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, 2012
OR
o TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-19969
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
Arkansas Best 401(k) and DC Retirement Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Arkansas Best Corporation
3801 Old Greenwood Road
Fort Smith, Arkansas 72903
Arkansas Best 401(k) and DC Retirement Plan
EIN 71-0673405 PN 002
Report of Independent Registered Public Accounting Firm
And Financial Statements
December 31, 2012 and 2011
Arkansas Best 401(k) and DC Retirement Plan
December 31, 2012 and 2011
1 | |
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Financial Statements |
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2 | |
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3 | |
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4 | |
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Schedule H, Line 4i Schedule of Assets (Held at End of Year) |
15 |
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16 | |
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17 |
Report of Independent Registered Public Accounting Firm
Investment Committee and Plan Administrator
Arkansas Best 401(k) and DC Retirement Plan
Fort Smith, Arkansas
We have audited the accompanying statements of net assets available for benefits of Arkansas Best 401(k) and DC Retirement Plan as of December 31, 2012 and 2011, and the related statements of changes in net assets available for benefits for the years then ended. 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing auditing 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. Our audits also included 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 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 Arkansas Best 401(k) and DC Retirement Plan as of December 31, 2012 and 2011, and the changes in its net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information as listed in the table of contents is not a required part of the basic 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. The supplemental information is the responsibility of the Plans management. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic 2012 financial statements taken as a whole.
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/s/BKD, LLP |
Fort Smith, Arkansas
June 26, 2013
Federal Employer Identification Number: 44-0160260
Arkansas Best 401(k) and DC Retirement Plan
Statements of Net Assets Available for Benefits
December 31, 2012 and 2011
|
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2012 |
|
2011 |
| ||
|
|
|
|
|
| ||
Cash |
|
$ |
210,027 |
|
$ |
359,819 |
|
|
|
|
|
|
| ||
Investments, At Fair Value |
|
|
|
|
| ||
Mutual funds |
|
199,478,008 |
|
173,310,709 |
| ||
Collective trust investment |
|
29,188,439 |
|
29,367,267 |
| ||
Arkansas Best Corporation Stock Fund |
|
3,440,026 |
|
4,592,818 |
| ||
Other common stock |
|
4,477,971 |
|
4,049,513 |
| ||
Variable annuity funds |
|
143,938 |
|
|
| ||
Other |
|
793,965 |
|
974,722 |
| ||
|
|
|
|
|
| ||
|
|
237,522,347 |
|
212,295,029 |
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|
|
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|
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Receivables |
|
|
|
|
| ||
Employer contributions |
|
312,964 |
|
1,045,901 |
| ||
Participant contributions |
|
19,562 |
|
56,568 |
| ||
Notes receivable from participants |
|
5,935,092 |
|
5,460,722 |
| ||
Other receivables |
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4,368 |
|
3,821 |
| ||
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|
|
|
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|
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6,271,986 |
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6,567,012 |
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|
|
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|
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Net Assets Available for Benefits, At Fair Value |
|
$ |
244,004,360 |
|
$ |
219,221,860 |
|
See Notes to Financial Statements
Arkansas Best 401(k) and DC Retirement Plan
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2012 and 2011
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2012 |
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2011 |
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Contributions |
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|
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|
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Participants |
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$ |
12,264,680 |
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$ |
10,687,540 |
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Employers |
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3,666,746 |
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1,051,978 |
| ||
Rollovers |
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1,626,769 |
|
579,129 |
| ||
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|
|
|
|
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Total contributions |
|
17,558,195 |
|
12,318,647 |
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|
|
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Deductions |
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|
|
|
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Benefits paid to participants |
|
17,013,875 |
|
17,545,694 |
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Administrative expenses |
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83,295 |
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17,039 |
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|
|
|
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Total deductions |
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17,097,170 |
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17,562,733 |
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Net Investment Income (Loss) |
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Net appreciation (depreciation) in fair value of investments |
|
19,794,009 |
|
(7,289,631 |
) | ||
Interest and dividends |
|
4,197,736 |
|
3,418,196 |
| ||
|
|
|
|
|
| ||
Net investment income (loss) |
|
23,991,745 |
|
(3,871,435 |
) | ||
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|
|
|
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Other Income |
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|
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9,576 |
| ||
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|
|
|
|
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Interest Income on Notes Receivable from Participants |
|
315,846 |
|
340,319 |
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|
|
|
|
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Net Increase (Decrease) Prior to Transfers |
|
24,768,616 |
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(8,765,626 |
) | ||
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|
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Transfer of Assets from Other Plan |
|
13,884 |
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|
| ||
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Net Increase (Decrease) |
|
24,782,500 |
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(8,765,626 |
) | ||
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|
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Net Assets Available for Benefits, Beginning of Year |
|
219,221,860 |
|
227,987,486 |
| ||
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|
|
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|
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Net Assets Available for Benefits, End of Year |
|
$ |
244,004,360 |
|
$ |
219,221,860 |
|
See Notes to Financial Statements
Arkansas Best 401(k) and DC Retirement Plan
December 31, 2012 and 2011
Note 1: Description of the Plan
The following description of the Arkansas Best 401(k) and DC Retirement Plan (the Plan) provides only general information. For a more complete description of the Plans provisions, participants should refer to the Plan document and Summary Plan Description, which are available from Arkansas Best Corporation, the Plan Administrator.
