UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
or
o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 1-3381
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
The Pep Boys Savings Plan Puerto Rico
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
The Pep Boys Manny, Moe & Jack
3111 W. Allegheny Avenue
Philadelphia, PA 19132
Registrants telephone number, including area code (215) 430-9000
Notices and communications from the Securities and Exchange Commission relating to this Report should be forwarded to:
Bernard K. McElroy
Vice President Finance & Treasurer
The Pep Boys Manny, Moe & Jack
3111 West Allegheny Avenue
Philadelphia, PA 19132
THE PEP BOYS SAVINGS PLAN Puerto Rico
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PAGE |
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2 | |
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FINANCIAL STATEMENTS: |
|
|
|
3 | |
|
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4 | |
|
|
512 | |
|
|
SUPPLEMENTAL SCHEDULE: |
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|
|
Form 5500, Schedule H, Part IV, Line 4i Schedule of Assets (Held at End of Year) |
13 |
|
|
14 | |
|
|
15 |
All other schedules required by Section 2520.103-10 of the Department of Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Participants and the Administrative Committee of
The Pep Boys Savings Plan Puerto Rico
We have audited the accompanying statements of net assets available for benefits of The Pep Boys Savings Plan Puerto Rico (the Plan) as of December 31, 2014 and 2013, and the related statements of changes in net assets available for benefits for the years ended December 31, 2014 and 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 audits.
We conducted our audits 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2014 and 2013, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The supplemental information in the accompanying Schedule H, Line 4i - Schedule of Assets (Held at End of Year) as of December 31, 2014 has been subjected to audit procedures performed in conjunction with the audit of the Plans financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but includes supplemental information required by the Department of Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plans management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information in the accompanying schedule, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information in the accompanying schedule is fairly stated in all material respects in relation to the financial statements as a whole.
/s/ Baker Tilly Virchow Krause, LLP |
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Philadelphia, Pennsylvania |
|
June 25, 2015 |
|
THE PEP BOYS SAVINGS PLAN PUERTO RICO
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(dollar amounts in thousands)
|
|
December 31, |
|
December 31, |
| ||
ASSETS |
|
|
|
|
| ||
Investments at fair value |
|
$ |
3,855 |
|
$ |
3,730 |
|
|
|
|
|
|
| ||
Receivables: |
|
|
|
|
| ||
Participant contribution receivable |
|
|
|
12 |
| ||
Employer contribution receivable |
|
132 |
|
133 |
| ||
Notes receivable from participants |
|
591 |
|
613 |
| ||
Total receivables |
|
723 |
|
758 |
| ||
|
|
|
|
|
| ||
Total assets |
|
4,578 |
|
4,488 |
| ||
|
|
|
|
|
| ||
LIABILITIES |
|
|
|
|
| ||
|
|
|
|
|
| ||
NET ASSETS REFLECTING INVESTMENTS AT FAIR VALUE |
|
4,578 |
|
4,488 |
| ||
|
|
|
|
|
| ||
Adjustment from fair value to contract value for fully benefit-responsive investment contracts in relation to the common collective trusts |
|
(17 |
) |
(12 |
) | ||
|
|
|
|
|
| ||
NET ASSETS AVAILABLE FOR BENEFITS |
|
$ |
4,561 |
|
$ |
4,476 |
|
See notes to financial statements.
