NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013
AND 2012, AND FOR THE YEAR ENDED DECEMBER 31, 2013
The
following description of the PCS U.S. Employees Savings Plan (the Plan) is provided for general information purposes only. Participants should refer to the Plan document for more complete information.
General
The Plan is a defined contribution plan sponsored by PCS Administration (USA), Inc. (the
Company), covering all eligible employees of the Company; PCS Phosphate Company, Inc.; PCS Sales (USA), Inc.; certain employees of White Springs Agricultural Chemicals, Inc.; and certain employees of PCS
Nitrogen Inc., as defined in the Plan document. The Employee Benefits Committee of the Company controls and manages the operation and administration of the Plan. Fidelity Management Trust Company (Fidelity) serves as the trustee of
the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
In December
2013, Potash Corporation of Saskatchewan, Inc. (PCS), the parent of the Company announced a reduction in force impacting certain participants in this plan. These participants are fully vested in their individual accounts and entitled to receive
their 2013 performance contribution, which was paid in 2014.
Contributions
Participants may contribute up
to 50% of base compensation each year, as defined in the Plan, subject to certain Internal Revenue Code of 1986, as amended (IRC) limitations. These contributions may be pretax contributions and/or after-tax contributions. Participants who are
age 50 and over may also make catch-up contributions. The Plan has an automatic enrollment provision, under which new participants are provided with a 3% pretax deferral, unless they formally waive participation or elect a different
participation level. In 2012, the Plan was amended to automatically increase the pretax deferral rate each year for certain participants automatically enrolled in the Plan on or after April 2, 2012.
The Company matches $0.50 for each $1.00 of participant contributions, excluding catch-up contributions, up to 6% of base compensation,
subject to certain limitations as described in the Plan and the IRC. Participants may also rollover amounts representing distributions from other qualified defined benefit or contribution plans (rollover contributions), which are not eligible for
the Company match.
The Company may also make a discretionary Company performance contribution ranging from 0% to 3% of each
eligible participants base pay. The 2013 and 2012 Company performance contributions were each 3% of each eligible participants base pay.
Participant Accounts
Individual accounts are maintained for each Plan participant. Each participants account is credited with the participants contribution, the
Companys matching contribution, the Companys performance contribution when applicable, and allocations of Plan earnings, and is charged with withdrawals, allocation of Plan losses, and administrative expenses. Allocations are based on
participant earnings or account balances, as defined in the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participants account.
- 4 -
Investments
Participants direct the investment of their account balances
and contributions into various investment options offered by the Plan. The Plan currently offers Potash Corporation of Saskatchewan Inc. (PCS) common stock, a selection of mutual funds, and one pooled investment stable value fund. The U.S.
Government Reserves Fund is used to maintain dividends distributed by a participants investment in PCS common stock and is not available as a participant-directed investment option. The PCS stock purchase account is a money market fund that is
used in the recordkeeping of the purchases and sales of fractional shares of PCS common stock and is not available as a participant-directed investment option.
Participants who are enrolled in the Plan under the automatic enrollment provision and who have not otherwise made an investment election, will have their contributions and the employer contributions
invested in the Plans default fund, which has been designated as Fidelity Freedom Funds, specifically the Fidelity Freedom Fund that has a target retirement date closest to the year that the participant might retire, based on the
participants current age and assuming a normal retirement age of 65.
Vesting
Participants are
immediately vested in their account balances.
Participant Loans
Participants may borrow from their fund
accounts up to a maximum amount equal to the lesser of $50,000 or 50% of their account balance. Loan terms range from one to five years or up to 20 years for the purchase of a primary residence. The loans are secured by the balance in the
participants account. All new loans bear interest at the prime rate plus 200 basis points. Prior to January 1, 2012, interest rates on outstanding general loans were set at two percentage points above the rate for five-year U.S. Treasury
notes on the last day of the preceding calendar quarter in which the funds were borrowed and the interest rate on primary residence loans was set at the standard lending rate for 20-year fixed rate home mortgage loans. Principal and interest are
paid ratably through payroll deductions. As of December 31, 2013, participant loans have maturities through 2033 at interest rates ranging from 3.0% to 8.5%.
