SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
[No Fee Required]
For the year ended December 31, 2003
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from _____________ to ________________
Commission file number 33-91238
A. Full title of the plan and the address of the plan, if different from that of the issuer named below: |
XPRE$$AVINGS 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
U.S. XPRESS ENTERPRISES, INC.
4080 Jenkins Road
Chattanooga, TN 37421
AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
Xpre$$avings 401(k) Plan
As of December 31, 2003 and 2002 and for the Year Ended December 31, 2003 with Report of Independent Registered Public Accounting Firm
| Xpre$$avings 401(k) Plan Audited Financial Statements and Supplemental Schedules As of December 31, 2003 and 2002 and for the Year Ended December 31, 2003 | ||||
|---|---|---|---|---|
Contents | ||||
| Report of Independent Registered Public Accounting Firm | 1 | |||
| Audited Financial Statements | ||||
| Statements of Net Assets Available for Benefits | 2 | |||
| Statement of Changes in Net Assets Available for Benefits | 3 | |||
| Notes to Financial Statements | 4 | |||
| Supplemental Schedules | ||||
| Schedule H, Line 4a - Schedule of Delinquent Participant Contributions | 10 | |||
| Schedule H, Line 4i--Schedule of Assets (Held at End of Year) | 11 | |||
Report of Independent Registered Public Accounting Firm
The Plan Administrator of the
Xpre$$avings 401(k) Plan
We have audited the accompanying statements of net assets available for benefits of Xpre$$avings 401(k) 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 auditing 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 the Plan at 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 U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December 31, 2003, and delinquent participant contributions for the year then ended are presented for purposes of additional analysis and are not a required part of the financial statements but are 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. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
Chattanooga, Tennessee
May 21, 2004
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| Xpre$$avings 401(k) Plan Statements of Net Assets Available for Benefits | ||||||||
|---|---|---|---|---|---|---|---|---|
December 31 | ||||||||
| 2003 | 2002 | |||||||
| Assets | ||||||||
| Investments, at fair value: | ||||||||
| Interest-bearing cash | $ | 123,156 | $ | - | ||||
| Participant loans | 1,605,472 | 932,903 | ||||||
| Mutual funds | 15,703,479 | 11,645,643 | ||||||
| Common stock | 2,523,868 | 2,055,441 | ||||||
| Common trust fund | 5,523,796 | 5,509,861 | ||||||
| Total investments | 25,479,771 | 20,143,848 | ||||||
| Contributions receivable: | ||||||||
| Participants | 190,857 | 176,093 | ||||||
| Employer | 1,379,763 | 1,288,527 | ||||||
| Total contributions receivable | 1,570,620 | 1,464,620 | ||||||
| Total assets | 27,050,391 | 21,608,468 | ||||||
Liabilities | ||||||||
| Excess contributions payable | 53,772 | 53,155 | ||||||
| Net assets available for benefits | $ | 26,996,619 | $ | 21,555,313 | ||||
See accompanying notes.
2
| Xpre$$avings 401(k) Plan Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2003 | |||||
|---|---|---|---|---|---|
Additions to net assets attributed to: | |||||
| Investment income | $ | 202,288 | |||
| Net appreciation in fair value of investments | 3,605,807 | ||||
| Contributions: | |||||
| Participants | 4,312,085 | ||||
| Employer | 1,379,763 | ||||
| Total additions | 9,499,943 | ||||
| Deductions from net assets attributed to: | |||||
| Benefits paid to participants | 3,978,582 | ||||
| Administrative expenses | 80,055 | ||||
| Total deductions | 4,058,637 | ||||
| Net increase | 5,441,306 | ||||
| Net assets available for benefits: | |||||
| Beginning of year | 21,555,313 | ||||
| End of year | $ | 26,996,619 | |||
See accompanying notes.
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Xpre$$avings 401(k) Plan
Notes to Financial Statements
December 31, 2003
1. Description of the Plan
The following description of the Xpre$$avings 401(k) Plan (the “Plan”) is provided for general information purposes only. More complete information regarding the Plan’s provisions may be found in the Plan document.
General
The Plan is a defined contribution plan established January 1, 1993, by U.S. Xpress Enterprises, Inc. (the “Company” and “Plan Administrator”) under the provisions of Section 401(a) of the Internal Revenue Code (the “IRC”), which includes a qualified cash or deferred arrangement as described in Section 401(k) of the IRC, for the benefit of eligible employees of the Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.
Employees are eligible to participate in the Plan when they have completed six months of service, as defined in the Plan document, and have attained age 21.
Plan Administration
The Plan is administered by the Investment Committee, which includes management personnel appointed by the executive officers of the Company, and Morgan Keegan & Company, Inc., who provides investment advisory services to the Plan. The Plan’s trustee and recordkeeper, is responsible for the custody and management of the assets. Effective September 1, 2003, the Plan changed trustees from SunTrust Bank to Investors Bank & Trust Company (“IBT”). IBT has a servicing agent agreement for trustee services with Diversified Investment Advisors, Inc. (“Diversified”) to provide the recordkeeping services for the trust.
