The accompanying Notes to Financial Statements are an integral part of these statements.
The accompanying Notes to Financial Statements are an integral part of these
statements.
The accompanying Notes to Financial Statements are an integral part of these statements.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
1. Description of the Plan
The following description of the NextEra Energy, Inc. Employee Retirement Savings Plan (the Plan) provides only general information.
Participating employees (Participants) should refer to the Summary Plan Description available in their employee handbook (as updated periodically through Summaries of Material Modifications) for a more complete description of the Plan.
General
The Plan is a defined
contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The Plan includes a cash or deferred arrangement (Pretax Option) permitted by Section 401(k) of the Internal Revenue Code of
1986, as amended (the Code). The Pretax Option permits Participants to defer federal income taxes on their contributions (Pretax Contributions) until such contributions are distributed from the Plan.
Employees of NextEra Energy, Inc. (the Company/Employer) and its subsidiaries, with the exception of employees in the International
Brotherhood of Electrical Workers local 2150 (IBEW 2150) at NextEra Energy Point Beach, LLC (NextEra Energy Point Beach), are eligible to participate in the Plan on the first day of the month coincident with the completion of one full month of
service with the Company or certain of its subsidiaries or on the first day of any payroll period thereafter. Employees at NextEra Energy Point Beach represented by IBEW 2150 are eligible to participate in the Plan on the first day of employment or
on the first day of any payroll period thereafter. Effective January 1, 2018, employees at NextEra Energy Point Beach represented by IBEW 2150 are eligible to participate in the Plan on the first day of the month coincident with the
completion of one full month of service with the Company or on the first day of any payroll period thereafter.
The Plan contains employee
stock ownership plan (ESOP) provisions. The ESOP is a stock bonus plan within the meaning of U.S. Treasury Regulation
Section 1.401-1(b)(1)(iii)
which is qualified under Section 401(a) of the Code
and is designed to invest primarily in the common stock, par value $.01 per share, of the Company (Company Stock).
The Plan has a
Dividend Payout Program which enables Participants to choose how their dividends on certain shares of Company Stock held in the Plan are to be paid. The options available to Participants include reinvestment of dividends in Company Stock or
distribution of dividends in cash.
Trustee
Fidelity Management Trust Company (Trustee) administers the NextEra Energy, Inc. Employee Retirement Savings Plan Trust (Trust) established to
hold the assets and liabilities of the Plan.
Administration of the Plan
The Plan is intended to qualify as a
participant-directed
account plan under Section 404(c) of
ERISA. The Employee Benefit Plans Administrative Committee (as appointed by the Employee Benefits Advisory Committee of the Company) is the named fiduciary responsible for the general operation and administration of the Plan (but not management or
control of Plan assets), and the Employee Benefit Plans Investment Committee (as appointed by the Employee Benefits Advisory Committee of the Company) is the named investment fiduciary, but is not directly responsible for the management and control
of the Plan assets. The Employee Benefits Advisory Committee acts on behalf of the Company as the Plan Sponsor, as defined by ERISA. Fidelity Workspace Services LLC (Fidelity) provides recordkeeping services with respect to the Plan.
Employee Contributions
The Plan allows
for combined pretax and/or Roth
after-tax
contributions by eligible employees up to the limit under Code Section 402(g), in whole percentages of up to 50% of
their eligible earnings, as defined by the Plan (50% Limit). In addition, eligible employees age 50 or older who contributed the maximum annual amount allowable under the pretax and/or Roth
after-tax
options
in the Plan have the option of contributing an additional pretax
catch-up
contribution or Roth
catch-up
contribution in accordance with Code Section 414(v), up to
the 50% Limit. The Plan also allows for traditional
after-tax
contributions up to the 50% Limit.
