[X] ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT OF
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT
(Full title of the plan and the address of the plan, if different from that of the issuer named below)
(Name of issuer of the securities held pursuant to the plan and the address of its principal executive office)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Retirement Committee of the
Acme Brick Company 401(k)
Retirement and Savings Plan
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of the Acme Brick Company 401(k) Retirement and Savings Plan
(the Plan) as of December 31, 2018 and 2017, and the related statement of changes in net assets available for benefits for the year ended December 31, 2018, and the related notes (collectively referred to as the financial
statements). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2018 and 2017, and the changes in net assets available for benefits for
the year ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plans management. Our responsibility is to express an opinion on the
Plans financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits
included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a reasonable basis for our opinion.
Supplemental Information
The supplemental information in the accompanying schedule of Form 5500, Schedule H, line 4i Schedule of Assets (Held at End of Year) as
of December 31, 2018, has been subjected to audit procedures performed in conjunction with the audit of the Plans financial statements. The supplemental information is the responsibility of the Plans management. Our audit procedures
included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information
presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labors
Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a
whole.
s Whitley Penn LLP
We have
served as the Plans auditor since 2003.
Fort Worth, Texas
June 14, 2019
1
Notes to Financial Statements
Year Ended December 31, 2018
The following description of the Acme Brick Company (the Company) 401(k) Retirement and Savings Plan (the
Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plans provisions.
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a.
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General.
The Plan is a defined contribution plan which covers all employees. Employees are eligible
to participate in the Plan as of the first day of the month on or after each employee has completed sixty (60) days of service and reached the age of eighteen (18). The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
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b.
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Contributions.
Employees may make voluntary
pre-tax
contributions or
after-tax
Roth 401(k) contributions through salary deferrals, limited to 65% of each employees eligible earnings, but not more than the maximum allowed by law. Prior to March 1,
2017, contributions were limited to 15% of the employees eligible earnings.
After-tax
Roth 401(k) contributions were not allowed prior to July 3, 2017. Employee contributions are subject to Internal
Revenue Code (the Code) limitations. The maximum contribution allowed by the Plan was $18,500 in 2018. Employees who are 50 or older as of December 31, 2018 and reach either the maximum
before-tax
contribution limit of 65% or maximum contribution allowed by the Plan may make
catch-up
contributions. The
catch-up
contribution limit was $6,000 for 2018 and is not eligible for Company matching.
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Company matching
contributions are equal to 50% of the sum of each employees voluntary
pre-tax
contributions and
after-tax
Roth contributions up to five percent of the
employees eligible earnings. The Companys Board of Directors annually determines the matching percentage. Company matching contributions totaled $1,564,197 for the year ended December 31, 2018. Forfeiture balances of approximately
$23,200 will be applied against the amount due in 2019.
Any employee of the Company may roll over distributions made from
a previous employers qualified retirement plan into the Plan.
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c.
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Participant Accounts.
Each participants account is credited with the employees
contributions and an allocation of the Companys contributions and investment earnings. Allocations are based on participants 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.
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d.
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Vesting.
Participants have a fully-vested, nonforfeitable right to employee contributions. Company
matching contributions are allocated to those participants actively employed on the last day of the year and become fully vested after participants have completed three years of vested service. One year of vested service is credited for each
calendar year in which a participant has at least 1,000 hours of service. Forfeitures of the Company match may be used to pay Plan expenses or fund other matching contributions; however, the forfeiture amount is credited back to participants upon
re-employment
with the Company. Forfeiture balances remaining at December 31, 2018 were approximately $23,200. Forfeiture balances remaining at December 31, 2017 were approximately $24,500.
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e.
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Investment Options.
All employee contributions and Company matching contributions are participant
directed among fourteen investment funds and Berkshire Hathaway Class B common stock.
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4
ACME BRICK COMPANY 401(k) RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements - Continued
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f.
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Payment of Benefits.
Withdrawals of employer contributions from the Plan by participants can be made
at normal retirement (age 65), early retirement (age 55), when a participant dies, becomes disabled or a break in service occurs. Distributions upon withdrawal are made in accordance with the Plan document.
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g.
