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ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
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U.S.
BORAX INC.
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401(k)
PLAN FOR HOURLY EMPLOYEES
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Financial
Statements and Supplemental Schedule
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As
of December 31, 2008 and 2007
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and
for the Year Ended December 31, 2008
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Together
with Report of Independent Registered Public
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Accounting
Firm
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Page
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Report of
Independent Registered Public Accounting Firm
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2
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Financial
Statements:
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Statements
of Assets Available for Benefits as of
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December
31, 2008 and 2007
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3
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Statement
of Changes in Assets Available for Benefits
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for
the year ended December 31, 2008
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4
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Notes
to Financial Statements
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5 –
17
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Schedule H,
Part IV, Line 4i –
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Schedule of
Assets (Held at End of Year)
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18 –
19
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2008
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2007
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Assets
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Investments (at fair
value)
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$ | 32,432,468 | $ | 43,276,888 | ||||
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Total
assets
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32,432,468 | 43,276,888 | ||||||
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Assets available for benefits (at
fair value)
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32,432,468 | 43,276,888 | ||||||
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Adjustment from fair value to
contract value for fully benefit-responsive investment
contracts
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1,422,884 | 160,708 | ||||||
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Assets available for
benefits
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$ | 33,855,352 | $ | 43,437,596 | ||||
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See
accompanying notes to financial statements.
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3
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Contributions:
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Employee
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$ | 2,394,159 | ||
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Employer
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356,683 | |||
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Total
contributions
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2,750,842 | |||
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Investment income
(loss):
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Net depreciation in fair value of
investments
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(11,459,890 | ) | ||
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Interest and
dividends
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1,586,263 | |||
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Total investment loss,
net
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(9,873,627 | ) | ||
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Deductions from assets attributed
to:
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Transfers to the Rio Tinto America
Inc. Savings Plan
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534,580 | |||
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Benefits paid to
participants
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1,924,826 | |||
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Administrative
expenses
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53 | |||
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Total
deductions
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2,459,459 | |||
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Decrease in assets available for
benefits
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(9,582,244 | ) | ||
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Assets available for
benefits:
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Beginning of
year
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43,437,596 | |||
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End of year
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$ | 33,855,352 | ||
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See
accompanying notes to financial statements.
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4
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1. Description
of
the
Plan
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The following
brief description of the U.S. Borax Inc. 401(k) Plan for Hourly Employees
(the Plan) is provided for general information purposes
only. Participants should refer to the plan document and
summary plan description for more complete information.
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General
The Plan is a
defined contribution plan covering full-time hourly employees who are
represented by or included in a collective bargaining unit of U.S. Borax
Inc. and its affiliates (collectively, the “Company” or the “Employer”),
as defined in the plan document. U.S. Borax Inc. is an
indirect, wholly-owned subsidiary of Rio Tinto America Inc., which is an
indirect, wholly-owned subsidiary of Rio Tinto plc (the
Parent). The Plan is intended to be a qualified retirement plan
under the Internal Revenue Code (IRC) and is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA), as
amended.
Eligible
employees who are represented by Local 30-International Longshoremen’s and
Warehousemen’s Union (Boron hourly employees) can participate in the Plan
immediately after completing sixty days of continuous
service.
Eligible
employees who are represented by Local 20A-International Longshoremen’s
and Warehousemen’s Union (Wilmington hourly employees) can participate in
the Plan immediately upon employment.
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Contributions
Each year
participants may elect under a salary reduction agreement to contribute to
the Plan. Contributions are limited by the IRC, which established a
maximum contribution of $15,500 for the year ended December 31,
2008. Participant contributions are recorded in the period
during which the amounts are withheld from participant
earnings. Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined contribution
plans.
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Boron hourly
employees can contribute an amount not less than 1% and not more than 30%
of their eligible compensation on a before-tax basis through payroll
deductions. Participants may also elect to make an after-tax contribution
not less than 1% and not more than 30% of their eligible
compensation. Total before-tax and after-tax contributions
cannot exceed 30% of each participant’s eligible
compensation.