5
NEXTERA ENERGY, INC. EMPLOYEE RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
The table below presents the Roth
after-tax
and Roth
catch-up
contributions, subject to the 50% Limit, for the various eligible employee Participant groups covered by the Plan as of December 31, 2017 and 2016.
|
|
|
|
|
Participant Group *
|
|
Roth Contribution effective
dates (includes
after-tax
and
catch-up
contributions)
|
|
|
NextEra Energy, Inc.
and subsidiaries
non-bargaining
and certain bargaining unit employees not listed below
|
|
January 1, 2016
|
|
|
Employees
represented by the NextEra Energy Seabrook, LLC
(NextEra Energy Seabrook) bargaining unit
|
|
January 1, 2017
|
|
|
FPL bargaining unit
employees and NextEra Energy Point Beach employees represented by IBEW 2150
|
|
January 1, 2018
|
*
|
NextEra Energy Duane Arnold, LLC (NextEra Energy Duane Arnold) bargaining unit employees represented by IBEW
204 are not eligible for these provisions.
|
The table below presents the auto enrollment Pretax Contributions for the
various groups of eligible employees unless such employees revoke or modify their Pretax Contribution election within 60 days of their date of hire or rehire.
|
|
|
|
|
Participant Group *
|
|
Deemed Pretax Contribution
|
|
|
NextEra Energy, Inc.
and subsidiaries
non-bargaining
and bargaining unit employees not listed below
|
|
3% for employees hired or rehired on or after
January 1, 2015
|
|
|
NextEra Energy Point
Beach bargaining unit employees represented by IBEW 2150
|
|
3% for employees hired or rehired on or after
January 1, 2008
|
|
|
NextEra Energy
Seabrook bargaining unit employees
|
|
3% for employees hired or rehired on or after
March 1, 2017
|
|
|
NextEra Energy Maine
Operating Services, LLC (NextEra Energy Maine) bargaining unit employees
|
|
3% for employees hired or rehired on or after
July 1, 2015
|
|
|
FPL bargaining unit
employees
|
|
3% for employees hired or rehired on or after
January 1, 2018
|
*
|
NextEra Energy Duane Arnold bargaining unit employees represented by IBEW 204 are not eligible for these
provisions.
|
Participants can elect to invest in any combination of different investment options offered under the Plan.
Participants may change their investment elections daily, subject to Fidelitys excessive trading policy and the Plans limitations on investments in Company Stock.
6
NEXTERA ENERGY, INC. EMPLOYEE RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
Employer Contributions
The Company provides matching contributions through the ESOP in the form of Company Stock. The table below presents the Employer contribution
formula for the various Participant groups covered by the Plan as of December 31, 2017 and 2016.
|
|
|
|
|
Participant Group
|
|
Benefit
|
|
|
NextEra Energy, Inc.
and subsidiaries
non-bargaining
and bargaining unit employees not listed below
|
|
100% on the first 3% of employee contributions
50% on the next 3% of employee contributions
25% on the next 1%
of employee contributions
|
|
|
NextEra Energy
Seabrook
non-bargaining
employees hired prior to November 1, 2002
NextEra Energy Seabrook bargaining unit employees hired prior to January 1, 2004
|
|
100% on the first 3% of employee contributions
|
|
|
NextEra Energy Duane
Arnold
non-bargaining
employees hired prior to January 27, 2006
NextEra Energy Point Beach
non-bargaining
employees hired prior to September 28, 2007
NextEra Energy Duane Arnold bargaining unit employees and NextEra Energy Point Beach
bargaining unit employees (not represented by IBEW 2150)
|
|
100% on the first 3% of employee contributions
50% on the next 2% of employee contributions
|
|
|
NextEra Energy Point
Beach bargaining unit employees represented by IBEW 2150 participating through December 31, 2017, subsequently they will be included in the NextEra Energy, Inc. and subsidiaries
non-bargaining
and
bargaining unit employees group above
|
|
100% on the first 1% of employee contributions
50% on the next 6% of employee contributions
|
Forfeitures
Forfeitures of
non-vested
Company matching contributions due to termination of employment may be used
to restore amounts previously forfeited or to reduce the amount of future Company matching contributions to the Plan or may be applied to administrative expenses. Forfeitures used to reduce Employer contributions in 2017 totaled $1,700,000 and
forfeitures applied to administrative fees in 2017 totaled $444,505. At December 31, 2017 and 2016, the balance of the forfeiture account was $133,798 and $91,874, respectively.
