan is not a qualified plan under the U.S. Internal Revenue Code. This is a Non-Domiciled U.S. Plan, which is qualified under Section 1165(e) of the Puerto Rico Internal Revenue Code of 1994, as amended. Therefore, it is not subject to income taxes provided continuance compliance with all the terms and eligibility requirements of the Plan. 7 10 GMG RETIREMENT & SAVINGS PLAN FORMERLY GM GROUP, INC. CODA PROFIT SHARING PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 2000 AND 1999
2000 1999 ------------------------ ------------------------ Current Current Identity of Issuer Description of Investment Cost Value Cost Value --------------------------- ------------------------------------------------ ----------- ----------- ----------- ----------- Fidelity Investments Fund Fidelity Advisor Balanced Fund $ -- $ -- $ 251,474 $ 308,996 Fidelity Investments Fund Fidelity Advisor Government Investment Fund -- -- 135,079 146,101 Fidelity Investments Fund Fidelity Advisor Growth Opportunities Fund -- -- 575,073 729,729 Fidelity Investments Fund Fidelity Advisor Equity Growth Fund 1,376,729 1,143,165 - - Vanguard Group Vanguard Total Bond Market Index 111,090 113,997 - - Federate Funds Federated Equity-Income Fund - Class A 271,639 232,994 - - Deutsche Asset Management Deutsche Institutional International Equity Fund 256,047 209,613 - - Dreyfus Dreyfus Emerging Leaders Fund 683,317 694,596 - - Popular, Inc. Popular, Inc. - Common Stock 1,703,918 1,843,651 - - Federated Government Obligation Fund 1,010 1,010 Oriental Bank & Trust Money Market Fund -- - 275,218 275,218 ----------- ----------- ----------- ----------- $ 4,403,750 $ 4,239,026 $ 1,236,844 $ 1,460,044 =========== =========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS SCHEDULE. 8 11 SUPPLEMENTAL SCHEDULE GMG RETIREMENT & SAVINGS PLAN FORMERLY GM GROUP, INC. CODA PROFIT SHARING PLAN SCHEDULE OF RECONCILIATION OF FORM 5500 DECEMBER 31, 2000 AND 1999 =============================================================================== This schedule summarizes differences between the financial statement of GMG Retirement & Savings Plan as of December 31, 1999, and the financial information presented as part of Form 5500 for this year. The net effect of the $28,985 difference for 1998, which is set forth below, was recognized as contributions during 1999 for Form 5500 purposes. There are no differences to reconcile between the financial statements of the Plan as of December 31, 2000, and the financial information presented as part of Form 5500. A - STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 1999 ----------- Total Assets and Net Assets Available for Plan Benefits per financial statements $ 1,460,044 Less - Net effect of contributions receivable that were recorded for financial statement purposes in the current audit year period, but not recorded for Form 5500 purposes 28,985 ----------- Total Assets and Net Assets and Net Assets Available for Plan Benefits per Form 5500 $ 1,489,029 =========== B - STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 1999 ----------- Net Increase in Plan Assets per financial statements $ 325,707 Less - Net effect of contributions receivable that were recorded for financial statement purposes in the current audit year period, but not recorded for Form 5500 purposes 28,985 ----------- Net Increase in Plan Assets per Form 5500 $ 354,692 ===========
9 12 SIGNATURE Pursuant to the requirement of the Securities Exchange Act of 1934, the persons who administer the employee benefit plan have duly caused this annual report to be signed on its behalf the undersigned hereunto duly authorized. GMC Retirement & Savings Plan (Name of Plan) By: /s/ Maria Isabel Burckhart --------------------------- Maria Isabel Burckhart Authorized Representative By: /s/ Jorge A. Junquera --------------------------- Jorge A. Junquera Authorized Representative in the United States Dated: June 7, 2001 10 13 HIPOLITO TORRES RIVERA & CO. CPA's, P.S.C. (Logo) CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference of our report dated June 7, 2001 in the Registration Statement on Form S-8 relating to the financial statements for the years ended December 31, 2000 and 1999, which appears in the Annual Report of the GMG Retirement & Savings Plan on the Form 11-K for the year ended December 31, 2000. /s/ Hipolito Torres Rivera & Co. CPA's, P.S.C. San Juan, Puerto Rico Dated: June 20, 2001 GM Group Plaza Suite 104A-Box 8 1590 Ponce de Leon Ave., San Juan, PR 00926 T (787) 281-0088 F (787) 281-0087 E-Mail htrpa@prtc.net 11