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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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(Mark One):
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
----- 1934.
For the fiscal year ended December 31, 2000.
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
---- EXCHANGE ACT OF 1934.
For the transition period from __________________ to _________________
Commission file number: 0-1502
A. Full title of the plan and the address of the plan, if
different from that of the issuer name below:
AMERICAN GREETINGS RETIREMENT
PROFIT SHARING AND SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
AMERICAN GREETINGS CORPORATION
ONE AMERICAN ROAD
CLEVELAND, OHIO 44144
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REQUIRED INFORMATION
The following financial statements are being furnished for the American
Greetings Retirement Profit Sharing and Savings Plan (the "Plan"):
1. Audited statements of net assets available for benefits as of
December 31, 2000 and 1999.
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2. Audited statements of changes in net assets available for
benefits for the years ended December 31, 2000 and 1999.
EXHIBITS
Exhibit No.
23 Consent of Independent Auditors
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
AMERICAN GREETINGS RETIREMENT
PROFIT SHARING AND SAVINGS PLAN
June 29, 2001 By: /s/ William S. Meyer
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Name: William S. Meyer
Title: Senior Vice-President
and Chief Financial Officer
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AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
American Greetings Retirement Profit Sharing and Savings Plan
Years Ended December 31, 2000 and 1999
with Report of Independent Auditors
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American Greetings
Retirement Profit Sharing and Savings Plan
Audited Financial Statements and Supplemental Schedule
Years Ended December 31, 2000 and 1999
TABLE OF 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 H, Line 4(i)--Schedule of Assets (Held at End of Year)........... 9
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Report of Independent Auditors
Administrative Committee of the American Greetings
Retirement Profit Sharing and Savings Plan
Cleveland, Ohio
We have audited the accompanying statements of net assets available for benefits
of American Greetings Retirement Profit Sharing and Savings 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. 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, 2000 and 1999, 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 financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2000, is presented for purpose 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.
/s/ Ernst & Young LLP
Cleveland, Ohio
June 25, 2001
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American Greetings
Retirement Profit Sharing and Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2000 1999
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ASSETS
Investments, at fair value $ 758,108,094 $ 799,942,404
Contribution receivables:
Employer 5,175,320 16,374,521
Participants 1,545,420 1,063,261
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Total receivables 6,720,740 17,437,782
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Net assets available for benefits $ 764,828,834 $ 817,380,186
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See notes to financial statements.
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American Greetings
Retirement Profit Sharing and Savings Plan
Statements of Changes in Net Assets Available for Benefits
FOR THE YEAR ENDED
DECEMBER 31
2000 1999
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ADDITIONS
Investment income:
Net (depreciation) appreciation in fair value
of investments $ (49,317,838) $ 55,113,140
Interest and dividends 41,345,906 43,604,537
Dividends from American Greetings
Corporation common stock 1,425,117 989,679
Contributions:
Participants 18,940,547 16,686,347
Employer 5,175,320 16,374,521
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Total additions 17,569,052 132,768,224
DEDUCTIONS
Benefits paid directly to participants 60,638,256 54,997,190
Transfer to AmericanGreetings.com 401(k) Plan 9,423,222 -
Administrative expenses 58,926 53,073
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Total deductions 70,120,404 55,050,263
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Net (decrease) increase (52,551,352) 77,717,961
Net assets available for benefits at
beginning of year 817,380,186 739,662,225
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Net assets available for benefits
at end of year $ 764,828,834 $ 817,380,186
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See notes to financial statements.
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American Greetings
Retirement Profit Sharing and Savings Plan
Notes to Financial Statements
Years Ended December 31, 2000 and 1999
A. DESCRIPTION OF PLAN
The following description of the American Greetings Retirement Profit Sharing
and Savings Plan (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 full-time
non-union employees and certain union employees of American Greetings
Corporation (the "Corporation") and domestic subsidiaries. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
CONTRIBUTIONS
The Corporation contributes 8% of its consolidated domestic pretax profits (as
defined), excluding dividends and gains and losses from capital assets and
foreign currency transactions, to the Plan. Additional amounts may be
contributed at the option of the Corporation's Board of Directors. No additional
contributions were made in 2000 or 1999.
Additionally, participants may contribute 2% to 15% of pretax annual
compensation (401(k) contributions), as defined in the Plan. The Corporation may
restrict individual contributions below 15% in order to meet certain
governmental limitations. The Corporation contributes 40% of the first 6% of
pretax annual compensation that a participant contributes to the Plan, provided
that the Corporation achieves certain predetermined financial goals. The
Corporation made no matching contribution in 2000. All contributions are
invested in accordance with the participants' investment elections.
Participants direct the investment of their accounts, together with their share
of the Corporation's annual contributions, in increments of 10% to any of the
investment options offered under the Plan.
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American Greetings
Retirement Profit Sharing and Savings Plan
Notes to Financial Statements (continued)
A. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT ACCOUNTS AND VESTING
Each participant's account is credited with the participant's 401(k)
contributions and allocations of (a) the Corporation's profit sharing
contribution and 401(k) match and (b) Plan earnings. Allocations are based on
participant compensation, participant elections, or account balances, as
defined. Individuals who have retired or terminated employment with the
Corporation do not participate in the Corporation's contribution to the Plan.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's account. Participants are immediately vested in
both their and the Corporation's contributions, plus actual earnings thereon.
