11-K 1 a15-14773_111k.htm ANNUAL REPORT OF EMPLOYEE STOCK PURCHASE, SAVINGS PLANS

Table of Contents

 

 

 

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 number 000-19969

 

A.                                    Full title of the plan and the address of the plan, if different from that of the issuer named below:

 

ArcBest 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:

 

ArcBest Corporation

3801 Old Greenwood Road

Fort Smith, Arkansas 72903

 

 

 



Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

EIN 71-0673405 PN 002

Report of Independent Registered Public Accounting Firm

and Financial Statements

December 31, 2014 and 2013

 




Table of Contents

 

Report of Independent Registered Public Accounting Firm

 

Investment Committee and Plan Administrator

ArcBest 401(k) and DC Retirement Plan

Fort Smith, Arkansas

 

We have audited the accompanying statements of net assets available for benefits of ArcBest 401(k) and DC Retirement Plan as of December 31, 2014 and 2013, 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 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 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 Plan’s 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 ArcBest 401(k) and DC Retirement Plan as of December 31, 2014 and 2013, 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.

 

The Schedule of Assets (Held at End of Year) has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements.  The supplemental information is the responsibility of the Plan’s 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, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.  In our opinion, the Schedule of Assets (Held at End of Year) is fairly stated, in all material respects, in relation to the financial statements as a whole.

 

/s/ BKD, LLP

 

 

Fort Smith, Arkansas

June 29, 2015

 

Federal Employer Identification Number:  44-0160260

 



Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Statements of Net Assets Available for Benefits

December 31, 2014 and 2013

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Cash

 

$

340,302

 

$

214,370

 

 

 

 

 

 

 

Investments, At Fair Value

 

 

 

 

 

Mutual funds

 

264,997,105

 

237,118,643

 

Collective trust investment

 

30,639,159

 

30,380,865

 

ArcBest Corporation Stock Fund

 

8,436,579

 

7,713,721

 

Other common stock

 

4,433,429

 

4,853,892

 

Variable annuity funds

 

553,486

 

233,907

 

Other

 

457,964

 

1,075,807

 

 

 

 

 

 

 

 

 

309,517,722

 

281,376,835

 

 

 

 

 

 

 

Receivables

 

 

 

 

 

Employer contributions

 

9,394,305

 

6,036,815

 

Participant contributions

 

859,610

 

747,111

 

Notes receivable from participants

 

6,862,794

 

5,799,161

 

 

 

 

 

 

 

 

 

17,116,709

 

12,583,087

 

 

 

 

 

 

 

Net Assets Available for Benefits, At Fair Value

 

$

326,974,733

 

$

294,174,292

 

 

See Notes to Financial Statements

 

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Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Statements of Changes in Net Assets Available for Benefits

Years Ended December 31, 2014 and 2013

 

 

 

2014

 

2013

 

Contributions

 

 

 

 

 

Participants

 

$

14,777,037

 

$

12,383,840

 

Employer

 

13,803,849

 

9,627,943

 

Rollovers

 

5,357,714

 

1,468,718

 

 

 

 

 

 

 

Total contributions

 

33,938,600

 

23,480,501

 

 

 

 

 

 

 

Deductions

 

 

 

 

 

Benefits paid to participants

 

32,860,091

 

28,995,263

 

Administrative expenses

 

137,975

 

90,710

 

 

 

 

 

 

 

Total deductions

 

32,998,066

 

29,085,973

 

 

 

 

 

 

 

Net Investment Income

 

 

 

 

 

Net appreciation in fair value of investments

 

15,366,439

 

51,887,068

 

Interest and dividends

 

4,596,100

 

3,528,572

 

 

 

 

 

 

 

Net investment income

 

19,962,539

 

55,415,640

 

 

 

 

 

 

 

Other Income

 

2,926

 

 

 

 

 

 

 

 

Interest Income on Notes Receivable from Participants

 

318,103

 

305,850

 

 

 

 

 

 

 

Net Increase Prior to Transfers

 

21,224,102

 

50,116,018

 

 

 

 

 

 

 

Transfer of Assets from Other Plan

 

