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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the year ended June 30, 2005
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Commission file number: 33-60032
Buckeye Retirement Plan
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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, 2005 and 2004
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BUCKEYE RETIREMENT PLAN
Financial Statements
and Supplemental Schedule
For the Year Ended June 30, 2005
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
Supplemental Schedule
Schedule of Assets Held for Investment Purposes at End of Year 10
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, 2005 and 2004, and
the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the 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, 2005 and 2004, 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.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying
supplemental schedule of assets held for investment purposes at end of
year as of June 30, 2005 is presented for the purpose of complying with
the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974,
and is not a required part of the basic financial statements. The
supplemental schedule has been subjected to the auditing procedures
applied in the audit of the 2005 financial statements and, in our
opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
Memphis, Tennessee
December 15, 2005
BUCKEYE RETIREMENT PLAN
Statements of Net Assets Available for Benefits
June 30, 2005 and 2004
2005 2004
------------------- ----------------
Assets
Investments
Mutual funds $ 79,057,351 $ 70,947,498
Common stock of Buckeye Technologies Inc. 17,248,419 23,119,863
Loans to participants 434,389 314,503
----------------- ----------------
96,740,159 94,381,864
Receivables
Employer contributions 5,703,520 5,751,972
Due from broker for unsettled trades 67,045 -
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5,770,565 5,751,972
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Net assets available for benefits $ 102,510,724 $ 100,133,836
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The accompanying notes are an integral
part of these financial statements.
-3-
BUCKEYE RETIREMENT PLAN
Statements of Changes in Net Assets Available for Benefits
For the Years Ended June 30, 2005 and 2004
2005 2004
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Additions to net assets attributed to:
Investment income (loss)
Net appreciation (depreciation) in fair value of investments $ (3,690,877) $ 18,255,370
Interest and dividends 1,701,824 1,005,881
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(1,989,053) 19,261,251
Contributions
Employer 6,607,348 5,780,032
Participants 3,771,535 3,130,880
Rollovers from other plans 169,860 124,689
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10,548,743 9,035,601
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Total additions 8,559,690 28,296,852
Deductions from net assets attributed to:
Benefits paid to participants 6,141,104 10,042,064
Administrative expenses 41,698 50,302
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6,182,802 10,092,366
Total deductions -------------------------------------
Net increase in net assets 2,376,888 18,204,486
Net assets available for benefits
Beginning of year 100,133,836 81,929,350
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End of year $ 102,510,724 $ 100,133,836
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-4-
BUCKEYE RETIREMENT PLAN
Notes to Financial Statements
June 30, 2005 and 2004
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 upon completion of 1,000
hours of service during their first year 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.
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 1 1/2% 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.
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. The Company did not make a premium
contribution to the Plan for the year ended June 30, 2004.
-5-
BUCKEYE RETIREMENT PLAN
Notes to Financial Statements (Continued)
June 30, 2005 and 2004
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
earnings 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
Participant's 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. Prior
to March 28, 2005, the minimum payable distribution balance was $5,000.
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.
Forfeitures used to reduce employer contributions totaled $51,047 in
2005 and $44,074 in 2004.
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.
-6-
BUCKEYE RETIREMENT PLAN
Notes to Financial Statements (Continued)
June 30, 2005 and 2004
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, 2005 and 2004 is as follows:
2005 2004
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Fidelity Growth and Income Fund $ 23,216,156 $ 23,963,758
Buckeye Technologies Inc. common stock 17,248,419 23,119,863
Spartan U.S. Equity Index Fund 13,385,245 12,727,896
Neuberger Berman Genesis Fund 10,775,368 7,208,301
Davis New York Venture Fund, Inc. 6,880,742 5,615,796
Fidelity Retirement Money Market Portfolio 6,564,544 5,627,576
Fidelity Puritan Fund 5,929,535 5,934,577
During 2005 and 2004, the Plan's investments (including investments
bought, sold and held during the year) appreciated (depreciated) in
value as follows:
2005 2004
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Mutual funds $ 3,825,464 $ 8,740,167
Common stock of Buckeye Technologies Inc. (7,516,341) 9,515,203
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$(3,690,877) $18,255,370
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-7-
BUCKEYE RETIREMENT PLAN
Notes to Financial Statements (Continued)
June 30, 2005 and 2004
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:
2005 2004
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Net assets
Common stock of Buckeye Technologies $4,299,120 $6,419,482
Inc.
