UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
(Mark One):
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the plan year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 001-14097
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
SAUER-DANFOSS LaSALLE FACTORY
EMPLOYEE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Sauer-Danfoss Inc.
2800 East 13th Street
Ames, IA 50010
REQUIRED INFORMATION
The following plan financial statements, schedules, and reports have been prepared in accordance with the financial reporting requirements of ERISA.
1. Financial Statements:
Report of Independent Auditors, KPMG LLP
Statement of Net Assets Available for Plan Benefits as of
December 31, 1999 and 1998
Statement of Changes in Net Assets Available for Plan Benefits for
the years ended December 31, 1999 and 1998
Notes to Financial Statements
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes as of
December 31, 1999
2. Exhibits:
Consent of KPMG LLP, Independent Auditors
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned, hereunto duly authorized.
Dated: July 12, 2000 SAUER-DANFOSS LaSALLE FACTORY
EMPLOYEE SAVINGS PLAN
By: Sauer-Danfoss (US) Company
----------------------------------------
Plan Administrator
By: Kenneth D. McCuskey
----------------------------------------
Kenneth D. McCuskey
Vice President
Exhibit 23
Independent Auditors' Consent
Employee Benefit Committee Sauer-Sundstrand
La Salle Factory Employee Savings Plan
Des Moines, Iowa:
We consent to incorporation by reference in the Registration Statement No. 333-93745 on Form S-8 of Sauer Inc. of our report dated April 28, 2000, relating to the statements of net assets available for benefits of the Sauer-Sundstrand La Salle Factory Employee Savings Plan as of December 31, 1999 and 1998, the related statements of changes in net assets available for benefits for the years then ended, and the related supplementary supporting schedule which appears in the December 31, 1999, Annual Report on Form 11-K of the Sauer-Sundstrand La Salle Factory Employee Savings Plan.
KPMG LLP
Des Moines, Iowa
July 11, 2000
SAUER-SUNDSTRAND LA SALLE
FACTORY EMPLOYEE SAVINGS PLAN
Financial Statements and Schedules
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
SAUER-SUNDSTRAND LA SALLE
FACTORY EMPLOYEES' SAVINGS PLAN
Table of Contents
Page
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 2
Notes to Financial Statements 3
Schedule
1 Schedule H Line 4i - Schedules of Assets 7
Independent Auditors' Report
Employee Benefit Committee
Sauer-Sundstrand La Salle
Factory Employee Savings Plan:
We have audited the accompanying statements of net assets available for benefits of the Sauer-Sundstrand La Salle Factory Employee Savings 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 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 the Sauer-Sundstrand La Salle Factory Employee Savings Plan and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary Schedule 1 is presented for purposes 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 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.
KPMG LLP
April 28, 2000
SAUER-SUNDSTRAND LA SALLE | ||||||||||
FACTORY EMPLOYEE SAVINGS PLAN | ||||||||||
Statements of Net Assets Available for Benefits | ||||||||||
December 31, 1999 and 1998 | ||||||||||
1999 | 1998 | |||||||||
Assets - net value of Plan's interest in the Trust (note 3) | $ | 4,302,939 | 3,508,288 | |||||||
Liabilities | - | - | ||||||||
Net assets available for benefits | $ | 4,302,939 | 3,508,288 | |||||||
Statements of Changes in Net Assets Available for Benefits | ||||||||||
Years ended December 31, 1999 and 1998 | ||||||||||
1999 | 1998 | |||||||||
Additions to net assets attributed to: | ||||||||||
Contributions: | ||||||||||
Employees | $ | 531,662 | 494,832 | |||||||
Employers | 10,038 | 3,734 | ||||||||
Net investment gain from the Trust (note 3) | 363,793 | 293,856 | ||||||||
Total additions | 905,493 | 792,422 | ||||||||
Deductions from net assets attributed to: | ||||||||||
Benefits paid | 101,102 | 71,952 | ||||||||
Fees | 3,470 | - | ||||||||
Premiums | 8,532 | - | ||||||||
Total deductions | 113,104 | 71,952 | ||||||||
Transfers from (to) other plans, net | 2,262 | (7,542) | ||||||||
Net increase in net assets available for benefits | 794,651 | 712,928 | ||||||||
Net assets available for benefits: | ||||||||||
Beginning of year | 3,508,288 | 2,795,360 | ||||||||
End of year | $ | 4,302,939 | 3,508,288 | |||||||
See accompanying notes to financial statements. | ||||||||||
(1) Description of the Plan
The following description of Sauer-Sundstrand La Salle Factory Employee Savings Plan (the Plan) provides only general information. Participants should refer to the Plan's agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan which covers any person regularly employed by Sauer-Sundstrand Company (the Company) at its La Salle, Illinois manufacturing facility whose employment is within the unit covered by the collective bargaining agreement between the Company and Local Union No. 285 of International Union, United Automobile, Aerospace and Agricultural Implement Workers of America. Persons employed on a part-time, temporary, or irregular basis for less than 1,000 hours a year are excluded from coverage.
