Buckeye Retirement Plan June 30, 2006
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
11-K
ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the
year ended June 30, 2006
Commission
file number: 33-60032
Buckeye
Retirement Plan
Buckeye
Technologies Inc.
1001
Tillman Street, Memphis, TN 38112
901-320-8100
Plan
Number 002
Internal
Revenue Service — Employer Identification No. 62-1518973
June
30,
2006 and 2005
BUCKEYE
RETIREMENT PLAN
Financial
Statements
For
the
Year Ended June 30, 2006
BUCKEYE
RETIREMENT PLAN
Contents
|
Page
|
Independent
Auditor's Report
|
2
|
|
|
Statements
of Net Assets Available for Benefits
|
3
|
|
|
Statements
of Changes in Net Assets Available for Benefits
|
4
|
|
|
Notes
to Financial Statements
|
5-9
|
Independent
Auditor's Report
To
the
Buckeye Investment Committee
Buckeye
Retirement Plan
Memphis,
Tennessee
We
have
audited the accompanying statements of net assets available for benefits of
Buckeye Retirement Plan as of June 30, 2006 and 2005, 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 standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for benefits of Buckeye Retirement
Plan at June 30, 2006 and 2005, 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.
/s/
Thompson & Dunavant
Memphis,
Tennessee
November
13, 2006
BUCKEYE
RETIREMENT PLAN
Statements
of Net Assets Available for Benefits
June
30,
2006 and 2005
|
|
|
2006
|
|
|
2005
|
|
Assets
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
Mutual
funds
|
|
$
|
95,564,050
|
|
$
|
79,057,351
|
|
Common
stock of Buckeye Technologies Inc.
|
|
|
14,220,360
|
|
|
17,248,419
|
|
Loans
to participants
|
|
|
531,626
|
|
|
434,389
|
|
|
|
|
110,316,036
|
|
|
96,740,159
|
|
Receivables
|
|
|
|
|
|
|
|
Employer
contributions
|
|
|
6,162,660
|
|
|
5,703,520
|
|
Participant
contributions
|
|
|
169,711
|
|
|
-
|
|
Due
from broker for unsettled trades
|
|
|
3,276
|
|
|
67,045
|
|
|
|
|
6,335,647
|
|
|
5,770,565
|
|
Net
assets available for benefits
|
|
$
|
116,651,683
|
|
$
|
102,510,724
|
|
The
accompanying notes are an integral
part
of
these financial statements.
BUCKEYE
RETIREMENT PLAN
Statements
of Changes in Net Assets Available for Benefits
For
the
Years Ended June
30,
2006 and 2005
|
|
2006
|
|
2005
|
|
Additions
to net assets attributed to:
|
|
|
|
|
|
|
|
Investment
income (loss)
|
|
|
|
|
|
|
|
Net
appreciation (depreciation) in fair value of investments
|
|
$
|
2,064,941
|
|
$
|
(3,690,877
|
)
|
Interest
and dividends
|
|
|
4,691,055
|
|
|
1,701,824
|
|
|
|
|
6,755,996
|
|
|
(1,989,053
|
)
|
Contributions
|
|
|
|
|
|
|
|
Employer
|
|
|
7,166,002
|
|
|
6,607,348
|
|
Participants
|
|
|
4,409,789
|
|
|
3,771,535
|
|
Rollovers
from other plans
|
|
|
4,231
|
|
|
169,860
|
|
|
|
|
11,580,022
|
|
|
10,548,743
|
|
Total
additions
|
|
|
18,336,018
|
|
|
8,559,690
|
|
Deductions
from
net assets attributed to:
|
|
|
|
|
|
|
|
Benefits
paid to participants
|
|
|
4,158,013
|
|
|
6,141,104
|
|
Administrative
expenses
|
|
|
37,046
|
|
|
41,698
|
|
Total
deductions
|
|
|
4,195,059
|
|
|
6,182,802
|
|
Net
increase in net assets
|
|
|
14,140,959
|
|
|
2,376,888
|
|
Net
assets available for benefits
|
|
|
|
|
|
|
|
Beginning
of
year
|
|
|
102,510,724
|
|
|
100,133,836
|
|
End
of
year
|
|
$
|
116,651,683
|
|
$
|
102,510,724
|
|
The
accompanying notes are an integral
part
of
these financial statements.
BUCKEYE
RETIREMENT PLAN
Notes
to
Financial Statements
June
30,
2006 and 2005
Note
1 -
Description of Plan
The
following description of Buckeye Retirement Plan provides only general
information. Readers should refer to the Plan Agreement for a more complete
description of the Plan's provisions.
