UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
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| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2019
or
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| o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
1-37548
A.Full title of the plan and the address of the plan, if different from that of the issuer named below:
Welbilt Retirement Savings Plan
B.Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Welbilt, Inc.
2227 Welbilt Boulevard
New Port Richey, FL 34655
REQUIRED INFORMATION
The following financial statements and schedules of the Welbilt Retirement Savings Plan, prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, as amended, are filed herewith.
WELBILT RETIREMENT SAVINGS PLAN
Index to Financial Statements and Supplemental Schedule on Form 11-K
For the Year Ended December 31, 2019
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| Financial Statements | |
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| Supplemental Schedule | |
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Report of Independent Registered Public Accounting Firm
Plan Administrator
Welbilt Retirement Savings Plan
New Port Richey, Florida
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of the Welbilt Retirement Savings Plan (the "Plan") as of December 31, 2019 and 2018, and the related statement of changes in net assets available for benefits for the year ended December 31, 2019 and the related notes and schedule (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2019 and 2018, and the changes in net assets available for benefits for the year ended December 31, 2019 in conformity with accounting principles generally accepted in the United States.
Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Supplemental Information
The Schedule H, Line 4i - Schedule of Assets (Held at End of Year) as of December 31, 2019 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
/s/Wipfli LLP
Wipfli LLP
We have served as the Plan’s auditor since 2016.
La Crosse, Wisconsin
June 26, 2020
WELBILT RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
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| | | | | | | | |
| | | As of December 31 |
| | | 2019 | | 2018 |
| Assets: | | | | |
| Investments - Interest in Welbilt Master Trust | | $ | 56,255,511 |
| | $ | 50,386,753 |
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| Receivables: | | | | |
| Interest and dividends | | 23,198 |
| | 13,917 |
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| Notes receivable from participants | | 663,985 |
| | 621,856 |
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| Total receivables | | 687,183 |
| | 635,773 |
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| Net assets available for benefits | | $ | 56,942,694 |
| | $ | 51,022,526 |
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See accompanying notes to financial statements.
WELBILT RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
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| | | | |
| | | Year Ended |
| | | December 31, 2019 |
| Investment income: | | |
| Investment income - Interest in net appreciation in fair value of Welbilt Master Trust | | $ | 11,055,193 |
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| Interest income on notes receivable from participants | | 35,178 |
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| Total investment income, net | | 11,090,371 |
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| Contributions: | |
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| Employer | | 355,950 |
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| Participants | | 1,163,758 |
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| Total contributions | | 1,519,708 |
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| Deductions: | | |
| Benefits paid to participants | | (6,600,065 | ) |
| Administrative expenses | | (89,846 | ) |
| Total deductions | | (6,689,911 | ) |
| Net increase in net assets available for benefits | | 5,920,168 |
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| Net assets available for benefits as of beginning of year | | 51,022,526 |
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| Net assets available for benefits as of end of year | | $ | 56,942,694 |
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See accompanying notes to financial statements.
WELBILT RETIREMENT SAVINGS PLAN
Notes to Financial Statements
1. Plan Description
The following description of the Welbilt Retirement Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
General
The Plan is a retirement savings plan under Section 401(k) of the Internal Revenue Code ("the Code"). The Plan is available only to eligible employees of participating companies of Welbilt, Inc. (the "Company"). Eligible employees are limited to hourly domestic employees who are covered by a collective bargaining agreement between a participating company of Welbilt and the union representing employees of the participating company. The participating companies in this Plan include The Delfield Company, LLC ("Delfield") as represented by AFL-CIO (Local 585) and the Ice operating plant of Manitowoc FSG Operations, LLC ("Ice") as represented by IAM (Local 516).
The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The Company's Retirement Plan Committee (the "Committee" and "Plan Administrator") is responsible for oversight of the Plan and consists of two sub-committees, the settlor sub-committee and the fiduciary sub-committee. The settlor sub-committee does not exercise any fiduciary duties, instead it acts in the interest of the Company by overseeing, maintaining and amending the Plan on behalf of the Company. The fiduciary sub-committee determines the appropriateness of the Plan’s investment offerings and monitors investment performance. The entire Committee reports to the Company's Board of Directors.