General
The Plan is a defined contribution plan sponsored by Arkansas Best Corporation which covers eligible employees of Arkansas Best Corporation and certain of its subsidiaries: ABF Freight System, Inc., ABF Cartage, Inc., Albert Companies, Inc., Data-Tronics Corp., FleetNet America, Inc., FreightValue, Inc., Global Supply Chain Services, Inc., and Moving Solutions, Inc. (Participating Companies or collectively, the Company), except for employees of collective bargaining units, casual employees (defined as part-time employees who work less than thirty hours per week) who have not completed certain periods of service and leased employees.
In addition to the right to participate in the Plan, eligible employees hired before January 1, 2006 also participate in a nonunion defined benefit pension plan sponsored by the Company. Employees hired after December 31, 2005 do not participate in the nonunion defined benefit pension plan. The Plan was amended, effective January 1, 2006, to provide a DC Retirement feature (the DC feature) for eligible employees who do not participate in the nonunion defined benefit pension plan. The DC feature of the Plan covers substantially all regular full-time employees of the Company hired after December 31, 2005, except for employees of collective bargaining units, casual employees who have not completed certain periods of service and leased employees. Employees participating in the DC feature are eligible to receive a discretionary annual contribution from the Company which is subject to the provisions of the Plan.
The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). For 2012 and 2011, Diversified Retirement Corporation was the Plan recordkeeper and State Street Bank and Trust Company was the trustee and custodian of the Plan.
For the year ended December 31, 2012, participant account balances totaling $13,884 were transferred to the Plan from the ABF Freight System, Inc. 401(k) Savings Plan, which covers the Companys eligible employees who are members of collective bargaining units.
Contributions
For 2012 and 2011, the Plan allowed participants to contribute up to 69% of their annual compensation, as defined by the Plan, through salary deferral subject to certain limitations. In addition to regular pre-tax 401(k) contributions, the Plan allows for after-tax Roth 401(k) contributions. Employees are able to designate all or part of their elective contributions as after-tax Roth 401(k) contributions. Employee rollover contributions are also permitted. Under the Plan, certain Participating Companies provide Company 401(k) matching contributions to each participants account. Company 401(k) matching contributions may be made in the form of cash or Arkansas Best Corporation stock. The Company 401(k) matching contribution was suspended
Arkansas Best 401(k) and DC Retirement Plan
Notes to Financial Statements
December 31, 2012 and 2011
relative to participants compensation beginning January 1, 2010 and was reinstated effective January 1, 2012. All contributions for the 2012 plan year were made in the form of cash. For the year ended December 31, 2012, the Company 401(k) matching contributions as a percentage of each participants annual compensation deferral are presented in the following table:
Participating Company |
|
Company 401(k) Matching |
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Arkansas Best Corporation |
|
50% of the first 6% |
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ABF Freight System, Inc. |
|
50% of the first 6% |
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|
|
ABF Cartage, Inc. |
|
50% of the first 6% |
|
|
|
Albert Companies, Inc. |
|
50% of the first 6% |
|
|
|
Data-Tronics Corp. |
|
50% of the first 6% |
|
|
|
FleetNet America, Inc. |
|
No Match |
|
|
|
FreightValue, Inc. |
|
50% of the first 6% |
|
|
|
Global Supply Chain Services, Inc. |
|
50% of the first 6% |
|
|
|
Moving Solutions, Inc. |
|
50% of the first 6% |
An additional annual 401(k) Company contribution may be made at the discretion of each Participating Companys Board of Directors. For the years ended December 31, 2012 and 2011, no additional 401(k) Company contributions were made. The Company made no discretionary contributions related to the DC feature for the 2012 plan year but made contributions of $1,045,901 for the 2011 plan year. Discretionary Company contributions under the DC feature are credited to a participants account based on a percentage of the participants eligible compensation.