11,576,339

 

53,914

 

 

 

 

 

 

 

Net Increase

 

32,800,441

 

50,169,932

 

 

 

 

 

 

 

Net Assets Available for Benefits, Beginning of Year

 

294,174,292

 

244,004,360

 

 

 

 

 

 

 

Net Assets Available for Benefits, End of Year

 

$

326,974,733

 

$

294,174,292

 

 

See Notes to Financial Statements

 

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Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

Note 1:                                Description of the Plan

 

Effective May 1, 2014, the name of the Plan changed from the Arkansas Best 401(k) and DC Retirement Plan to the ArcBest 401(k) and DC Retirement Plan. The following description of the ArcBest 401(k) and DC Retirement Plan (the “Plan”) provides only general information.  For a more complete description of the Plan’s provisions, participants should refer to the Plan document and Summary Plan Description, which are available from the Plan Administrator, ArcBest Corporation.

 

General

 

The Plan is a defined contribution plan sponsored by ArcBest Corporation which covers eligible employees of ArcBest Corporation and substantially all of its subsidiaries including: ABF Freight System, Inc.; ABF Cartage, Inc.; ABF Logistics, Inc.; ABF Supply Chain Solutions, Inc.; Albert Companies, Inc.; ArcBest Technologies, Inc.; FleetNet America, Inc.; ABF Multimodal, Inc.; ABF Global Supply Chain Services, Inc.; Moving Solutions, Inc.; Panther II Transportation Inc.; and Expedited 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.  Since January 1, 2006, the Plan has provided a DC Retirement feature (the “DC feature”) for eligible employees who do not participate in the nonunion defined benefit pension plan.  Effective July 1, 2013, the Plan was amended to include as participants those employees who were eligible to accrue benefits under the nonunion defined benefit pension plan prior to the freeze of such plan effective July 1, 2013.  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 2014 and 2013, Transamerica Retirement Solutions 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, 2014, participant account balances totaling $11,576,339 were transferred to the Plan from the Panther II Transportation, Inc. 401(k) Profit Sharing Plan and from the Andrews Van Lines, Inc. 401(k) Profit Sharing Plan and Trust.  For the year ended December 31, 2013, participant account balances totaling $53,914 were transferred to the Plan from the ABF Freight System, Inc. 401(k) Savings Plan, which covered the Company’s eligible employees who are members of collective bargaining units.

 

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Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

Contributions

 

For 2014 and 2013, 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 participant’s account.  Company 401(k) matching contributions may be made in the form of cash or ArcBest Corporation stock.  The Company 401(k) matching contributions for the 2014 and 2013 plan years were made in the form of cash.  For the years ended December 31, 2014 and 2013, the Company 401(k) matching contributions as a percentage of each participant’s annual compensation deferral are presented in the following table:

 

Participating Company

 

Company 401(k) Matching
Contribution as a Percentage
of Each Participant’s Annual
Compensation Deferral

ArcBest Corporation

 

50% of the first 6%

ABF Freight System, Inc.

 

50% of the first 6%

ABF Cartage, Inc.

 

50% of the first 6%

ABF Logistics, Inc.

 

50% of the first 6%

ABF Supply Chain Solutions, Inc.

 

50% of the first 6%

Albert Companies, Inc.

 

50% of the first 6%

ArcBest Technologies, Inc.

 

50% of the first 6%

FleetNet America, Inc.

 

No Match

ABF Multimodal Inc.

 

50% of the first 6%

ABF Global Supply Chain Services, Inc.

 

50% of the first 6%

Moving Solutions, Inc.

 

50% of the first 6%

Panther II Transportation, Inc.

 

50% of the first 6%

Expedited Solutions, Inc.

 

50% of the first 6%

 

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Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

Contributions - Continued

 

An additional annual 401(k) Company contribution may be made at the discretion of each Participating Company’s Board of Directors.  For the years ended December 31, 2014 and 2013, no additional 401(k) Company contributions were made.  The Company made discretionary contributions related to the DC feature of the Plan of $8,875,455 and $5,610,656 for the 2014 and 2013 plan years, respectively.  Discretionary Company contributions under the DC feature are made to a participant’s account based on a percentage of the participant’s eligible compensation.