Payments of Benefits
On termination of service, a participant may elect to receive either a lump-sum amount equal to the value of the participants interest in his or her account;
or monthly, quarterly, or annual installments over the participants estimated life span. Other forms of benefits are also provided to participants whose accounts were transferred from other plans. A participant may elect to receive payment of
benefits prior to termination of service, as defined in the Plan. Participants may elect to receive their investment in the PCS stock fund in cash or in whole shares of PCS common stock. The Plan includes an employee stock ownership plan feature
with a dividend payout program whereby participants may elect to receive dividends paid on their shares of PCS common stock in the PCS stock fund in PCS common stock or cash.
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis of Accounting
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
Use of Estimates
The preparation of financial statements in conformity with GAAP requires Plan management to make
estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Risks and Uncertainties
The Plan utilizes various investment instruments, including mutual funds, a pooled investment
stable value fund, and common stock. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
- 5 -
Investment Valuation and Income Recognition
The Plans investments
are stated at fair value. Fair value of a financial instrument is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. See Note 3 for a description of valuation
methods. The Fidelity Managed Income Portfolio II (the Portfolio), the pooled investment stable value fund, is stated at fair value and then adjusted to contract value as the Portfolios investment contracts are fully
benefit-responsive. Fair value of the Portfolio is the sum of the fair value of the underlying investments. Contract value of the Portfolio is the sum of participant and Company contributions, plus accrued interest thereon less withdrawals. In
accordance with GAAP, the Portfolio is presented at fair value in participant-directed investments in the statements of net assets available for benefits and an additional line item is presented showing the adjustment from fair value to contract
value. The statement of changes in net assets available for benefits is presented on a contract value basis.
Purchases and
sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation in fair value of investments includes the Plans gains and losses on
investments bought and sold as well as held during the year.
Management fees and operating expenses charged to the Plan for
investments in the mutual funds and pooled investment stable value fund are deducted from income earned on a daily basis and are not separately charged to an expense. Consequently, management fees and operating expenses are reflected as a reduction
of investment return for such investments.
Notes Receivable from Participants
Notes receivable from
participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent participant loans are recorded as distributions based on the terms of the Plan.
Administrative Expenses
Administrative expenses of the Plan are paid by the Plan or the Plan sponsor, as provided in
the Plan document.
Payment of Benefits
Benefit payments to participants are recorded upon distribution.
There were no amounts allocated to accounts of participants who had elected to withdraw from the Plan, but had not yet been paid at December 31, 2013 and 2012.
Corrective Distributions Payable
The Plan is required to return contributions received during the Plan year in excess of the IRC limits.
3.
|
FAIR VALUE MEASUREMENTS
|
Fair value measurements establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of
inputs within the fair value hierarchy are described below:
Level 1
Unadjusted quoted prices in active
markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
- 6 -
Level 2
Quoted prices in markets that are not considered to be
active or financial instruments for which all significant inputs are observable, either directly or indirectly. Level 2 inputs may also include pricing models whose inputs are observable or derived principally from or corroborated by observable
market data.
Level 3
Prices or valuations that require inputs that are both significant to the fair
value measurement and unobservable.
A financial instruments level within the fair value hierarchy is based on the lowest
level of any input that is significant to the fair value measurement.
The following descriptions of the valuation methods and
assumptions used by the Plan to estimate the fair values of the investments apply to the investments held.
Common
Stock
The PCS common stock is valued using quoted closing prices listed on a nationally recognized security exchange (Level 1 inputs).
Mutual Funds and Short Term Funds
Shares of registered investment companies and money market funds are valued at quoted market prices that represent the net asset value of shares
held at the Plan year-end (Level 1 inputs).