Participant Investment Account Options
Participants direct the investment of their contributions as well as the Companys DC and matching contributions into various investment options offered by the Plan including mutual funds, a collective trust, variable annuity funds, and, for 401(k) employee and Company matching contributions, the Arkansas Best Corporation Stock Fund and the self-directed Schwab Personal Choice Retirement Account® (the PCRA). A participants investment in either the Arkansas Best Corporation Stock Fund or the PCRA is generally limited to 25% of the participants 401(k) account balance. Participants may change the allocation of their investments daily.
The Plans investment committee may change the available investment options from time-to-time.
Arkansas Best 401(k) and DC Retirement Plan
Notes to Financial Statements
December 31, 2012 and 2011
Participant Accounts
Separate sources are maintained within a participants 401(k) account for 401(k) contributions, Roth 401(k) contributions, the Companys matching contributions, and the Companys discretionary contributions including contributions made pursuant to the DC feature. Each participants account is credited with related investment returns. Each participants account is also charged with an allocation of transaction processing and account administration fees, which are reflected in the accompanying statements of changes in net assets available for benefits as 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 account.
Vesting
Participants in the Plan are immediately vested in their 401(k) contributions plus earnings thereon. Participants are fully vested in the Companys contributions plus related earnings after three years of continuous service. Upon death, disability, or normal retirement, as defined by the Plan, participants become fully vested in the Companys contributions and related earnings. Any unvested Company contributions and related earnings are generally forfeited upon termination.
Under the DC feature, participants are fully vested in the Companys discretionary contributions after three years of continuous service. Upon death, disability or normal retirement, as defined by the Plan, participants become fully vested in the Companys discretionary contributions.
Payment of Benefits
Upon termination of service, a participant is entitled to receive a lump-sum amount equal to the vested balance of the participants account, which will be paid either as a direct rollover or directly to the participant. Beginning in 2012, a participant who selected a SecurePath for Life investment option of the Plan may also elect any distribution method permitted by the variable annuity fund investment option. See Note 2 for discussion of the SecurePath for Life investment options.
Forfeited Accounts
Forfeitures of participants unvested Company contributions and related earnings are used to reduce the Companys matching contributions. Forfeited nonvested accounts reported as cash and cash equivalents in the accompanying statement of net assets available for benefits totaled $204,041 and $359,819 at December 31, 2012 and 2011, respectively.
Forfeitures of $225,000 were used to reduce the Companys 401(k) matching contribution made during 2012. Subsequent to December 31, 2012, additional forfeitures of $140,000 were used to reduce the Companys 401(k) matching contribution receivable for the 2012 plan year. The remaining balance of forfeited nonvested accounts at December 31, 2012 will be used to reduce future employer contributions. No forfeitures were used to reduce employer contributions for 2011.
Arkansas Best 401(k) and DC Retirement Plan
Notes to Financial Statements
December 31, 2012 and 2011
Notes Receivable from Participants
Notes receivable from participants consist of participant loans. The Plan document includes provisions authorizing loans from the Plan to active eligible participants. Participants may borrow from their 401(k) account a minimum of $1,000 up to a maximum calculated as the lesser of 50% of their vested 401(k) account balance or $50,000 reduced by the participants highest loan balance in the preceding twelve-month period. The loans are secured by the balance in the participants account and are repayable generally over a period not to exceed five years (except for loans for the purchase of a principal residence). Interest on the loans is determined by the Plan Administrator based on reasonable rates of interest at prevailing rates for loans of a similar nature. At December 31, 2012 and 2011, the interest rates on outstanding participant loans ranged from 5.25% to 8.32%.