 

Participant Investment Account Options

 

Participants direct the investment of their contributions as well as the Company’s 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 ArcBest Corporation Stock Fund and the self-directed Schwab Personal Choice Retirement Account® (the “PCRA”).  A participant’s investment in either the ArcBest Corporation Stock Fund or the PCRA is generally limited to 25% of the participant’s 401(k) account balance.  Participants may change the allocation of their investments daily.

 

Plan participants may also elect to invest in PortfolioXpress.  PortfolioXpress is a service offered by Transamerica.  FiduciaryVest, the Plan’s investment advisor has customized the age based target retirement allocation utilizing the investment holdings of the Plan.  Participants may choose the PortfolioXpress service and designate their retirement year.  The portfolio is rebalanced quarterly and as the participant gets closer to retirement. PortfolioXpress is also the Plan’s Qualified Default Investment Alternative (QDIA) for participants who do not make their own investment election. The PortfolioXpress allocation is held in the individual funds of the Plan rather than in a separate segregated fund.

 

The Plan’s investment committee may change the available investment options from time-to-time.

 

Participant Accounts

 

Separate sources are maintained within a participant’s 401(k) account for 401(k) contributions, Roth 401(k) contributions, the Company’s matching contributions, and the Company’s discretionary contributions including contributions made pursuant to the DC feature.  Each participant’s account is credited with related investment returns.  Each participant’s 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 participant’s vested account.

 

Vesting

 

Participants in the Plan are immediately vested in their 401(k) contributions plus earnings thereon.  Participants are fully vested in the Company’s 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 Company’s contributions and related earnings.  Any unvested Company contributions and related earnings are generally forfeited upon termination.

 

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Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

Vesting - continued

 

Under the DC feature, participants are fully vested in the Company’s 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 Company’s 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 participant’s account, which will be paid either as a direct rollover or directly to the participant.  A participant who selects 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.

 

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 participant’s election until the earlier of full payment of the vested amounts in the participant’s accounts or the participant’s death.  Amounts remaining after the participant’s death shall be paid in a lump-sum payment to the appropriate parties under the terms of the Plan.

 

Forfeited Accounts

 

Forfeited nonvested accounts reported as cash and cash equivalents in the accompanying statement of net assets available for benefits totaled $281,171 and $152,596 at December 31, 2014 and 2013, respectively. These accounts will be used to reduce future employer contributions.  Forfeitures of $172,288 and $140,000 were used to reduce the Company’s 401(k) matching contributions for the 2014 and 2013 plan years, respectively.

 

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 participant’s highest loan balance in the preceding twelve-month period.  The loans are secured by the balance in the participant’s 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.

 

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 ArcBest 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.

 

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Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

Reclassifications

 

Certain reclassifications have been made to the 2013 financial statement to conform to the 2014 financial statement presentation.  These reclassifications had no effect on changes in net assets available for benefits.

 

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.

 

The Diversified Stable Pooled Fund, an investment option of the Plan, is an investment of the Diversified Investment Advisors Collective Trust.  The Plan’s interest in the collective trust investment is valued at estimated fair value as provided by the Plan recordkeeper, which is based on information reported in 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 ArcBest Corporation Stock Fund is a unitized stock fund, which invests in the common stock of ArcBest 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 ArcBest Corporation Stock Fund at the financial statement date provided by the Plan recordkeeper is based on the value of the shares of ArcBest 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 Plan’s 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.

 

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Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

Valuation of Investments and Income Recognition - continued

 

Purchases and sales of securities are recorded on a trade-date basis.  Interest income is recorded on the accrual basis.  Dividend income is recorded on the date paid by the issuer.  Net appreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

 

Notes Receivable from Participants

 

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest.  Interest income is recorded on the accrual basis. 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.  Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2014 and 2013.

 

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’s most recent determination letter is dated November 21, 2011.  In the letter, 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 years ended December 31, 2014 and 2013.  The Plan is generally no longer subject to U.S. federal, state, and local income tax examinations by tax authorities for years before 2011.

