SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
COMMISSION FILE NUMBER 0-11688
A. American Ecology Corporation 401(k) Savings and Retirement Plan and Trust
B. American Ecology Corporation
300 East Mallard, Suite 300
Boise, Idaho 83706
SIGNATURES
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.
AMERICAN ECOLOGY CORPORATION 401(K) SAVINGS AND RETIREMENT PLAN AND TRUST
Date: 6/25/2004 /s/ James R. Baumgardner
--------------- -------------------------------
James R. Baumgardner
As Trustee for the Plan
AMERICAN ECOLOGY CORPORATION
401(K) SAVINGS AND RETIREMENT PLAN
AND TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
AND
FINANCIAL STATEMENTS
WITH
SUPPLEMENTAL INFORMATION
DECEMBER 31, 2003 AND 2002
CONTENTS
PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 3
NOTES TO FINANCIAL STATEMENTS 4-8
SUPPLEMENTAL INFORMATION
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) 9-10
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees
American Ecology Corporation 401(k) Savings and Retirement Plan and Trust
We have audited the accompanying statement of net assets available for benefits
of American Ecology Corporation 401(k) Savings and Retirement Plan and Trust
(the Plan) as of December 31, 2003 and 2002 and the related statement of changes
in net assets available for benefits for the year ended December 31, 2003.
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 American Ecology
Corporation 401(k) Savings and Retirement Plan and Trust as of December 31, 2003
and 2002 and the changes in its net assets available for benefits for the year
ended December 31, 2003 in conformity with accounting principles generally
accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental Schedule of Assets (Held at End
of Year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audit of the basic financial statements for the year ended December 31, 2003
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ Moss Adams LLP
Seattle, Washington
June 4, 2004
2
AMERICAN ECOLOGY CORPORATION 401(K) SAVINGS
AND RETIREMENT PLAN AND TRUST
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
2003 2002
---------- ----------
ASSETS
Investments, at fair value
Pooled separate accounts $8,298,013 $7,547,611
Common stock of American Ecology Corporation - 205,302
Participant loans 267,361 375,680
Investments, at contract value 87,796 158,863
Receivables
Employer match contribution - 28
---------- ----------
TOTAL ASSETS 8,653,170 8,287,484
LIABILITIES
Accrued liabilities 452 -
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $8,652,718 $8,287,484
========== ==========
See accompanying notes. 3
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AMERICAN ECOLOGY CORPORATION 401(K) SAVINGS
AND RETIREMENT PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2003
--------------------------------------------------------------------------------
ADDITIONS
Investment income
Net appreciation in fair value of common stock $ 100,634
Net appreciation in fair value of pooled separate accounts 1,691,611
Interest 16,514
----------
1,808,759
----------
Contributions
Employer 189,590
Employee 420,800
Rollovers 25,969
----------
636,359
----------
Total additions 2,445,118
----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO
Benefits paid to participants 2,044,919
Administrative expenses 34,965
----------
Total deductions 2,079,884
----------
NET INCREASE IN ASSETS AVAILABLE FOR BENEFITS 365,234
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 8,287,484
----------
End of year $8,652,718
==========
See accompanying notes. 4
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AMERICAN ECOLOGY CORPORATION 401(K) SAVINGS
AND RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF PLAN
The following brief description of the American Ecology Corporation 401(k)
Savings and Retirement Plan and Trust (the Plan) is provided for general
information purposes only. Participants should refer to the Plan document
for complete information regarding the Plan's definitions, benefits,
eligibility, and other matters.
GENERAL - The Plan is a defined contribution plan covering all employees of
American Ecology Corporation and its subsidiaries (the Company) that have
90 days of service and are age eighteen or older. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Prior to January 1, 2003, all employees of the Company who had one year of
service and were age eighteen or older were eligible to participate in the
Plan. A year of service was defined as a 12-consecutive month period in
which an employee completed at least 1,000 hours of service.
CONTRIBUTIONS - Each year, participants may defer up to 100 percent of
their compensation as defined by the Plan, up to the maximum deferrable
amount allowed by the Internal Revenue Service. Participants may elect to
deposit their contributions in any of the investment options available.
Participants may also contribute amounts representing distributions from
other qualified plans. Participants direct the contributions into various
investment options offered by the Plan. The Company contributes a
discretionary matching contribution, which is determined by the Employer.