Participants in the Plan are generally eligible to participate in the elective deferral portions of the Plan upon hire and are automatically enrolled at a contribution rate of 4% of gross wages. These general terms may be modified by specific collective bargaining agreements. Individual participants may also change the default contribution rate by affirmatively electing not to participate in the Plan or contribute at a different rate.
Ice participants are also immediately eligible to share in any matching contributions, but must complete a year of service with the Company to share in any other Company contributions. Delfield participants must complete a year of service with the Company to share in any Company contributions, including any matching contributions. For purposes of the Plan, a year of service is earned if the participant is credited with at least 1,000 hours of service during the 12-month period immediately following the date of hire. If the participant is not credited with at least 1,000 hours of service during the 12-month period immediately following the date of hire, a year of service will be earned if the participant works at least 1,000 hours during any plan year beginning after the date of hire.
Contributions
Total annual contributions to a participant’s account are limited to the lesser of 75% of the participant’s compensation for the year or the maximum contribution subject to limitations established by the Internal Revenue Service ("IRS"). Participants who have attained age 50 before the end of the plan year are eligible to make catch-up contributions. The Plan allows direct rollovers from other qualified plans.
In addition to elective deferrals, the Plan includes certain matching contributions and the potential for additional employer non-elective contributions. All matching and any additional employer non-elective contributions are discretionary and the employer will determine in its sole discretion how much, if any, it will make as a matching contribution or a non-elective contribution. Such amounts can be determined either as a uniform percentage of deferrals or as a flat dollar amount for each participant. Participants should refer to the Plan document for provisions of matching employer contributions. There were no non-elective contributions made during the year ended December 31, 2019. Rollovers are not matched.
Participants’ Accounts
All investments in participants’ accounts are participant-directed. The Plan allows participants to select from a variety of investment options including common/collective trust funds, mutual funds and a money market fund.
Each participant’s account is credited with the participant’s contributions, the Company’s contributions and an allocation of plan earnings or losses, and is reduced for withdrawals and an allocation of investment expenses (based on account balances and participant investment elections). The benefit to which a participant is entitled is equivalent to the participant’s vested account balance.
Vesting
All employee elective deferrals, rollover contributions and related earnings or losses are 100% vested immediately.
Participants covered by the collective bargaining agreement with Delfield are 100% vested immediately in the Company’s matching contribution plus actual earnings or losses thereon. These participants vest in any additional Company employer non-elective contributions, plus actual earnings or losses according to the following schedule: 20% after one year of service; 40% after two years of service; 60% after three years of service; 80% after four years of service; and 100% after five years of service.
Participants covered by collective bargaining agreements with Ice are subject to a separate vesting schedule. All employer contributions and non-elective contributions, plus actual earnings or losses vest according to the following schedule: 10% after one year of service; 20% after two years of service; 40% after three years of service; 60% after four years of service; 80% after five years of service; and 100% after six years of service.
Participants who leave the Company because of normal retirement, disability or death are 100% vested.
Voting Rights
Each participant is entitled to exercise voting rights attributable to the Company’s common stock allocated to his or her account and is notified by the trustee prior to the time that such rights are to be exercised. If a participant fails to provide direction as to voting their shares on any issue, BMO Harris Bank, N.A. ("BMO"), the trustee, votes the shares as directed by the Plan Administrator.
Notes Receivable from Participants
Participants may generally borrow from their accounts a minimum of $1,000 up to a maximum, net of all outstanding notes receivable amounts, equal to the lesser of $50,000 or 50% of their employee and rollover contributions account balance. Ice participants may only borrow funds if they can demonstrate financial hardship, as defined by IRS rules.
The notes are secured by the balance in the participant’s account and bear interest at the prime rate plus 1%. Interest rates on existing notes as of December 31, 2019 ranged from 4.25% to 6.50%. Principal and interest are paid ratably through payroll deductions over a maximum period of five years.