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1. Description
of
the
Plan
Continued
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Contributions –
Continued
The Company
matches the Boron participants’ contributions to the Plan at 30%, up to
the first 5% of their eligible compensation. Matching
contributions are recorded on the date the related participant
contributions are withheld.
Wilmington
hourly employees can contribute an amount not less than 1% and not more
than 15% of their eligible compensation on a before-tax basis through
payroll deductions. Participants may also elect to make an after-tax
contribution not less than 1% and not more than 15% of their eligible
compensation. Total before-tax and after-tax contributions
cannot exceed 15% of each participant’s eligible
compensation.
The Company
matches the Wilmington participants’ contributions to the Plan at 35%, up
to the first 5% of their eligible compensation. Matching
contributions are recorded on the date the related participant
contributions are withheld.
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Participant
Accounts
Individual
accounts are maintained for each Plan participant. Each
participant’s account is credited with the participant’s contributions,
the Company’s matching contributions, and an allocation of the Plan’s
earnings, and is charged with withdrawals and an allocation of the Plan’s
losses and 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.
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Participant-Directed
Options for Investments
Participants
direct the investment of their contributions and the Company matching
contributions into various investment options offered by the Plan.
Investment options include mutual funds, a common/collective trust, common
stock of the Parent in the form of American Depositary Receipts (ADRs),
and a stable value fund consisting of a money market fund, a
common/collective trust and synthetic guaranteed investment
contracts.
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Vesting
Participants
are immediately vested in their contributions and Company matching
contributions plus actual earnings thereon.
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1. Description
of
the
Plan
Continued
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Payment
of Benefits
On
termination of service due to death, disability, or retirement,
participants or their beneficiaries may elect to receive lump-sum
distributions or annual, semi-annual, quarterly or monthly installments in
amounts equal to the value of the participants’ vested interests in their
accounts. Under certain circumstances, participants may
withdraw their contributions prior to the occurrence of these
events.
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Transfers
Along with
the Plan, the Company employees also participate in another 401(k) plan
that covers employees not represented by a collective bargaining unit
(union). If employees are changed from union to non-union status during
the year, their account balances are transferred from this Plan to the
non-union plan. For the year ended December 31, 2008, transfers to the Rio
Tinto America Inc. Savings Plan totaled $534,580.
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2. Summary
of
Significant
Accounting
Policies
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Basis
of Presentation
The financial
statements of the Plan have been prepared on the accrual basis of
accounting.
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Use
of Estimates
The
preparation of the Plan’s financial statements in conformity with U.S.
generally accepted accounting principles requires Plan management to make
estimates and assumptions that affect the reported amounts of assets
available for benefits at the date of the financial statements, the
changes in assets available for benefits during the reporting period and,
when applicable, the disclosures of contingent assets and liabilities at
the date of the financial statements. Actual results could
differ from those estimates.
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Financial
Accounting Standards Board Staff Position
As described
in Financial Accounting Standards Board (FASB) Staff Position, FSP AAG
INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment
Contracts Held by Certain Investment Companies Subject to the AICPA
Investment Company Guide and Defined-Contribution Health and Welfare and
Pension Plans (the FSP), investment contracts held by a
defined-contribution plan are required
to be reported at fair value. However, contract value is the
relevant measurement attribute for that portion of the assets available
for benefits of a defined-contribution plan attributable to
fully
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2. Summary
of
Significant
Accounting
Policies
Continued
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Financial
Accounting Standards Board Staff Position - Continued
benefit-responsive
investment contracts because contract value is the amount participants
would receive if they were to initiate permitted transactions under the
terms of the plan. As required by the FSP, the Statement of
Assets Available for Benefits presents the fair value of the investment
contracts as well as the adjustment of the fully benefit-responsive
investment contracts from fair value to contract value. The
Statement of Changes in Assets Available for Benefits is prepared on a
contract value basis.
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Risks
and Uncertainties
The Plan
provides for investments in securities that are exposed to various risks,
such as interest rate, currency exchange rate, credit and overall market
fluctuation. Due to the level of risk associated with certain
investment securities, it is reasonably possible that changes in the
values of investment securities will occur in the near term and that such
changes could materially affect participants’ account balances and the
amounts reported in the statements of assets available for
benefits.
