Notes to Financial Statements
December 31, 2013 and 2012
(1)
|
Description of the Plan
|
The following description of the Huttig Building Products, Inc. Savings and Profit Sharing Plan (the Plan) is provided for financial
statement purposes only. Participants should refer to the Plan document for more complete information.
(a) General
The Plan is a defined contribution plan established by Huttig Building Products, Inc. (Huttig or the Company) under the provisions of Section 401(a) of the Internal Revenue Code (IRC), which includes
a qualified cash or deferred salary arrangement as described in Section 401(k) of the IRC, for the benefit of eligible employees of the Company. The Plan was established December 16, 1999 to offer the employees of the Company a means of
saving funds, on a pre-tax basis or after-tax basis, for retirement. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. Participation is voluntary.
Full-time employees are eligible to participate in the Plan upon completing 30 days of regular service. The Plan covers all employees of
the Company or any other corporation affiliated with the Company, which has adopted the Plan, who have completed 30 days of service, as defined by the Plan, and are not leased employees. Each employee may become a participant of the Plan on the
first day of any calendar month coinciding with, or following, the fulfillment of the eligibility requirements.
The Plan is
administered by executives of the Company. Prudential Trust Company serves as the Plan Trustee (the Trustee) and The Prudential Investment Company of America serves as Plan Recordkeeper and Custodian.
(b) Contributions
Plan participants may contribute a percentage of their annual compensation, up to the maximum allowable under Section 402(g) of the IRC. Contributions may be made prior to Federal and certain other
income taxes pursuant to Section 401(k) of the IRC or on an after-tax basis. Plan participants must elect out of the minimum annual contribution. The minimum was 2% through May 30, 2013. Effective June 1, 2013, this was increased to
3%. Participants attaining the age of 50 before the end of year are eligible to make catch-up contributions of an extra $5,500. The Plan allows participants to make Roth contributions to the Plan.
Company matching contributions are discretionary as determined by the Board of Directors. The Company did not make any matching
contributions in 2013 or 2012.
The Company may also make a profit-sharing contribution on a discretionary basis on behalf of
all eligible participants employed on the last day of the Plan year, as defined by the Plan, whether or not they make an elective matching contribution for the Plan year. Profit-sharing contributions are based on the Companys profitability and
are allocated based on a participants yearly eligible compensation as a percentage of total eligible compensation for that particular year. These contributions are also subject to certain limitations. There were no discretionary profit sharing
contributions remitted to the Plan in 2013 or 2012.
7
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
(c) Investments
Participants may elect to place their deferred or non-deferred contributions into the following investments: Huttig Common Stock,
Prudential Jennison Growth Fund Z, Prudential Dryden Stock Index Fund I, Prudential Guaranteed Income Fund, American Funds Euro Pacific Growth Fund A, T Rowe Price Mid-Cap Growth R, Federated Clover Small Value A, PIMCO Total Return A, Lord Abbett
Developing Growth A Fund, Virtus Emerging Market Opportunities A, JPMorgan Diversified Sel, JPMorgan Mid Cap Value Inst, American Balanced Fund, BlackRock Equity Dividend Inst and Templeton Global Bond Fund. As a result of the spin-off of the
Company by Crane Co. in 1999, all assets resulting from such transfer held within the Crane Common Stock are held as a separate investment fund; however, participants are not permitted to direct any contributions to the Crane Common Stock after the
effective date of the Plan.
(d) Vesting and Forfeitures
Participants are always 100% vested in the value of their contributions and the earnings thereon. Vesting of Company contributions and the
earnings thereon is determined based on participants years of vesting service. A participant is vested 20% after each year of service and becomes fully vested after five years of service or if employment terminates by reason of death,
permanent disability, or retirement at age 65. A terminated participant forfeits non-vested Company contributions on the one year anniversary of the participants termination.
Any amounts forfeited are first used for payment of employer matching contributions and then to pay Plan expenses. The amounts forfeited
were $4,746 and $5,132 in 2013 and 2012, respectively.