General
Buckeye
Retirement Plan (the "Plan") is a defined contribution plan covering all
full-time employees of Buckeye Technologies Inc. and its wholly-owned
subsidiaries (collectively the "Company"). Employees, as defined in the Plan
Agreement, are eligible to make employee deferral contributions and rollover
contributions to the Plan and receive Company matching contributions upon date
of hire in an eligible category of employment. Employees are eligible for the
Company foundation contribution upon completion of 1,000 hours of service either
during the first twelve months of employment or during any plan year (July
1 to
June 30). The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Contributions
Participants
may defer up to 100% of their annual compensation and may also contribute a
portion or all of incentive compensation, subject to Internal Revenue Service
limitations. Effective July 1, 2004, the Plan was restated to discontinue the
premium contribution referred to below and to allow the Company to make matching
contributions to the Plan equal to 50% of the first 4% of compensation that
a
participant contributes to the Plan not to exceed $2,000.
Prior
to
July 1, 2004, the Company made a premium contribution, determined annually
by
the Board of Directors, that was based upon the Company's financial performance.
As required by the Plan Agreement, subsequent to June 30, 1996, all Company
premium contributions were invested in the common stock of Buckeye Technologies
Inc. Existing premium contribution account balances based on premium
contributions made in prior years shall continue to be held and invested in
accordance with the terms of the Plan.
Foundation
contributions, as defined in the Plan Agreement, made annually by the Company
are computed based upon the following formula:
Contribution
= (A+B)C
A
= 1%, B
= .5% multiplied by number of years service not to exceed twenty (20) years.
C =
Plan year compensation. The minimum contribution is 1½% of eligible compensation
and the maximum contribution is 11% of eligible compensation.
Foundation
contributions are generally funded in the six month period following the Plan's
year end.
BUCKEYE
RETIREMENT PLAN
Notes
to
Financial Statements (Continued)
June
30,
2006 and 2005
Note
1 -
Description of Plan (continued)
Participant
accounts
Each
participant's account is credited with the participant's deferral contribution,
the Company's matching contribution, and an allocation of the Company's
foundation contributions, plus a proportionate interest in the investment
earnings or losses of the funds in which the contributions are invested.
Allocations are based upon the participant's eligible compensation or account
balances, as defined by the Plan Agreement. The benefit to which a participant
is entitled is the benefit that can be provided from the participant's
account.
Vesting
Participants
are immediately vested in their deferral contributions plus earnings thereon.
Participants vest in the Company matching contributions and related earnings
at
the rate of 20% per year, with 100% vesting after completion of five years
of
credited service. Participants are 100% vested in the Company foundation
contributions and related earnings after completion of five years of credited
service. In the event of death, disability, normal retirement age (65), or
if
the Plan is discontinued, participants become 100% vested in all account
balances.
Payment
of benefits
Participants
may choose to receive account distributions either in the form of a lump sum
payment or installments over a period of time as defined in the Plan Agreement.
However, if the participant's vested balance does not exceed $1,000, the Plan
may distribute funds in the form of a lump sum payment without the consent
of
the participant.
Forfeitures
If
an
employee terminates before his or her account has become fully vested, such
portion of the account is forfeited. Participant forfeitures are used to reduce
future employer contributions. There were no forfeitures used to reduce employer
contributions in 2006. Forfeitures used to reduce employer contributions totaled
$51,047 in 2005. Forfeitures used to pay plan expenses totaled $1,525 in 2006
and $2,451 in 2005.
Plan
termination
Although
it has not expressed any intent to do so, the Company has the right to modify
or
terminate the Plan at any time subject to the provisions of ERISA and the Plan
Agreement. In the event of termination, the Plan provides that all affected
participants' interests will become fully vested and
nonforfeitable.
BUCKEYE
RETIREMENT PLAN
Notes
to
Financial Statements (Continued)
June
30,
2006 and 2005
Note
2 -
Summary of significant accounting policies
Investments
Investments
are stated at fair value based upon quoted market prices. Purchases and sales
of
securities are recorded on a trade-date basis. Interest income is recorded
on
the accrual basis and dividends are recorded on the ex-dividend
date.
Benefit
payments
Benefit
payments to participants are recorded upon distribution.
Use
of
estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and
assumptions which affect certain reported amounts and disclosures. Actual
results may differ from those estimates.
Note
3 -
Investments
The
Plan
allows participants to direct their contributions and account balances among
different investment options offered by Fidelity Management Trust Company.
The
Plan currently allows participants to invest in twenty different mutual funds
offered by Fidelity Management Trust Company and Buckeye Technologies Inc.
common stock.