Stable Value Fund
The fair value of participation units in
the stable value fund is based upon the net asset value of such fund including direct and indirect interests in fully benefit-responsive contracts (Level 2 inputs).
The Plans investment assets at fair value, set forth by level within the fair value hierarchy, as of December 31, 2013 and 2012, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Assets
at Fair Value as of
December 31, 2013
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
PCS common stock
|
|
$
|
86,994,160
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
86,994,160
|
|
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large cap equity funds
|
|
|
60,114,986
|
|
|
|
|
|
|
|
|
|
|
|
60,114,986
|
|
Balanced funds
|
|
|
36,659,791
|
|
|
|
|
|
|
|
|
|
|
|
36,659,791
|
|
Multi cap equity funds
|
|
|
12,017,601
|
|
|
|
|
|
|
|
|
|
|
|
12,017,601
|
|
International equity funds
|
|
|
9,105,999
|
|
|
|
|
|
|
|
|
|
|
|
9,105,999
|
|
Bond funds
|
|
|
7,282,554
|
|
|
|
|
|
|
|
|
|
|
|
7,282,554
|
|
Emerging markets equity
|
|
|
22,527
|
|
|
|
|
|
|
|
|
|
|
|
22,527
|
|
Stable value fund
|
|
|
|
|
|
|
38,675,731
|
|
|
|
|
|
|
|
38,675,731
|
|
Short term funds
|
|
|
8,088,376
|
|
|
|
|
|
|
|
|
|
|
|
8,088,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment assets at fair value
|
|
$
|
220,285,994
|
|
|
$
|
38,675,731
|
|
|
$
|
|
|
|
$
|
258,961,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 7 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Assets
at Fair Value as of
December 31, 2012
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
PCS common stock
|
|
$
|
103,439,088
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
103,439,088
|
|
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large cap equity funds
|
|
|
45,062,381
|
|
|
|
|
|
|
|
|
|
|
|
45,062,381
|
|
Balanced funds
|
|
|
28,330,044
|
|
|
|
|
|
|
|
|
|
|
|
28,330,044
|
|
International equity funds
|
|
|
8,248,268
|
|
|
|
|
|
|
|
|
|
|
|
8,248,268
|
|
Bond fund
|
|
|
8,123,225
|
|
|
|
|
|
|
|
|
|
|
|
8,123,225
|
|
Mid cap equity funds
|
|
|
5,584,377
|
|
|
|
|
|
|
|
|
|
|
|
5,584,377
|
|
Small cap equity funds
|
|
|
3,926,262
|
|
|
|
|
|
|
|
|
|
|
|
3,926,262
|
|
Stable value fund
|
|
|
|
|
|
|
43,557,968
|
|
|
|
|
|
|
|
43,557,968
|
|
Short term funds
|
|
|
9,643,324
|
|
|
|
|
|
|
|
|
|
|
|
9,643,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment assets at fair value
|
|
$
|
212,356,969
|
|
|
$
|
43,557,968
|
|
|
$
|
|
|
|
$
|
255,914,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31, 2013 and 2012, there were no transfers in or out of Levels 1,
2, or 3. The Plans policy is to recognize transfers between levels at the end of the reporting period.