(e) Payments of Benefits
Amounts in a participants account and the vested portion of a participants employer contributions are
distributed upon retirement, death, disability, or other termination of employment. Distributions from the Huttig Common Stock are made in cash.
(f) Notes Receivable Participants
Participants may borrow funds from their accounts up to 50% of the total vested balance but not more than $50,000, less the participants highest outstanding loan balance for the previous 12-month
period. The minimum loan amount is $1,000. Loans are repayable through payroll deductions over 1-10 years. At December 31, 2013, the interest rates on participants loans ranged from 4.25% 9.25%. The loans are secured by the balance
in the participants account and bear interest at the initial lending rate for the life of the loan. Loans taken out in 2013 had an initial lending rate of prime of 3.25% plus 1%, or 4.25%. Participant loans are measured at the unpaid principal
balance plus any accrued unpaid interest. The outstanding balance of loans to participants was $616,965 and $676,445 as of December 31, 2013 and 2012, respectively. Interest income on the loan fund is included as interest income in the
participants fund accounts based on their elected loan allocation.
8
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
(g) Plan Member Accounts
Individual accounts are maintained for each Plan participant to reflect the Plan participants share of the Plans income, the
Companys contribution, and the Plan participants contribution.
(2)
|
Summary of Significant Accounting Policies
|
(a) Basis of Presentation
The accompanying
financial statements of the Plan have been prepared on the accrual basis of accounting. As described in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 962,
Plan Accounting
Defined Contribution Plans
, investment contracts held by a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for
benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. As
required, the Statements of Net Assets Available for Benefits presents the fair value of the investment contracts. The contract is an insurance company issued general account backed group annuity contract. There are no specific securities in the
general account that back the investments in this account. All transactions are at contract value, including discontinuance of the contract. Therefore, fair value is equal to contract value for this investment and no adjustment to fair value is
required.
(b) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
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 additions and
deductions during the reporting period. Actual results could differ from those estimates.
(c) Administrative Expenses
The assets of the Plan shall be used to pay benefits as provided in the Plan and, to the extent not paid directly by the Company, to pay the reasonable expenses of administering the Plan. Administrative
expenses were $78,288 and $153,088 for the years ended December 31, 2013 and 2012, respectively.
(d) Valuation of Investments and Income Recognition
Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. See note 3 for discussion of fair value measurements.
9
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
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 (depreciation) includes the Plans gains and losses on investments bought and sold as well as held during the year.
(e) Payment of Benefits
Benefit payments to participants are recorded upon distribution.
(f) Transfers Between Fair Value Hierarchy Levels
Transfers in and out of Level 1 (quoted market prices), Level 2 (other significant observable inputs) and Level 3
(significant unobservable inputs) are recognized on the period beginning date.
(g) Reclassifications
Certain reclassifications have been made to the 2012 financial statement to conform to the 2013 financial statement presentation. These reclassifications had no effect on changes in net assets available
for benefits.