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Hardship Distributions:
A participant may receive a hardship distribution from salary reduction
contributions and rollover contributions if the distribution is: (1) on account of uninsured medical expenses incurred by the participant, their spouse or dependents; (2) to purchase (excluding mortgage payments) a principal residence of
the participant; (3) for the payment of post-secondary tuition expenses for the participant, their spouse or dependents; (4) needed to prevent eviction of the participant from his or her principal residence or foreclosure upon the mortgage
of the participants principal residence; (5) for burial or funeral expenses for the participants parent, spouse, children or dependents; or, (6) for expenses for the repair of damage to the participants principal
residence caused by fire, storm, or other casualty.
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h.
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Loans.
Participants are allowed to apply for and receive loans from their vested account balance,
subject to certain requirements, including the provision that they may not have more than one outstanding loan at a time. The minimum loan amount is $1,000 and the maximum is 50% of the participants combined Employee
pre-tax,
after-tax
and
after-tax
Roth accounts, but never more than $50,000 minus the highest outstanding balance of the
participants total Plan loans during the last 12 months. The loans are secured by the balance in the participants account. The interest rate on loans outstanding as of December 31, 2018 range from 4.25% to 8.50% and these loans
mature between 2019 and 2033. The interest rate on loans outstanding as of December 31, 2017 range from 4.25% to 8.50% and these loans mature between 2018 and 2033.
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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a.
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Basis of accounting.
The financial statements of the Plan are prepared under the accrual method of
accounting in accordance with accounting principles generally accepted in the United States of America (GAAP).
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b.
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Estimates.
The preparation of the financial statements in conformity with GAAP requires the plan
administrator to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and
disclosures of contingent assets and liabilities at the date of the financial statements. Actual results may, in some instances, differ from previously estimated amounts.
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c.
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Investments.
The Plans investments are stated at fair value. Shares of registered investment
companies and common stock are valued based on published market prices, which represent the net asset value of shares held by the Plan at the end of year. Gains and losses on the sale of investments are accounted for on an average cost basis. The
Plan presents net changes in the fair value of mutual funds and common stock, which consists of realized gains and losses, unrealized appreciation (depreciation), and any income or capital gain distributions from such investments in the accompanying
statement of changes in net assets available for benefits. Shares in the Wells Fargo Stable Return Fund are valued based on the fair value of the underlying investments as determined by Wells Fargo Bank, N.A. Shares in the two BlackRock Index Funds
are valued based on the fair value of the underlying investments as determined by BlackRock Institutional Trust Company NA. The Plan presents net changes in the fair value of the Wells Fargo Stable Return Fund and the BlackRock Index Funds, which
consists of realized gains and losses, unrealized appreciation (depreciation), and any income or capital gain distributions from such investments in the accompanying statement of changes in net assets available for benefits. Purchases and sales of
securities are recorded on a trade-date basis. Dividends are recorded on the
ex-dividend
date. Interest income is recorded on the accrual basis.
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5
ACME BRICK COMPANY 401(k) RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements - Continued
The Plan provides for various investment options in a variety of mutual
funds, three common collective trust funds and Berkshire Hathaway common stock. 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 participant account balances and the amounts reported in the Plans
financial statements.
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d.
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Participant Loans
. Participant loans are valued at unpaid principal balance plus accrued interest.
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e.
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Contributions.
Contributions by participants and participating employers are accounted for on the
accrual basis once determined.
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f.
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Benefit payments.
Benefit payments are recorded when paid.
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3.
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FAIR VALUE MEASUREMENTS
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The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques
used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair
value hierarchy under Financial Accounting Standards Board Accounting Standards Codification Topic No. 820,
Fair Value Measurements
, are described as follows:
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Level 1 inputs to the valuation methodology
are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.
Level 2 inputs to the valuation methodology include
quoted prices for similar assets or liabilities in active markets;
quoted prices for identical or similar assets or liabilities in inactive
markets;
inputs other than quoted prices that are observable for the asset or
liability;
inputs that are derived principally from or corroborated by observable market data
by correlation or other means.
Level 3 inputs to the valuation methodology are unobservable
and significant to the fair value measurement.
