UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2013
Or
¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 001-15903
A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
CARBO Ceramics Inc. Savings and Profit Sharing Plan
B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
CARBO Ceramics Inc.
Energy Center II
575 N. Dairy Ashford Rd.
Suite 300
Houston, TX 77079
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
Page | ||||
1 | ||||
3 | ||||
4 | ||||
5 | ||||
Schedule H, Line 4(i) - Schedule of Assets Held for Investment Purposes |
15 | |||
16 | ||||
Report of Independent Registered Public Accounting Firm
To the Plan Administrator of the
CARBO Ceramics Inc. Savings and Profit Sharing Plan
We have audited the accompanying statement of net assets available for benefits of the CARBO Ceramics Inc. Savings and Profit Sharing Plan as of December 31, 2013, and the related statement of changes in net assets available for benefits for the year ended December 31, 2013. These financial statements are the responsibility of the Plans management. Our responsibility is to express an opinion on these financial statements based on our audit. The statement of net assets available for benefits of the Plan as of December 31, 2012 was audited by other auditors. Their report, dated June 27, 2013, expressed an unmodified opinion on that statement.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Plans internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plans internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 2013 financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the CARBO Ceramics Inc. Savings and Profit Sharing Plan as of December 31, 2013, and the changes in its net assets available for benefits for the year ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.
Our audit was conducted 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, 2013, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Such information 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/ Postlewaite & Netterville, APAC
Lafayette, Louisiana
June 25, 2014
- 1 -
Report of Independent Registered Public Accounting Firm
The Plan Administrator
CARBO Ceramics Inc.
We have audited the accompanying statement of net assets available for benefits of the CARBO Ceramics Inc. Savings and Profit Sharing Plan as of December 31, 2012. This financial statement is the responsibility of the Plans management. Our responsibility is to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We were not engaged to perform an audit of the Plans internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plans internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the net assets available for benefits of the CARBO Ceramics Inc. Savings and Profit Sharing Plan as of December 31, 2012, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP |
New Orleans, Louisiana
June 27, 2013
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CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2013 AND 2012
2013 | 2012 | |||||||
Assets |
||||||||
Investments at fair value |
||||||||
Mutual funds |
$ | 50,458,439 | $ | 39,472,590 | ||||
CARBO Ceramics Inc. common stock |
3,074,745 | 2,004,211 | ||||||
Guaranteed income fund |
12,327,489 | 11,009,189 | ||||||
|
|
|
|
|||||
Total investments |
65,860,673 | 52,485,990 | ||||||
Receivables |
||||||||
Participant contributions |
78,408 | 122,546 | ||||||
Employer match contributions |
115,326 | 192,605 | ||||||
Profit-sharing contributions |
2,300,000 | 2,100,000 | ||||||
Notes receivable from participants |
2,068,609 | 1,751,500 | ||||||
|
|
|
|
|||||
Total receivables |
4,562,343 | 4,166,651 | ||||||
|
|
|
|
|||||
Total assets |
70,423,016 | 56,652,641 | ||||||
Net assets available for benefits |
$ | 70,423,016 | $ | 56,652,641 | ||||
|
|
|
|
See accompanying notes.
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CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2013
Additions to net assets attributed to: |
||||
Investment income: |
||||
Net appreciation in fair value of investments |
$ | 9,668,655 | ||
Interest and dividends |
898,768 | |||
|
|
|||
Total investment income |
10,567,423 | |||
Interest income: |
||||
Interest on notes receivable from participants |
78,563 | |||
Contributions to the Plan: |
||||
Participants |
4,405,078 | |||
Employer match |
1,488,757 | |||
Employer profit-sharing contribution |
2,300,000 | |||
Rollovers |
725,206 | |||
|
|
|||
Total contributions |
8,919,041 | |||
|
|
|||
Total additions |
19,565,027 | |||
Deductions from net assets attributed to: |
||||
Distributions and withdrawals |
5,753,834 | |||
Administrative fees |
40,818 | |||
|
|
|||
Total deductions |
5,794,652 | |||
|
|
|||
Net increase |
13,770,375 | |||
Net assets available for benefits: |
||||
Beginning of year |
56,652,641 | |||
|
|
|||
End of year |
$ | 70,423,016 | ||
|
|
See accompanying notes.