No loans are allowed under the DC feature.
Plan Termination
Although it has not expressed an intention to do so, any Participating Company, through action of its Board of Directors, has the right under the Plan to discontinue its contributions at any time and the Board of Directors of Arkansas Best Corporation, at its discretion, may terminate the Plan, subject to the provisions of ERISA. In the event of Plan termination, participants will become fully vested in their accounts.
Note 2: Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis of accounting.
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 net assets and changes in net assets and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates.
Valuation of Investments and Income Recognition
Quoted market prices, if available, are used to value investments. Quoted prices for mutual funds are the net asset value (NAV) of shares held by the Plan at the financial statement date. Common stocks are valued at the closing price reported on the active market on which the securities are traded. See Note 4 for discussion of fair value measurements.
Arkansas Best 401(k) and DC Retirement Plan
Notes to Financial Statements
December 31, 2012 and 2011
The Diversified Stable Pooled Fund, an investment option of the Plan, is an investment of the Diversified Investment Advisors Collective Trust. The Plans interest in the collective trust investment is valued based on information reported by the Plan recordkeeper, using the audited financial statements of the collective trust at year-end. The collective trust investment in the Diversified Stable Pooled Fund is directly invested in the Wells Fargo Stable Return Fund G, whose principal objective is to protect principal while providing a higher rate of return than shorter maturity investments, such as money market funds or certificates of deposit.
The Arkansas Best Corporation Stock Fund is a unitized stock fund which invests in the common stock of Arkansas Best Corporation with a percentage of the fund allocated to a cash equivalent holding in the State Street Institutional Liquid Reserves Fund. The NAV of the Arkansas Best Corporation Stock Fund at the financial statement date provided by the Plan recordkeeper is based on the value of the shares of Arkansas Best Corporation common stock held in the fund, which are valued at the closing price reported on the NASDAQ Global Select Market, and the value of the cash equivalent investment holding of the fund.
The Plans SecurePath for Life investment options are registered variable annuity funds issued by Transamerica Life Insurance Company. The variable annuity funds are subaccounts of Separate Account VA FF, a pooled separate account established by Transamerica Life Insurance Company. The NAV of the variable annuity funds is a daily calculated unit value based on the underlying investments of the pooled separate account which are Vanguard Target Retirement mutual funds.
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 payment date. Net appreciation (depreciation) includes the Plans gains and losses on investments bought and sold as well as held during the year.
Notes Receivable from Participants
Notes receivable from participants are reported at amortized principal balance plus accrued but unpaid interest. The accrual of interest on notes is discontinued at the end of the quarter during which the note becomes 90 days past due, unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the note.
All interest accrued but not collected remains as part of the balance due at the date the loan becomes a deemed distribution and is placed on nonaccrual status. Notes are returned to active status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Delinquent notes that reach default status are treated as distributions based upon the terms of the Plan document.
Plan Tax Status
The Plan obtained its latest determination letter on November 21, 2011, in which the U.S. Internal Revenue Service stated that the Plan and related trust, as then designed, were in compliance with the applicable requirements of the U.S. Internal Revenue Code and, therefore, not subject to income tax. The Plan has been amended since receiving the determination letter. However, the Plan Administrator believes that the Plan and related trust were designed and operated in compliance with the applicable requirements of the U.S. Internal Revenue Code as of and for the
Arkansas Best 401(k) and DC Retirement Plan
Notes to Financial Statements
December 31, 2012 and 2011
years ended December 31, 2012 and 2011. The Plan is generally no longer subject to U.S. federal, state, and local income tax examinations by tax authorities for years before 2009.
Payment of Benefits
Benefit payments to participants are recorded upon distribution.
Administrative Expenses
All investment-related administrative charges are paid by the Plan as provided in the Plan document. All other expenses of maintaining the Plan may be paid by the Company or the Plan, at the Companys discretion.
Life Insurance Policies
Prior to July 1, 1987, the Plan offered an option to invest in allocated life insurance contracts. The Plan has no liability under these life insurance contracts and the contracts values are excluded from the assets of the Plan. Upon death of the participant, benefits are paid directly to the beneficiary. Any cash surrender value upon termination of a life insurance policy is paid directly to terminated participants or to the Plan for active participants.
