WILMINGTON TRUST FIDUCIARY SERVICES COMPANY COLLECTIVE INVESTMENT TRUST FOR EMPLOYEE BENEFIT PLANS GIC PORTFOLIO FINANCIAL STATEMENTS

Transcription

1 WILMINGTON TRUST FIDUCIARY SERVICES COMPANY COLLECTIVE INVESTMENT TRUST FOR EMPLOYEE BENEFIT PLANS GIC PORTFOLIO FINANCIAL STATEMENTS FOR THE PERIOD FROM SEPTEMBER 1, 2015 TO SEPTEMBER 30, 2015 (DATE OF DISSOLUTION) WITH INDEPENDENT AUDITOR'S REPORT

2 GIC Portfolio CONTENTS Independent Auditor's Report... 1 Statement of Operations... 2 Statement of Changes in Net Assets... 3 Financial Highlights... 4 Notes to the Financial Statements... 5

3 INDEPENDENT AUDITOR'S REPORT Wilmington Trust Fiduciary Services Company, Trustee of the GIC Portfolio of Wilmington Trust Fiduciary Services Company Report on the Financial Statements We have audited the accompanying financial statements of the GIC Portfolio, a separate fund of Wilmington Trust Fiduciary Services Company, which comprise the statements of operations, changes in net assets, and the financial highlights for the period from September 1, 2015 to September 30, 2015 (date of dissolution), and the related notes to the financial statements. These financial statements and Financial Highlights are hereafter collectively referred to as financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the results of the GIC Portfolio's operations, changes in its net assets and its financial highlights for the period from September 1, 2015 to September 30, 2015 (date of dissolution) in accordance with accounting principles generally accepted in the United States of America. December 20, S. Utica Place, Suite 200, Tulsa, OK P F

4 Wilmington Trust Fiduciary Services Company GIC Portfolio Statement of Operations For the period from September 1, 2015 through September 30, 2015 (Date of Dissolution) Investment income Interest income $ 279 Total investment income 279 Expenses Professional fees 1,360 Portfolio operating expense waivers - see Note 3 (1,360) Net expenses - Net investment income 279 Contributions made by investment manager Payments from investment manager - see Note 4 33,991 Total contributions from investment manager - see Note 4 33,991 Net increase in net assets resulting from operations $ 34,270 See Notes to the Financial Statements. 2

5 Wilmington Trust Fiduciary Services Company GIC Portfolio Statement of Changes in Net Assets For the period from September 1, 2015 through September 30, 2015 (Date of Dissolution) Increase in net assets resulting from operations: Net investment income $ 279 Payments from investment manager 33,991 Net increase in net assets resulting from operations 34,270 Fund unit transactions: Proceeds from units sold 1,243,419 Value of units redeemed (63,349,033) Decrease in net assets resulting from fund unit transactions (62,105,614) Net decrease in net assets (62,071,344) Net assets Net assets in liquidation, beginning of period 62,071,344 Net assets, end of period $ - See Notes to the Financial Statements. 3

6 Wilmington Trust Fiduciary Services Company GIC Portfolio Financial Highlights For the period from September 1, 2015 through September 30, 2015 (Date of Dissolution) Class 0IM Net asset value, beginning of period $ Increase in net assets from investment operations: Net investment income (1) - Payments from investment manager (1) Net increase in net assets resulting from operations Liquidating redemption Net asset value, end of period $ - Total return (2) 0.061% Supplemental Data Ratio to average net assets: Expenses 0.000% Net investment income 0.061% Fund Unit Activity Units, beginning of the period 1,723,114 Issued 35,242 Redeemed (1,758,356) Units, end of period - (1) Based on average units outstanding. (2) Absent payment from investment manager, the total return would have been 0.00%. See Notes to the Financial Statements. 4

7 GIC Portfolio of the Wilmington Trust Fiduciary Services Company Notes to the Financial Statements September 30, 2015 (Date of Dissolution) Note 1 Organization Wilmington Trust Fiduciary Services Company (the "Trust") was created pursuant to a declaration of trust dated February 2, 1987, as last amended October 10, The Trust is organized and governed by the laws of the State of New Jersey, except to the extent pre-empted or superseded by the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or other governing federal law. Wilmington Trust Fiduciary Services Company (the "Trustee") serves as the Trustee of the Trust. The purpose of the Trust is to allow plan sponsors of retirement plans which qualify for exemption from federal income taxation pursuant to Section 501(a) of the Internal Revenue Code, as amended (the "Code"), by reason of qualifying under Section 401(a) of the Code; tax-exempt governmental plans under Section 414(d) or Section 818(a)(6) of the Code; eligible deferred compensation plans under Section 457(b) of the Code established by a government employer; or group trusts or separate accounts consisting solely of assets of the foregoing, collectively to invest plan assets in investments under the Trust. The Trust consists of separate investment portfolios with differing investment objectives, which are available for investment by participant plans. An eligible plan may join the Trust, subject to the Trustee's acceptance, and become a participating plan by executing participation materials specified by the Trustee. The Trustee is a wholly owned subsidiary of Wilmington Trust Retirement and Institutional Services Company, a wholly owned subsidiary of Wilmington Trust Corporation, which in turn is a wholly owned subsidiary of M&T Corporation. The Trustee is responsible for maintaining and administering the Trust and its various portfolios and also serves as the investment adviser (the "Investment Adviser") to the portfolios. GIC Portfolio (the "Portfolio") was one of the portfolios of the Trust and offered one share class 0IM for investment by eligible participant plans. The Portfolio was dissolved on September 30, The Portfolio was created during November 2000 by the Trustee, with the objective to generate a total return in excess of the benchmark BOA/Merrill Lynch 1 year US Treasury Note Index by investing in a pool of fixed income securities, primarily insurance and bank investment contracts for the purpose of offering stability of principal, while maximizing current income and providing book value liquidity for individual plan participant withdrawals. The Trustee appointed UBS Asset Management (Americas) Inc. (formerly known as USB Global Asset Management) as subadviser to the Portfolio. State Street Bank and Trust Company provided transfer agency services for the Portfolio. Note 2 Significant Accounting Policies The financial statements have been prepared in conformity with U.S. generally accepted accounting principles and the Trust agreement which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Security Transactions and Related Investment Income and Expense Security transactions were accounted for on the trade date (the date the order to buy or sell was executed). Interest income was recorded on the accrual basis. Costs used in determining realized gains (losses) on the security transactions were calculated on a first-in, first-out basis. 5