For 2003 and 2002, the Company established the discretionary matching
contribution for all participants equal to 55 percent of the amount of
compensation deferred by each participant for the calendar quarter not
exceeding 6 percent of compensation.
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's elective deferral, the Company's matching contribution and an
allocation of Plan earnings and charged with an allocation of
administrative expenses. Allocations are based on participant earnings or
account balances as defined. Forfeitures of terminated participant's
nonvested benefits are applied to pay administrative expenses and reduce
the Company's future contributions to the Plan. At December 31, 2003,
forfeited nonvested accounts totaled $19,627. This amount will be used to
reduce future employer contributions.
5
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AMERICAN ECOLOGY CORPORATION 401(K) SAVINGS
AND RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF PLAN (Continued)
VESTING - The vesting schedule is as follows on Company matching
contributions and actual earnings thereon:
Percentage of
Years of Service Vested Interest
------------------ -----------------
1 year 20%
2 years 60%
3 years 100%
The Plan provides for participants to be 100% vested upon death, permanent
disability or the attainment of age 65.
PARTICIPANT LOANS - Participants may borrow from their fund accounts a
minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of
their account balance. The term of the loan will not exceed 5 years except
in the case of a loan for the purpose of acquiring a primary residence. The
term of the loan will be determined by the Administrator at the time the
loan is made. The loans are secured by the balance in the participant's
account and bear interest at a rate commensurate with local prevailing
rates as determined by the Plan administrator. Interest rates range from
4.0% to 11.5%. Principal and interest is paid ratably through bi-weekly
payroll deductions.
PAYMENT OF BENEFITS - Upon normal retirement or death, vested benefits due
to participants and their beneficiaries may be paid in the form of either a
lump-sum distribution or fixed period annuities.
RISK - Investment securities are exposed to various risks, such as interest
rate, market, and credit risk. It is reasonably possible, given the level
of risk associated with investment securities that changes in the near term
could materially affect the investment amounts reported in the financial
statements.
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires the plan
administrator to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results may differ
from those estimates.
6
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AMERICAN ECOLOGY CORPORATION 401(K) SAVINGS
AND RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (Continued)
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at fair value except for its benefit-responsive investment
contracts, which are valued at contract value (see Note 3). All other
investments are carried at their fair value measured by quoted market
prices.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded on the ex-dividend date. Investment income is
recorded as earned.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
NOTE 3 - GUARANTEED INTEREST ACCOUNTS
In accordance with FASB statement No. 107, the fair values of the
guaranteed interest accounts held by the Plan is as follows at December 31:
2003 2002
------- -------
Guaranteed interest account with interest at rates of
6.50% to 6.90% as of December 31, 2002, maturing
on December 31, 2002. $ - $27,653
Guaranteed interest account with interest at rates of
4.66% to 6.10% at December 31, 2003 and 4.10% to
6.10% as of December 31, 2002, maturing on
December 31, 2003. 12,171 39,518
Guaranteed interest account with interest at rates of
3.65% to 4.10% as of December 31, 2003 and 3.63%
to 4.35% as of December 31, 2002, maturing on
December 31, 2004. 56,010 89,077
7
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AMERICAN ECOLOGY CORPORATION 401(K) SAVINGS
AND RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
NOTE 3 - GUARANTEED INTEREST ACCOUNTS (Continued)
2003 2002
------- -------
Guaranteed interest account with interest at rates of
2.05% to 5.80% as of December 31, 2003 and 2.90% to
5.80% as of December 31, 2002, maturing on December
31, 2005. $16,990 $1,389
Guaranteed interest account with interest at rates of
6.05% to 6.60% as of December 31, 2003 and 6.05% to
6.11% as of December 31, 2002, maturing on December
31, 2006. 1,216 1,072
Guaranteed interest account with interest at rates of
2.96% to 5.71% as of December 31, 2003 and 5.41% to
5.71% as of December 31, 2002, maturing on December
31, 2007. 916 846
Guaranteed interest account with interest at rates of
6.01% to 6.99% as of December 31, 2003 and 5.15% to
6.01% as of December 31, 2002, maturing on December
31, 2008. 230 215
Guaranteed interest account with interest at rates of
6.99% to 7.00% as of December 31, 2003 and
December 31, 2002, maturing on December 31, 2009. 274 250
Guaranteed interest account with interest at a rate of
5.78% as of December 31, 2003 and December 31,
2002, maturing on December 31, 2010. 269 248
Guaranteed interest account with interest at rates of
4.90% as of December 31, 2003 and 4.98% to 5.55% as
of December 31, 2002, maturing on December 31,
2011. 455 509
Guaranteed interest account with interest at rates of
3.60% to 4.00% as of December 31, 2003 and 4.2% as
of December 31, 2002, maturing on December 31,
2012. 188 14
8
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AMERICAN ECOLOGY CORPORATION 401(K) SAVINGS
AND RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
There are no reserves against the contract value for credit risk of the
contract issues or otherwise.