Reclassifications
Certain reclassifications have been made to the 2011 financial statements to conform to the 2012 financial statement presentation. The balance of the cash equivalent holdings of the Arkansas Best Corporation Stock Fund at December 31, 2012 was reclassified from a mutual fund investment in the State Street Institutional Liquid Reserves Fund to the employer stock fund. The reclassifications had no effect on net assets available for benefits or changes in net assets available for benefits.
Arkansas Best 401(k) and DC Retirement Plan
Notes to Financial Statements
December 31, 2012 and 2011
Note 3: Investments
The Plans investments are directed by participants into the various investment options. The fair value of the Plans investments at December 31, 2012 and 2011 were as follows:
|
|
2012 |
|
2011 |
| ||
|
|
|
|
|
| ||
Mutual funds |
|
$ |
199,478,008 |
|
$ |
173,310,709 |
|
Collective trust investment |
|
29,188,439 |
|
29,367,267 |
| ||
Arkansas Best Corporation Stock Fund |
|
3,440,026 |
|
4,592,818 |
| ||
Other common stock |
|
4,477,971 |
|
4,049,513 |
| ||
Variable annuity funds |
|
143,938 |
|
|
| ||
Other |
|
793,965 |
|
974,722 |
| ||
|
|
|
|
|
| ||
|
|
$ |
237,522,347 |
|
$ |
212,295,029 |
|
During the years ended December 31, 2012 and 2011, the net appreciation (depreciation) in fair value of the Plans investments (including gains and losses on investments bought, sold, and held during the year) was as follows:
|
|
2012 |
|
2011 |
| ||
|
|
|
|
|
| ||
Mutual funds |
|
$ |
21,083,585 |
|
$ |
(5,505,547 |
) |
Collective trust investment |
|
445,609 |
|
583,372 |
| ||
Arkansas Best Corporation Stock Fund |
|
(2,222,927 |
) |
(1,853,216 |
) | ||
Other common stock |
|
476,357 |
|
(466,517 |
) | ||
Variable annuity funds |
|
5,225 |
|
|
| ||
Other |
|
6,160 |
|
(47,723 |
) | ||
|
|
|
|
|
| ||
|
|
$ |
19,794,009 |
|
$ |
(7,289,631 |
) |
The fair value of the Plans individual investments that represented 5% or more of net assets available for benefits at December 31, 2012 and 2011 were as follows:
|
|
2012 |
|
2011 |
| ||
|
|
|
|
|
| ||
Spartan 500 Index Fund |
|
$ |
32,419,596 |
|
$ |
29,975,867 |
|
Diversified Stable Pooled Fund |
|
29,188,439 |
|
29,367,267 |
| ||
Dodge & Cox Stock Fund |
|
25,246,004 |
|
21,924,468 |
| ||
PIMCO Total Return Fund |
|
21,406,914 |
|
18,099,453 |
| ||
Franklin Flex Cap Growth Fund |
|
17,859,287 |
|
16,975,317 |
| ||
Vanguard Target Retirement 2015 Fund |
|
15,251,638 |
|
15,143,427 |
| ||
Fidelity Low-Priced Stock Fund |
|
14,661,479 |
|
13,219,743 |
| ||
Interest and dividends realized on the Plans investments for the years ended December 31, 2012 and 2011, were $4,197,736 and $3,418,196, respectively.
Arkansas Best 401(k) and DC Retirement Plan
Notes to Financial Statements
December 31, 2012 and 2011
Note 4: Fair Value of Plan Assets
Financial Accounting Standards Board Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (ASC 820), defines fair value as 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. ASC 820 specifies a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels described as follows:
Level 1 Quoted prices in active markets for identical assets or liabilities.
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and 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.
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying statements of net assets available for benefits, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the year ended December 31, 2012. The Plan had no liabilities measured at fair value on a recurring basis. In addition, the Plan had no assets or liabilities measured at fair value on a nonrecurring basis.
Investments
Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. The Plans investments classified as Level 1 include mutual funds, common stock, and other investments.