- 4 -
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
NOTES TO THE FINANCIAL STATEMENTS
1. | Description of Plan |
The following description of the CARBO Ceramics Inc. Savings and Profit Sharing Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plans provisions, which is available from CARBO Ceramics Inc. (the Company). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
General
The Plan is a contributory defined contribution plan covering substantially all employees of the Company and its domestic subsidiaries, StrataGen, Inc., and Falcon Technologies and Services, Inc. The Plan is administered by a committee that has been appointed by the Compensation Committee of the Board of Directors of the Company. The Plan allows for participants immediate participation in the Plan without regard to age or service requirements. Effective August 1, 2012, the Plan entry date has changed from the first day of the each month of the year to immediate entry upon employment.
Contributions
Participants may contribute from 2% to 75% of their annual compensation, as defined in the Plan agreement. Effective May 1, 2013, the Company automatically withholds 6% from a participants compensation as a salary reduction deferral unless the participant elects a greater or lower percentage (including zero) through a salary reduction agreement. Also effective May 1, 2013, the Plan has a contribution accelerated feature that automatically increases contributions by 1% each year on May 1, up to a maximum of 10% for participants who have elected to defer or who are automatically enrolled into the Plan. The participants have the option to opt out of this accelerated feature. Prior to May 1, 2013, the Company withheld 3% from a participants compensation as a salary reduction deferral unless the participant elected a greater or lower percentage (including zero) through a salary reduction agreement.
In addition, participants age 50 and over have the option to contribute up to an additional $5,500 in pretax contributions through the Plans catch-up contribution provisions. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. The Companys discretionary matching contribution to the Plan is equal to 50% of the participants contribution up to 6% of the participants compensation. The Company may also elect to make an additional discretionary profit-sharing contribution. Participants are eligible to receive a discretionary profit-sharing contribution upon the completion of one year of service, which means 1,000 hours of service in a plan year, and must be employed on December 31. Allocations of discretionary profit-sharing contributions are made pro rata based on compensation to eligible participants. During 2013, the Company made discretionary profit-sharing contributions totaling $2,300,000. All contributions made to the Plan are participant-directed into various investment options offered by the Plan and are subject to certain limitations under the Internal Revenue Code (the Code).
- 5 -
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
NOTES TO THE FINANCIAL STATEMENTS
1. | Description of Plan (continued) |
Participant Accounts
Each participants account is credited with the participants contributions and the Companys matching and/or profit-sharing contributions and allocations of plan earnings, and is charged with an allocation of administrative expenses. Plan earnings are allocated based on the participants share of net earnings and losses of the participants respective elected investment options. Allocations of administrative expenses are based on the participants account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participants vested account.
Administrative Expenses
Plan administrative expenses are paid by either the Company or the Plan, as provided in the Plan agreement.
Vesting
Participants are immediately 100% vested in employee contributions and plan investment earnings on those contributions. Employer discretionary matching and discretionary profit-sharing contributions and plan investment earnings on those contributions vest to individual participants after attainment of certain years of service. After one year of service, the participant becomes 50% vested in employer contributions and is 100% vested after two years of service. On the occurrence of death, retirement, disability, or Plan termination, a participant becomes fully vested in employer contributions and related earnings.
Participant Loans
In general, participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of $50,000 or 50% of their vested account balance, whichever is less, following the guidelines in the Plan agreement. Loan terms range from one to five years or up to a maximum of ten years for the purchase of a primary residence. The loans are secured by the balance in the participants account and bear interest at a rate commensurate with local prevailing rates as determined by the Plans administrator. Principal and interest is paid ratably through monthly payroll deductions.
Effective January 1, 2011, the Plan was amended so that no loan may be made to a participant sooner than 30 days after the outstanding loan balance of the prior loan has been repaid.