THE PEP BOYS SAVINGS PLAN PUERTO RICO
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31,
(dollar amounts in thousands)
|
|
2014 |
|
2013 |
| ||
Investment income: |
|
|
|
|
| ||
Dividends and interest |
|
$ |
23 |
|
$ |
17 |
|
Mutual fund rebate |
|
7 |
|
5 |
| ||
Net appreciation of investments |
|
38 |
|
462 |
| ||
Total investment income |
|
68 |
|
484 |
| ||
|
|
|
|
|
| ||
Interest income on notes receivable |
|
25 |
|
25 |
| ||
|
|
|
|
|
| ||
Contributions: |
|
|
|
|
| ||
Participants |
|
311 |
|
302 |
| ||
Employer |
|
132 |
|
133 |
| ||
Total contributions |
|
443 |
|
435 |
| ||
Total additions |
|
536 |
|
944 |
| ||
|
|
|
|
|
| ||
Deductions: |
|
|
|
|
| ||
Benefits paid to participants |
|
(443 |
) |
(135 |
) | ||
Administrative expense |
|
(8 |
) |
(5 |
) | ||
Total deductions |
|
(451 |
) |
(140 |
) | ||
|
|
|
|
|
| ||
NET INCREASE |
|
85 |
|
804 |
| ||
|
|
|
|
|
| ||
NET ASSETS AVAILABLE FOR BENEFITS: |
|
|
|
|
| ||
Beginning of year |
|
4,476 |
|
3,672 |
| ||
End of year |
|
$ |
4,561 |
|
$ |
4,476 |
|
See notes to financial statements.
THE PEP BOYS SAVINGS PLAN PUERTO RICO
1. DESCRIPTION OF THE PLAN
The information in these notes regarding The Pep Boys Savings Plan Puerto Rico (the Plan) is provided for general purposes only. Participants should refer to the plan document for a more complete description of the Plans provisions.
General
The Plan was established April 1, 1995. The Plan provides a vehicle for participating employees of Pep Boys Manny, Moe & Jack of Puerto Rico, Inc. (the Company) to increase retirement savings. The Company is a subsidiary of The Pep Boys Manny, Moe & Jack (the Parent). The Plan is a defined contribution plan structured to comply with the requirements of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.
Participation and Eligibility
Through plan year 2013, all employees of the Company who have attained the age of 21, are a bona fide resident of Puerto Rico and have completed one year of service as defined by the Plan may join the Plan any time on or after the start of the quarter, which immediately follows the employees anniversary date. These quarter dates are January 1, April 1, July 1, or October 1.
On October 22, 2013, the Company amended the Plans eligibility criteria effective January 1, 2014 permitting employees to participate who have attained the age of 18 years or older and completed the lesser of (1) six consecutive months of employment working at least 500 hours of service and (2) 12 consecutive months and at least 1,000 hours of service. This amendment also modified the entry date effective January 1, 2014 to be the first day of each calendar month upon satisfying the eligibility.
Contributions
Each year, participants may contribute up to 10% of pretax annual compensation, as defined by the Plan. Participants who have attained age 50 before the end of the plan year are eligible to make catch-up contributions. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Participants direct the investment of their contributions into various investment options offered by the Plan. Participants may at any time elect to rollover amounts from other qualified plans or individual retirement accounts into the Plan. Participants are not required to satisfy the eligibility requirements to complete a rollover.
The Company contributes the lesser of 50% of the first 6% of the participants pre-tax contributions or 3% of the participants compensation. To be eligible for a Company matching contribution, a participant must be employed on the last day of that plan year (December 31), or have terminated employment due to normal retirement, early retirement or disability prior to the last day of the plan year. The Companys matching contributions are invested in the same fund(s) and in the same proportion chosen by the participants for their contributions.
Participant contributions to the Plan, up to a maximum of $15,000 during 2014 and 2013, are not subject to income tax until their withdrawal from the Plan. Additionally, participants are not subject to tax on the Companys contributions to the Plan, appreciation in Plan assets or income earned thereon until withdrawn from the Plan. Contributions are subject to certain limitations.
Participant Accounts
Each participants account is credited with the participants and Companys contribution and an allocation of plan earnings, and is charged with an allocation of administrative expenses. Allocations are based on
participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participants vested balance.
Payment of Benefits
Lump sum distributions from the Plan equal to the value of the participants vested interest may be made to a participant upon attaining the age of 59-1/2, death, total disability, financial hardship or termination of employment. Distributions and withdrawals are processed on a daily basis.