If quoted market prices are not available, fair values are estimated by using pricing models or discounted cash flows with inputs derived from observable market data, quoted prices of securities with similar characteristics, or audited financial statements. The Plans Level 2 collective trust investment is valued at NAV based on the unit value of the underlying investment of the stable pooled fund, which is an observable input. The fair value of the Plans Level 2 investment in the Arkansas Best Corporation Stock Fund is calculated based on the quoted market price of the common stock, which is traded in an active market, and the money market mutual fund investment held in the fund. The Plans Level 2 investments in variable annuity funds are valued at NAV based on the underlying investments of the pooled separate account, which are mutual funds for which quoted prices are available in active markets. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. The Plan has no investments classified as Level 3.
Arkansas Best 401(k) and DC Retirement Plan
Notes to Financial Statements
December 31, 2012 and 2011
Recurring Measurements
The following table presents, for each of the fair value hierarchy levels, the fair value measurements of assets recognized in the accompanying statements of net assets available for benefits measured at fair value on a recurring basis at December 31, 2012 and 2011:
|
|
|
|
2012 |
| ||||||||
|
|
|
|
Fair Value Measurements Using |
| ||||||||
|
|
Fair Value |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Mutual funds |
|
|
|
|
|
|
|
|
| ||||
Large cap equity |
|
$ |
75,524,887 |
|
$ |
75,524,887 |
|
$ |
|
|
$ |
|
|
Blended |
|
39,621,010 |
|
39,621,010 |
|
|
|
|
| ||||
Bond |
|
36,379,917 |
|
36,379,917 |
|
|
|
|
| ||||
Small/Mid cap equity |
|
29,991,932 |
|
29,991,932 |
|
|
|
|
| ||||
International equity |
|
15,060,164 |
|
15,060,164 |
|
|
|
|
| ||||
Money market |
|
1,855,214 |
|
1,855,214 |
|
|
|
|
| ||||
Other |
|
1,044,884 |
|
1,044,884 |
|
|
|
|
| ||||
Collective trust investment |
|
29,188,439 |
|
|
|
29,188,439 |
|
|
| ||||
Arkansas Best Corporation Stock Fund |
|
3,440,026 |
|
|
|
3,440,026 |
|
|
| ||||
Variable annuity funds |
|
143,938 |
|
|
|
143,938 |
|
|
| ||||
Other common stock |
|
4,477,971 |
|
4,477,971 |
|
|
|
|
| ||||
Other |
|
793,965 |
|
793,965 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total |
|
$ |
237,522,347 |
|
$ |
204,749,944 |
|
$ |
32,772,403 |
|
$ |
|
|
Arkansas Best 401(k) and DC Retirement Plan
Notes to Financial Statements
December 31, 2012 and 2011
|
|
|
|
2011 |
| ||||||||
|
|
|
|
Fair Value Measurements Using |
| ||||||||
|
|
Fair Value |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Mutual funds |
|
|
|
|
|
|
|
|
| ||||
Large cap equity |
|
$ |
68,875,652 |
|
$ |
68,875,652 |
|
$ |
|
|
$ |
|
|
Blended |
|
35,783,833 |
|
35,783,833 |
|
|
|
|
| ||||
Bond |
|
28,751,807 |
|
28,751,807 |
|
|
|
|
| ||||
Small/Mid cap equity |
|
25,708,470 |
|
25,708,470 |
|
|
|
|
| ||||
International equity |
|
11,325,301 |
|
11,325,301 |
|
|
|
|
| ||||
Money market |
|
1,870,267 |
|
1,870,267 |
|
|
|
|
| ||||
Other |
|
995,379 |
|
995,379 |
|
|
|
|
| ||||
Collective trust investment |
|
29,367,267 |
|
|
|
29,367,267 |
|
|
| ||||
Arkansas Best Corporation Stock Fund |
|
4,592,818 |
|
|
|
4,592,818 |
|
|
| ||||
Other common stock |
|
4,049,513 |
|
4,049,513 |
|
|
|
|
| ||||
Other |
|
974,722 |
|
974,722 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total |
|
$ |
212,295,029 |
|
$ |
178,334,944 |
|
$ |
33,960,085 |
|
$ |
|
|
As a result of a reclassification on the statements of net assets available for benefits for 2011 (see Note 2), Arkansas Best Corporation Stock Fund is classified as a Level 2 investment for 2011 and was previously classified as Level 1.