 

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 and are included in net appreciation of fair value of investments.  All other expenses of maintaining the Plan may be paid by the Company or the Plan, at the Company’s discretion.  Certain expenses of maintaining the Plan are paid directly by the Company and are excluded from these financial statements. Fees related to the administration of notes receivable from participants are charged directly to the participant’s account and are included in administrative expenses.

 

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Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

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.

 

Note 3:                                Investments

 

The Plan’s investments are directed by participants into the various investment options.  The fair value of the Plan’s investments at December 31, 2014 and 2013 were as follows:

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Mutual funds

 

$

264,997,105

 

$

237,118,643

 

Collective trust investment

 

30,639,159

 

30,380,865

 

ArcBest Corporation Stock Fund

 

8,436,579

 

7,713,721

 

Other common stock

 

4,433,429

 

4,853,892

 

Variable annuity funds

 

553,486

 

233,907

 

Other

 

457,964

 

1,075,807

 

 

 

 

 

 

 

 

 

$

309,517,722

 

$

281,376,835

 

 

During the years ended December 31, 2014 and 2013, the net appreciation in fair value of the Plan’s investments (including gains and losses on investments bought, sold, and held during the year) was as follows:

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Mutual funds

 

$

12,251,705

 

$

43,252,806

 

Collective trust investment

 

319,853

 

365,376

 

ArcBest Corporation Stock Fund

 

2,641,760

 

6,963,229

 

Other common stock

 

110,181

 

1,042,540

 

Variable annuity funds

 

22,261

 

28,389

 

Other

 

20,679

 

234,728

 

 

 

 

 

 

 

 

 

$

15,366,439

 

$

51,887,068

 

 

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Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

The fair value of the Plan’s individual investments that represented 5% or more of net assets available for benefits at December 31, 2014 and 2013 were as follows:

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Spartan 500 Index Fund

 

$

42,386,894

 

$

38,843,099

 

Dodge & Cox Stock Fund

 

40,400,973

 

34,851,108

 

Diversified Stable Pooled Fund

 

30,639,159

 

30,380,865

 

T. Rowe Price Blue Chip Growth Fund

 

26,655,042

 

23,486,349

 

Neuberger Berman Genesis Fund

 

20,993,985

 

16,767,675

 

Fidelity Low-Priced Stock Fund

 

20,004,200

 

19,545,887

 

PIMCO Total Return Fund

 

17,973,412

 

16,992,563

 

 

Interest and dividends realized on the Plan’s investments for the years ended December 31, 2014 and 2013, were $4,596,100 and $3,528,572, respectively.

 

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, 2014.  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.

 

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Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

Investments

 

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy.  The Plan’s 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 Plan’s 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 Plan’s Level 2 investment in the ArcBest 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 Plan’s 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.

 

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, 2014 and 2013:

 

 

 

 

 

2014

 

 

 

 

 

Fair Value Measurements Using

 

 

 

Fair Value

 

Level 1

 

Level 2

 

Level 3

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

 

 

 

 

 

 

 

 

Large cap equity

 

$

109,442,909

 

$

109,442,909

 

$

 

$

 

Blended

 

48,818,619

 

48,818,619

 

 

 

Small/Mid cap equity

 

48,521,931

 

48,521,931

 

 

 

Bond

 

35,002,320

 

35,002,320

 

 

 

International equity

 

20,851,862

 

20,851,862

 

 

 

Money market

 

2,359,464

 

2,359,464

 

 

 

Collective trust investment

 

30,639,159

 

 

30,639,159

 

 

ArcBest Corporation Stock Fund

 

8,436,579

 

 

8,436,579

 

 

Variable annuity funds

 

553,486

 

 

553,486

 

 

Other common stock

 

4,433,429

 

4,433,429

 

 

 

Other

 

457,964

 

457,964

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

309,517,722

 

$

269,888,498

 

$

39,629,224

 

$

 

 

12



Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

Recurring Measurements - continued

 

 

 

 

 

2013

 

 

 

 

 

Fair Value Measurements Using

 

 

 

Fair Value

 