7
NEXTERA ENERGY, INC. EMPLOYEE RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
Vesting
Participants are immediately 100% vested in employee contributions.
The table below presents the vesting schedule for Company matching contributions of the various Participant groups covered by the Plan as of
December 31, 2017 and 2016.
|
|
|
|
|
Participant Group
|
|
Vesting of Company Match
|
|
|
NextEra Energy, Inc.
and subsidiaries
non-bargaining
and bargaining unit employees, not listed below
|
|
Company matching contributions are vested 20% for
each year of service and are fully vested upon a Participant attaining five years of service
|
|
|
NextEra Energy
Seabrook
non-bargaining
employees hired prior to November 1, 2002
NextEra Energy Duane Arnold
non-bargaining
employees hired prior to January 27, 2006
NextEra Energy Duane Arnold bargaining unit employees existing on the date of
acquisition of the Duane Arnold Energy Center (January 27, 2006)
NextEra Energy
Point Beach
non-bargaining
employees hired prior to September 28, 2007
NextEra Energy Point Beach bargaining unit employees existing on the date of acquisition of the Point Beach Nuclear Plant (September 28, 2007)
NextEra Energy Seabrook bargaining unit employees hired prior to January 1,
2009
|
|
Company matching contributions are fully vested
immediately
|
|
|
NextEra Energy Maine
non-bargaining
employees hired prior to August 1, 2006
NextEra Energy Maine bargaining unit employees hired prior to May 15, 2008
|
|
Company matching contributions are fully vested
after attaining six months of service
|
|
|
NextEra Energy Point
Beach bargaining unit employees represented by IBEW 2150 hired on or after September 28, 2007 but prior to January 1, 2018
|
|
Company matching contributions are fully vested
after attaining one year of service
|
Upon death, total and permanent disability or certain other circumstances an employee may become 100% vested.
In addition, in certain circumstances, such as acquisitions or divestitures, the Plan may recognize previous service for vesting purposes.
Participant
Loans
Each Participant may borrow from his or her account a minimum of $1,000 up to a maximum of $50,000 or 50% of the vested value of
the account (reduced by any outstanding loans), whichever is less. The vested portion of a Participants account will be pledged as security for the loan. Participants may not have more than two loans outstanding from the Plan at any time.
Participant loans have a fixed annual interest rate based on the prime rate which is updated quarterly. Loans outstanding at December 31, 2017 carry an interest rate of 3.25% to 4.25% and mature between 2018 and 2023.
Benefit Payments and Withdrawals
Withdrawals by Participants from their accounts during their employment are permitted with certain penalties and restrictions. The penalties
may limit a Participants contributions to the Plan for varying periods following a withdrawal. Upon termination from employment, Participants are eligible to receive a distribution of the full value of their vested account balance. Terminated
Participants can elect to receive a full payment, partial payments, or installments over a period of up to ten years.
8
NEXTERA ENERGY, INC. EMPLOYEE RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
Administrative Expenses
The Company pays a portion of the administrative expenses of the Plan. Additionally, Plan participants pay a fee of $61 per year to cover some
of the administrative expenses of the Plan. All other expenses are paid directly by the Plan through forfeitures or revenue sharing that the Plan receives either directly or indirectly from certain of the Plans investment
options. Any fees paid directly by the Company are not included in the financial statements.
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.
Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual basis of accounting in conformity with accounting principles generally
accepted in the United States of America.
Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Investment Valuation
The Plans
investments are reported at fair value, except for the fully benefit-responsive investment contracts, which are reported at contract value. Fair value measurement guidance emphasizes that fair value is a market-based measurement, not an
entity-specific measurement, and sets out a fair value hierarchy intended to disclose information about the relative reliability of fair value measurements, with the highest priority being unadjusted quoted prices in active markets for identical
assets or liabilities.
In some cases, a valuation approach used to measure fair value may include inputs from multiple levels of fair
value hierarchy. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.
The Plan recognizes transfers into and out of fair value hierarchy levels at the beginning of the period.
The following are descriptions of the valuation methods and assumptions used by the Plan to estimate the fair values of investments held by
the Plan.