Note 5: Party-in-Interest Transactions
Party-in-interest transactions include those with fiduciaries or employees of the Plan, any person who provides services to the Plan, an employer whose employees are covered by the Plan, an employee organization whose members are covered by the Plan, a person who owns 50 percent or more of such an employer or employee association, or relatives of such persons.
Investments in the Arkansas Best Corporation Stock Fund, which holds investments in the common stock of the Company, qualify as party-in-interest transactions. The Arkansas Best Corporation Stock Fund also holds cash equivalent investments in the State Street Institutional Liquid Reserves Fund administered by State Street Global Markets, LLC, an affiliate of State Street Corporation. The Plans trustee and custodian, State Street Bank and Trust Company, is also an affiliate of State Street Corporation.
The Plan invests in certain funds managed by the Plan recordkeeper, Diversified Retirement Corporation, or issued by Transamerica Life Insurance Company, which are affiliated companies owned by AEGON N.V. The Diversified Stable Pooled Fund is managed by Diversified Retirement Corporation, and the SecurePath for Life investment options are variable annuity funds issued by Transamerica Life Insurance Company; therefore, transactions with these funds qualify
Arkansas Best 401(k) and DC Retirement Plan
Notes to Financial Statements
December 31, 2012 and 2011
as party-in-interest. National Financial Services and Mid Atlantic Capital Corporation provide securities brokerage services to the Plan. Fees paid by the Plan for securities brokerage and investment management services are included in net appreciation (depreciation) in fair value of investments.
The Plan paid $38,165 and $17,039 of transaction processing and account administration fees to Diversified Retirement Corporation during 2012 and 2011, respectively, which are included in administrative expenses. Individually nonmaterial expenses paid by the Plan to parties-in-interest aggregating to $45,130 were recorded in Administrative Expenses for 2012 with no comparable amounts for 2011. The Company provides certain administrative services at no cost to the Plan.
Note 6: Significant Estimates and Concentrations
Economic Conditions
The recessionary economic environment in recent years has presented and may continue to present employee benefit plans with difficult circumstances and challenges, which in some cases have resulted and may continue to result in large and unanticipated declines in the fair value of investments. Given the volatility of current economic conditions, the values of assets recorded in the financial statements could change rapidly, resulting in material future changes in investment values that could impact the Plan.
Note 7: 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 the participants account balances and the amounts reported in the statements of net assets available for benefits.
Note 8: Subsequent Events
In January 2013, Diversified Retirement Corporation changed its name to Transamerica Retirement Solutions Corporation.
Effective January 1, 2013, the Plan was amended to allow participants to elect payment of benefits in monthly, quarterly, semiannual, or annual installments upon termination of service in lieu of a lump-sum payment. The installments shall continue pursuant to such participants election until the earlier of full payment of the vested amounts in the participants accounts or the participants death. Amounts remaining after the participants death shall be paid in a lump-sum payment to the appropriate parties under the terms of the Plan.
Arkansas Best 401(k) and DC Retirement Plan
EIN 71-0673405 PN 002
Schedule H, Line 4i Schedule of Assets (Held At End of Year)
December 31, 2012
Identity of Issuer |
|
Description of Investment |
|
Current Value |
| |||
|
|
Investments |
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
Mutual Funds |
|
|
|
|
| |
|
|
Fidelity Management Trust Company |
|
Spartan 500 Index Fund, 642,099 shares |
|
$ |
32,419,596 |
|
|
|
|
|
|
|
|
| |
|
|
Dodge & Cox Funds |
|
Dodge & Cox Stock Fund, 207,104 shares |
|
25,246,004 |
| |
|
|
|
|
|
|
|
| |
|
|
Pacific Investment Management Company |
|
PIMCO Total Return Fund, 1,904,530 shares |
|
21,406,914 |
| |
|
|
|
|
|