PARTICIPANT LOANS
Participants may borrow against their elected deferred contributions or rollover
contributions, a minimum of $1,000 up to a maximum equal to the lesser of
$50,000 or 50% of their vested account balance. Loan terms range from six to
sixty months. The loans are secured by the balance in the participant's account
and bear interest at a rate of prime plus one percent at the time of the loan
origination. Principal and interest are paid ratably through monthly payroll
deductions.
PAYMENT OF BENEFITS
At the time of a participant's retirement or termination of service, the
participant may elect to receive a lump sum payment or to be paid in monthly,
quarterly or annual installments.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Corporation 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, the
assets of the Plan will be distributed to the participants on the basis of
individual account balances at the date of termination.
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American Greetings
Retirement Profit Sharing and Savings Plan
Notes to Financial Statements (continued)
B. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared on the accrual basis of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value which equals the quoted market
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 at year-end. The common stock of the
Corporation is valued at the last reported sales price on the last business day
of the plan year. The participant loans are valued at their outstanding
balances, which approximate fair value.
Purchases and sales of investments are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
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American Greetings
Retirement Profit Sharing and Savings Plan
Notes to Financial Statements (continued)
C. INVESTMENTS
The Plan's investments are held by Vanguard Fiduciary Trust Company, Trustee of
the Plan. The fair value of individual investments that represent 5% or more of
the fair value of the Plan's net assets are as follows:
DECEMBER 31
2000 1999
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Vanguard Index Trust--500 Portfolio $ 178,405,325 $ 207,526,458
Vanguard/PRIMECAP Fund 265,756,074 251,154,480
Vanguard/Wellington Fund 47,350,415 52,122,652
Vanguard Money Market Reserves
Prime Portfolio 67,919,463 77,209,264
Vanguard Total Bond Market Index Fund 130,459,040 139,497,281
During the years ended December 31, 2000 and 1999, the Plan's investments
(including investments purchased, sold as well as held during the year)
(depreciated) appreciated in fair value as determined by quoted market prices as
follows:
2000 1999
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Registered Investment Companies $ (25,694,228) $ 72,115,878
Common Stock of American
Greetings Corporation (23,623,610) (17,002,738)
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Total net (depreciation) appreciation
in fair value of investments $ (49,317,838) $ 55,113,140
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American Greetings
Retirement Profit Sharing and Savings Plan
Notes to Financial Statements (continued)
D. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated August 24, 1995, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan's
Administrative Committee believes the Plan is being operated in compliance with
the applicable requirements of the Code and, therefore, believes that the Plan
is qualified and the related trust is tax exempt.
E. TRANSACTIONS WITH PARTIES-IN-INTEREST
The Plan held 1,441,816 Class A shares and 900,000 Class B shares of American
Greetings Corporation common stock at December 31, 2000 (520,601 and 900,000
shares, respectively, at December 31, 1999). The Plan received dividends from
the Corporation's stock of $1,425,117 and $989,679 in 2000 and 1999,
respectively. Class B shares are not publicly traded. The Plan invests in shares
of mutual funds managed by an affiliate of the Trustee. Accounting, legal and
certain other administrative fees are paid by the Corporation. All other
expenses of the Plan are paid by the Plan. Investment advisory fees for
portfolio management of Vanguard Funds are paid directly from fund earnings.
F. TRANSFERS OF ASSETS FROM OTHER PLANS
On March 9, 2000, the Corporation acquired Gibson Greetings, Inc. Effective
December 31, 2000, the Gibson Greetings, Inc. 401(k) Plan was merged with the
Plan and total assets of approximately $21 million were transferred to the Plan
on January 31, 2001. In addition, the Corporation acquired CPS Corporation on
July 13, 2000. Effective December 31, 2000, the CPS Corporation of Delaware
Personal Retirement Savings Plan and the CPS Corporation Henderson Hourly
Employee Savings Plan were merged with the Plan and total assets of
approximately $9 million were transferred to the Plan on April 2, 2001.
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American Greetings
Retirement Profit Sharing and Savings Plan
EIN: 34-0065325 Plan #001
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2000
DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE,
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, CURRENT
LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE VALUE
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VALUE OF INTEREST IN REGISTERED INVESTMENT COMPANIES
*Vanguard Index Trust--500 Portfolio 1,464,019 shares $ 178,405,325
*Vanguard/PRIMECAP Fund 4,401,392 shares 265,756,074
*Vanguard/Wellington Fund 1,678,498 shares 47,350,415
*Vanguard Money Market Reserves Prime Portfolio 67,919,463 shares 67,919,463
*Vanguard Total Bond Market Index Fund 13,098,297 shares 130,459,040
*Vanguard/Windsor II 749,270 shares 20,380,148
*Vanguard/Wellesley Income Fund 388,397 shares 7,900,004
*Vanguard International Growth Portfolio 458,651 shares 8,654,753
*Vanguard Extended Market Index Fund 288,004 shares 7,666,668
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Total value of interest in registered investment companies 734,491,890
EMPLOYER-RELATED INVESTMENTS
*American Greetings Corp. Class A Common Stock 1,441,816 shares 13,607,139
*American Greetings Corp. Class B Common Stock 900,000 shares 8,493,750
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Total employer-related investments 22,100,889
*LOANS TO PARTICIPANTS 8 % to 10%,
Matures 1-5 years 1,515,315
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$ 758,108,094
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* Indicates party-in-interest to the Plan.
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