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During 2008
and as of the date of the accompanying independent auditors’ report, the
world’s economic and financial markets have experienced significant
instability and illiquidity. These developments have impacted
the fair values of many of the Plan’s investments.
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Investment
Valuation and Income Recognition
The Plan’s
investments in mutual funds are valued at quoted market prices, which
represent the net asset value of units held by the Plan at year
end. Plan investments in common stock are stated at fair value
based on quoted market prices. The Plan’s interest in the
Dwight Stable Value Fund is valued based upon the market value of the
underlying securities at quoted market value or quoted share
prices. Participant loans are valued at their outstanding
balances, which approximate fair value.
Purchases and
sales of securities are recorded on a trade-date
basis. Interest income is recorded on an accrual
basis. Dividends are recorded on the ex-dividend
date.
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2. Summary
of
Significant
Accounting
Policies
Continued
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Investment
Valuation and Income Recognition - Continued
The net
depreciation in the fair value of investments, which includes realized
gains (losses) and unrealized appreciation (depreciation) on those
investments, is shown in the statement of changes in assets available for
benefits of the Plan, and totaled ($11,459,890) for the year ended
December 31, 2008.
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Payments
of Benefits
Benefit
payments are recorded when paid by the Plan.
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Administrative
Expenses
The Company
pays the majority of costs and expenses incurred in administering the
Plan. The Company provides accounting and other services for
the Plan at no cost to the Plan.
The Plan has
several fund managers that manage the investments held by the
Plan. Fees for investment fund management services are included
as a reduction of the return earned on each fund. In addition,
during the year ended December 31, 2008, the Company paid all investment
consulting fees related to these investment funds.
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Transaction
costs associated with the purchase or sale of Rio Tinto plc ADRs are paid
by the participants.
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Participant
Loans
Participants
may borrow from the Plan up to a maximum of $50,000 or 50% of their
account balances, whichever is less. Each loan is secured by
the balance in the participant’s account and bears interest at a rate
commensurate with prevailing rates at the time funds are borrowed, as
determined by the Plan Administrator. Loans originated during
the year ended December 31, 2008 have interest rates set at prime plus one
percent, and are reset quarterly.
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3. Fully
Benefit
Responsive
Investment
Contracts
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The Plan’s
investments include the Dwight Stable Value Fund. The Dwight
Stable Value Fund is invested in the following:
●
A money market fund (TBC Pooled Employee Daily Liquidity
Fund);
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3. Fully
Benefit
Responsive
Investment
Contracts
Continued
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●
A fully benefit-responsive common/collective trust (the SEI Stable
Asset Fund); and
● Fully
benefit-responsive synthetic guaranteed investment contracts (GICs) as
follows:
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a. Synthetic
GIC, Dwight Managed Target 2, no specified maturity date,
4.24%;
b. Synthetic GIC,
Dwight Managed Target 5, no specified maturity date, 4.24%;
c. Synthetic GIC,
Dwight Managed Target 2, no specified maturity date, 4.18%;
d. Synthetic
GIC, Dwight Managed Target 5, no specified maturity date,
4.18%
e. Synthetic
GIC, Dwight Intermediate Core Plus Fund, no specified maturity date,
4.24%; and
f. Synthetic
GIC, Dwight Intermediate Core Plus Fund, no specified maturity date,
4.18%.
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Synthetic
GICs provide for a guaranteed return on principal over a specified period
of time through fully benefit-responsive wrap contracts, issued by a third
party, which are secured by underlying assets. The Plan’s wrap
contracts have credit ratings ranging from AA+ to AAA. The
assets underlying the wrap contracts include diversified bond
portfolios. These bond portfolios include investments in
securities with contractual cash flows, such as asset backed securities,
collateralized mortgage obligations and commercial mortgage backed
securities, including securities backed by subprime mortgage
loans. The value, liquidity and related income of these
securities are sensitive to changes in economic conditions, including real
estate value, delinquencies or defaults, or both, and may be adversely
affected by shifts in the market’s perception of the issuers and changes
in interest rates.