Vesting
Participants are fully vested at all times in their accounts.
Forfeited Accounts
In order to be eligible to receive the Companys matching contribution for a given plan year, unless a participant terminates employment during the plan year as a result of disability or normal or early retirement, the participant must be employed by the Company on the last day of the plan year to which the Companys matching contribution relates. Matching contributions are immediately fully vested.
For certain prior years, matching contributions were incorrectly credited to participant accounts each payroll period rather than as of the close of the plan year upon eligibility, which resulted in forfeitures for those participants who were not employed on the last day of the applicable plan year. Forfeited matching contributions remained in the Plan and were used to reduce future Company contributions. Under the Companys current practice, no Company matching contributions are made prior to a participants eligibility to receive such matching contribution.
At December 31, 2014 and 2013, forfeited non-vested accounts totaled approximately $1,800.
Notes Receivable from Participants
Participants whose account value is $1,000 or more may borrow up to 50% of their account balance subject to a minimum of $500 and a maximum of $50,000. The $50,000 maximum may be reduced if the participant has another loan within one year of the date that such participant takes out the loan. The maximum duration of a loan is five years unless the loan is used to purchase a primary residence. In such a case, the loan term is permitted for up to a 30 year duration. The interest rate is commensurate with current fixed rates charged by institutions in the business of lending money for similar types of loans. Interest rates at December 31, 2014, range from 4.25% to 9.25%. Participants may have up to two loans outstanding at any one time and can prepay loans in full at any time. Principal and interest is paid ratably through payroll deductions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Plan have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
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. The Statements of Net Assets Available for Benefits presents the fair value of the investment contracts held in the common collective trusts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value. The Statements of Changes in Net Assets Available for Benefits are prepared on a contract value basis.
Application of Accounting Standards
In May 2015, the Financial Accounting Standards Board issued Accounting Standards Update No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset value per Share (or Its Equivalent) (ASU 2015-07). ASU 2015-07 removes the requirement to include investments in the fair value hierarchy for which fair value is measured using the net asset value per share practical expedient under Accounting Standards Codification 820. ASU 2015-07 is effective for the Plan years beginning after December 15, 2015 with early adoption permitted. Management is currently evaluating the impact of the pending adoption of ASU 2015-07 on the Plans financial statements.
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plans management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results may differ from those estimates and assumptions.
Risks and Uncertainties
The Plan provides for investment options in mutual funds, common collective trusts and common stock of the Parent. Investment securities are exposed to various risks, such as interest rate, market and credit risk. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in the value 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 Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits.
Notes Receivable from Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent notes receivable are recorded as distributions based upon the terms of the plan document.
Payment of Benefits
Benefits are recorded when paid.
Investment Valuation and Income Recognition
The Plans 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 8 for further discussion of fair value measurements.
Purchases and sales of securities are recorded on the 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.
Management fees and operating expenses charged to the Plan for investments in mutual funds are deducted from income earned and are not separately reflected. Therefore, management fees and operating expenses are reflected as a reduction of investment return on such investments.
3. INVESTMENTS
The following presents investments that represent 5 percent or more of the Plans net assets:
|
|
December 31, |
| ||||
(dollar amounts in thousands) |
|
2014 |
|
2013 |
| ||
Columbia Trust Stable Government I-10 Fund * |
|
$ |
1,449 |
|
$ |
1,302 |
|
The Pep Boys Stock Fund |
|
386 |
|
514 |
| ||
Wells Fargo/Blackrock S&P 500 Index CIT N |
|
397 |
|
** |
| ||
Columbia Small Cap Index Fund K |
|
248 |
|
228 |
| ||
Columbia Trust Large Cap Index Fund C |
|
*** |
|
483 |
| ||
* Formerly RVST Stable Capital Fund II
** The Wells Fargo/Blackrock S&P 500 Index CIT N was a new investment option in the plan for the year ended December 31, 2014
***The Columbia Trust Large Cap Index Fund C was removed as an investment option from the Plan for the year ended December 31, 2014
During 2014 and 2013, the Plans investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:
|
|
December 31, |
| ||||
(dollar amounts in thousands) |
|
2014 |
|
2013 |
| ||
The Pep Boys Stock Fund |
|
$ |
(94 |
) |
$ |
116 |
|
Common Collective Trusts |
|
80 |
|
130 |
| ||
Mutual Funds |
|
52 |
|
216 |
| ||
|
|
$ |
38 |
|
$ |
462 |
|
4. 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 termination of the Plan, the interest of the participants or their beneficiaries will remain fully vested and not be subject to forfeiture in whole or in part and distributions shall be made to them in cash and/or stock as applicable.
5. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of common collective trusts managed by Wells Fargo & Co. (Wells Fargo). Wells Fargo serves as the recordkeeper of the Plan, and therefore, Plan transactions involving these investment securities qualify as party-in-interest transactions. Oriental Bank is the trustee of the Plan and is compensated for trust services which qualify as party-in-interest transactions. Additionally, loans to participants qualify as party-in-interest transactions. All of these transactions are exempt from the prohibited transactions rules of ERISA.
The Plan offers participants Pep Boys common stock through the stock fund as an investment option. These transactions qualify as party-in-interest transactions, exempt from prohibited transaction rules of ERISA. The Plan held 38,152 and 42,335 shares of Pep Boys common stock in the stock fund with a current value of $375,000 and $514,000 as of December 31, 2014 and 2013, respectively.
Prior to October 2014, the Company paid all costs associated with administering the Plan, except loan administration fees and certain investment-related fees. Beginning October 1, 2014 administrative and record keeping costs are paid by charging all participants an annual fee of 0.18% of their respective accounts value. Loan administration fees and certain investment-related fees remained paid for by participants.
Certain administrative functions of the Plan are performed by members of the The Pep Boys Manny, Moe & Jack Benefit Plan Committee (the Committee) who are employees of the Parent. No such employee receives compensation from the Plan.
6. TAX STATUS
The Puerto Rico Department of Treasury has determined and informed the Company by a letter dated March 26, 1996 that the Plan was designed in accordance with the applicable sections of Section 401(a) of the Puerto Rico Internal Revenue Code of 1994 (the 1994 Code). Accordingly, the Plans related trust was exempt from federal taxation under Section 1165(a) of the 1994 Code. On January 31, 2011, the 1994 Code was replaced by the Puerto Rico Internal Revenue Code of 2011 (2011 Code). The Plan is currently in the process of obtaining a determination letter under the 2011 Code. Although the Plan has been amended and the 1994 Code was replaced since receiving the determination letter, the Committee believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the 2011 Code. Therefore, no provision for income taxes has been included in the Plans financial statements.
Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Puerto Rico Department of Treasury. The Committee has analyzed the tax positions taken by the Plan and has concluded that as of December 31, 2014, 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 Committee believes that the Plan is no longer subject to income tax examinations for years prior to 2011.