- 8 -
Investments
that represent 5% or more of the Plans net assets available for benefits as of December 31, 2013 and 2012, are marked with an asterisk. Both Fidelity and PCS are parties-in-interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
2012
|
|
|
|
|
PCS common stock
|
|
$
|
86,994,160
|
|
|
|
*
|
|
|
$
|
103,439,088
|
|
|
|
*
|
|
Large cap equity funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T. Rowe Price Dividend Growth Fund
|
|
|
22,855,537
|
|
|
|
*
|
|
|
|
18,005,327
|
|
|
|
*
|
|
Fidelity Growth Company K
|
|
|
19,598,645
|
|
|
|
*
|
|
|
|
15,045,295
|
|
|
|
*
|
|
Fidelity Spartan 500 Index Institutional Fund
|
|
|
14,145,598
|
|
|
|
*
|
|
|
|
10,067,456
|
|
|
|
|
|
ABF Large Cap Value Institutional
|
|
|
2,059,535
|
|
|
|
|
|
|
|
1,136,947
|
|
|
|
|
|
Fidelity OTC Portfolio
|
|
|
1,455,671
|
|
|
|
|
|
|
|
807,356
|
|
|
|
|
|
Balanced Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fidelity Puritan Fund
|
|
|
13,088,715
|
|
|
|
|
|
|
|
10,544,600
|
|
|
|
|
|
Fidelity Freedom K Income
|
|
|
757,013
|
|
|
|
|
|
|
|
718,774
|
|
|
|
|
|
Fidelity Freedom K 2000
|
|
|
101,667
|
|
|
|
|
|
|
|
175,714
|
|
|
|
|
|
Fidelity Freedom K 2005
|
|
|
38,778
|
|
|
|
|
|
|
|
20,238
|
|
|
|
|
|
Fidelity Freedom K 2010
|
|
|
727,397
|
|
|
|
|
|
|
|
970,694
|
|
|
|
|
|
Fidelity Freedom K 2015
|
|
|
3,827,961
|
|
|
|
|
|
|
|
3,223,073
|
|
|
|
|
|
Fidelity Freedom K 2020
|
|
|
4,398,807
|
|
|
|
|
|
|
|
3,465,500
|
|
|
|
|
|
Fidelity Freedom K 2025
|
|
|
3,975,773
|
|
|
|
|
|
|
|
2,734,746
|
|
|
|
|
|
Fidelity Freedom K 2030
|
|
|
2,466,050
|
|
|
|
|
|
|
|
1,666,770
|
|
|
|
|
|
Fidelity Freedom K 2035
|
|
|
1,802,871
|
|
|
|
|
|
|
|
1,206,025
|
|
|
|
|
|
Fidelity Freedom K 2040
|
|
|
2,385,824
|
|
|
|
|
|
|
|
1,590,335
|
|
|
|
|
|
Fidelity Freedom K 2045
|
|
|
1,310,898
|
|
|
|
|
|
|
|
838,493
|
|
|
|
|
|
Fidelity Freedom K 2050
|
|
|
1,495,566
|
|
|
|
|
|
|
|
1,067,149
|
|
|
|
|
|
Fidelity Freedom K 2055
|
|
|
282,471
|
|
|
|
|
|
|
|
107,933
|
|
|
|
|
|
Multi Cap equity fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fidelity Spartan Extended Market Index Advantage
|
|
|
12,017,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International equity funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harbor International Fund Institutional Class
|
|
|
9,085,470
|
|
|
|
|
|
|
|
8,248,268
|
|
|
|
|
|
Vanguard Total International Stock Signal
|
|
|
20,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bond funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fidelity Institutional Short-Intermediate Government Fund
|
|
|
7,261,100
|
|
|
|
|
|
|
|
8,123,225
|
|
|
|
|
|
PIMCO Total Return Institutional Fund
|
|
|
19,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard Total Bond Market Signal
|
|
|
1,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Markets equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DFA Emerging Market Core Equity
|
|
|
22,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stable Value Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fidelity Managed Income Portfolio II
|
|
|
38,675,731
|
|
|
|
*
|
|
|
|
43,557,968
|
|
|
|
*
|
|
Short term funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fidelity Retirement Money Market Portfolio
|
|
|
8,087,124
|
|
|
|
|
|
|
|
9,641,866
|
|
|
|
|
|
PCS stock purchase account
|
|
|
1,162
|
|
|
|
|
|
|
|
1,370
|