NOTE 4 - INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets at December 31:
2003 2002
---------- ----------
Manulife Lifestyle Balanced $1,131,271 $ 663,635
Manulife Lifestyle Growth 1,531,265 1,190,640
Manulife Money Market 673,875 776,947
Manulife Lifestyle Conservative 275,279 580,968
MFC Excelsior Value and Restructuring Fund 441,958 303,625
NOTE 5 - PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments include pooled separate accounts, a money market
account and guaranteed investment contracts that are managed by Manulife
Financial and, therefore, these transactions qualify as party-in-interest
transactions.
The Plan invested in company stock until this investment option was
discontinued on November 28, 2003. American Ecology Corporation purchased
back the company stock held in the Plan.
NOTE 6 - PLAN TERMINATION
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. In the event of Plan
termination, participants would become 100 percent vested in their employer
contributions.
NOTE 7 - INCOME TAX STATUS
The Plan obtained its latest determination letter on April 9, 2001 in which
the Internal Revenue Service stated that the original Plan and all
amendments through December 11, 2000, were in compliance with the
applicable requirements of the Internal Revenue Code (IRC). The Plan has
been amended since receiving the determination letter. However, the Plan
administrator believes the Plan as currently designed is being operated in
compliance with the applicable requirements of the IRC.
9
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SUPPLEMENTAL INFORMATION
------------------------
AMERICAN ECOLOGY CORPORATION 401(K) SAVINGS
AND RETIREMENT PLAN AND TRUST
EIN: 95-3889638
PLAN NUMBER: 003
DECEMBER 31, 2003
-------------------------------------------------------------------------------------------------------
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
(e)
(b) (c) (d) Current
(a) Identity of issue Description Cost value
--- ----------------------------------------- ----------------------------------- ----- -----------
* Manulife Lifestyle - Conservative Pooled Separate Account ** $ 275,279
* Manulife Lifestyle - Moderate Pooled Separate Account ** 33,896
* Manulife Lifestyle - Balanced Pooled Separate Account ** 1,131,271
* Manulife Lifestyle - Growth Pooled Separate Account ** 1,531,265
* Manulife Lifestyle - Aggressive Pooled Separate Account ** 321,055
* Manulife Guaranteed Interest Accounts Maturing 12/31/03, 4.66% to 6.10% ** 12,251
* Manulife Guaranteed Interest Accounts Maturing 12/31/04, 3.65% to 4.10% ** 55,168
* Manulife Guaranteed Interest Accounts Maturing 12/31/05, 2.05% to 5.80% ** 16,905
* Manulife Guaranteed Interest Accounts Maturing 12/31/06, 6.05% to 6.60% ** 1,075
* Manulife Guaranteed Interest Accounts Maturing 12/31/07, 2.96% to 5.71% ** 1,102
* Manulife Guaranteed Interest Accounts Maturing 12/31/08, 6.01% to 6.99% ** 211
* Manulife Guaranteed Interest Accounts Maturing 12/31/09, 6.99% to 7.00% ** 231
* Manulife Guaranteed Interest Accounts Maturing 12/31/10, 5.78% ** 241
* Manulife Guaranteed Interest Accounts Maturing 12/31/11, 4.90% ** 419
* Manulife Guaranteed Interest Accounts Maturing 12/31/12, 3.60% to 4.00% ** 193
* Manulife Money Market Money Market ** 673,875
* MFC Short-Term Federal Pooled Separate Account ** 21,519
* MFC PIMCO Total Return Fund Pooled Separate Account ** 170,820
* MFC Salomon Brothers High Yield Fund Pooled Separate Account ** 206,857
* MFC T. Rowe Price Spectrum Income Fund Pooled Separate Account ** 98,771