Level 1

 

Level 2

 

Level 3

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

 

 

 

 

 

 

 

 

Large cap equity

 

$

97,180,556

 

$

97,180,556

 

$

 

$

 

Blended

 

46,067,734

 

46,067,734

 

 

 

Small/Mid cap equity

 

43,238,210

 

43,238,210

 

 

 

Bond

 

29,521,794

 

29,521,794

 

 

 

International equity

 

18,491,614

 

18,491,614

 

 

 

Money market

 

1,689,403

 

1,689,403

 

 

 

Other

 

929,332

 

929,332

 

 

 

Collective trust investment

 

30,380,865

 

 

30,380,865

 

 

ArcBest Corporation Stock Fund

 

7,713,721

 

 

7,713,721

 

 

Variable annuity funds

 

233,907

 

 

233,907

 

 

Other common stock

 

4,853,892

 

4,853,892

 

 

 

Other

 

1,075,807

 

1,075,807

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

281,376,835

 

$

243,048,342

 

$

38,328,493

 

$

 

 

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, and 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 ArcBest Corporation Stock Fund, which holds investments in the common stock of the Company, qualify as party-in-interest transactions.  The ArcBest Corporation Stock Fund also holds cash equivalent investments in the State Street Institutional Liquid Reserves Fund administered by State Street Global Markets, LLC, and an affiliate of State Street Corporation.  The Plan’s trustee and custodian, State Street Bank and Trust Company, is also an affiliate of State Street Corporation.

 

FiduciaryVest provides investment consulting and investment management services for the plan.  FiduciaryVest customizes the age based target retirement allocation utilizing the investment holdings of the Plan for participants that choose the PortfolioXpress service.  During 2014 and 2013, the Plan paid FiduciaryVest a total of $40,000 and $9,146, respectively, for these services.

 

13



Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

Party-in-Interest Transactions - continued

 

The Plan invests in certain funds managed by the Plan recordkeeper, Transamerica Retirement Solutions 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 Transamerica Retirement Solutions Corporation and the SecurePath for Life investment options are variable annuity funds issued by Transamerica Life Insurance Company; therefore, transactions with these funds qualify 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 in fair value of investment, as they are paid through revenue sharing, rather than a direct payment.  The Plan paid $63,307 and $46,547 of transaction processing and account administration fees, not covered by revenue sharing, to Transamerica Retirement Solutions Corporation during 2014 and 2013, respectively, which are included in administrative expenses.

 

Individually immaterial expenses paid by the Plan to parties-in-interest aggregating to $31,876 and $29,500 were recorded in administrative expenses for 2014 and 2013, respectively. 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.  Volatility in economic conditions may cause the values of assets recorded in the financial statements to 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.

 

14



Table of Contents

 

ArcBest 401(k) and DC Retirement Plan

Notes to Financial Statements

December 31, 2014 and 2013

 

Note 8:                                Subsequent Events

 

Effective January 1, 2015, the Plan was amended to reduce the maximum investment election in ArcBest Stock from 25% to 10%.

 

Effective January 1, 2015, the Plan was amended to add FTI Groups, Inc. and Contract Logistics, LLC as participating companies.

 

Effective March 15, 2015, the Plan was amended to add ArcBest Enterprise Customer Solutions, Inc. as a participating company.

 

15



Table of Contents

 

Supplemental Schedule

 



Table of Contents

 

ArcBest 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, 2014

 

Identity of Issuer

 

Description of Investment

 

Current Value

 

 

Cash

 

 

 

 

 

*

State Street Bank & Trust Co.