Distributions to Participants
Upon retirement, death, disability, or termination of employment, participants or their beneficiaries may receive the vested balance of their accounts in the form of a lump-sum payment, or if eligible, in the form of an individual retirement account (IRA) rollover. Participants also are allowed to transfer their account balance to another tax deferred qualified plan. A participant may withdraw all or a portion of his or her account in the event of financial hardship, as defined in the Plan agreement.
- 6 -
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
NOTES TO THE FINANCIAL STATEMENTS
1. | Description of Plan (continued) |
Forfeitures
Forfeitures of terminated employees nonvested account balances are used to reduce employer contributions and Plan expenses. Effective January 1, 2012, prior to allocating participant forfeitures to pay Plan expenses, the Plan Administrator may use assets of the Plan held under any Expense Reimbursement Account to pay outstanding expenses as they occur. Unallocated forfeiture balances as of December 31, 2013 and 2012 were approximately $17,000 and $103,000, respectively, and forfeitures used to reduce Company contributions and pay Plan expenses for 2013 were approximately $114,000.
2. | Significant Accounting Policies |
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements, accompanying notes, and supplemental schedule. Actual results may differ from those estimates.
Notes Receivable from Participants
Notes receivable from participants represent participant loans that are recorded at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Related fees are recorded as administrative expense and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2013 or 2012. If a participant ceases to make loan repayments and the Plan administrator deems the participant loan to be a distribution, the participant loan balance is reduced and a benefit payment is recorded.
Investment Valuation
Prudential Financial, Inc. (Prudential) is the custodian of the Plan. The Plans funds are invested in mutual funds, CARBO Ceramics Inc. common stock, and a guaranteed income fund (GIF). Investments are stated at fair value. Fair value is the price that could be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Mutual funds are valued at the closing fund share price based on market quotations on the last business day of the Plan year. Common stock is valued at the quoted market price on the last business day of the Plan year. See Note 3 for discussion of fair value measurements.
- 7 -
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
NOTES TO THE FINANCIAL STATEMENTS
2. | Significant Accounting Policies (continued) |
Investment Valuation (continued)
The GIF invests in the Prudential Retirement Insurance and Annuity Companys general accounts under a group annuity contract. The GIF is fully benefit-responsive and should be reported at fair value in the Plans statement of net assets available for benefits, with a corresponding adjustment to reflect these investments at contract value. Due to the nature of the GIF, fair value approximates contract value. The investment in the GIF has no maturity date. Although not invoked in 2013 or 2012, and as explained further in Note 5, a discontinuance liquidation would result in the return of contract value within 90 days; therefore, the Company believes that a discontinuance payment would be a reasonable determinant of the fair value and that fair value would approximate contract value due to the discontinuing period being only 90 days. Contract value is the relevant measurement 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. The contract value of the GIF represents contributions plus earnings, less participant withdrawals and administrative expenses.
Investment Transactions
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 includes the Plans gains and losses on investments bought and sold as well as held during the year.
Risks and Uncertainties
Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risks. 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 statements of net assets available for benefits and participant account balances.
Payment of Benefits
Benefits are recorded when paid.
- 8 -
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
NOTES TO THE FINANCIAL STATEMENTS
3. | Fair Value Measurements |
FASB ASC 820 establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, i.e., an exit price. 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 the fair value hierarchy under ASC 820 are described below:
Level 1: | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access. |
Level 2: | Inputs to the valuation methodology include: |
| Quoted prices for similar assets or liabilities in active markets; |
| Quoted prices for identical or similar assets or liabilities in inactive markets; |
| Inputs other than quoted prices that are observable for the asset or liability; |
| Inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3: | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The assets or liabilitys fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The valuation methodologies described in Note 2 may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There have been no changes in the methodologies used at December 31, 2013 and 2012.
- 9 -
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
NOTES TO THE FINANCIAL STATEMENTS
3. | Fair Value Measurements (continued) |
The following table set forth, by level, within the fair value hierarchy, the Plans assets at fair value as of December 31, 2013.