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The crediting
interest rates of the contracts are based on agreed-upon formulas with the
issuing third-party, as defined in the contract agreement, but cannot be
less than zero. The contract or
crediting interest rates for the GICs are typically reset quarterly and
are based on capital market developments, the performance of the assets
backing the contract, and the expected and actual contributions and
withdrawals of all of the plans participating in the
contract. These contracts typically provide that realized and
unrealized gains and losses on the underlying assets are not reflected
immediately in the assets of the fund. Realized and unrealized gains and losses are amortized, usually over
the time to maturity or the duration of the underlying
investments, through adjustments to the future interest crediting
rate. Additional inputs used to determine the crediting
interest rates include each contract’s portfolio market value, current
yield-to-date maturity, duration, and market value relative to contract
value.
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3. Fully
Benefit
Responsive
Investment
Contracts
Continued
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The fair
value of the investment contracts relative to the contract value are
reflected in the statements of assets available for benefits as
“adjustment from fair value to contract value for fully benefit-responsive
investment contracts” (adjustment). If the adjustment is positive, this
indicates that the contract value is greater than the fair value. The
embedded losses will be amortized in the future through a lower interest crediting rate than would otherwise be the case. If the adjustment
is negative, this indicates that the contract value is less than the fair
value. The embedded gains will cause the future interest crediting rate to be higher than it otherwise would have been. A
positive adjustment is reflected in the Plan’s statements of assets
available for benefits as of December 31, 2008 and 2007 in the amounts of
$1,422,884 and $160,708, respectively.
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These wrap
contracts provide benefit withdrawals and investment exchanges at the full
contract value of the synthetic contracts (principal plus accrued
interest) notwithstanding the actual market value of the underlying
investments (fair value plus accrued interest). There are
no reserves against contract value for credit risk of the contract issuer
or otherwise.
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Certain
events may limit the ability of the Plan to transact at contract value
with the issuer of fully benefit-responsive investment
contracts. Such events include the following: (1) amendments to
the Plan documents (including complete or partial plan termination or
merger with another plan), (2) bankruptcy of the Company or other Company
events (for example, divestiture or spin-off of a subsidiary) that cause a
significant withdrawal from the Plan, or (3) the failure of the trust to
qualify for exemption from federal income taxes or any required prohibited
transaction exemption under ERISA, as amended. The Plan
Administrator does not believe that the occurrence of any such event,
which would limit the Plan’s ability to transact at contract value with
participants, is probable. The contracts provide that
withdrawals associated with certain events which are not in the ordinary
course of fund operations, and are determined by the issuer to have a
material adverse effect on the issuer’s financial interest, may be paid at
other than contract value.
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3. Fully
Benefit
Responsive
Investment
Contracts
Continued
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Absent the
events described in the preceding paragraph, the synthetic guaranteed
investment contracts do not permit the issuers to terminate the agreements
prior to the scheduled maturity dates.
Average
duration for all investment contracts was 2.36 and 2.92 years
at December 31, 2008 and 2007, respectively. Average yield
data for all fully benefit-responsive investment contracts for the years
ended December 31, 2008 and 2007 was as
follows:
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Average
Yields
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2008
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2007
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Based on
actual earnings
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4.50 | % | 5.68 | % | ||||
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Based on
interest rate credited to
participants
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3.59 | % | 4.82 | % | ||||
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4. Related
Party
Transactions
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Certain Plan
investments are managed by Putnam Investments, the Plan trustee,
therefore, these transactions are exempt party-in-interest transactions.
Transaction fees paid by the Plan for investment management services were
included as a reduction of the return earned on each fund.
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Transactions
associated with Rio Tinto plc ADRs are considered exempt party-in-interest
transactions because Rio Tinto plc is the parent of the
Company. As of December 31, 2008 and 2007, the Plan held
13,402 and 11,351 shares, respectively, of common stock of Rio Tinto plc.
During the year ended December 31, 2008, the Plan recorded dividend income
of $66,145 related to this stock.