 

Cash Reserve Account

 

$

340,302

 

 

 

 

 

 

 

 

 

Investments

 

 

 

 

 

 

Mutual Funds

 

 

 

 

 

 

Fidelity Management Trust Company

 

Spartan 500 Index Fund, 581,838 shares

 

$

42,386,894

 

 

 

 

 

 

 

 

 

Dodge & Cox Funds

 

Dodge & Cox Stock Fund, 223,284 shares

 

40,400,973

 

 

 

 

 

 

 

 

 

T. Rowe Price Associates, Inc.

 

T. Rowe Price Blue Chip Growth Fund, 399,326 shares

 

26,655,042

 

 

 

 

 

 

 

 

 

Neuberger Berman Management LLC

 

Neuberger Berman Genesis Fund, 370,918 shares

 

20,993,985

 

 

 

 

 

 

 

 

 

Fidelity Management Trust Company

 

Fidelity Low-Priced Stock Fund, 398,094 shares

 

20,004,200

 

 

 

 

 

 

 

 

 

Pacific Investment Management Company

 

PIMCO Total Return Fund, 1,686,061 shares

 

17,973,412

 

 

 

 

 

 

 

 

 

Harbor Funds

 

Harbor International Fund, 253,094.57

 

16,241,078

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2015 Fund, 865,163 shares

 

13,228,346

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2025 Fund, 703,220 shares

 

11,624,235

 

 

 

 

 

 

 

 

 

Fidelity Management Trust Company

 

Spartan Extended Market Index Fund, 136,349 shares

 

7,523,746

 

 

 

 

 

 

 

 

 

Franklin Templeton Investments

 

Templeton Global Bond, 514,963 shares

 

6,416,436

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2035 Fund, 359,376 shares

 

6,411,268

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Total Bond Market Index Fund, 548,095 shares

 

5,957,793

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2020 Fund, 188,278 shares

 

5,358,383

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2045 Fund, 281,102 shares

 

5,242,554

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Inflation-Protected Securities Adm, 179,926 shares

 

4,654,679

 

 

 

 

 

 

 

 

 

Fidelity Management Trust Company

 

Spartan International Index Fund, 123,879 shares

 

4,610,784

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2030 Fund, 75,180 shares

 

2,183,226

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement Income Fund, 145,354 shares

 

1,876,520

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2040 Fund, 45,878 shares

 

1,365,323

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2050 Fund, 33,304 shares

 

986,451

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2010 Fund, 11,876 shares

 

312,589

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2055 Fund, 3,904 shares

 

124,861

 

 

 

 

 

 

 

 

 

Vanguard Trust Company

 

Vanguard Target Retirement 2060 Fund, 3,719 shares

 

104,863

 

 

 

 

 

 

 

 

 

Collective Trust Investment

 

 

 

 

 

*

Diversified Retirement Corporation

 

Diversified Stable Pooled Fund, 1,833,626 shares

 

30,639,159

 

 

 

 

 

 

 

 

 

Personal Choice Retirement Accounts

 

 

 

 

 

 

Charles Schwab & Co., Inc.

 

Personal Choice Retirement Accounts

 

7,250,857

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

*

ArcBest Corporation

 

ArcBest Corporation Stock Fund

 

8,436,579

 

 

 

 

 

 

 

 

 

Variable Annuity Funds

 

 

 

 

 

*

Transamerica Life Insurance Company

 

SecurePath for Life 2025 Fund, 19,164 shares

 

271,307

 

 

 

 

 

 

 

 

*

Transamerica Life Insurance Company

 

SecurePath for Life 2020 Fund, 4,167 shares

 

224,663

 

 

 

 

 

 

 

 

*

Transamerica Life Insurance Company

 

SecurePath for Life 2015 Fund, 16,833 shares

 

57,516

 

 

 

 

 

 

 

 

 

Total Investments

 

 

 

$

309,517,722

 

 

 

 

 

 

 

 

*

Participant Loans

 

Various loans with interest rates of 3.25% to 10.25% with original maturities generally not exceeding 5 years

 

$

6,862,794

 

 


* Indicates party-in-interest to the Plan.

 

16



Table of Contents

 

SIGNATURES

 

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.

 

 

ArcBest 401(k) and DC Retirement Plan

 

 

 

 

 

/s/ David R. Cobb

June 29, 2015

David R. Cobb

 

Vice President – Chief Financial Officer

 

and Principal Financial Officer

 

ArcBest Corporation

 

17



Table of Contents

 

EXHIBIT INDEX

 

Exhibit Number

 

Seq. Description

23.1

 

Consent of BKD, LLP

 

18