The
fair
value of the individual investments which represent five percent (5%) or more
of
the Plan's net assets available for benefits as of June 30, 2006 and 2005 is
as
follows:
|
|
2006
|
|
2005
|
|
Fidelity
Growth
and Income Fund
|
|
$
|
21,336,524
|
|
$
|
23,216,156
|
|
Neuberger
Berman Genesis Fund
|
|
|
16,446,986
|
|
|
10,775,368
|
|
Buckeye
Technologies Inc. common stock
|
|
|
14,220,360
|
|
|
17,248,419
|
|
Spartan
U.S. Equity Index Fund
|
|
|
13,638,286
|
|
|
13,385,245
|
|
Fidelity
Diversified International Fund
|
|
|
10,341,762
|
|
|
4,617,446
|
|
Davis
New York Venture Fund, Inc.
|
|
|
8,324,311
|
|
|
6,880,742
|
|
Fidelity
Retirement Money Market Portfolio
|
|
|
6,842,981
|
|
|
6,564,544
|
|
Fidelity
Puritan Fund
|
|
|
6,427,329
|
|
|
5,929,535
|
|
*
Presented for comparative purposes only. Does not represent 5% or more of the
fair value of the Plan's net assets as of June 30, 2005.
BUCKEYE
RETIREMENT PLAN
Notes
to
Financial Statements (Continued)
June
30,
2006 and 2005
During
2006 and 2005, the Plan's investments (including investments bought, sold and
held during the year) appreciated (depreciated) in value as
follows:
|
|
2006
|
|
2005
|
|
Mutual
funds
|
|
$
|
2,504,438
|
|
$
|
3,825,464
|
|
Buckeye
Technologies Inc. common stock
|
|
|
(439,497
|
)
|
|
(7,516,341
|
)
|
|
|
$
|
2,064,941
|
|
$
|
(3,690,877
|
)
|
Note
4 -
Nonparticipant-directed investments
Information
about the net assets and the significant components of the changes in net assets
relating to the nonparticipant-directed investments is as follows:
|
|
2006
|
|
2005
|
|
Net
assets
|
|
|
|
|
|
Buckeye
Technologies Inc. common stock
|
|
$
|
3,982,362
|
|
$
|
4,299,120
|
|
Changes in net assets
|
|
|
|
|
|
|
|
Net
depreciation in fair value of investments
|
|
$
|
(108,938
|
)
|
$
|
(1,832,331
|
)
|
Benefits
paid to participants
|
|
|
(204,593
|
)
|
|
(287,702
|
)
|
Administrative
expenses
|
|
|
(128
|
)
|
|
(152
|
)
|
Note
5 -
Loans to participants
Participants
that qualify for in-service hardship withdrawals, as defined in the Plan
Agreement, may borrow up to the lesser of their deferral contributions account
or $50,000. Any such hardship loan must be for at least $1,000 or the balance
of
the participant's deferral contributions account, if less. Loan repayment
periods range from one to five years. The loans are collateralized by the
balance in the participants' account and bear interest at a rate commensurate
with local prevailing rates as determined by the plan administrator. As of
June
30, 2006, interest rates on loans to participants ranged from 5.00% to 9.75%.
Principal and interest is repaid ratably through payroll
deductions.
BUCKEYE
RETIREMENT PLAN
Notes
to
Financial Statements (Continued)
June
30,
2006 and 2005
Note
6 -
Related party transactions
The
Plan
purchased $2,675,160 and sold $7,001,242 of the plan sponsor's common stock
during the year ended June 30, 2006. During the year ended June 30, 2005, the
Plan purchased $4,752,964 and sold $3,600,144 of the plan sponsor's common
stock. The common stock of the plan sponsor held by the Plan at June 30, 2006
and 2005 had a market value of $14,220,360 and $17,248,419,
respectively.
Plan
investments include interests in certain mutual funds managed by Fidelity
Investments Institutional Operations Company, Inc. Fidelity Management Trust
Company, an affiliate of Fidelity Investments Institutional Operations Company,
Inc., is the trustee as defined by the Plan and, therefore, these investments
and related investment transactions qualify as a party-in-interest. Fees paid
to
the trustee totaled $37,046 and $41,698 for the years ended June 30, 2006 and
2005, respectively.
The
Company provides the Plan with certain management and administrative services
for which no fees are charged.
Note
7 -
Tax status
The
Plan
has received a determination letter from the Internal Revenue Service stating
that the Plan qualifies under the applicable sections of the Internal Revenue
Code (IRC) and is, therefore, not subject to tax under present income tax law.
The Plan, which has been amended since receiving the determination letter,
is
required to operate in conformity with the IRC to maintain its qualification.
Management is not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.
Note
8 -
Concentration of market risk
The
Plan
has a significant portion of its assets invested in Buckeye Technologies Inc.
common stock. This investment in Buckeye Technologies Inc. common stock
approximates 12% of the Plan's net assets available for benefits as of June
30,
2006. As a result of this concentration, any significant reduction in the market
value of this stock could adversely affect individual participant accounts
and
the net assets of the Plan.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Retirement
Plan
Committee of the Employee Retirement Plans for Buckeye Technologies Inc. has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
BUCKEYE
RETIREMENT PLAN
By: /s/
Steven
G. Dean
Steven
G.
Dean, Vice President and Chief Financial Officer
Date:
December _________, 2006