7. FAIR VALUE MEASUREMENTS
Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. There is a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability based on market data obtained from sources independent of the Plan. Unobservable inputs are inputs that reflect assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets or identical or similar assets or liabilities in inactive markets. Level 3 inputs are unobservable inputs for the asset or liability and significant to fair value measurement. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The following tables provide information by level for assets that are measured at fair value at December 31, 2014 and 2013:
|
|
Fair Value at |
|
Fair Value Measurements |
| ||||||||
(dollar amounts in thousands) |
|
2014 |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| ||||
Mutual Funds: |
|
|
|
|
|
|
|
|
| ||||
Target funds |
|
$ |
864 |
|
$ |
864 |
|
$ |
|
|
$ |
|
|
Index funds |
|
295 |
|
295 |
|
|
|
|
| ||||
Foreign funds |
|
77 |
|
77 |
|
|
|
|
| ||||
Bond fund |
|
142 |
|
142 |
|
|
|
|
| ||||
Growth funds |
|
101 |
|
101 |
|
|
|
|
| ||||
Value funds |
|
92 |
|
92 |
|
|
|
|
| ||||
Common Collective Trusts: |
|
|
|
|
|
|
|
|
| ||||
Columbia Trust Stable Government I-10 Fund |
|
1,449 |
|
|
|
1,449 |
|
|
| ||||
Wells Fargo/Blackrock S&P 500 Index CIT |
|
397 |
|
|
|
397 |
|
|
| ||||
Wells Fargo Stable Return Fund N |
|
52 |
|
|
|
52 |
|
|
| ||||
The Pep Boys Stock Fund |
|
386 |
|
|
|
386 |
|
|
| ||||
Total |
|
$ |
3,855 |
|
$ |
1,571 |
|
$ |
2,284 |
|
$ |
|
|
|
|
Fair Value at |
|
Fair Value Measurements |
| ||||||||
(dollar amounts in thousands) |
|
2013 |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| ||||
Mutual Funds: |
|
|
|
|
|
|
|
|
| ||||
Target funds |
|
$ |
731 |
|
$ |
731 |
|
$ |
|
|
$ |
|
|
Index funds |
|
264 |
|
264 |
|
|
|
|
| ||||
Foreign fund |
|
74 |
|
74 |
|
|
|
|
| ||||
Bond fund |
|
120 |
|
120 |
|
|
|
|
| ||||
Growth funds |
|
167 |
|
167 |
|
|
|
|
| ||||
Value funds |
|
75 |
|
75 |
|
|
|
|
| ||||
Common Collective Trusts: |
|
|
|
|
|
|
|
|
| ||||
RVST Stable Capital Fund II |
|
1,302 |
|
|
|
1,302 |
|
|
| ||||
Columbia Trust Large Cap Index Fund C |
|
483 |
|
|
|
483 |
|
|
| ||||
The Pep Boys Stock Fund |
|
514 |
|
|
|
514 |
|
|
| ||||
Total |
|
$ |
3,730 |
|
$ |
1,431 |
|
$ |
2,299 |
|
$ |
|
|
Generally, investments are valued based on information in financial publications of general circulation, statistical and valuation services, records of security exchanges, appraisal by qualified persons, transactions and bona fide offers. The following is a description of the valuation methodologies used for the Plan assets measured at fair value. There have been no changes in the methodologies used at December 31, 2014 and 2013.
Mutual funds are valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (NAV) and to transact at that price. The mutual funds held by the plan are deemed to be actively traded. These investments are classified within Level 1 of the fair value hierarchy and include:
· Target funds consisting of Fidelity Freedom Funds with successive target retirement dates that provide an age-based investment mix of stocks, bonds and short-term investments. The funds seek high total return until the target retirement dates and high income and capital appreciation thereafter.
· Index funds consisting primarily of the Columbia Small Cap Index Fund K whose investment goal is a total return before fees and expenses that corresponds to the total return of the Standard & Poors SmallCap 600 index.
· Bond funds consisting primarily of the MetWest Total Return Bond Fund which seeks to maximize long-term total return by investing in government and corporate debt securities, mortgage and asset backed securities, money market instruments and derivatives. The Fund can invest up to 20% of net assets in securities below investment grade.
· Foreign funds consisting primarily of the Templeton Foreign Fund (Class A) whose investment goal is long-term capital growth by investing at least 80% of its net assets in foreign securities.
· Various other growth and value funds whose investment goals are long-term capital growth.