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As of
December 31, 2008 and 2007, the Plan held loans from participants totaling
$2,709,715 and $2,704,260, respectively. Loans to participants,
at cost, which approximates fair value, are at interest rates ranging from
5.00% to 9.50% and maturities ranging from 2009 to 2021.
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5. Global
Securities
Lending
Program
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The Plan
participates in the State Street Bank and Trust Company S&P 500
Flagship Securities Lending Series C Fund (the Fund), a common/collective
trust. The Fund invests in certain collective investment funds that
participate in the State Street Global Securities Lending Program (Lending
Funds). Under the State Street Global Securities Lending Program, securities held by Lending Funds are loaned by State
Street Bank, as agent, to certain brokers and other financial institutions
(the Borrowers).
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5. Global
Securities
Lending
Program
Continued
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The Borrowers
provide cash, securities, or letters of credit as collateral against loans
in an amount at least equal to 100% of the fair value of the loaned
securities. The Borrowers are required to maintain the
collateral at not less than 100% of the fair value of the loaned
securities. Cash collateral provided by the Borrowers may be
invested in State Street Bank and Trust Company Collateral Funds (Cash
Collateral Funds). The Lending Funds invested cash provided by
the Borrowers into the State Street Bank and Trust Company Quality Trust
for SSgA Funds.
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Risks
and Indemnification
State Street
Bank, as lending agent, indemnifies Lending Funds for replacement of any
loaned securities (or, in certain circumstances, return of equivalent cash
value) due to Borrower default on a security loan. Lending Fund
participants, however, bear the risk of loss with respect to the
investment of collateral.
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Withdrawal
Safeguards
From time to
time, the Trustee of the Lending Funds may exercise its rights in order to
protect all participants in the State Street Bank securities lending
funds. In an effort to better ensure safety of principal and
better maintain adequate liquidity, as well as achieve favorable returns
for all securities lending program participants, State Street Bank has
temporarily implemented withdrawal safeguards on full or partial
redemptions from certain securities lending funds.
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The objective
of these withdrawal safeguards is to protect the interest of all
participants, while providing the maximum level of liquidity that can be
prudently made available to all participants. These withdrawal
safeguards permit redemptions resulting from ordinary course activity,
subject to certain thresholds. Ordinary course activity also
may include periodic participant rebalancing of their investment portfolio
between Lending Funds and other State Street Bank collective investment
funds. Requests for redemptions above these withdrawal
safeguards may result in proceeds consisting of cash, units of other State
Street Bank collective investment funds, units of Cash Collateral Funds
that will be converted into units of a liquidating trust, or a combination
thereof. The Trustee continues to monitor market conditions and
evaluates the need for withdrawal safeguards, as
appropriate.
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5. Global
Securities
Lending
Program
Continued
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Investment
in Cash Collateral Fund Valuation
Management of
the Lending Funds regularly reviews the performance of the Cash Collateral
Funds and the variation between their per unit fair values and
$1.00. The Cash Collateral Funds primarily utilize quotations
from independent pricing services, quotations from bond dealers and
information with respect to bond and note transactions (“pricing service
information”) to determine the fair value of its
investments. Such pricing service information may also consist
of quotations derived from valuation models or matrix
pricing. As of December 31, 2008, the per unit fair value was
$0.93 for the State Street Bank and Trust Company Quality Trust for SSgA
Funds.
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For the
purposes of determining transaction price for issuances and redemptions of
Lending Fund units, management of the Lending Funds also evaluates
additional inputs to the fair value of the Lending Funds’ investments in
the Cash Collateral Funds, including among other things current market
conditions, credit quality, liquidity of the Cash Collateral Funds and the
assessed probability of incurring a realized loss on Cash Collateral Fund
Assets. Additionally, management of the Lending Funds evaluates
the qualitative aspects of the State Street Global Securities Lending
Program, including the historical performance of State Street Bank as
lending agent, the Cash Collateral Funds’ investment strategy and past
performance, and the expected continuing transactions price of the Cash
Collateral Funds at $1.00 per unit.