Assets at Fair Value as of December 31, 2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Mutual funds: |
||||||||||||||||
Domestic equity funds |
$ | 29,384,083 | $ | | $ | | $ | 29,384,083 | ||||||||
International equity funds |
11,732,530 | | | 11,732,530 | ||||||||||||
Fixed income funds |
5,274,167 | | | 5,274,167 | ||||||||||||
Asset allocation |
3,824,941 | | | 3,824,941 | ||||||||||||
Other |
242,718 | | | 242,718 | ||||||||||||
Common stocks |
3,074,745 | | | 3,074,745 | ||||||||||||
Guaranteed income fund |
| | 12,327,489 | 12,327,489 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets at fair value |
$ | 53,533,184 | $ | | $ | 12,327,489 | $ | 65,860,673 | ||||||||
|
|
|
|
|
|
|
|
The following table set forth, by level, within the fair value hierarchy, the Plans assets at fair value as of December 31, 2012.
Assets at Fair Value as of December 31, 2012 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Mutual funds: |
||||||||||||||||
Domestic equity funds |
$ | 20,642,697 | $ | | $ | | $ | 20,642,697 | ||||||||
International equity funds |
10,390,899 | | | 10,390,899 | ||||||||||||
Fixed income funds |
4,693,082 | | | 4,693,082 | ||||||||||||
Asset allocation |
3,457,149 | | | 3,457,149 | ||||||||||||
Other |
288,763 | | | 288,763 | ||||||||||||
Common stocks |
2,004,211 | | | 2,004,211 | ||||||||||||
Guaranteed income fund |
| | 11,009,189 | 11,009,189 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets at fair value |
$ | 41,476,801 | $ | | $ | 11,009,189 | $ | 52,485,990 | ||||||||
|
|
|
|
|
|
|
|
- 10 -
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
NOTES TO THE FINANCIAL STATEMENTS
3. | Fair Value Measurements (continued) |
Level 3 Gains and Losses
The table below sets forth a summary of changes in the fair value of the Plans Level 3 investment asset, the Guaranteed Income Fund, for the year ended December 31, 2013.
Balance, beginning of year |
$ | 11,009,189 | ||
Transfers into Level 3 |
| |||
Transfers out of Level 3 |
| |||
Realized gains/(losses) |
| |||
Unrealized gains/(losses) relating to instruments still held at the reporting date |
| |||
Purchases |
3,812,265 | |||
Sales |
(2,493,965 | ) | ||
Issuances and settlements (net) |
| |||
|
|
|||
Balance, end of year |
$ | 12,327,489 | ||
|
|
The following table presents information about significant unobservable inputs used in Level 3 fair value measurements:
Instrument |
Fair Value |
Principle Valuation |
Unobservable Inputs |
Range of Significant | ||||
Guaranteed Income Fund | $12,327,489 | Fair Value = Contract Value |
Earnings at guaranteed crediting rate |
Gross guaranteed crediting rate must be greater than or equal to the contractual minimum crediting rate |
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CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
NOTES TO THE FINANCIAL STATEMENTS
4. | Investments |
The Plan allows participants to invest a portion of their retirement savings in common stock of the Company. Participants can invest up to 20% of any new contributions in the Companys common stock. Transfers by participants of existing account balances into Company common stock can be performed at any time, subject to insider trading rules established by the Company, and cannot result in more than 20% of their total account balance invested in Company common stock.
Each participant is entitled to exercise voting rights attributable to the shares allocated to their account and is notified by the Company prior to the time that such rights may be exercised. Prudential, the trustee of the Plan, is not permitted to vote any allocated shares for which instructions have not been given by a participant. The trustee votes any unallocated shares in the same proportion as those shares that were allocated, unless the Plans Investment Committee directs the trustee otherwise. Participants have the same voting rights in the event of a tender or exchange offer.