|
|
|
|
|
Fidelity U.S. Government Reserves Fund
|
|
|
90
|
|
|
|
|
|
|
|
88
|
|
|
|
|
|
Mid cap equity fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fidelity Mid-Cap Stock Fund
|
|
|
|
|
|
|
|
|
|
|
5,584,377
|
|
|
|
|
|
Small cap equity fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fidelity Small Cap Stock Fund
|
|
|
|
|
|
|
|
|
|
|
3,926,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at fair value
|
|
$
|
258,961,725
|
|
|
|
|
|
|
$
|
255,914,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 9 -
The Plans investments (including gains and losses on investments bought and sold, as
well as held during the year) appreciated (depreciated) in value during the year ended December 31, 2013, as follows:
|
|
|
|
|
PCS common stock
|
|
$
|
(19,691,754
|
)
|
Large cap equity funds
|
|
|
|
|
T. Rowe Price Dividend Growth Fund
|
|
|
4,982,745
|
|
Fidelity Growth Company K
|
|
|
4,279,277
|
|
Fidelity Spartan 500 Index Institutional Fund
|
|
|
3,131,464
|
|
ABF Large Cap Value Institutional
|
|
|
450,401
|
|
Fidelity OTC Portfolio
|
|
|
240,972
|
|
Balanced Funds
|
|
|
|
|
Fidelity Puritan Fund
|
|
|
1,057,093
|
|
Fidelity Freedom K Income
|
|
|
13,456
|
|
Fidelity Freedom K 2000
|
|
|
4,340
|
|
Fidelity Freedom K 2005
|
|
|
1,859
|
|
Fidelity Freedom K 2010
|
|
|
66,813
|
|
Fidelity Freedom K 2015
|
|
|
329,109
|
|
Fidelity Freedom K 2020
|
|
|
423,377
|
|
Fidelity Freedom K 2025
|
|
|
439,692
|
|
Fidelity Freedom K 2030
|
|
|
296,667
|
|
Fidelity Freedom K 2035
|
|
|
254,317
|
|
Fidelity Freedom K 2040
|
|
|
333,495
|
|
Fidelity Freedom K 2045
|
|
|
186,605
|
|
Fidelity Freedom K 2050
|
|
|
232,139
|
|
Fidelity Freedom K 2055
|
|
|
38,192
|
|
Multi Cap equity fund
|
|
|
|
|
Fidelity Spartan Extended Market Index Advantage
|
|
|
147,384
|
|
International equity funds
|
|
|
|
|
Harbor International Fund Institutional Class
|
|
|
1,167,087
|
|
Vanguard Total International Stock Signal
|
|
|
820
|
|
Bond funds
|
|
|
|
|
Fidelity Institutional Short-Intermediate Government Fund
|
|
|
(82,485
|
)
|
PIMCO Total Return Institutional Fund
|
|
|
(362
|
)
|
Vanguard Total Bond Market Signal
|
|
|
(11
|
)
|
Emerging Markets equity
|
|
|
|
|
DFA Emerging Market Core Equity
|
|
|
(458
|
)
|
Mid cap equity fund
|
|
|
|
|
Fidelity Mid-Cap Stock Fund
|
|
|
1,877,811
|
|
Small cap equity fund
|
|
|
|
|
Fidelity Small Cap Stock Fund
|
|
|
711,036
|
|
|
|
|
|
|
Net appreciation of investments
|
|
$
|
891,081
|
|
|
|
|
|
|
The Fidelity Managed Income Portfolio II
The Portfolio is a stable value fund that
is a commingled pool of the Fidelity Group Trust for Employee Benefit Plans. The Portfolio is invested in fixed interest insurance company investment contracts, money market funds, corporate and government bonds, mortgage-backed securities, bond
funds, and other fixed income securities, with the objective of providing a high level of return that is consistent with also providing stability of investment return, preservation of capital and liquidity to pay plan benefits of its retirement plan
investors. Fair value of the Portfolio is the net asset value of its holdings at
year-end,
which is based on the fair value of the underlying investments. Underlying securities for which quotations are readily
available are valued at their most recent bid prices or are valued on the basis of information provided by a pricing service.