The
following presents investments that represent 5% or more of the Plans net assets available for benefits:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Prudential Guaranteed Income Fund
|
|
$
|
11,442,114
|
|
|
$
|
12,489,740
|
|
American Funds EuroPacific Growth Fund A
|
|
|
5,442,760
|
|
|
|
6,009,614
|
|
Prudential Jennison Growth Fund Z
|
|
|
6,779,373
|
|
|
|
5,476,284
|
|
Pioneer Fundamental Value Fund Y
|
|
|
|
|
|
|
5,283,455
|
|
BlackRock Equity Dividend Inst
|
|
|
6,261,525
|
|
|
|
|
|
Huttig Company Stock
|
|
|
6,942,586
|
|
|
|
2,981,972
|
|
American Balanced Fund
|
|
|
|
*
|
|
|
2,695,638
|
|
* Investment is less than 5% of net assets available for benefits
10
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
The Plans investments (including realized and unrealized gains and losses on investments bought
and sold, as well as held during the year) appreciated (depreciated) in value as follows:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Appreciation/(depreciation) in fair value:
|
|
|
|
|
|
|
|
|
JPMorgan Diversified Sel
|
|
$
|
(5,838
|
)
|
|
$
|
|
|
JPMorgan Mid Cap Value Inst
|
|
|
333,339
|
|
|
|
|
|
Prudential Jennison Growth Fund Z
|
|
|
1,732,696
|
|
|
|
762,593
|
|
Crane Common Stock
|
|
|
812,641
|
|
|
|
(48,689
|
)
|
Huttig Common Stock
|
|
|
4,094,356
|
|
|
|
2,069,609
|
|
Prudential Dryden Stock Index Fund I
|
|
|
589,265
|
|
|
|
255,529
|
|
American Funds EuroPacific Growth Fund A
|
|
|
1,139,287
|
|
|
|
910,937
|
|
BlackRock Equity Dividend Inst
|
|
|
759,722
|
|
|
|
|
|
Federated Clover Small Value A
|
|
|
297,376
|
|
|
|
85,079
|
|
Columbia Mid Cap Value A
|
|
|
218,690
|
|
|
|
312,238
|
|
T Rowe Price Mid Cap Growth R
|
|
|
556,766
|
|
|
|
122,678
|
|
Lord Abbett Developing Growth A
|
|
|
422,054
|
|
|
|
20,312
|
|
Eaton Vance Large Cap Value Fund A
|
|
|
|
|
|
|
130,021
|
|
Templeton Global Bond Fund
|
|
|
7
|
|
|
|
10,931
|
|
American Balanced Fund
|
|
|
490,969
|
|
|
|
295,383
|
|
Virtus Emerging Market Opportunities A
|
|
|
6,561
|
|
|
|
1,170
|
|
Pioneer Fundamental Value Fund Y
|
|
|
492,433
|
|
|
|
270,658
|
|
PIMCO Total Return A
|
|
|
(99,658
|
)
|
|
|
54,627
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11,840,666
|
|
|
$
|
5,253,076
|
|
|
|
|
|
|
|
|
|
|
11
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
Fair Value Measurements
Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820,
Fair Value Measurements and Disclosures
, establishes a fair value hierarchy that prioritizes inputs to
valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority; Level 2 inputs consist of quoted
market prices in active markets for similar assets type assets; and Level 3 consist of unobservable inputs that have the lowest priority. The Plan uses appropriate techniques based on the available inputs to measure the fair value of its
investments. When available, the Plan measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. There have been no changes in methodologies used in December 31, 2013 or 2012. The Plan had
no assets measured at fair value on a nonrecurring basis.
Level 1 Fair Value Measurements
The fair value of mutual funds is based on quoted net asset values of the shares held by the Plan at year-end. The fair value of common
stock is based on quoted market prices.
Level 2 Fair Value Measurements
Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted market prices in active markets for similar
assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or
liabilities. The Plan has no Level 2 investments in 2013.
Level 3 Fair Value Measurements
The fair value is based upon significant unobservable inputs, including the reporting entitys own assumptions in determining the
fair value of investments. The Plans investment in the Guaranteed Income Fund (GIF) is a fully benefit-responsive investment fund. The GIF is valued based on the participant contributions made in the fund, plus earnings at guaranteed crediting
rates, less withdrawals and fees.