Contributions
As defined in the Plan document, eligible employees may make before-tax contributions up to 75% of compensation and after-tax contributions up to 10% of compensation, subject to certain limitations of the IRC. Effective August 11, 2003, participants were no longer permitted to make after-tax contributions. The Company provides a contribution equal to 50% of each participant’s before-tax contribution up to a maximum of 6%, not to exceed 3% of a participant’s compensation. The Company does not match after-tax contributions. Effective September 1, 2003, under certain circumstances, participants may make an additional catch-up contribution.
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Xpre$$avings 401(k) Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Vesting
Participants are fully vested in their contributions and the earnings thereon. Vesting in employer matching contributions and earnings thereon is based on years of service. Participants who were eligible to enter the Plan before July 1, 2000, vest according to the following schedule:
| Years of Service | Percentage Vested | ||||
|---|---|---|---|---|---|
| Less than 2 years | 0 % | ||||
| 2 but not more than 3 years | 30 % | ||||
| 3 but not more than 4 years | 65 % | ||||
| 4 or more years | 100 % | ||||
Participants who entered the Plan on or after July 1, 2000, vest according to the following schedule:
| Years of Service | Percentage Vested | ||||
|---|---|---|---|---|---|
| Less than 2 years | 0 % | ||||
| 2 but not more than 3 years | 20 % | ||||
| 3 but not more than 4 years | 40 % | ||||
| 4 but not more than 5 years | 60 % | ||||
| 5 but not more than 6 years | 80 % | ||||
| 6 or more years | 100 % | ||||
Participants automatically become 100% vested in employer contributions upon attainment of retirement age, as defined in the Plan document, or termination due to death or total disability.
At December 31, 2003 and 2002 forfeited non-vested accounts totaled $81,843 and $69,023, respectively. These accounts will be used to reduce future employer contributions.
Benefits
Upon retirement, death, disability, or termination of service, a participant (or participant’s beneficiary in the event of death) may elect to receive a lump-sum distribution equal to the value of the participant’s vested account balance. In addition, participants may receive an in-service withdrawal of after-tax contributions. Hardship distributions are also permitted if certain criteria are met.
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Xpre$$avings 401(k) Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Participant Accounts
Individual accounts are maintained for each of the Plan’s participants to reflect the participant’s contributions and related Company matching contributions, as well as the participant’s share of the Plan’s investment results and any related administrative expenses. Allocations of income are based on individual participant account balances in proportion to total participant account balances.
Participant Loans
Subject to approval, a participant can secure a loan from the Plan against his/her account balance for a minimum of $1,000 up to the lesser of 50% of the vested account balance or $50,000. Effective September 1, 2003, participants can have up to two loans outstanding at a time. Loans may generally be repaid over one to five years, unless the loan is used to purchase a principal residence in which case the repayment period can be extended up to fifteen years. Loans must be repaid through automatic payroll deductions unless otherwise provided for by the Plan Administrator. The interest rate is the prime rate plus 1% and is fixed over the life of the loan.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements have been prepared using the accrual method of accounting.
Income Recognition
Investment income is recorded as earned on the accrual basis. Dividend income is recorded on the ex-dividend date. Net realized gains (losses) and unrealized appreciation (depreciation) are presented in the accompanying statement of changes in net assets available for benefits as net appreciation in fair value of investments.
Investment Valuation
Investments of the Plan are stated at fair value, as determined by quoted market prices on the last business day of the Plan year. The fair value of participation units in the common fund was based on the quoted redemption value on the last business day of the Plan’s year. Participant loans are valued at their outstanding balance, which approximates fair value. Purchases and sales of securities are reflected on a trade-date basis.
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Xpre$$avings 401(k) Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Administrative Expenses
Through September 1, 2003, each participant's account was charged $5 each quarter for administration and maintenance. The Plan pays a $25 distribution fee for each lump sum distribution. Effective September 1, 2003, a plan service fee equal to 0.0275% of each participant’s account balance is charged each quarter for administration and maintenance. In addition, a loan set-up fee of $75 per loan is charged to a participant’s account upon issuance of a loan. All other expenses, if any, are paid by the Company.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Reclassifications
Certain prior year amounts reported in the financial statements have been reclassified to conform to the current year presentation.
Risk and Uncertainties
The Plan invests in various investment securities. Investment securities 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.
7
Xpre$$avings 401(k) Plan
Notes to Financial Statements (continued)
3. Investments
The fair values of individual assets that represent 5% or more of the Plan’s net assets as of December 31 are as follows:
| 2003 | 2002 | |||||||
|---|---|---|---|---|---|---|---|---|
| American Century Ultra Advisor Fund | $ | - | $ | 3,646,226 | ||||
| STI Classic Balanced Fund | - | 2,798,315 | ||||||
| STI Classic Capital Appreciation Fund | - | 2,811,308 | ||||||
| SunTrust Employee Benefit Stable Asset Fund | - | 5,509,861 | ||||||
| U.S. Xpress Enterprises, Inc. Common Stock | 2,523,868 | 2,055,441 | ||||||
| Equity Growth Fund | 7,774,256 | - | ||||||
| Intermediate Horizon Strategic Allocation Fund | 3,006,322 | - | ||||||
| Stable Pooled Fund | 5,523,796 | - | ||||||
During the year ended December 31, 2003, the Plan’s investments (including investments purchased and sold, as well as held during the year) appreciated in fair value as follows:
| Mutual Funds | $ | 2,542,031 | |||
| Common Stock | 836,601 | ||||
| Common Trust Fund | 227,175 | ||||
| $ | 3,605,807 | ||||
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated September 27, 1995, stating that the Plan is qualified under Section 401(a) of the IRC and, therefore, the related trust is exempt from taxation. Subsequent to the issuance of the determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the IRC and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt.