Payment of Benefits
Vested benefits are available at normal retirement (generally age 65), disability retirement, death and termination of employment. Benefits are payable in one lump sum, direct rollover, equal installments over a period of years or an insurance company single premium nontransferable annuity contract. In addition, hardship distributions made from the participant’s voluntary contributions which were transferred from a specific predecessor plan are permitted if certain criteria are met. The Plan also allows for in-service distributions upon attaining age 59½. Distributions are made as soon as administratively feasible.
Forfeitures
As of December 31, 2019 and 2018, forfeited non-vested accounts totaled $4,031 and $1,927, respectively. These accounts can be used to pay Plan expenses, allocate as additional contributions to the Plan or reduce future employer contributions. For the year ended December 31, 2019, employer contributions were reduced by $5 from forfeited non-vested accounts.
Transfers to/from Another Company-Sponsored Plan
The Plan and the Company allow participants to transfer account balances between another plan sponsored by the Company when the employee transfers to a new division or the participant's job status changes (i.e., union versus nonunion).
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States ("GAAP").
Use of Estimates
The preparation of financial statements in accordance with GAAP requires the Plan Administrator to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan’s investments are commingled with the Welbilt 401(k) Retirement Plan in the Welbilt Master Trust (the "Master Trust").
Investments are measured and disclosed at fair value with the exception of direct fully benefit-responsive investment contracts which are measured and disclosed at contract value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Committee determines the Plan’s valuation policies utilizing information provided by Morgan Stanley Global Banking, its investment advisor, and BMO, its trustee. See Note 4, "Fair Value Measurements" for discussion of fair value measurements.
Welbilt Stock Fund - Fair value is based on the closing sales price reported on recognized securities exchanges on the last business day of the fiscal year. The Welbilt Stock Fund is maintained on a unit value basis and includes a money market fund for liquidity purposes. As of December 31, 2019 and 2018, the Welbilt Stock Fund held a money market fund in the amount of $623,717 and $711,912, respectively. The number of units and related net asset value per unit as of December 31, 2019 and 2018 for the fund are as follows:
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| | | | | | | | | | |
| | | Master Trust | | Plan | | Net Asset |
| | | Units | | Units | | Value |
| | | Outstanding | | Outstanding | | Per Unit |
| December 31, 2019 | | 900,916 |
| | 178,473 |
| | $ | 17.04 |
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| December 31, 2018 | | 1,105,499 |
| | 225,798 |
| | $ | 12.24 |
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Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation includes the Plan’s gains and losses on investments bought and sold and held during the year.
Notes Receivable from Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. No allowance for credit losses has been recorded as of December 31, 2019. If a participant ceases to make note payments and the Plan Administrator deems the participant note receivable to be in default and the participant has reached a distributable event, the participant note receivable balance is reduced and a benefit payment is recorded.
Payment of Benefits
Payment of benefits is recorded when paid.
Administrative Expenses
Administrative expenses and audit fees incurred by the Plan are paid from the assets of the Master Trust. Fees related to the administration of notes receivable from participants are charged directly to the participant’s account and are included in administrative expenses. Investment-related expenses are either paid directly from the assets of the Master Trust or through revenue sharing and are included in administrative expenses.
Risks and Uncertainties
The Master Trust’s investments are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least 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 net assets available for benefits.
Recently Adopted Accounting Pronouncements
In February 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-06, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting (a consensus of the Emerging Issues Task Force) ("ASU 2017-06"). ASU 2017-06 clarifies presentation requirements for a plan’s interest in a master trust and requires more detailed disclosures of the Plan’s interest in the Master Trust. ASU 2017-06 was effective for the Company on January 1, 2019 and the adoption had no impact on the Company's consolidated financial statements, however the expanded disclosures required by the guidance are included in Note 3, "Investments in the Master Trust."
Recently Issued Accounting Pronouncements Not Yet Adopted
In August 2018, the FASB issued ASU No. 2018‑13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The ASU modifies the disclosure requirements of fair value measurements in Accounting Standards Codification Topic 820. The ASU is effective for all reporting periods beginning after December 15, 2019, with early adoption permitted. An entity may elect to early adopt any removed or modified disclosures upon issuance of this Update and delay the adoption of the additional disclosures until the effective date. The adoption of this ASU will impact disclosures within the financial statements footnotes for the fiscal year ending December 31, 2020 and such impact is not expected to be material.