12
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
Recurring Measurements
The following table presents the fair value measurements of assets and liabilities recognized in the accompanying statements of net assets available for benefits measured at fair value on a recurring
basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using:
|
|
December 31, 2013
|
|
Fair Value
|
|
|
Quoted Prices
in
Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Other
Significant
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Mutual funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balanced
|
|
$
|
4,310,823
|
|
|
$
|
4,310,823
|
|
|
$
|
|
|
|
$
|
|
|
Bond
|
|
|
2,484,869
|
|
|
|
2,484,869
|
|
|
|
|
|
|
|
|
|
International
|
|
|
6,463,066
|
|
|
|
6,463,066
|
|
|
|
|
|
|
|
|
|
Large Cap Growth
|
|
|
6,779,373
|
|
|
|
6,779,373
|
|
|
|
|
|
|
|
|
|
Large Cap Balanced
|
|
|
2,425,013
|
|
|
|
2,425,013
|
|
|
|
|
|
|
|
|
|
Large Cap Value
|
|
|
6,261,525
|
|
|
|
6,261,525
|
|
|
|
|
|
|
|
|
|
Mid Cap Growth
|
|
|
2,550,975
|
|
|
|
2,550,975
|
|
|
|
|
|
|
|
|
|
Mid Cap Value
|
|
|
2,916,881
|
|
|
|
2,916,881
|
|
|
|
|
|
|
|
|
|
Small Cap Value
|
|
|
1,636,011
|
|
|
|
1,636,011
|
|
|
|
|
|
|
|
|
|
Small Cap Growth
|
|
|
2,022,829
|
|
|
|
2,022,829
|
|
|
|
|
|
|
|
|
|
Huttig Common Stock
|
|
|
6,942,586
|
|
|
|
6,942,586
|
|
|
|
|
|
|
|
|
|
Crane Common Stock
|
|
|
2,386,512
|
|
|
|
2,386,512
|
|
|
|
|
|
|
|
|
|
Guaranteed Income Fund
|
|
|
11,442,144
|
|
|
|
|
|
|
|
|
|
|
|
11,442,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
58,622,607
|
|
|
$
|
47,180,463
|
|
|
$
|
|
|
|
$
|
11,442,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using:
|
|
December 31, 2012
|
|
Fair Value
|
|
|
Quoted Prices
in
Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Other
Significant
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Mutual funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balanced
|
|
$
|
2,695,638
|
|
|
$
|
2,695,638
|
|
|
$
|
|
|
|
$
|
|
|
Bond
|
|
|
1,788,588
|
|
|
|
1,788,588
|
|
|
|
|
|
|
|
|
|
International
|
|
|
6,042,842
|
|
|
|
6,042,842
|
|
|
|
|
|
|
|
|
|
Large Cap Growth
|
|
|
5,476,284
|
|
|
|
5,476,284
|
|
|
|
|
|
|
|
|
|
Large Cap Balanced
|
|
|
2,104,488
|
|
|
|
2,104,488
|
|
|
|
|
|
|
|
|
|
Large Cap Value
|
|
|
5,283,455
|
|
|
|
5,283,455
|
|
|
|
|
|
|
|
|
|
Mid Cap Growth
|
|
|
2,033,319
|
|
|
|
2,033,319
|
|
|
|
|
|
|
|
|
|
Mid Cap Value
|
|
|
2,259,854
|
|
|
|
2,259,854
|
|
|
|
|
|
|
|
|
|
Small Cap Value
|
|
|
1,184,523
|
|
|
|
1,184,523
|
|
|
|
|
|
|
|
|
|
Small Cap Growth
|
|
|
1,400,638
|
|
|
|
1,400,638
|
|
|
|
|
|
|
|
|
|
Huttig Common Stock
|
|
|
2,981,972
|
|
|
|
2,981,972
|
|
|
|
|
|
|
|
|
|
Crane Common Stock
|
|
|
1,885,492
|
|
|
|
1,885,492
|
|
|
|
|
|
|
|
|
|
Guaranteed Income Fund
|
|
|
12,489,740
|
|
|
|
|
|
|
|
12,489,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
47,626,833
|
|
|
$
|
35,137,093
|
|
|
$
|
12,489,740
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value determinations for Level 3 measurements of securities are the responsibility of the Plan Administrator.
The Plan Administrator contracts with the trustee to generate fair value estimates on a monthly or quarterly basis. The Plan Administrator challenges the reasonableness of the assumptions used and reviews the methodology to ensure the estimated fair
value complies with accounting standards generally accepted in the United States.