Individual investments that represent 5% or more of the Plans assets available for benefits are as follows:
December 31 | ||||||||
2013 | 2012 | |||||||
Prudential: |
||||||||
Guaranteed Income Fund |
$ | 12,327,489 | $ | 11,009,189 | ||||
Mutual funds: |
||||||||
Allianz NFJ Dividend Value Admin |
5,552,891 | 4,352,912 | ||||||
American Funds Europacific Growth R5 |
7,044,093 | 7,589,679 | ||||||
Franklin Growth Adv |
6,883,725 | 5,296,630 | ||||||
Goldman Sachs Mid Cap Value A |
(a) | 3,217,945 | ||||||
Oakmark Equity & Income I |
3,824,941 | 3,457,149 | ||||||
PIMCO Total Return Bond Fund Admin |
(a) | 3,712,687 |
(a) | Investment is less than 5% |
During the year ended December 31, 2013, the Plans investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in fair value as follows:
Mutual funds |
$ | 8,634,231 | ||
Common stock |
1,034,424 | |||
|
|
|||
Total |
$ | 9,668,655 | ||
|
|
- 12 -
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
NOTES TO THE FINANCIAL STATEMENTS
5. | Contract With Insurance Companies |
The Plan has entered into a group annuity contract issued by Prudential, which is a fully benefit-responsive investment. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their account balance at contract value. The account is credited with participant contributions plus earnings and charged for participant withdrawals and administrative expenses. The issuer is contractually obligated to repay the principal at a specified interest rate that is guaranteed to the Plan.
The average yield earned by the Plan was 2.00% for the year ended December 31, 2013, and 2.35% for the year ended December 31, 2012. The average yield earned by the Plan, adjusted to reflect the actual interest rate credited to participants, was 2.00% for the year ended December 31, 2013, and 2.35% for the year ended December 31, 2012. These rates are the same because all interest credited to the Plan is credited to the participants. 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 regardless of the timing of those contributions. Interest crediting rates are reviewed on a semiannual basis for resetting.
When establishing interest crediting rates, Prudential considers many factors, including current economic and market conditions, the general interest rate environment and both the expected and actual experience of a reference portfolio within the issuers general account. These rates are established without the use of a specific formula. The minimum crediting rate under the contract is 1.50%.
Events that may limit the ability of the Plan to transact at contract value with the issuer are as follows: premature termination of the contract by the Plan, plant closures, Company layoffs, Plan termination, bankruptcy, and Company mergers. In the case of these events, Prudential reserves the right to settle within 90 days or over time as specified in the group annuity contract. The Company has made no such plans for the near future.
The contract includes a pool transfer limitation (the deferral provision). Prudential has the contractual right to defer a transfer or distribution. If total distributions and transfers from the contracts pool exceed 10% of the pools balance as of January 1 in any one calendar year, the distribution or transfer may be deferred by Prudential. During a deferral provision, any amount deferred will continue to receive credited interest. Retirement, termination, death or disability distributions, hardship withdrawals, and distributions required by Code section 401(a)(9) payable from the guaranteed income fund will be paid and not deferred. The deferral provision was not invoked in 2013 or 2012.
6. | Allocated Amounts |
At December 31, 2013, there were no amounts allocable to participants who had elected to withdraw from the Plan.
7. | Related-Party Transactions |
Certain investments are managed by Prudential, the trustee of the Plan. Certain Plan assets are also invested in the common stock of the Company. These transactions qualify as party-in-interest transactions. All of these transactions are exempt from prohibited transaction rules under ERISA. During 2013, the Plan received $30,761 in common stock dividends from the Company.
- 13 -
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
NOTES TO THE FINANCIAL STATEMENTS
8. | Income Tax Status |
The underlying nonstandardized prototype plan has received an opinion letter from the Internal Revenue Service (IRS) dated March 31, 2008, stating that the form of the Plan is qualified under Section 401(a) of the Code, and therefore, the related trust is tax-exempt. In accordance with Revenue Procedures 2012-6 and 2011-49, the Plan sponsor has determined that it is eligible to and has chosen to rely on the current IRS prototype plan opinion letter. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan administrator has indicated that it will take the necessary steps, if any, to bring the Plans operations into compliance with the Code.
Accounting principles generally accepted in the United States require Plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to 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. The Plan has recognized no interest or penalties related to uncertain tax positions. 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.
9. | 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.
10. | Subsequent Events |
The Plan has evaluated, for consideration of recognition or disclosure, subsequent events that have occurred through the date of issuance of its financial statements, and has determined that no significant events occurred after December 31, 2013, but prior to the issuance of these financial statements that would have a material impact on its financial statements.
