11-K 1 l16471ae11vk.htm RES-CARE, INC. RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES 11-K
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
     
þ   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
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: 1-13163
  A.   Full title of the plan and the address of the plan, if different from that of the issuer named below:
Res-Care, Inc. Retirement Savings Plan for Puerto Rico Employees
  B.   Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Res-Care, Inc.
10141 Linn Station Road
Louisville, Kentucky 40223

 

 
 

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RES-CARE, INC. RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES
Financial Statements and Supplemental Schedule
December 31, 2004 and 2003
(With Report of Independent Registered
Public Accounting Firm Thereon)
RES-CARE, INC. RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES
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Report of Independent Registered Public Accounting Firm
Plan Administrator
Res-Care, Inc. Retirement Savings Plan for Puerto Rico Employees
We have audited the accompanying Statements of Net Assets Available for Benefits of the Res-Care, Inc. Retirement Savings Plan for Puerto Rico Employees (the Plan) as of December 31, 2004 and 2003 and the related Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2004. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing 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, 2004 and 2003 and the changes in net assets available for benefits for the year December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets (Held at End of Year) as of December 31, 2004 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all materials respects in relation to the basic financial statements taken as a whole.
/s/ Mountjoy & Bressler, LLP
Louisville, Kentucky
August 17, 2005

 

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RES-CARE, INC.
RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
                 
    December 31,  
    2004     2003  
ASSETS
                
 
                
Investments, at fair value
   $ 1,109,206     $ 960,847  
 
                
Receivables:
                
Employer’s contribution
     —       2,045  
Participants’ contribution
     —       2,558  
 
            
 
 
     —       4,603  
 
            
 
                
Net Assets Available For Benefits
   $ 1,109,206     $ 965,450  
 
            
See accompanying report of independent registered
  public accounting firm and notes to financial statements

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RES-CARE, INC.
RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2004
         
Additions To Net Assets Attributed To:
        
Investment income:
        
Net appreciation in fair value of investments
   $ 73,453  
Interest and dividends
     5,824  
 
      
 
 
     79,277  
 
        
Contributions:
        
Employer
     52,419  
Participants’
     78,275  
 
      
 
        
 
     130,694  
 
      
 
        
Total additions
     209,971  
 
        
Deductions From Net Assets Attributed To:
        
Benefits paid
     85,994  
Administrative expenses
     16,425  
 
      
 
        
Total deductions
     102,419  
 
      
 
        
Net increase prior to transfers
     107,552  
 
        
Transfers to Plan
     36,204  
 
      
 
        
Net increase
     143,756  
 
        
Net Assets Available For Benefits:
        
 
        
Beginning of Year
     965,450  
 
      
 
        
End of Year
   $ 1,109,206  
 
      
See accompanying report of independent registered
  public accounting firm and notes to financial statements

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RES-CARE, INC.
RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
NOTE A—DESCRIPTION OF PLAN
The following description of the Res-Care, Inc. Retirement Savings Plan for Puerto Rico Employees (the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
General – Effective January 1, 1996, the Plan was adopted as a defined contribution plan covering certain employees of Res-Care, Inc. (the Company) employed in Puerto Rico who work 1,000 hours or more during a calendar year. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
Trustee and Custodian – Effective January 1, 2003, the plan administrator established U.S. Bank, N.A. as Custodian of the Plan. Banco Popular de Puerto Rico, a local financial institution in Puerto Rico, serves as Trustee for the Plan due to local requirements regarding benefit disbursements.
Contributions – Each year, participants may contribute up to 25 percent of pretax annual compensation, up to a limit of $8,000, as defined in the Plan. The Company matches 100 percent of the first 3 percent and 50 percent of the next 2 percent of base compensation that a participant contributes to the Plan. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. Participants are immediately vested in their contributions and the Company matching contributions plus actual earnings thereon.
Participants’ Accounts – Each participant’s account is credited with the participant’s contribution and an allocation of (a) the Company’s contribution and (b) investment earnings and charged with an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined by the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Participant Loans – Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50 percent of their vested account balance. Loan terms range from one to five years. The loans are secured by the balance in the participant’s account and bear interest at prime plus 1%. Principal and interest are paid ratably through payroll deductions at each regular pay period.
Payment of Benefits – Upon termination of service, a participant may elect to receive a lump-sum amount in cash equal to the value of the participant’s vested interest in his or her account, or a direct rollover into another qualified plan. Benefits are also paid upon retirement, death or disability.

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RES-CARE, INC.
RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES
NOTES TO FINANCIAL STATEMENTS—CONTINUED
December 31, 2004
NOTE B—SIGNIFICANT ACCOUNTING POLICIES
Following are the significant accounting policies followed by the Plan.
Basis of Presentation – The accompanying financial statements have been prepared on the accrual basis and present the net assets available for benefits and changes in those net assets.
Estimates – The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan administrator to make estimates and assumptions that affect the reported amounts of net assets available for benefits and the reported changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates and assumptions.
Administration of Plan Assets – The Plan’s assets are held by the Custodian and the Trustee. Contributions are held and managed by the Custodian and Trustee, which invest cash received, interest and dividend income and makes distributions to participants. The Trustee also administers the payment of interest and principal on the participant loans, which is reimbursed to the Trustee through contributions as determined by the Company.
Payment of Benefits – Benefits are recorded when paid.
Risks and Uncertainties – The Plan provides for various investment options. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the values of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits and the statement of changes in net assets available for benefits.
NOTE C—INVESTMENTS
The Plan’s investments are held in bank-administered trust funds and are recorded at fair value based on quoted market prices of the fund’s underlying assets. Participant notes receivable are valued at the amount borrowed less repayments, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis and dividends are recorded on the ex-dividend date.
Continued