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The asset or liabilitys fair value measurement level within the fair value hierarchy is
based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes
in the methodologies used at December 31, 2018 and 2017. These methodologies were consistently applied to all assets and liabilities of the Plan.
Cash and cash equivalents
These investments are carried at amortized cost which approximates fair value. The investments are classified within
Level 2 of the valuation hierarchy.
6
ACME BRICK COMPANY 401(k) RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements - Continued
Common stock
Common stock is valued at the closing price reported on the active market on which the individual securities are traded. All
common stock is classified within Level 1 of the valuation hierarchy.
Common/collective trust funds
The common/collective trust funds (CCT) are valued using Net Asset Value (NAV) per share as a practical
expedient. NAV is based on the fair value of the underlying investments held by the fund less its liabilities. In accordance with GAAP, since each CCT is measured using the NAV per share practical expedient, the CCTs are not classified in the
fair value hierarchy. The fair value amounts for the CCTs presented in the table below are intended to permit reconciliation to the amounts presented in the Statements of Net Assets Available for Benefits.
Mutual funds
Mutual funds are valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are
open-end
mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily NAV and to transact at that price. The mutual funds held by the Plan are deemed
to be actively traded. All mutual funds are classified within Level 1 of the valuation hierarchy.
The following
table sets forth by level, within the fair value hierarchy, the Plans assets at fair value as of December 31, 2018 and 2017. The Plan has no assets classified within Level 3 of the valuation hierarchy.
Assets at Fair Value as of December 31, 2018
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Level 1
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Level 2
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Total
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Cash/cash equivalents
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$
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-
|
|
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$
|
4,687,992
|
|
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$
|
4,687,992
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Mutual funds
|
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61,454,628
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|
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|
-
|
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61,454,628
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Common stock
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|
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12,776,095
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-
|
|
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|
12,776,095
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|
|
|
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|
|
|
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Total investments in the fair value hierarchy
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$
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74,230,723
|
|
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$
|
4,687,992
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|
|
|
78,918,715
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Investments measured at net asset value
(a)
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22,250,602
|
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Total investments at fair value
|
|
|
|
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$
|
101,169,317
|
|
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Assets at Fair Value as of December 31, 2017
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Level 1
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Level 2
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Total
|
Cash/cash equivalents
|
|
$
|
-
|
|
|
$
|
3,818,681
|
|
|
$
|
3,818,681
|
|
Mutual funds
|
|
|
70,203,881
|
|
|
|
-
|
|
|
|
70,203,881
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|
Common stock
|
|
|
13,581,483
|
|
|
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-
|
|
|
|
13,581,483
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total investments in the fair value hierarchy
|
|
$
|
83,785,364
|
|
|
$
|
3,818,681
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|
|
|
87,604,045
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Investments measured at net asset value
(a)
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|
|
|
|
|
|
|
|
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17,994,518
|
|
|
|
|
|
|
|
|
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|
|
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Total investments at fair value
|
|
|
|
|
|
|
|
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$
|
105,598,563
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(a)
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In accordance with Subtopic
820-10,
certain investments that were
measured at NAV per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the
statement of net assets available for benefits.
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7
ACME BRICK COMPANY 401(k) RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements - Continued
The Plan has received a determination letter from the Internal Revenue Service (IRS) dated February 23, 2015,
stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. Although
the Plan has been amended since applying for its last determination letter, the Plans Administrative Committee believes that the Plan is being operated in compliance with the applicable provisions of the Code and, therefore, believes that the
Plan is qualified and the related trust is tax exempt.
Management evaluates tax positions taken by the Plan and
recognizes a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan sponsor has analyzed the tax positions taken by the Plan and has concluded that
as of December 31, 2018, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing
jurisdictions; however, there are currently no audits for any tax periods in progress.
5.
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EXCESS PARTICIPANTS CONTRIBUTIONS REFUNDABLE
|
As a result of nondiscrimination requirements relating to contributions, certain highly compensated employees
received refunds of excess contributions. Such amounts have been accrued in the accompanying financial statements for 2018 and 2017 as a liability of the Plan as of the end of the year.
6.