* Manulife Balanced Fund Pooled Separate Account ** 48,315
* Manulife Equity Income Fund Pooled Separate Account ** 24,830
* MFC T. Rowe Price Equity Income Fund Pooled Separate Account ** 75,362
* MFC Davis New York Venture Fund Pooled Separate Account ** 129,227
* MFC Mutual Beacon Fund Pooled Separate Account ** 50,340
* MFC Weitz Partners Value Fund Pooled Separate Account ** 119,886
* MFC Fidelity Advisor Div Growth Fund Pooled Separate Account ** 259,061
* MFC Franklin Balance Sheet Fund Pooled Separate Account ** 173,200
* MFC Mutual Discovery Fund Pooled Separate Account ** 79,260
* MFC Domini Social Equity Fund Pooled Separate Account ** 26,380
* MFC MFS Strategic Value Fund Pooled Separate Account ** 17,315
* MFC T. Rowe Price Blue Chip Fund Pooled Separate Account ** 165,999
* Manulife Capital Growth Stock Fund Pooled Separate Account ** 127,213
* MFC Morgan Stanley Equity Growth Fund Pooled Separate Account ** 4,425
* MFC Excelsior Value & Restructuring Fund Pooled Separate Account ** 441,958
* MFC Fidelity Contrafund Pooled Separate Account ** 335,863
* MFC Fidelity Advisor Large Cap Fund Pooled Separate Account ** 70,206
* Manulife Growth Plus Stock Fund Pooled Separate Account ** 111,790
* MFC Prudential Jennison Growth Fund Pooled Separate Account ** 7,376
* MFC Putnam Global Equity Fund Pooled Separate Account ** 39,610
* MFC Janus Advisor Worldwide Pooled Separate Account ** 24,627
* MFC Templeton Foreign Fund Pooled Separate Account ** 91,892
* MFC Templeton Foreign Small Company Fund Pooled Separate Account ** 1,154
* MFC Fidelity Advisor Overseas Fund Pooled Separate Account ** 467
9
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AMERICAN ECOLOGY CORPORATION 401(K) SAVINGS
AND RETIREMENT PLAN AND TRUST
EIN: 95-3889638
PLAN NUMBER: 003
DECEMBER 31, 2003
---------------------------------------------------------------------------------------------------------------
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS (HELD AT END OF YEAR) (Continued)
(e)
(b) (c) (d) Current
(a) Identity of issue Description Cost value
--- --------------------------------------------- --------------------------------------- ----- -----------
* MFC Scudder International Select Equity Fund Pooled Separate Account ** $ 58,142
* MFC AIM Constellation Fund Pooled Separate Account ** 83,025
* MFC Janus Twenty Fund Pooled Separate Account ** 153,045
* MFC Scudder Mid Cap Fund Pooled Separate Account ** 23,915
* MFC Franklin Small-Mid Growth Fund Pooled Separate Account ** 61,105
* MFC AIM Aggressive Growth Fund Pooled Separate Account ** 193,647
* MFC AIM Small Cap Growth Fund Pooled Separate Account ** 5,543
* Manulife Emerging Growth Stock Fund Pooled Separate Account ** 11,734
* MFC Templeton Developing Markets Fund Pooled Separate Account ** 20,460
* MFC T. Rowe Price Science & Technology Fund Pooled Separate Account ** 352,947
* 500 Index Fund Pooled Separate Account ** 267,098
* Total Stock Market Index Fund Pooled Separate Account ** 42,869
* Mid Cap Index Fund Pooled Separate Account ** 33,546
* Quantitative Mid Cap Fund Pooled Separate Account ** 71,740
* International Index Fund Pooled Separate Account ** 9,824
* Small Cap Index Fund Pooled Separate Account ** 19,009
* Participant Loans Bearing Interest between 4.00% -11.50% 267,361
-----------
$ 8,653,170
===========
* Denotes party-in-interest
** Amounts not required as investments are participant directed.
-12-
EXHIBIT INDEX
Exhibit DESCRIPTION
Exhibit 23 Consent of Moss Adams LLP
Exhibit 32.1 Certification of December 31, 2003 Form 11-K by Trustees dated June 30, 2003
-13-