The collective trust funds are valued at the NAV of units of a bank collective trust. The NAV, as provided by the trustee, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities. The practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported NAV. Participant transactions (purchases and sales) may occur daily. Were the Plan to initiate a full redemption of the collective trust, the investment adviser reserves the right to temporarily delay withdrawal from the trust in order to ensure that securities liquidations will be carried out in an orderly business manner. These investments are classified within Level 2 of the fair value hierarchy and include:
· The Columbia Trust Stable Government I-10 Fund whose investment goal is to preserve principal and interest while maximizing income by investing in fixed income securities and bonds, the Wells Fargo/Blackrock S&P 500 Index CIT whose investment goal is to approximate the total return of the S&P 500 Index by investing primarily in securities upon which the index is based and the Wells Fargo Stable Return Fund N whose investment goal is to preserve principal while obtaining a consistent, low volatility return. The trusts are valued at NAV per share and have no unfunded commitments or significant redemption restrictions.
· The RVST Stable Capital Fund II was renamed the Columbia Trust Stable Government I-10 Fund effective February 18, 2014.
The Pep Boys Stock Fund is valued based upon the fair value of the underlying assets derived principally from or corroborated by observable market data by correlation or other means. This investment is classified within Level 2 of the fair value hierarchy and includes:
· The Pep Boys Stock Fund which is invested in The Pep Boys Manny, Moe & Jack common stock and the Wells Fargo Advantage Heritage Money Market. This fund gives the participant the opportunity to acquire an ownership interest in The Pep Boys Manny, Moe & Jack. The value of the amounts invested in this fund depends primarily on the price of the common stock at any given time.
The methods described above may produce a fair value calculation that may not be indicative of the net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate, 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.
8. RECONCILIATION TO THE FORM 5500
Certain items in the Plans financial statements are treated differently for tax purposes and reporting under the Plans Annual Return/Report of Employee Benefit Plan (Form 5500). The following differences exist between financial and tax reporting at or for the years ended December 31, 2014 and 2013:
(dollar amounts in thousands) |
|
Form 5500 |
|
Statements of Net |
|
Differences |
| |||
Year ended December 31, 2014 |
|
|
|
|
|
|
| |||
Income |
|
$ |
549 |
|
$ |
536 |
|
$ |
13 |
(a) |
Expense |
|
$ |
449 |
|
$ |
451 |
|
$ |
2 |
(b) |
|
|
|
|
|
|
|
| |||
At December 31, 2014 |
|
|
|
|
|
|
| |||
Net Assets |
|
$ |
4,423 |
|
$ |
4,561 |
|
$ |
138 |
(a)(b) |
|
|
|
|
|
|
|
| |||
At December 31, 2013 |
|
|
|
|
|
|
| |||
Net Assets |
|
$ |
4,323 |
|
$ |
4,476 |
|
$ |
153 |
(a)(b) |
(dollar amounts in thousands) |
|
Form 5500 |
|
Statements of Net |
|
Differences |
| |||
Year ended December 31, 2013 |
|
|
|
|
|
|
| |||
Income |
|
$ |
809 |
|
$ |
944 |
|
$ |
135 |
(a) |
Expense |
|
$ |
137 |
|
$ |
140 |
|
$ |
3 |
(b) |
|
|
|
|
|
|
|
| |||
At December 31, 2013 |
|
|
|
|
|
|
| |||
Net Assets |
|
$ |
4,323 |
|
$ |
4,476 |
|
$ |
153 |
(a)(b) |
|
|
|
|
|
|
|
| |||
At December 31, 2012 |
|
|
|
|
|
|
| |||
Net Assets |
|
$ |
3,651 |
|
$ |
3,672 |
|
$ |
21 |
(a)(b) |
Notes for differences
(a) contributions receivable.