8 GIC Portfolio of the Wilmington Trust Fiduciary Services Company Notes to the Financial Statements (continued) September 30, 2015 (Date of Dissolution) Units Issued and Redeemed Unit purchases and redemptions were transacted at the net asset value per unit of the Portfolio determined as of the close of each business day. The Portfolio issued new units and repurchased outstanding units on a daily basis at the net asset value per unit. Investment income earned was retained in the Portfolio and included in the determination of unit values. Income Taxes The Trust is a qualified Trust under Section 401(a) of the Code and, because of this qualification, no provision for income taxes is required. It is intended that the Trust and the Portfolio be exempt from taxation under Section 501(a) of the Code and qualify as a "group trust" under Revenue Ruling and other applicable Internal Revenue Service rules and regulations. ASC , Accounting for Uncertainty in Income Taxes, provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Portfolio's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense. The Trustee evaluated uncertain tax positions in the United States and all major foreign jurisdictions for all open tax years for the Portfolio since the Portfolio's inception and determined that the Portfolio's tax positions were deemed to be "more-likely-thannot" as of September 30, The Trust's federal fiduciary tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service. The Portfolio did not accrue any interest or penalties related to uncertain tax liabilities as of September 30, Note 3 Expenses Trustee Fee The Trustee was entitled to receive an annual fee for trustee and administrative services provided to the Portfolio. These fees were based upon the average daily value of the Portfolio. These fees were accrued daily, payable in arrears as of the close of business in New York, New York (normally, 4:00 p.m. U.S. Eastern time) on the last business day of each calendar month, and charged against the assets invested in the Portfolio at a rate of three basis points. The Trustee voluntarily waived its fee for the one-month period ended September 30, Portfolio Operating Expenses In addition to the fees described above, the Portfolio bore expenses related to its operation, including, but not limited to, audit, custody, tax and legal services. Expenses incurred in connection with the investment and reinvestment of Portfolio assets, including, without limitation, transfer agency fees and other expenses, were also charged against the Portfolio. For the one-month period ended September 30, 2015, the Trustee paid such operating expenses on behalf of the Portfolio. Note 4 Payments from Investment Manager On March 17, 2009, the Portfolio entered into a fee waiver, fee reimbursement agreement with UBS Global Asset Management (Americas), Inc. effective February 1, This waiver and reimbursement could be discontinued by UBS Asset Management (Americas), Inc. at any time without prior notice to plan sponsors or participants in the Portfolio. 6

9 GIC Portfolio of the Wilmington Trust Fiduciary Services Company Notes to the Financial Statements (continued) September 30, 2015 (Date of Dissolution) Beginning July 2011, UBS Asset Management (Americas), Inc. made voluntary cash payments on a monthly basis to maintain an annual crediting rate of 0.75% of the Portfolio's book value (gross of ordinary operating expenses). These voluntary payments could have been discontinued by UBS Asset Management (Americas), Inc. at any time without prior notice to plan sponsors or participants in the Portfolio. During the period ended September 30, 2015, UBS Asset Management (Americas), Inc. made voluntary payments in the amount of $33,991. Note 5 Related Party Transactions The Trustee is a non-depository bank that provides trust and custodial services for tax-advantaged retirement plans as well as trust and investment services to business pension and retirement plans. The Trustee is responsible for managing the Trust's investment and business affairs. For such services provided by the Trustee to the Trust, the Trustee received Trustee fees which were not charged to the Portfolio but to the plans themselves or their plan sponsor. Note 6 Indemnification The Trust's organizational documents provide limited indemnification for the Trustee, and its directors, officers, employees and agents against liabilities arising in connection with the performance of their duties to the Trust. The Trust's maximum exposure under this arrangement is unknown as this would be dependent on future claims that may be made against the Trust. The risk of material loss from such claims is considered remote. Note 7 Subsequent Events The Trustee has evaluated the effects of subsequent events on the Portfolio's financial statements through December 20, 2016, which is the date the financial statements were available to be issued, and has determined that there are no material subsequent events that would require adjustment or disclosure in the Portfolio's financial statements through this date. 7