Registered investment companies (mutual funds), Company Stock, and common stock
: Investments in shares of registered
investment companies are valued at quoted market prices in active markets (Level 1 inputs), which represent the net asset value of such shares at
year-end.
Investments in shares of actively traded money market
mutual funds are stated at the net asset value of such shares held at
year-end
(Level 1 inputs). Company Stock and other publicly traded common stock are valued at their quoted market price in active markets
(Level 1 inputs). Certain common stock is valued using significant unobservable inputs (Level 3 inputs).
Collective trust funds
:
The fair values of participation units held in collective trust funds are based on the net asset value per unit share reported by the fund manager as of the financial statement dates and on recent transaction prices (Level 2 inputs). Each collective
trust fund provides for daily redemptions reported at net asset value per unit share, with no advance notice requirement.
The following
is a description of the valuation methods and assumptions used by the Plan to report the contract value of the fully benefit-responsive synthetic guaranteed investment contracts held by the Plan.
Investment contracts (wrapper contracts):
The Managed Income Fund holds fully benefit-responsive investment contracts (wrapper
contracts) (see Note 7 Managed Income Fund) with various insurance companies and financial institutions in order to provide Participants with a stable, fixed-rate of return on investments and protection of principal from changes in market
interest rates. The crediting interest rate resets monthly and is based on an
agreed-upon
formula with the issuers, but cannot be less than zero. The key factors that influence future rates could include the
following: the level of market interest rates, the difference between the fully benefit-responsive investment contracts book and market values, the amount and timing of Participant contributions, transfers and withdrawals into/out of the fully
benefit-responsive investment contracts, and the duration of the underlying investments backing the fully benefit-responsive investment contracts.
9
NEXTERA ENERGY, INC. EMPLOYEE RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
The wrapper contracts within the Managed Income Fund are a synthetic guaranteed investment
contract which is valued at the contract value of the underlying investments of the contracts, primarily debt securities and wrapper contracts. The underlying investments in the Managed Income Fund include U.S. Treasury notes, asset-backed and
mortgage-backed securities, corporate bonds and government agency notes. The contracts are unallocated in nature and are fully benefit-responsive. Therefore, net assets available for benefits reflects the contract value of the Managed Income Fund.
There are no reserves against contract values (which represent contributions made under the contract, plus earnings, less withdrawals and administrative expenses) for credit risk of the contract issuer or otherwise. Wrapper contracts provide the
Managed Income Fund with the ability to use contract value accounting to maintain a constant $1.00 unit price. Wrapper contracts also provide for the payment of participant-directed withdrawals and exchanges at contract value (principal and interest
accrued to date) during the term of the wrapper contracts. However, withdrawals prompted by certain events (e.g., layoffs, retirement during specified early retirement window periods, spin-offs, sale of a division, facility closings, plan
terminations, partial plan terminations, changes in law or regulation, material breach of contract responsibilities, loss of the Plans qualified status, etc.) may be paid at fair value which may be less than contract value. Currently,
management believes that the occurrence of an event that would cause the Plan to be paid at less than contract value is not probable. A contract issuer may terminate a wrapper contract at any time; however, if the fair value of the contract is less
than the contract value, the contract issuer can either hold the contract until the fair value and contract value are equal or make up the difference between the two. If the funds in the wrapper contracts are needed for benefit payments prior to
contract maturity, they may be withdrawn without penalty.
Investment Income Recognition
Purchases and sales of investment securities are recorded on the trade date. Gains or losses on sales of investment securities are determined
using the average cost method of the securities. The carrying amounts of securities held in Participants accounts are adjusted daily. Unrealized appreciation or depreciation is recorded to recognize changes in fair value. Interest income is
recorded on the accrual basis. Dividends are recorded on the
ex-dividend
date.
Payment of Benefits
Benefits distributed to Participants are recorded when paid.
Participant Loans
Participant loans are
reported at their unpaid principal balance plus any accrued but unpaid interest, with no allowance for credit losses, as repayments of principal and interest are received through payroll deductions and the notes are collateralized by the
Participants account balances in the Plan.