- 14 -
CARBO CERAMICS INC. SAVINGS AND PROFIT SHARING PLAN
EIN: 72-1100013 PN: 001
Schedule H, Line 4(i) Schedule of Assets (Held at End of Year)
December 31, 2013
Identity of Issue, Borrower, or Similar Party |
Description of Investment, Including Maturity Date, Rate of Interest, Collateral, Par, or Maturity Value |
Current Value | ||||
* Prudential Financial, Inc.: |
||||||
Guaranteed Income Fund |
274,314 units |
$ | 12,327,489 | |||
Allianz NFJ Dividend Value Admin |
345,544 units |
5,552,891 | ||||
Allianz NFJ Small Cap Value Admin |
58,574 units |
1,938,201 | ||||
American Funds Europacific Growth R5 |
143,816 units |
7,044,093 | ||||
American Funds Fundamental Investors R5 |
19,917 units |
1,035,506 | ||||
Columbia Acorn Z |
72,433 units |
2,703,216 | ||||
Franklin Growth Adv |
105,433 units |
6,883,725 | ||||
Goldman Sachs Mid Cap Value IR |
71,239 units |
3,102,476 | ||||
Invesco Global Real Estate Y |
17,354 units |
203,393 | ||||
Loomis Sayles Bond Instl |
32,884 units |
498,514 | ||||
Oakmark Equity & Income I |
117,150 units |
3,824,941 | ||||
Oppenheimer Developing Markets Y |
65,320 units |
2,453,427 | ||||
Oppenheimer International Small Co. Y |
62,898 units |
2,031,617 | ||||
PIMCO All Assets Admin |
200,607 units |
2,427,349 | ||||
PIMCO Real Return Bond Admin |
4,039 units |
44,310 | ||||
PIMCO Total Return Bond Fund Admin |
327,868 units |
3,504,909 | ||||
Principal MidCap S&P 400 Index R5 |
55,680 units |
1,069,060 | ||||
Principal Small Cap S&P 600 Index R5 |
24,217 units |
612,934 | ||||
* Prudential Jennison Natural Resources Z |
4,741 units |
242,718 | ||||
* Prudential Jennison Small Company Z |
87,832 units |
2,522,542 | ||||
* Prudential Stock Index Z |
37,652 units |
1,536,183 | ||||
Templeton Global Bond Adv |
93,692 units |
1,226,434 | ||||
* CARBO Ceramics Inc. common stock |
26,386 units |
3,074,745 | ||||
* Participant loans |
Maturities to 2023, at interest ranging from 4.25% to 7.75% |
2,068,609 | ||||
|
|
|||||
Total |
$ | 67,929,282 | ||||
|
|
* | Indicates party-in-interest to the Plan. |
- 15 -
Pursuant to the requirements of the Securities Exchange Act of 1934, the plan administrator, which administers the Plan, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
CARBO Ceramics Inc. Savings and Profit Sharing Plan | ||||||
DATE: June 25, 2014 | ||||||
Plan Administrator | ||||||
By: | /s/ Ernesto Bautista, III | |||||
Ernesto Bautista, III | ||||||
Vice President and Chief Financial Officer |
- 16 -
Index to Exhibit
Exhibit number |
Description | |
23.1 | Consent of Independent Registered Public Accounting Firm | |
23.2 | Consent of Independent Registered Public Accounting Firm |
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-113688) pertaining to the CARBO Ceramics Inc. Savings and Profit Sharing Plan of our report dated June 25, 2014, with respect to the financial statements and schedule of CARBO Ceramics Inc. Savings and Profit Sharing Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2013.
/s/ Postlethwaite & Netterville, APAC
Lafayette, Louisiana
June 25, 2014
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-113688) pertaining to the CARBO Ceramics Inc. Savings and Profit Sharing Plan of our report dated June 27, 2013, with respect to the financial statement of the CARBO Ceramics Inc. Savings and Profit Sharing Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2012.
/s/ Ernst & Young LLP
New Orleans, Louisiana
June 25, 2014