Changes in net assets
Net appreciation (depreciation) in
fair value of investments (1,832,331) 2,737,799
Benefits paid to participants (287,702) (461,703)
Administrative expenses (152) (3,993)
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, 2005, interest rates on loans to participants ranged from 5.0%
to 9.75%. Principal and interest is repaid ratably through payroll
deductions.
Note 6 - Related party transactions
The Plan purchased $4,752,964 and sold $3,600,144 of the plan sponsor's
common stock during the year ended June 30, 2005. During the year ended
June 30, 2004, the Plan purchased $4,160,849 and sold $5,380,925 of the
plan sponsor's common stock. The common stock of the plan sponsor held
by the Plan at June 30, 2005 and 2004 had a market value of $17,248,419
and $23,119,863, respectively.
Plan investments include interests in certain mutual funds managed by
Fidelity Investments Institutional Operations Company, Inc. 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 Fidelity totaled $41,698 and $50,302 for the years ended June
30, 2005 and 2004, respectively.
The Company provides the Plan with certain management and administrative
services for which no fees are charged.
-8-
BUCKEYE RETIREMENT PLAN
Notes to Financial Statements (Continued)
June 30, 2005 and 2004
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 17% of the Plan's net assets available
for benefits as of June 30, 2005. 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.
-9
SUPPLEMENTAL SCHEDULE
BUCKEYE RETIREMENT PLAN
Schedule of Assets Held for Investment Purposes at End of Year
EIN: 62-1518973 / Plan Number: 001
June 30, 2005
Current
(a) b)(c) Identity of Issue/Description (d) Cost ** (e) Value
--- ------------------------------------------------------------- ----------- ------------
Mutual funds
* Fidelity Growth and Income Fund $ - $ 23,216,156
* Spartan U.S. Equity Index Fund - 13,385,245
Neuberger Berman Genesis Fund - 10,775,368
Davis New York Venture Fund, Inc. - 6,880,742
* Fidelity Retirement Money Market Portfolio - 6,564,544
* Fidelity Puritan Fund - 5,929,535
* Fidelity Diversified International Fund - 4,617,446
Allianz CCM Capital Appreciation Fund - 2,456,034
PIMCo Total Return Institutional Fund - 947,303
* Fidelity Freedom 2015 Fund - 786,835
* Fidelity Freedom 2010 Fund - 702,285
* Fidelity Freedom 2020 Fund - 665,029
* Fidelity Freedom 2025 Fund - 486,064
* Fidelity Capital Appreciation Fund - 480,688
* Fidelity Freedom 2030 Fund - 477,813
* Fidelity Freedom 2040 Fund - 329,975
* Fidelity Freedom 2035 Fund - 182,768
* Fidelity Freedom Income Fund - 105,337
* Fidelity Freedom 2005 Fund - 46,638
* Fidelity Freedom 2000 Fund - 21,546
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79,057,351
Common stock
* Buckeye Technologies Inc. common stock 28,382,117 17,248,419
Loans to participants
Participant loans, interest rates ranging from 5.0% to 9.75% - 434,389
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Total assets held for investment purposes at end of year $ 28,382,117 $ 96,740,159
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* Represents a party-in-interest.
** Cost omitted for participant-directed investments.
-10-
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/ KRISTOPHER J. MATULA
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Kristopher J. Matula, Executive Senior Vice President
and Chief Financial Officer
Date: December 29, 2005