Accordingly,
for purposes of calculating the transaction price of the Lending Funds,
management of the Lending Funds has valued its investments in Cash
Collateral Funds at their per unit transaction price of
$1.00. Management of the Lending Funds will continue to review
the Lending Funds participation in the State Street Global Securities
Lending Program, including the appropriateness of the fair value of the
Lending Funds’ investments in the Cash Collateral Funds at $1.00 per unit
for transaction purposes or, alternatively, at a lower per unit fair
value.
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6. Investments
|
The Plan’s
investments, stated at fair value, that represent five percent or more of
the Plan’s assets available for benefits as of December 31, 2008 and
2007 are as follows:
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2008
|
2007
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Assets of the Dwight
Stable
Value Fund:
|
||||||||
|
TBC Pooled Employee Daily
Liquidity Fund
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$ | 1,650,587 | $ | 66,119 | ||||
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SEI
Stable Asset Fund
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6,949,170 | 7,047,256 | ||||||
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Monumental Life Insurance
Company Synthetic
GICs
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4,461,825 | 4,623,003 | ||||||
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State Street Bank &
Trust
Synthetic GICs
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4,304,594 | 4,460,719 | ||||||
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Total
Dwight Stable Value Assets
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$ | 17,366,176 | $ | 16,197,097 | ||||
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Participant
Loans
|
2,709,715 | 2,726,590 | ||||||
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Dodge
and Cox Stock Fund
|
2,575,527 | 4,935,589 | ||||||
|
Harbor
Capital Appreciation
|
2,065,159 | 3,565,154 | ||||||
|
Artisan
Mid Cap Fund
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- | 2,977,966 | ||||||
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Rio
Tinto plc ADRs
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- | 4,766,255 | ||||||
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During the
year ended December 31, 2008, the Plan’s investments (including gains and
losses on investments bought and sold, as well as
held during the year) depreciated in value as
follows:
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Mutual
Funds
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$ | (6,857,187 | ) | |
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Common
Stock
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(3,841,552 | ) | ||
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Common/collective
trusts
|
(761,151 | ) | ||
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Net
depreciation
|
$ | (11,459,890 | ) |
|
Effective
January 1, 2008, the Plan adopted Statement of Financial Accounting
Standards (SFAS) No. 157, Fair Value
Measurements. SFAS No. 157 defines fair value as the price that
would be received to sell an asset or paid to transfer a liability in the
principal market for the asset or liability or, in the absence of a
principal market, the most advantageous market for the asset or liability,
in an orderly transaction between market participants at the measurement
date.
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6. Investments
Continued
|
SFAS
No. 157 also establishes a fair value hierarchy for those instruments
measured at fair value that distinguishes between assumptions based on
market data (observable inputs) and the Plan’s assumptions (unobservable
inputs). The hierarchy consists of three levels:
Level
1: Quoted prices (unadjusted) in active markets that are accessible
at the measurement date for assets of liabilities.
Level
2: Unobservable prices that are based on inputs not quoted on
active markets, but corroborated by market data.
Level
3: Inputs are unobservable inputs for the asset that are supported
by little or no market activity and that are significant to the fair value
of the underlying asset.