14
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
Transfers Between Levels
Transfers between Levels, 1, 2 and 3 and the reason for those transfers are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level
1)
|
|
Other
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Reason for
Transfer
|
Transfers from level
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranteed Income Fund
|
|
|
$
|
|
|
|
|
$
|
12,489,740
|
|
|
|
$
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total transfers from level
|
|
|
$
|
|
|
|
|
$
|
12,489,740
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfers to level
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranteed Income Fund
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
12,489,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total transfers from level
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
12,489,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Management determined key inputs not observable
Unobservable (Level 3) Inputs
The following table presents quantitative information about unobservable inputs used in recurring Level 3 fair value measurements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
12/31/2013
|
|
Valuation
Technique
|
|
Unobservable
Inputs
|
|
Range
(Weighted
Average)
|
Prudential Guaranteed Income Fund
|
|
|
$
|
11,442,114
|
|
|
|
|
Contract Value
|
|
|
|
|
Contractual interest rate
|
|
|
|
|
2%
|
|
Sensitivity of Significant Unobservable Inputs
The following is a discussion of the sensitivity of significant unobservable inputs, the interrelationships between those inputs and other
unobservable inputs used in recurring fair value measurement and of how those inputs might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement.
Investment Contract with Insurance Company
The significant unobservable input used in the fair value measurement of the Plans investment contract with an insurance company is the interest rate of the investment contract. Changes in the
contractual interest rate would result in a significant change in fair value to the extent the change deviates from changes in market interest rates. Generally, an increase (decrease) in the difference between the contractual interest rate and the
market interest rate is accompanied by a directionally opposed change in the fair value.
15
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
The table below sets forth a summary of changes in the fair value of the Plans Level 3 investment
assets for the years ended 2013 and 2012.
|
|
|
|
|
|
|
Guaranteed
Income
Fund
|
|
Balance at January 1, 2013
|
|
$
|
0
|
|
Transfer into Level 3
|
|
|
12,489,740
|
|
Interest Income
|
|
|
287,879
|
|
Purchases
|
|
|
2,302,384
|
|
Sales
|
|
|
(3,637,859
|
)
|
|
|
|
|
|
Balance at December 31, 2013
|
|
$
|
11,442,144
|
|
|
|
|
|
|
16
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
(4)
|
Contract with Insurance Company
|
In 2013 and 2012, the Plan invested in the Prudential Guaranteed Income Fund (GIF) offered by the Trustee Prudential Retirement Insurance and Annuity Company (PRIAC). Guarantees are based on the claims
paying ability of PRIAC and not the value of the securities within the insurers general account. The credit rating of the issuer at December 31, 2013 was A1 as reported by Moodys Investors Service. Deposits made to the GIF are
deposited in PRIACs general account. Payment obligations under the GIF represent an insurance claim supported by all the general assets. The GIF does not operate like a mutual fund, variable annuity product, or conventional fixed rate
individual annuity product. Expenses related to the GIF are calculated by PRIAC and incorporated in the GIF crediting rate. Past interest rates are not indicative of future interest rates.
GIF Operation
Under the group annuity contract that supports this product, participants may ordinarily direct permitted withdrawals or transfers of all or a portion of their account balance at Contract Value within
reasonable time frames. Contract Value represents deposits made to the contract, plus earnings at guaranteed crediting rates, less withdrawals and fees. The contract is effected directly between the Plan and the issuer. The repayment of principal
and interest credited to participants is a financial obligation of the issuer. There are no reserves against Contract Value for credit risk of the contract issuer or otherwise. Given these provisions, the Plan considers this contact to be benefit
responsive.
Contract/Fair Value
The concept of a value other than Contract Value does not apply to this insurance company issued account backed evergreen (no maturity date) group annuity spread product even upon discontinuance of the
contract in which case Contract Value would be paid no later than 90 days from the date the sponsor provides notice to discontinue. The contracts operation is different than many other evergreen group annuity products in that market by virtue
of the fact that a market value (fair value) adjustment does not apply upon a discontinuance. This annuity contract, and therefore the liability of the insurer, is not backed by specific securities of its general account, and therefore the market
value of the securities in the insurers general account does not represent the fair value. The Plan owns a promise to receive interest at crediting rates which are announced in advance and guaranteed for a specific period of time as outlined
in the group annuity contract. This product is not a traditional Guaranteed Investment Contract (GIC), and therefore there are no known cash flows that could be discounted. As a result, the value amount shown materially approximates the Contract
Value. As of December 31, 2013 and 2012, the Plan held $11,442,144 and $12,489,740, respectively.