Subsequent Events
Subsequent events have been evaluated through the date the financial statements were issued.
In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the United States and the world. The pandemic, along with the measures implemented by governmental authorities and other third-parties in response, has negatively impacted the world economy, and investment fund prices and common stock share prices for most companies, including the Company's common stock included in the Welbilt Stock Fund. The Plan’s investment in the Welbilt Stock Fund is stated at net asset value as of December 31, 2019, which is at a value higher than the current net asset value. The impact of COVID-19 on companies continues to evolve rapidly and its future effects on the Plan’s net assets available for benefits and changes in net assets available for benefits are uncertain.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES") Act was passed by Congress. The CARES Act provides immediate and temporary relief to allow certain eligible individuals to receive coronavirus-related relief for note repayment, suspend required minimum distributions, and delay the commencement date for required minimum distributions. The provisions of the CARES Act were operationalized as soon as possible, in accordance with applicable laws. The Company plans to formally adopt a plan amendment for the provisions of the CARES Act as soon as practicable.
3. Investments in the Master Trust
The Plan’s investments are in the Master Trust which was established for the investment of assets of the Plan and the Welbilt 401(k) Retirement Plan, which is another retirement plan sponsored by the Company. Each participating retirement plan has an undivided interest in the Master Trust. The assets of the Master Trust are held by BMO.
The value of the Plan’s interest in the Master Trust is based on the beginning of year value of the Plan’s interest in the Master Trust plus actual contributions and allocated investment income or loss, less actual distributions and allocated administrative expenses. As of December 31, 2019 and 2018, the Plan’s interest in the net assets of the Master Trust was approximately 18% and 19%, respectively, determined by comparing the Plan's investment in the Master Trust to the total net assets in the Master Trust.
Transfers in and out of the Master Trust and certain administrative expenses are specifically identified with the particular retirement plan. Investment income or loss and certain administrative expenses relating to the Master Trust are allocated to the individual retirement plans based on the ratio of the investment balances of the plans.
The following table summarizes the net assets held by the Master Trust as of December 31:
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| | | | | | | | | | | | | | | | |
| | | 2019 | | | | 2018 | | |
| | | Plan's Portion | | 2019 | | Plan's Portion | | 2018 |
| | | of Master | | Master | | of Master | | Master |
| | | Trust Assets | | Trust Assets | | Trust Assets | | Trust Assets |
| Investments with fair value determined by quoted market price: | | | | | | | | |
| Common/collective trust funds | | $ | 11,002,988 |
| | $ | 54,318,064 |
| | $ | 10,980,918 |
| | $ | 53,274,008 |
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| Mutual funds | | 45,228,784 |
| | 256,805,719 |
| | 39,369,294 |
| | 215,439,701 |
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| Cash | | 23,739 |
| | 76,868 |
| | 36,541 |
| | 844,574 |
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| Investments at fair value | | $ | 56,255,511 |
| | $ | 311,200,651 |
| | $ | 50,386,753 |
| | $ | 269,558,283 |
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As of December 31, 2019 and 2018, the Plan's portion of Master Trust assets for accrued interest and dividends is $23,198 and $13,917, respectively. As of December 31, 2019 and 2018, the Master Trust assets for accrued interest and dividends is $104,192 and $56,525, respectively.
As of December 31, 2019 and 2018, the portion of Master Trust assets allocated to the Welbilt 401(k) Retirement Plan is $254,945,140 and $219,171,530, respectively.