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|
The following
table summarizes the Plan’s financial instruments measured at fair value
on a recurring basis in accordance with SFAS No. 157 as of December 31,
2008:
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Description
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Level
1
|
Level
2
|
Level
3
|
Total
|
||||||||||||
|
Money
market fund
|
$ | 1,652,597 | $ | - | $ | - | $ | 1,652,597 | ||||||||
|
Common
collective trusts
|
6,279,325 | 1,742,672 | 107,203 | 8,129,200 | ||||||||||||
|
Mutual
funds
|
9,982,922 | - | - | 9,982,922 | ||||||||||||
|
Synthetic
guaranteed investment
contracts
|
716,698 | 7,529,635 | 520,086 | 8,766,419 | ||||||||||||
|
Common
stock
|
1,191,615 | - | - | 1,191,615 | ||||||||||||
|
Participant
loans
|
- | - | 2,709,715 | 2,709,715 | ||||||||||||
| $ | 19,823,157 | $ | 9,272,307 | $ | 3,337,004 | $ | 32,432,468 | |||||||||
|
The following
is a reconciliation of the investments in which significant unobservable
inputs (Level 3) were used in determining fair
value:
|
|
Common
Collective Trusts and Synthetic Guaranteed Investment
Contracts
|
|||||||||||||||||||
|
Beginning
|
Net
realized
|
Net
|
Net
transfers
|
Ending
|
|||||||||||||||
|
balance
as of
|
gain/(loss)
|
purchases/
|
in
and/or out
|
balance
as of
|
|||||||||||||||
|
January
1, 2008
|
and
depreciation
|
sales
|
of
Level 3
|
December
31, 2008
|
|||||||||||||||
| $ |
1,179,644
|
$ |
(155,287)
|
$ |
(308,369)
|
$ |
(88,699)
|
$ |
627,289
|
||||||||||
|
Participant
Loans
|
||||
|
Amount
|
||||
|
Beginning
balance January 1, 2008
|
$ | 2,726,590 | ||
|
Issuances
|
1,349,688 | |||
|
Repayments
and settlements
|
(1,366,563 | ) | ||
|
Ending
Balance, December 31, 2008
|
$ | 2,709,715 | ||
|
No
adjustments were required to be made to the financial statements as a
result of adopting SFAS No. 157.
|
||
|
7. Plan
Termination
|
Although it
has not expressed any intention 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 set forth in
ERISA.
|
|
8. Income
Tax
Status
|
The Internal
Revenue Service has determined and informed the Company by a letter dated
August 27, 2003, that the Plan and related trust were designed in
accordance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the
determination letter; however, the Plan Administrator and the Plan’s legal
counsel believe that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Internal Revenue
Code. Therefore, no provision for income taxes has been
included in the Plan’s financial statements.
|
|
|
9. Reconciliation
of
Financial
Statements
to
Form
5500
|
The following
is a reconciliation of assets available for benefits from the financial
statements to the Form 5500 as of December
31:
|
|
2008
|
2007
|
|||||||
|
Assets
available for benefits as presented in the financial
statements
|
$ | 33,855,352 | $ | 43,437,596 | ||||
|
Adjustment
from contract value to fair value for fully benefit-responsive
investment contracts
|
(1,422,884 | ) | (160,708 | ) | ||||
|
Assets
available for benefits as presented in Form 5500
|
$ | 32,432,468 | $ | 43,276,888 | ||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||||||||||
|
Party
in
|
Number
of
|
Current
|
||||||||||||||
|
Interest
|
Identity
of Issue
|
Description
of Investment
|
Units
|
Cost
|
Value
|
|||||||||||
|
Money
Market Fund:
|
||||||||||||||||
|
Mellon
Bank
|
TBC
Pooled Employee Daily Liquidity Fund
|
1,650,587 |
**
|
$ | 1,650,587 | |||||||||||
|
Common/Collective
Trusts:
|
||||||||||||||||
|
SEI
Investments
|
SEI
Stable Asset Fund
|
6,949,170 |
**
|
6,949,170 | ||||||||||||
|
State
Street Bank and Trust Company
|
State
Street Bank and Trust Company S&P 500 Flagship
Securities
|
|||||||||||||||
|
Lending
Series C Fund
|
71,168 |
**
|
1,180,030 | |||||||||||||
|
Total
Common/Collective Trusts
|
8,129,200 | |||||||||||||||
|
Mutual
Funds:
|
||||||||||||||||
|
Dodge
and Cox
|
Dodge
and Cox Stock Fund
|
34,631 |
**
|
2,575,527 | ||||||||||||
|
Harbor
|
Harbor
Capital Appreciation Fund
|
88,633 |
**
|
2,065,159 | ||||||||||||
|
PIMCO
|
PIMCO
Total Return Fund
|
160,712 |
**
|
1,629,621 | ||||||||||||
|
Artisan
|
Artisan
Mid Cap Fund
|
83,257 |
**
|
1,416,202 | ||||||||||||
|
*
|
Putnam
|
American
Funds EuroPacific Growth Fund
|
24,026 |
**
|
671,527 | |||||||||||
|
Blackrock
|
Blackrock
Small Capital Growth Equity Fund
|
31,365 | 454,161 | |||||||||||||
|
Dodge
and Cox
|
Dodge
and Cox International Fund
|
19,448 |
**
|
425,915 | ||||||||||||
|
UAM
Trust Company
|
UAM/ICM
Small Company Fund
|
20,685 |
**
|
382,257 | ||||||||||||
|
Wells
Fargo
|
Wells
Fargo Advantage C&B Mid Cap Fund
|
33,059 |
**
|
347,782 | ||||||||||||
|
*
|
Putnam
|
JP
Morgan Investor Balance Fund
|
1,561 |
**
|
14,771 | |||||||||||
|
Total
Mutual Funds
|
9,982,922 | |||||||||||||||
|
*
denotes a party-in-interest as defined by
ERISA
|
||||||||||||||||
|
**
not required as investments are participant
directed
|
||||||||||||||||
|
See
accompanying report of independent registered public accounting
firm.