5. 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 will become fully vested in their accounts.
6. Differences Between Financial Statements and Form 5500
As of December 31, 2002, the Plan had $221,433 of pending distributions to participants who had elected to withdraw from the Plan. This amount is recorded as a liability in the Plan’s Form 5500; however, this amount is not recorded as a liability in the accompanying statement of net assets available for benefits as of December 31, 2002 in accordance with U.S. generally accepted accounting principles.
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Xpre$$avings 401(k) Plan
Notes to Financial Statements (continued)
6. Differences Between Financial Statements and Form 5500 (continued)
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
| Benefits Payable to Participants | 2003 | Net Assets Available for Benefits | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2002 | Benefits Paid | 2002 | |||||||||
| Per the financial | |||||||||||
| statements | - | $ | 3,978,582 | $ | 21,555,313 | ||||||
| 2003 deemed | |||||||||||
| distributions | - | (220,336 | ) | - | |||||||
| 2002 accrued benefits | |||||||||||
| payments | 221,433 | (221,433 | ) | (221,433 | ) | ||||||
| Per Form 5500 | $ | 221,433 | $ | 3,536,813 | $ | 21,333,880 | |||||
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| Xpre$$avings 401(k) Plan EIN 62-1378182 Plan Number 001 Schedule H, Line 4a Schedule of Delinquent Participant Contributions Year Ended December 31, 2003 | |||
|---|---|---|---|
Participant Contributions Transferred Late to Plan | Total that Constitute Nonexempt Prohibited Transactions | ||
| $212,443 | $212,443 | ||
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Xpre$$avings 401(k) Plan
| |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (a) | (b) Identity of Issue, Borrower, Lessor, of Similar Party | (c) Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value | (e) Current Value | ||||||||
| * | Investors Bank & Trust Company | Interest-bearing Cash | $ | 123,156 | |||||||
| * | Diversified Investment Advisors, Inc. | Stable Pooled Fund | 5,523,796 | ||||||||
| * | Diversified Investment Advisors, Inc. | Short Horizon Strategic Allocation Fund | 39,921 | ||||||||
| * | Diversified Investment Advisors, Inc. | Short/Intermediate Horizon Strategic Allocation Fund | 5,067 | ||||||||
| * | Diversified Investment Advisors, Inc. | Intermediate Horizon Strategic Allocation Fund | 3,006,322 | ||||||||
| * | U.S. Xpress Enterprises, Inc. | U.S. Xpress Enterprises, Inc. Common Stock | 2,523,868 | ||||||||
| * | Diversified Investment Advisors, Inc. | Intermediate/Long Horizon Strategic Allocation Fund | 58,039 | ||||||||
| * | Diversified Investment Advisors, Inc. | Long Horizon Strategic Allocation Fund | 87,922 | ||||||||
| * | Diversified Investment Advisors, Inc. | High Quality Bond Fund | 60,421 | ||||||||
| * | Diversified Investment Advisors, Inc. | Core Bond Fund | 567,715 | ||||||||
| * | Diversified Investment Advisors, Inc. | Value & Income Fund | 466,012 | ||||||||
| * | Diversified Investment Advisors, Inc. | Stock Index Fund | 232,521 | ||||||||
| * | Diversified Investment Advisors, Inc. | Equity Growth Fund | 7,774,256 | ||||||||
| * | Diversified Investment Advisors, Inc. | Mid-Cap Value Fund | 572,260 | ||||||||
| * | Diversified Investment Advisors, Inc. | Mid-Cap Growth Fund | 1,002,504 | ||||||||
| * | Diversified Investment Advisors, Inc. | Special Equity Fund | 702,524 | ||||||||
| * | Diversified Investment Advisors, Inc. | International Equity Fund | 1,127,995 | ||||||||
| * | Participant Loans | Loans to participants, with interest rates | |||||||||
| from 5.00% to 10.50% | 1,605,472 | ||||||||||
| $ | 25,479,771 | ||||||||||
*Indicates a party-in-interest to the Plan.
Note: Cost information has not been included in column (d) because all investments are participant directed.
11
SIGNATURE
The Plan. 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.
Date: June 28, 2004
U.S. XPRESS ENTERPRISES, INC.’S |
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Index to Exhibits
| Exhibit Number | Description of Exhibit | ||
|---|---|---|---|
| 23 | Consent of Independent Registered Public Accounting Firm | ||
13