Net investment income recognized by the Master Trust for the year ended December 31, 2019 was allocated as follows:
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| | | | |
| | | 2019 |
| Investment income: | | |
| Interest and dividends | | $ | 5,043,330 |
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| Net appreciation in fair value of investments | | 56,086,167 |
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| Total investment income of the Master Trust | | 61,129,497 |
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| Less: investment income allocated to Welbilt 401(k) Retirement Plan | | 50,074,304 |
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| Net investment income allocated to the Plan | | $ | 11,055,193 |
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The changes in net assets for the Master Trust for the year ended December 31, 2019 were as follows:
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| | | | |
| | | 2019 |
| Interest and dividends | | $ | 5,043,330 |
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| Net appreciation in fair value of investments | | 56,086,167 |
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| Net investment income | | 61,129,497 |
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| Net transfers | | (19,487,129 | ) |
| Increase in net assets | | 41,642,368 |
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| Net assets as of the beginning of year | | 269,558,283 |
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| Net assets as of the end of year | | $ | 311,200,651 |
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4. Fair Value Measurements
The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described as follows:
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| Level 1 | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access. |
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| Level 2 | Inputs to the valuation methodology include: |
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| • | Quoted prices for similar assets or liabilities in active markets. |
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| • | Quoted prices for identical or similar assets or liabilities in inactive markets. |
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| • | Inputs other than quoted prices that are observable for the asset or liability. |
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| • | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
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| Level 3 | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The following is a description of the valuation methodologies used for assets measured at fair value:
Mutual funds: Valued at the quoted net asset value ("NAV") of shares held by the Plan as of year-end. The NAV is a quoted price in an active market.
Common/collective trust funds: Valued at NAV of units held by the Plan as of year-end, provided by the administrator of the fund. The NAV is based on the value of the underlying assets of the fund, minus its liabilities, and then divided by the number of units outstanding. The NAV’s unit price is quoted on a private market that is not active; however, the unit price is based on underlying investments which are traded on an active market.
The following tables set forth by level, within the fair value hierarchy, the Master Trust’s assets at fair value as of December 31, 2019 and 2018:
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| | | | | | | | | | | | | | | |
| | Fair Value as of December 31, 2019 |
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Mutual funds | $ | 256,805,719 |
| | $ | — |
| | $ | — |
| | $ | 256,805,719 |
|
| Investments measured at NAV (a) | | | | | | | 54,318,064 |
|
| Total assets at fair value | | | | | | | $ | 311,123,783 |
|
|
| | | | | | | | | | | | | | | |
| | Fair Value as of December 31, 2018 |
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Mutual funds | $ | 215,439,701 |
| | $ | — |
| | $ | — |
| | $ | 215,439,701 |
|
| Investments measured at NAV (a) | | | | | | | 53,274,008 |
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| Total assets at fair value | | | | | | | $ | 268,713,709 |
|
(a) In accordance with ASC Subtopic 820-10, Fair Value Measurements, certain investments that were measured at NAV per share (or equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the line items presented in the Statements of Net Assets Available for Benefits.
5. Net Asset Value per Share
The following tables set forth additional disclosures of the Master Trust’s investments whose fair value is estimated using net asset value per share as of December 31, 2019 and 2018:
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| | | | | | | | |
| | Fair Value Estimated Using Net Asset Value |
| | Per Share as of December 31, 2019 |
| Investment | Fair Value | Unfunded Commitment | Redemption Frequency | Other Redemption Restrictions | Redemption Notice Period |
| Welbilt Stock Fund (a) | $ | 15,352,195 |
| — |
| Daily | Written or telephone notice | 1 day |
| Goldman Sachs Stable Value (b) | 38,965,869 |
| — |
| Daily | Written or telephone notice | 1 day |
| Total | $ | 54,318,064 |
| | | | |
|
| | | | | | | | |
| | Fair Value Estimated Using Net Asset Value |
| | Per Share as of December 31, 2018 |
| Investment | Fair Value | Unfunded Commitment | Redemption Frequency | Other Redemption Restrictions | Redemption Notice Period |
| Welbilt Stock Fund (a) | $ | 13,530,088 |
| — |
| Daily | Written or telephone notice | 1 day |
| Goldman Sachs Stable Value (b) | 39,743,920 |
| — |
| Daily | Written or telephone notice | 1 day |
| Total | $ | 53,274,008 |
| | | | |
(a) This is a single stock portfolio that tracks the performance of Welbilt, Inc. common stock. The price of the stock can fluctuate from day to day and is designed for individuals who invest for the long term and can tolerate short-term volatility.