|
|
| |
|
|
Franklin Templeton Investments |
|
Franklin Flex Cap Growth Fund, 380,795 shares |
|
17,859,287 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2015 Fund, 1,139,883 shares |
|
15,251,638 |
| |
|
|
|
|
|
|
|
| |
|
|
Fidelity Management Trust Company |
|
Fidelity Low-Priced Stock Fund, 371,177 shares |
|
14,661,479 |
| |
|
|
|
|
|
|
|
| |
|
|
Harbor Funds |
|
Harbor International Fund, 183,838 shares |
|
11,315,201 |
| |
|
|
|
|
|
|
|
| |
|
|
Neuberger Berman Management LLC |
|
Neuberger Berman Genesis Fund, 232,144 shares |
|
11,310,065 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2025 Fund, 580,130 shares |
|
7,883,961 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Total Bond Market Index Fund, 692,844 shares |
|
7,683,638 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2035 Fund, 331,888 shares |
|
4,676,307 |
| |
|
|
|
|
|
|
|
| |
|
|
Fidelity Management Trust Company |
|
Spartan Extended Market Index Fund, 100,736 shares |
|
4,020,388 |
| |
|
|
|
|
|
|
|
| |
|
|
Fidelity Management Trust Company |
|
Spartan International Index Fund, 109,246 shares |
|
3,744,963 |
| |
|
|
|
|
|
|
|
| |
|
|
Franklin Templeton Investments |
|
Templeton Global Bond, 278,724 shares |
|
3,729,322 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2045 Fund, 246,466 shares |
|
3,586,081 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Inflation-Protected Securities Adm, 124,739 shares |
|
3,560,043 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2020 Fund, 135,918 shares |
|
3,238,929 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2030 Fund, 76,890 shares |
|
1,797,677 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement Income Fund, 122,508 shares |
|
1,493,367 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2040 Fund, 26,021 shares |
|
603,167 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2050 Fund, 23,770 shares |
|
548,847 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2010 Fund, 21,114 shares |
|
509,470 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2060 Fund, 1,349 shares |
|
29,418 |
| |
|
|
|
|
|
|
|
| |
|
|
Vanguard Trust Company |
|
Vanguard Target Retirement 2055 Fund, 87 shares |
|
2,148 |
| |
|
|
|
|
|
|
|
| |
|
|
Collective Trust Investment |
|
|
|
|
| |
* |
|
Diversified Retirement Corporation |
|
Diversified Stable Pooled Fund, 1,787,817 shares |
|
29,188,439 |
| |
|
|
|
|
|
|
|
| |
|
|
Personal Choice Retirement Accounts |
|
|
|
|
| |
|
|
Charles Schwab & Co., Inc. |
|
Personal Choice Retirement Accounts |
|
8,172,034 |
| |
|
|
|
|
|
|
|
| |
|
|
Common Stock |
|
|
|
|
| |
* |
|
Arkansas Best Corporation |
|
Arkansas Best Corporation Stock Fund |
|
3,440,026 |
| |
|
|
|
|
|
|
|
| |
|
|
Variable Annuity Funds |
|
|
|
|
| |
* |
|
Transamerica Life Insurance Company |
|
SecurePath for Life 2025, 10,837 shares |
|
124,702 |
| |
* |
|
Transamerica Life Insurance Company |
|
SecurePath for Life 2015 Fund, 1,686 shares |
|
19,236 |
| |
|
|
|
|
|
|
|
| |
|
|
Total Investments |
|
|
|
237,522,347 |
| |
|
|
|
|
|
|
|
| |
|
|
Cash Equivalents |
|
|
|
210,027 |
| |
|
|
|
|
|
|
|
| |
* |
|
Participant Loans |
|
Various loans with interest rates of 5.25% to 8.32% with original maturities generally not exceeding 5 years |
|
5,935,092 |
| |
|
|
|
|
|
|
$ |
243,667,466 |
|
* |
Indicates party-in-interest to the Plan. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the 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.
|
Arkansas Best 401(k) and DC Retirement Plan |
|
|
|
|
|
/s/ David R. Cobb |
June 26, 2013 |
David R. Cobb |
|
Vice President and Controller |
|
Arkansas Best Corporation |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to incorporation by reference in the Registration Statement on Form S-8 (Registration No. 033-52877) pertaining to the Arkansas Best 401(k) and DC Retirement Plan of our report dated June 26, 2013, on our audits of the statements of net assets available for benefits of the Arkansas Best 401(k) and DC Retirement Plan as of December 31, 2012 and 2011, and the related statements of changes in net assets available for benefits for the years ended December 31, 2012 and 2011, and related schedule, which report appears in the December 31, 2012 annual report on Form 11-K of the Arkansas Best 401(k) and DC Retirement Plan.
|
/s/ BKD, LLP |
Fort Smith, Arkansas
June 26, 2013