17
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
Interest Crediting Rates
Interest is credited on contract balances using a single portfolio rate approach. Under this methodology, a single interest crediting rate
is applied to all contributions made to the product regardless of the timing of those contributions. The average interest earned by the Plan was 2.00% and 2.18% for the year ended December 31, 2013 and December 31, 2012, respectively. No
adjustment is required to mediate between the average earnings credited to the Plan and the average earnings credited to the participants. The same crediting interest rate is applied to the entire contract value and is reviewed on a semi-annual
basis for resetting. The factors considered in establishing the crediting interest rate include current economic and market conditions, the general interest rate environment and both actual and expected experience of a reference portfolio within the
general account. The guaranteed minimum interest rate is 1.50%.
Events
Only an event causing liquidity constraints at PRIAC could limit the ability of the Plan to transact at Contract Value paid within 90 days
or in rare circumstances, Contract Value over time. There are not any events that allow the issuer to terminate the contract and which require the Plan sponsor to settle at an amount different than Contact Value paid either within 90 days or over
time.
The Plan
Administrator has concluded that as of December 31, 2013, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the 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 the Plan is no longer subject to examination for the years prior to 2010.
The Plan operates under a non-standardized adoption agreement in connection with a prototype retirement plan and trust/custodial document
sponsored by The Prudential Investment Company of America. This prototype plan document has been filed with the appropriate agency. The Plan has not obtained or requested a determination letter. However, the Plan Administrator believes that the Plan
is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code and that the Plan was qualified and the related trust was tax exempt as of the financial statement date.
(6)
|
Distribution of Assets Upon Termination of the Plan
|
Huttig reserves the right to terminate the Plan, in whole or in part, at any time. In the event of termination, all amounts credited to the participant accounts will become 100% vested. If the Plan is
terminated at any time or contributions are completely discontinued and Huttig determines that the trust shall be terminated, all accounts shall be revalued as if the termination date were a valuation date and such accounts shall be distributed to
participants. If the Plan is terminated or contributions completely discontinued, but Huttig determines that the trust shall be continued pursuant to the terms of the trust agreement, participants or the Company shall make no further contributions,
but the trust shall be administered as though the Plan were otherwise in effect. There are no intentions to terminate the Plan at this time.
18
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2013 and 2012
(7)
|
Related Party Transactions
|
Certain Plan investments are shares of mutual funds and the guaranteed income fund that are managed by Prudential Trust Company.
Prudential Trust Company is the Trustee, as defined by the Plan, and therefore, these transactions qualify as party-in-interest transactions.
Additionally, Plan investments include shares of Huttig Building Products, Inc. common stock. Huttig Building Products, Inc. is the Plan Sponsor, as defined by the Plan and, therefore, these transactions
qualify as party-in-interest transactions. These party-in-interest transactions are allowable under ERISA regulations. The Plan has investments in Huttig Common Stock as of December 31, 2013 and 2012 of $6,942,586 and $2,981,972, respectively.
In 2013 and 2012, the Company did not make matching contributions for the purchase of Huttig Common Stock. The participant can reallocate the vested portions of the Huttig Common Stock at any time. In addition, after three years of service, a
participant can reallocate matching contributions invested in Huttig Common Stock regardless of whether the participant is vested in such matching contributions.
As of December 31, 2013 and 2012, the Plan held approximately 1,798,597 and 1,863,733 shares, respectively, of Company Common Stock. Total outstanding Huttig Company Stock as of December 31,
2013, was approximately 25 million shares.