(b) The objective of this investment is to seek safety of principal and consistency of return while attempting to maintain minimal volatility.
6. Party-in-Interest Transactions
Transactions involving Welbilt Inc. common stock and notes receivable from participants are considered party-in-interest transactions. These transactions are not considered prohibited transactions under 29 CFR 408(b) of ERISA regulations.
Certain plan investments are common/collective trust funds, mutual funds and money market funds. BMO is the Plan's trustee and, therefore, these transactions are considered party-in-interest transactions. No fees were paid by the Plan to the trustee directly for administrative expenses and no fees were paid to the trustee through revenue sharing for the year ended December 31, 2019.
For the year ended December 31, 2019, the Plan paid Morgan Stanley Global Banking $15,000 for investment advisory services, paid One America $62,771 for record keeping fees and paid Wipfli LLP $12,075 for audit services.
7. Plan Termination
The Company intends to continue the Plan indefinitely; however, the Company reserves the right to terminate the Plan at any time. In the event of termination, all amounts credited to participants’ accounts shall become 100% vested and distributed to participants in accordance with the Plan’s provisions included in the Plan document.
8. Tax-Exempt Status of the Plan
The Plan was submitted to the IRS for a new determination letter on January 27, 2017. A favorable determination letter was received from the IRS dated December 18, 2017. Accordingly, the Plan is exempt from federal and state income taxes under current provisions of their respective laws. The Plan has been amended since receiving the determination letter; however, the Plan Administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code.
GAAP requires the Plan Administrator to evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan Administrator has analyzed the tax positions taken by the Plan and has concluded that as of December 31, 2019, there are no uncertain positions taken, or expected to be taken, that would require recognition of a liability or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions. There are currently no audits for any tax periods in progress.
9. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per the financial statements as of December 31, 2019 and 2018 to Form 5500:
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| | | | | | | | |
| | | 2019 | | 2018 |
| Net assets available for benefits per the financial statements | | $ | 56,942,694 |
| | $ | 51,022,526 |
|
| Deemed distributions on defaulted notes receivable | | (9,928 | ) | | (19,280 | ) |
| Pending distributions | | (23,834 | ) | | (35,698 | ) |
| Net assets available for benefits per Form 5500 | | $ | 56,908,932 |
| | $ | 50,967,548 |
|
The following is a reconciliation of the change in net assets available for benefits per the financial statement for the year ended December 31, 2019 to Form 5500:
|
| | | | |
| | | 2019 |
| Net increase in net assets available for benefits per the financial statements | | $ | 5,920,168 |
|
| Change in deemed distributions on defaulted notes receivable | | 9,352 |
|
| Change in pending distributions | | 11,864 |
|
| Change in net assets per Form 5500 | | $ | 5,941,384 |
|
SUPPLEMENTAL SCHEDULE
Plan’s EIN #47-4625716 Plan #002
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2019
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| | | | | | | | | | |
| Identity of Issue, | | Description of Investment Including Maturity | | | | |
| Borrower, Lessor, | | Date, Rate of Interest, Collateral, Par, or | | | | Current |
| or Similar Party | | Maturity Value | | Cost | | Value |
| Notes receivable from participants* | | 4.25% to 6.50% notes, maturing through November 2024 | | $ | — |
| | $ | 663,985 |
|
| Plan interest in Welbilt Defined Contribution Master Trust* | | Master Trust | | ** |
| | 56,255,511 |
|
| | | | | | | $ | 56,919,496 |
|
* Denotes party-in-interest
** Cost not required for participant-directed investments
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan's administrator has duly caused this annual report to be signed on its behalf by the undersigned, hereunto duly authorized.
|
| | | |
| | | Welbilt Retirement Savings Plan |
| | | | |
| Date: June 26, 2020 | | By: | /s/ Jennifer Gudenkauf |
| | | | Jennifer Gudenkauf |
| | | | Executive Vice President, Chief Human Resources Officer |
| | | | Welbilt, Inc. |
EXHIBIT INDEX
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| Exhibit Number | Description |
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