|
18
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||||||||||
|
Party
in
|
Number
of
|
Current
|
||||||||||||||
|
Interest
|
Identity
of Issue
|
Description
of Investment
|
Units
|
Cost
|
Value
|
|||||||||||
|
Synthetic
Guaranteed Investment Contracts:
|
||||||||||||||||
|
Monumental
Life Insurance Company
|
Synthetic
GIC, Dwight Managed Target 2, no specified maturity date,
4.24%
|
152,735 |
**
|
$ | 2,542,812 | |||||||||||
|
Monumental
Life Insurance Company
|
Synthetic
GIC, Dwight Managed Target 5, no specified maturity date,
4.24%
|
66,008 |
**
|
1,147,035 | ||||||||||||
|
Monumental
Life Insurance Company
|
Synthetic
GIC, Dwight Intermediate Core Plus,
|
|||||||||||||||
|
no
specified maturity date, 4.24%
|
54,005 |
**
|
771,978 | |||||||||||||
|
State
Street Bank and Trust Company
|
Synthetic
GIC, Dwight Managed Target 2, no specified maturity date,
4.18%
|
146,292 |
**
|
2,435,550 | ||||||||||||
|
State
Street Bank and Trust Company
|
Synthetic
GIC, Dwight Managed Target 5, no specified maturity date,
4.18%
|
63,132 |
**
|
1,097,066 | ||||||||||||
|
State
Street Bank and Trust Company
|
Synthetic
GIC, Dwight Intermediate Core Plus,
|
|||||||||||||||
|
no
specified maturity date, 4.18%
|
54,005 |
**
|
771,978 | |||||||||||||
|
Total
Synthetic Guaranteed Investment Contracts
|
8,766,419 | |||||||||||||||
|
Common
Stock:
|
||||||||||||||||
|
*
|
Rio
Tinto plc ADRs
|
Common
Stock
|
13,402 |
**
|
1,191,615 | |||||||||||
|
*
|
Various
participants
|
Participant
loans (maturing 2009 to 2021 at interest
rates
|
||||||||||||||
|
ranging
from 5.0% to 9.5%)
|
359 |
**
|
2,709,715 | |||||||||||||
|
*
|
Putnam
|
Pending
Account
|
**
|
2,010 | ||||||||||||
|
Total
Investments
|
$ | 32,432,468 | ||||||||||||||
|
*
denotes a party-in-interest as defined by
ERISA
|
||||||||||||||||
|
**
not required as investments are participant
directed
|
||||||||||||||||
|
See
accompanying report of independent registered public accounting
firm.
|
19
|
|
U.S.
BORAX INC. 401(k) PLAN FOR HOURLY EMPLOYEES
|
||
| By: | /s/ Chad Anderson | |
|
Name: Chad
Anderson
|
||
|
General
Manager Human Resources Americas - Rio Tinto Minerals
|
||
| Rio Tinto America Benefits Compliance Committee | ||
|
Exhibit
|
||
|
Number
|
Document
|
|
|
23.1
|
Consent
of Independent Registered Public Accounting
Firm
|