During the year ended December 31, 2013, the Plan had the following
transactions involving Huttig Common Stock:
|
|
|
|
|
Shares purchased
|
|
|
156,442
|
|
Shares sold
|
|
|
221,578
|
|
Cost of shares purchased
|
|
$
|
423,918
|
|
Cost of shares sold
|
|
$
|
419,977
|
|
Net proceeds from shares sold
|
|
$
|
557,659
|
|
(8)
|
Risks and Uncertainties
|
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and
credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect
participants account balances and the amounts reported in the statement of net assets available for benefits.
19
Schedule 1
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
Schedule H, Line 4i Schedule of Assets Held (at end of year)
EIN #43-0334550 Plan No. 006
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) (b) Identity of Issuer
|
|
(c) Description
|
|
(d) Cost
|
|
(e) Current
Value
|
Prudential Guaranteed Income Fund*
|
|
Unallocated Investment Contract
|
|
**
|
|
|
$
|
11,442,144
|
|
JPMorgan Diversified Sel
|
|
Mutual Fund
|
|
**
|
|
|
|
1,535,846
|
|
American Funds EuroPacific Growth Fund A
|
|
Mutual Fund
|
|
**
|
|
|
|
5,442,760
|
|
JPMorgan Mid Cap Value Inst
|
|
Mutual Fund
|
|
**
|
|
|
|
2,916,881
|
|
Prudential Jennison Growth Fund Z*
|
|
Mutual Fund
|
|
**
|
|
|
|
6,779,373
|
|
Huttig Common Stock*
|
|
Company Stock
|
|
**
|
|
|
|
6,942,586
|
|
American Balanced Fund
|
|
Mutual Fund
|
|
**
|
|
|
|
2,774,977
|
|
BlackRock Equity Dividend Inst
|
|
Mutual Fund
|
|
**
|
|
|
|
6,261,525
|
|
Prudential Dryden Stock Index Fund I*
|
|
Mutual Fund
|
|
**
|
|
|
|
2,425,013
|
|
T Rowe Price Mid Cap Growth R
|
|
Mutual Fund
|
|
**
|
|
|
|
2,550,975
|
|
Crane Common Stock
|
|
Company Stock
|
|
**
|
|
|
|
2,386,512
|
|
PIMCO Total Return A
|
|
Mutual Fund
|
|
**
|
|
|
|
1,697,226
|
|
Lord Abbett Developing Growth A
|
|
Mutual Fund
|
|
**
|
|
|
|
2,002,829
|
|
Federated Clover Small Value A
|
|
Mutual Fund
|
|
**
|
|
|
|
1,636,011
|
|
Virtus Emerging Market Opportunities A
|
|
Mutual Fund
|
|
**
|
|
|
|
1,020,306
|
|
Templeton Global Bond Fund
|
|
Mutual Fund
|
|
**
|
|
|
|
787,643
|
|
Notes receivableparticipants*
|
|
Interest rates 4.25% to 9.25%;
maturing dates vary through 2020
|
|
**
|
|
|
|
616,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
59,219,572
|
|
|
|
|
|
|
|
|
|
|
|
|
*Represents a party-in-interest investment allowable under ERISA regulations.
**Cost omitted for participant-directed investments
See accompanying report of independent registered public accounting firm
20
SIGNATURES
The Plan.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustees (or other persons who administer the
employee benefit plan) have duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
HUTTIG BUILDING PRODUCTS, INC.
SAVINGS AND PROFIT SHARING PLAN
|
|
|
|
|
|
|
|
HUTTIG BUILDING PRODUCTS, INC.
(Plan Administrator)
|
|
|
|
|
Date: June 12, 2014
|
|
|
|
By:
|
|
/s/ Philip W.
Keipp
|
|
|
|
|
Name:
|
|
Philip W. Keipp
|
|
|
|
|
Title:
|
|
Vice President and Chief Financial Officer
|
EXHIBIT INDEX
|
|
|
Exhibit No.
|
|
Description
|
|
|
23.1
|
|
Consent of BKD, LLP, independent registered public accounting firm.
|
|
|
23.2
|
|
Consent of Brown Smith Wallace, L.L.C., independent registered public accounting firm.
|
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