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ADMINISTRATIVE EXPENSES
|
All expenses of Plan administration may be paid out of Plan assets unless paid by the Company at its discretion. In 2018, the
Company elected to directly pay all administrative expenses of the Plan with the exception of brokerage commissions and transfer taxes on stock purchases, which are included in the cost of the stock purchased. Expenses paid by the Company are not
reported in the Plans financial statements.
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions
at any time and to terminate the Plan subject to the provisions of ERISA. Upon termination, all participants would become 100% vested and Plan assets would be distributed accordingly.
8.
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RELATED PARTIES AND
PARTIES-IN-INTEREST
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The Plan holds investments in the common stock of Berkshire Hathaway Inc., the Companys parent, a retirement bank
account and common collective trust fund managed by Bank of America, N.A., which acted as trustee for only those investments as defined by the Plan, and notes receivable from participant loans. Transactions in such investments qualify as
party-in-interest
transactions, which are exempt from the prohibited transaction rules.
Administrative expenses of the Plan are borne by the Company, an affiliate of the Plan sponsor, Acme Building Brands, Inc.
8
ACME BRICK COMPANY 401(k) RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements - Continued
The employer match for qualified employee contributions made during 2010, 2011, 2012 and 2013 was set by the Company at 25%.
On August 18, 2014, a lawsuit was filed in the United States District Court by certain then-current and former employees contesting, among other items, that the 25% matching contribution was less than what was required according to the Plan
and/or other agreements.
It is managements position its actions were permitted, that the claims are not valid, and
that the Company will prevail. However, due to the uncertainty of such litigation, the ultimate outcome is unknown.
9
ACME BRICK COMPANY 401(k) RETIREMENT AND SAVINGS PLAN
EIN:
75-2864968 Plan
Number: 014
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2018
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(a)
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(b)
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(c)
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(e)
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Identity of Issue, Borrower,
Lessor or Similar Party
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Description of Investment Including
Maturity Date, Rate of Interest,
Collateral, Par, or Maturity Value
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Current Value
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American Funds Growth Fund of America Class R5
|
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232,849
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shares
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$
|
9,940,324
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*
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Berkshire Hathaway Common Stock Class B
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62,573
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shares
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12,776,095
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Blackrock MSCI ACWI
ex-US
Index Fund Class M
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212,657
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shares
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2,712,179
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Blackrock US Debt Index Fund
Non-lending
Class M
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242,256
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shares
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2,694,564
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Carillon Eagle Mid Cap Growth Fund Class I
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65,263
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shares
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3,463,528
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Delaware Value Fund Class I
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165,676
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shares
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3,243,927
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Goldman Sachs Government Income Fund Class I
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551,533
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shares
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7,920,018
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JPMorgan Small Cap Core Fund Select Class
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142,288
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shares
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|
6,162,473
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*
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Merrill Lynch Retirement Bank Account
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4,687,992
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shares
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4,687,992
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Metropolitan West Total Return Bond Fund Class I
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263,196
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shares
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2,734,605
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Oppenheimer International Growth Fund Class Y
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167,121
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shares
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5,797,442
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Touchstone Large Cap Focused Fund Class Y
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225,962
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shares
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8,301,858
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Vanguard 500 Index Fund Admiral Class
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30,259
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shares
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7,003,102
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Victory Sycamore Established Fund Class I
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208,329
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shares
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6,887,351
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Wells Fargo Stable Return Fund Class O
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149,824
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shares
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16,843,859
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*
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Participant loans
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Interest rates range from 4.25%
to 8.50%, due through 2033.
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2,322,813
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$
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103,492,130
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* Denotes an investment issued or managed by an entity known to be a
party-in-interest
to the Plan, as defined by ERISA. Column (d) cost information omitted for participant-directed investments.
10
ACME BRICK COMPANY 401(k) RETIREMENT AND SAVINGS PLAN
SIGNATURES
The
Plan
. 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.
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Acme Brick Company 401(k) Retirement and Saving Plan
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By: /s/ Elaine Suleski
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Elaine Suleski
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Vice President of Accounting
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Date:
June 14, 2019
11
ACME BRICK COMPANY 401(k) RETIREMENT AND SAVINGS PLAN
EXHIBIT INDEX
12
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