3. Risks and Uncertainties
Investment securities, in general, are exposed to various risks, such as interest rate, credit, liquidity and overall market volatility, which
could result in changes in the value of such securities. Due to the level of risk associated with certain types of investment securities, it is at least reasonably possible that changes in the values of the investment securities will occur in the
near term and that such changes could materially affect Participants account balances and the amounts reported in the statements of net assets available for benefits and the statement of changes in net assets available for benefits.
4. Nonparticipant-Directed Investments
The Nonparticipant-Directed net assets of the Plan and changes therein represent Employer contributions into the ESOP component of
the Plan. Participants have the option to reinvest nonparticipant-directed shares daily among any of the other investment options available under the Plan.
5. Parties-In-Interest
Transactions
Parties-in-interest
are defined under Department of Labor
regulations as any fiduciary of the Plan, any party rendering service to the Plan, the Employer, and certain others.
Dividend income
earned by the Plan includes dividends on Company Stock. In accordance with the Plan and the Companys Dividend Reinvestment and Direct Stock Purchase Plan in which the Trustee participates, participants may elect to reinvest dividends in
Company Stock or receive dividends in cash. During 2017, dividends on shares of Company Stock held in Participants accounts totaled $44,327,677.
10
NEXTERA ENERGY, INC. EMPLOYEE RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
During 2017, employer contributions of Company Stock credited to Participants accounts
totaled $52,564,753 which equates to 377,879 shares. At December 31, 2017 and 2016, the number of shares of Company Stock held in Participants accounts totaled 10,958,146 and 11,606,405, respectively, with a fair value of $1,711,552,781
and $1,386,501,109, respectively. Realized gains on shares of Company Stock sold by Participants during the Plan year totaled $31,377,131.
Certain fees were paid by the Plan to the managers of the investments held in the Plan and certain Plan investments are managed by an
affiliate of the Trustee or investment advisors of the Plan. These transactions qualify as
party-in-interest
transactions. The Plan also pays for various administrative
expenses to service providers which constitute
party-in-interest
transactions. Additionally, the Plan reimburses the Company for a portion of the costs incurred in the
administration of the Plan which are considered
party-in-interest
transactions. Participant loans held by the Plan of $69,958,932 and $70,823,295 at December 31,
2017 and December 31, 2016, respectively, are also considered
party-in-interest
transactions.
6. Investments
The following table sets
forth by level, within the fair value hierarchy, the Plans assets that are measured at fair value on a recurring basis as of December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements
At December 31, 2017 using
|
|
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
|
Significant
Other
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
Participant-directed investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies
|
|
$
|
426,956,812
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
426,956,812
|
|
Collective trust funds
|
|
|
|
|
|
|
1,615,240,260
|
|
|
|
|
|
|
|
1,615,240,260
|
|
Common stock other than NextEra Energy, Inc. common stock
|
|
|
366,789,979
|
|
|
|
|
|
|
|
2,628,725
|
|
|
|
369,418,704
|
|
NextEra Energy, Inc. common stock
|
|
|
505,405,823
|
|
|
|
|
|
|
|
|
|
|
|
505,405,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total participant-directed investments
|
|
|
1,299,152,614
|
|
|
|
1,615,240,260
|
|
|
|
2,628,725
|
|
|
|
2,917,021,599
|
|
Nonparticipant-directed investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NextEra Energy, Inc. common stock
|
|
|
1,206,146,958
|
|
|
|
|
|
|
|
|
|
|
|
1,206,146,958
|
|
Registered investment companies
|
|
|
10,270,951
|
|
|
|
|
|
|
|
|
|
|
|
10,270,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonparticipant-directed investments
|
|
|
1,216,417,909
|
|
|
|
|
|
|
|
|
|
|
|
1,216,417,909
|
|
Total investments in the fair value heirarchy
|
|
|
2,515,570,523
|
|
|
|
1,615,240,260
|
|
|
|
2,628,725
|
|
|
|
4,133,439,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at contract value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
281,704,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,415,143,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the 2017 Plan year there were no transfers between Level 1 and Level 2 investments.