Administration
The Plan is administered by the Employee Benefit Committee of the Company (the Plan Administrator).
Trustees
Institutional Trust Company has been designated as Trustee of the Plan. Investors Fiduciary Trust Company was previously designated Trustee through August 1998.
Contributions
The Plan is funded by employee and employer contributions. Participating employees may contribute a percentage of their wages ranging from 1% to 21%. Annual contributions, including life insurance purchased, may not exceed $10,000 in 1999 and 1998, as indexed by the Internal Revenue Service. The Plan also places certain restrictions on contributions from those employees defined as highly compensated.
Employer contributions consist of a non-elective 2% contribution and an additional maximum contribution of 2% at a rate of .5% for each one percent of employee contribution.
Participant Accounts
Participants have the option to invest contributions in the following funds: INVESCO Retirement Stable Value Fund, IIF Select Income Fund, IVT Total Return Fund, ITC 500 Index Fund, AIM Blue Chip Growth Fund, IDF Small Company Growth, ITC ADR Fund, and Fidelity Equity Income Fund. Participant accounts are credited for contributions and allocations of Plan earnings. Plan earnings are allocated to participants based upon their relative percentages of each fund's investment account balance. In addition, participants may elect to invest in a life insurance fund which purchases coverage for them and their families. Assets invested in participant life insurance coverage are excluded from Plan assets.
Participants may also elect to borrow up to amounts defined in the Plan. Participant loans amounting to $190,492 and $164,932 at December 31, 1999 and 1998, respectively, are included in the net value of the Plan's interest in the Trust.
Vesting
Participants are immediately vested in their voluntary contributions and actual earnings thereon.
The interests of participants in the employer contributions and actual earnings thereon vest at the rate of 20% per year effective the first day of each year of service.
Plan Expenses
Administrative expenses of the Plan are paid by the Company, except for mutual fund investment fees which are paid by the Plan.
(2) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements of the Plan have been prepared on an accrual basis and present the net assets available for benefits and changes in those assets. The Plan's assets and liabilities consist of the assets and liabilities of the Sauer-Sundstrand La Salle Factory Employee Savings Plan Trust (the Trust).
The Plan Administrator has made certain estimates and assumptions relating to the reporting of assets, liabilities, and changes therein to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from these estimates.
In September 1999, the American Institute of Certified Public Accountants issued Statement of Position 99-3, Accounting for and Reporting of Certain Defined Contribution Plan Investments and Other Disclosure Matters (SOP 99-3). SOP 99-3 simplifies the disclosure for certain investments and is effective for plan years ending after December 15, 1999. The Plan adopted SOP 99-3 during the Plan year ended December 31, 1999. Accordingly information previously required to be disclosed about participant-directed fund investment programs is not presented in the Plan's 1999 financial statements. The Plan's 1998 financial statements have been reclassified to conform with the current year's presentation.
Federal Income Taxes
The Internal Revenue Service has issued a determination letter that the Plan is qualified, and the Trust established by the Plan is tax-exempt, under Sections 401(a) and 501(a) of the Internal Revenue Code. Continued qualification of the Plan will depend on the operation of the Plan in compliance with the Internal Revenue Code.
(3) The Trust
Investments are valued at quoted market prices, if available. Investments not having an established market are valued at fair value, as determined by the Trustees.