(b) deemed distributions
THE PEP BOYS SAVINGS PLAN PUERTO RICO
FORM 5500, SCHEDULE H, PART IV
LINE 4i SCHEDULE OF ASSETS (HELD AT END OF YEAR)
EIN # 51-0363784, Plan #001
DECEMBER 31, 2014
Identity of Issue |
|
Description |
|
Current Value |
| ||
* |
Columbia Trust Stable Government I-10 Fund |
|
Common Collective Trust |
|
$ |
1,448,807 |
|
* |
Wells Fargo/Blackrock S&P 500 Index CIT |
|
Common Collective Trust |
|
396,870 |
| |
* |
Wells Fargo Stable Return Fund N |
|
Common Collective Trust |
|
52,764 |
| |
* |
The Pep Boys Stock Fund |
|
Stock Fund |
|
385,664 |
| |
|
PIMCO Total Return Fund (Institutional Shares) |
|
Mutual Fund |
|
1,147 |
| |
|
MetWest Total Return Bond Fund I |
|
Mutual Fund |
|
137,833 |
| |
|
Fidelity Freedom 2010 Fund |
|
Mutual Fund |
|
204,014 |
| |
|
Fidelity Freedom 2020 Fund |
|
Mutual Fund |
|
162,737 |
| |
|
Fidelity Freedom 2025 Fund |
|
Mutual Fund |
|
583 |
| |
|
Fidelity Freedom 2030 Fund |
|
Mutual Fund |
|
221,419 |
| |
|
Fidelity Freedom 2035 Fund |
|
Mutual Fund |
|
13,455 |
| |
|
Fidelity Freedom 2040 Fund |
|
Mutual Fund |
|
149,484 |
| |
|
Fidelity Freedom 2045 Fund |
|
Mutual Fund |
|
6,994 |
| |
|
Fidelity Freedom 2050 Fund |
|
Mutual Fund |
|
105,131 |
| |
|
Columbia Small Cap Index Fund K |
|
Mutual Fund |
|
248,589 |
| |
|
Templeton Foreign Fund (R6) |
|
Mutual Fund |
|
57,890 |
| |
|
Conestoga Small Cap Fund |
|
Mutual Fund |
|
10,506 |
| |
|
T. Rowe Price Equity Income Fund |
|
Mutual Fund |
|
28,768 |
| |
|
Goldman Sachs Mid-Cap Value Fund I |
|
Mutual Fund |
|
6,897 |
| |
|
Fidelity Freedom Income Fund |
|
Mutual Fund |
|
12,087 |
| |
|
Goldman Sachs Growth Opportunity I |
|
Mutual Fund |
|
14,866 |
| |
|
Vanguard Mid-Cap Index Fund ADM |
|
Mutual Fund |
|
5,837 |
| |
|
Mainstay Large Cap Growth I |
|
Mutual Fund |
|
75,761 |
| |
|
MFS Inst International Equity Fund |
|
Mutual Fund |
|
19,409 |
| |
|
William Blair Small Cap Value I |
|
Mutual Fund |
|
84,866 |
| |
|
Columbia Intermediate Bond - K |
|
Mutual Fund |
|
2,622 |
| |
* |
Notes receivable from participants |
|
Interest rates of 4.25% to 9.25%, maturing from 2015-2019 |
|
590,823 |
| |
|
|
|
|
|
$ |
4,445,823 |
|
Participant directed investments; cost not required to be reported.
* |
Indicates party-in-interest to the Plan. |
|
|
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustees (or other persons who administer the Plan) have duly caused this Annual Report to be signed by the undersigned hereunto duly authorized.
|
THE PEP BOYS SAVINGS PLAN - PUERTO RICO | |
|
| |
|
|
|
DATE: June 25, 2015 |
BY: |
/s/ BERNARD K. MCELROY |
|
Bernard K. McElroy | |
|
Member of the Benefits Committee |
(23.1)** Consent of Independent Registered Public Accounting Firm
** Filed herewith
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement (No. 333-165013) on Form S-8 of our report dated June 25, 2015, which appears in this annual report on Form 11-K of The Pep Boys Savings Plan Puerto Rico for the year ended December 31, 2014.
/s/ Baker Tilly Virchow Krause, LLP |
|
|
|
Philadelphia, Pennsylvania |
|
|
|
June 25, 2015 |
|
|
|