11
NEXTERA ENERGY, INC. EMPLOYEE RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
The following table sets forth by level, within the fair value hierarchy, the Plans
assets that are measured at fair value on a recurring basis as of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements
At December 31, 2016 using
|
|
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
|
Significant
Other
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
Participant-directed investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies
|
|
$
|
371,045,386
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
371,045,386
|
|
Collective trust funds
|
|
|
|
|
|
|
1,412,853,250
|
|
|
|
|
|
|
|
1,412,853,250
|
|
Common stock other than NextEra Energy, Inc. common stock
|
|
|
267,670,134
|
|
|
|
|
|
|
|
2,717,255
|
|
|
|
270,387,389
|
|
NextEra Energy, Inc. common stock
|
|
|
424,506,346
|
|
|
|
|
|
|
|
|
|
|
|
424,506,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total participant-directed investments
|
|
|
1,063,221,866
|
|
|
|
1,412,853,250
|
|
|
|
2,717,255
|
|
|
|
2,478,792,371
|
|
Nonparticipant-directed investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NextEra Energy, Inc. common stock
|
|
|
961,994,763
|
|
|
|
|
|
|
|
|
|
|
|
961,994,763
|
|
Registered investment companies
|
|
|
15,269,859
|
|
|
|
|
|
|
|
|
|
|
|
15,269,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonparticipant-directed investments
|
|
|
977,264,622
|
|
|
|
|
|
|
|
|
|
|
|
977,264,622
|
|
Total investments in the fair value heirarchy
|
|
|
2,040,486,488
|
|
|
|
1,412,853,250
|
|
|
|
2,717,255
|
|
|
|
3,456,056,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at contract value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
321,574,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,777,631,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the 2016 Plan year there were no transfers between Level 1 and Level 2 investments.
7. Managed Income Fund
The contract
value of fully benefit-responsive investment contracts was $281,704,258 and $321,574,692, respectively, at December 31, 2017 and 2016. The contract value of fully benefit-responsive investment contracts includes a government short-term
collective investment trust in the amount of $3,417,857 and $708,147, respectively, at December 31, 2017 and 2016. The contract value of fully benefit-responsive investment contracts excludes short term investments in registered investment
companies that are not covered by the wrapper contracts. These investments are reported at fair value in the amount of $4,206,125 and $2,774,449, respectively, at December 31, 2017 and 2016.
8. Income Taxes
On June 17,
2015, the Internal Revenue Service (IRS) made a favorable determination that the Plan meets the requirements of Section 401(a) of the Code. The Plan has been amended since receiving the favorable determination letter and due to expiry of the
determination letter program, no new letter is expected. The Company and the plan administrator believe that the Plan is currently designed and operated in material compliance with the applicable requirements of the Code and that the Plan continues
to be
tax-exempt.
The Trust established under the Plan will generally be exempt from federal income taxes under Section 501(a) of the Code; Company contributions paid to the Trust under the Plan will be
allowable federal income tax deductions of the Company subject to the conditions and limitations of Section 404 of the Code; and the Plan meets the requirements of Section 401(k) of the Code allowing Pretax Contributions to be exempt from
federal income tax at the time such contributions are made, provided that in operation the Plan and Trust meet the applicable provisions of the Code. Participants are given the option to receive dividend distributions on Company Stock in cash; all
vested dividends earned by Participants are deductible by the Company.
Company matching contributions to the Plan on a Participants
behalf, the Participants Pretax Contributions, and the earnings thereon generally are not taxable to the Participant until such Company matching contributions, Pretax Contributions, and earnings thereon are distributed or
withdrawn. Participants Roth
after-tax
contributions and the earnings thereon generally are not taxable to the Participant if made as a qualified distribution. Earnings on traditional
after-tax
contributions are not taxable to the Participant until distributed or withdrawn. A loan from a Participants account generally will not represent a taxable distribution if the loan is repaid in a
timely manner and does not exceed certain limitations.
Accounting principles generally accepted in the United States of America require
plan administrators to evaluate tax positions taken by the Plan. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2017 and 2016, respectively, there are no uncertain positions
taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing authorities, and an IRS audit is currently in progress for 2014 and
2015. The plan administrator believes it is no longer subject to income tax examinations by the IRS for years prior to 2014.
12