- 10 -
Certain events limit the ability of the Plan to transact at contract value with the
Portfolio issuer. Such events include the following: (a) the Plans failure to qualify under the Internal Revenue Code; (b) the establishment of a defined contribution plan that competes with the Plan for employee contributions;
(c) any substantive modification of the Portfolio or the administration of the Portfolio that is not consented to by the wrap issuer; (d) any change in law, regulation or administrative ruling applicable to the Plan that could have a
material adverse effect on the Portfolios cashflow; (e) any communication given to unitholders that is designed to induce or influence unitholders not to invest in the Portfolio or to transfer assets out of the Portfolio; (f) any
transfer of assets from the Portfolio directly to a competing investment option; or (g) the inability of the Portfolio to maintain wrap contracts covering its underlying assets. The Plan administrator does not believe the occurrence of any such
value event, which would limit the Plans ability to transact at contract value with participants, is probable.
Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment in the Portfolio at contract value.
The crediting interest rates were 1.14% and 1.28% at December 31, 2013 and 2012, respectively, which were based on the interest rates of the underlying portfolio of assets. The average yield for the year ended December 31, 2013, was 1.59%.
The participants in the Plan are able to redeem from the Portfolio immediately. The Portfolio has no redemption restrictions and there is no redemption notice period required for participants.
5.
|
EXEMPT PARTY-IN-INTEREST TRANSACTIONS
|
Certain Plan investments are shares of investment funds managed by Fidelity. Fidelity serves as the trustee of the Plan, and therefore, these transactions qualify as exempt party-in-interest transactions.
Fees paid by the Plan for the investment management services were included as a reduction of the return earned on each fund.
At December 31, 2013 and 2012, the Plan held approximately 2,639,386 and 2,542,125 shares, respectively, of PCS common stock,
with a cost basis of $82,863,755 and $79,158,418, respectively. During the year ended December 31, 2013, the Plan recorded dividend income of $3,044,272.
Although it has not expressed any intention 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 set forth in ERISA.
7.
|
FEDERAL INCOME TAX STATUS
|
The Internal Revenue Service (IRS) has determined and informed the Company by a letter dated September 19, 2013, that the Plan was
designed in accordance with applicable IRC requirements. Although the Plan has been amended since receiving the determination letter, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the
applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plans financial statements.
GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would be sustained
upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2013, there are no uncertain tax positions taken or expected to be taken that would require
recognition of a liability (or asset) or disclosure in the Plans financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan
administrator believes it is no longer subject to income tax examinations for years prior to 2010.
- 11 -
8.
|
RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
|
The following is a reconciliation of the financial statements as of December 31, 2013 and 2012, to the Form 5500:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Statements of net assets available for benefits:
|
|
|
|
|
|
|
|
|
Net assets available for benefits per the financial statements
|
|
$
|
269,416,861
|
|
|
$
|
265,329,702
|
|
Company performance contribution receivable
|
|
|
(4,008,725
|
)
|
|
|
(3,947,184
|
)
|
Corrective distributions payable at December 31
|
|
|
41,542
|
|
|
|
17,393
|
|
Adjustment from fair value to contract value for fully benefit-responsive stable value fund
|
|
|
544,415
|
|
|
|
1,181,279
|
|
Rounding
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per the Form 5500 at fair value
|
|
$
|
265,994,094
|
|
|
$
|
262,581,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of changes in net assets available for benefits:
|
|
|
|
|
|
|
|
|
Increase in net assets per the financial statements
|
|
$
|
4,087,159
|
|
|
|
|
|
Increase in Company performance contribution receivable
|
|
|
(61,541
|
)
|
|
|
|
|
Increase in corrective distributions payable at December 31
|
|
|
24,149
|
|
|
|
|
|
Net change in adjustment from fair value to contract value
|
|
|
(636,864
|
)
|
|
|
|
|
Rounding
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in net assets available for benefits per Form 5500
|
|
$
|
3,412,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
******
- 12 -
SUPPLEMENTAL SCHEDULE
- 13 -