The fair values of investments of the Trust at December 31, 1999 and 1998 were as follows:
1999 | 1998 | |||||||||
Fidelity Equity Income Fund | $ | 700,352 | 617,135 | |||||||
INVESCO Retirement Stable Value Fund | 2,065,013 | 1,745,272 | ||||||||
IIF Select Income Fund | 2,120 | 19,518 | ||||||||
IVT Total Return Fund | 333,233 | 396,722 | ||||||||
ITC 500 Index Fund | 159,656 | 85,880 | ||||||||
AIM Blue Chip Growth Fund | 654,873 | 421,028 | ||||||||
IDF Small Company Fund | - | 1,698 | ||||||||
IDF Small Company Growth | 125,918 | - | ||||||||
ITC ADR Fund | 71,282 | 55,349 | ||||||||
Cash | - | 754 | ||||||||
Participants loans | 190,492 | 164,932 | ||||||||
$ | 4,302,939 | 3,508,288 | ||||||||
Investment income for 1999 and 1998 was as follows:
1999 | 1998 | |||||||||
Interest | $ | 10,750 | 12,165 | |||||||
Dividends | 213,254 | 81,712 | ||||||||
Capital gains | - | 9,263 | ||||||||
Net realized and unrealized appreciation | ||||||||||
(depreciation): | ||||||||||
Norwest Stable Return Fund | - | 66,331 | ||||||||
Fidelity Equity Income Fund | (21,805) | 32,375 | ||||||||
Fidelity Growth Company Fund | - | (24,367) | ||||||||
Vanguard Wellington Fund | - | (13,276) | ||||||||
Vanguard International Growth Portfolio | - | (855) | ||||||||
IIF Select Income Fund | (1,489) | (778) | ||||||||
IVT Total Return Fund | (28,728) | 32,806 | ||||||||
ITC 500 Index Fund | 25,664 | 4,778 | ||||||||
AIM Blue Chip Growth Fund | 126,386 | 87,630 | ||||||||
IDF Small Company Fund | 333 | 155 | ||||||||
IDF Small Company Growth | 23,808 | - | ||||||||
ITC ADR Fund | 15,620 | 5,917 | ||||||||
$ | 363,793 | 293,856 | ||||||||
(4) Plan Termination
While the Company has not expressed any intent to terminate the Plan, it is free to do so at any time. Upon termination of the Plan, each participant's account shall be fully vested and nonforfeitable.
Schedule 1 | ||||||||||||
SAUER-SUNDSTRAND LA SALLE | ||||||||||||
FACTORY EMPLOYEE SAVINGS PLAN | ||||||||||||
Schedule H Line 4i - Schedules of Assets | ||||||||||||
December 31, 1999 and 1998 | ||||||||||||
1999 | ||||||||||||
Description | Units | Cost | Fair value | |||||||||
Fidelity Equity Income Fund | 12,564.71 | $ | 653,580 | 700,352 | ||||||||
INVESCO Retirement Stable Value Fund | 2,065,012.60 | 2,065,013 | 2,065,013 | |||||||||
IIF Select Income Fund | 349.16 | 2,230 | 2,120 | |||||||||
IVT Total Return Fund | 11,506.67 | 337,572 | 333,233 | |||||||||
ITC 500 Index Fund | 4,577.30 | 138,543 | 159,656 | |||||||||
AIM Blue Chip Growth Fund | 6,762.52 | 459,217 | 654,873 | |||||||||
IDF Small Company Growth | 13,095.59 | 103,493 | 125,918 | |||||||||
ITC ADR Fund | 3,065.89 | 52,832 | 71,282 | |||||||||
Participant loans | N/A | 190,492 | 190,492 | |||||||||
$ | 4,002,972 | 4,302,939 | ||||||||||
1998 | ||||||||||||
Description | Units | Cost | Fair value | |||||||||
Fidelity Equity Income Fund | 11,109.54 | $ | 529,138 | 617,135 | ||||||||
INVESCO Retirement Stable Value Fund | 1,745,271.51 | 1,745,272 | 1,745,272 | |||||||||
IIF Select Income Fund | 2,966.33 | 19,792 | 19,518 | |||||||||
IVT Total Return Fund | 12,650.57 | 365,894 | 396,722 | |||||||||
ITC 500 Index Fund | 2,976.78 | 81,208 | 85,880 | |||||||||
AIM Blue Chip Growth Fund | 10,150.13 | 337,134 | 421,028 | |||||||||
IDF Small Company Fund | 163.94 | 1,537 | 1,698 | |||||||||
ITC ADR Fund | 3,014.66 | 49,791 | 55,349 | |||||||||
Cash | N/A | 754 | 754 | |||||||||
Participant loans | N/A | 164,932 | 164,932 | |||||||||
$ | 3,295,452 | 3,508,288 | ||||||||||
See accompanying independent auditors' report. | ||||||||||||