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RES-CARE, INC.
RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES
NOTES TO FINANCIAL STATEMENTS—CONTINUED
December 31, 2004
NOTE C—INVESTMENTS—CONTINUED
The following table represents the fair value of individual investments which exceed 5 percent of the Plan’s net assets:
                 
    December 31,  
    2004     2003  
Interest in registered investment companies:
                
U.S. Bank Stable Asset Fund
   $ 508,506     $ 448,179  
T. Rowe Price Equity Income Fund
     154,439       129,238  
Federated G N M A Fund Institutional Service Shares
     86,200       77,023  
M F S Total Return Fund Class A
     73,722       61,741  
T. Rowe Price Mid Cap Growth Fund
     78,783       58,832  
Participant loans
     106,783       115,075  
During 2004, the Plan’s investments (including investments bought, sold and held during the year) appreciated (depreciated) in value as follows:
         
Interest in registered investment companies:
        
American Funds EuroPacific Growth Fund Class A
   $ 269  
American Funds Growth Fund of America Class A
     340  
Federated G N M A Fund Institutional Service Shares
     2,710  
First American Investment Funds Equity Index Class Y
     1,586  
Franklin Managed Trust Rising Dividends Fund
     126  
M F S New Discovery Fund Class A
     (1,587 )
M F S Total Return Fund Class A
     7,405  
T. Rowe Price Equity Income Fund
     19,846  
T. Rowe Price Mid Cap Growth Fund
     11,741  
U.S. Bank Stable Asset Fund
     15,175  
Lord Abbott Small Cap Fund Class A
     52  
Fidelity Small Cap Fund
     2,815  
 
        
Common stock:
        
Res-Care, Inc.
     12,975  
 
      
 
   $ 73,453  
 
      
NOTE D—RELATED PARTY TRANSACTIONS
Certain Plan investments are invested in the common stock of Res-Care, Inc., a related party. Other Plan investments are invested in funds managed by U.S. Bank, N.A., the Trustee. Certain administrative functions are provided by the Company at no cost to the Plan and certain administrative costs incurred by the Plan are paid by the Company. These transactions qualify as party-in-interest transactions.

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RES-CARE, INC.
RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES
NOTES TO FINANCIAL STATEMENTS—CONTINUED
December 31, 2004
NOTE E—PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right under the Plan agreement to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of a Plan termination, participants will become 100 percent vested in their accounts.
NOTE F—INCOME TAXES
A determination letter dated January 1, 1997 has been received from the Internal Revenue Service stating that the Plan and the related trust qualified under the Internal Revenue Code (IRC) and, therefore, are exempt from Federal income taxes. The Plan has been amended since receiving the determination letter. The Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.

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SUPPLEMENTAL SCHEDULE

 

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RES-CARE, INC.
RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
EIN: 61-0875371 Plan: 003
December 31, 2004
                         
    Identity of Issue, Borrower,               Current  
(a)   Lessor, or Similar Party (b)   Description (c)   Cost (d)     Value (e)  
*   U.S. Bank, N.A.  
American Funds EuroPacific Growth Fund Class A
   $ 2,029     $ 2,256  
*   U.S. Bank, N.A.  
American Growth Fund of America Class A
     4,559       4,895  
*   U.S. Bank, N.A.  
Federated G N M A Fund Institutional Service Shares
     87,958       86,200  
*   U.S. Bank, N.A.  
Fidelity Cash Reserves
     322       322  
*   U.S. Bank, N.A.  
First American Investment Funds Equity Index Class Y
     13,311       16,514  
*   U.S. Bank, N.A.  
Franklin Managed Trust Rising Dividends Fund
     898       977  
*   U.S. Bank, N.A.  
Lord Abbott Small Cap Fund Class A
     24,019       24,071  
*   U.S. Bank, N.A.  
M F S Total Return Fund Class A
     66,240       73,722  
*   U.S. Bank, N.A.  
T. Rowe Price Equity Income Fund
     125,217       154,439  
*   U.S. Bank, N.A.  
T. Rowe Price Mid Cap Growth Fund
     55,829       78,783  
*   U.S. Bank, N.A.  
U.S. Bank Stable Asset Fund
     479,994       508,506  
*   U.S. Bank, N.A.  
Res-Care, Inc. Common Stock
     24,134       51,738  
    Participant Loans  
Interest rates 5% - 10.5% per annum, various maturities
     —       106,783  
       
 
            
       
 
   $ 884,510     $ 1,109,206  
       
 
            
 
*   Denotes party-in-interest

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
         
    RES-CARE, INC. RETIREMENT SAVINGS PLAN FOR PUERTO RICO EMPLOYEES
 
        
 
  By:   /s/ Ronald G. Geary
 
       
 
      Ronald G. Geary
 
      Chairman, President and Chief Executive Officer
 
        
 
  By:   /s/ David W. Miles
 
       
 
      David W. Miles
 
      Vice President and Controller, Interim Chief
 
        Financial Officer
 
        
Date: October 19, 2005
        

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EXHIBIT INDEX
     
Exhibit    
Number   Description of Exhibit
23
  Consent of Independent Registered Public Accounting Firm