UNITED STATES
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. |
For the fiscal year ended December 31, 2005
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the transition period from to .
Commission File No. 33-55629
A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
ANNTAYLOR, INC. SAVINGS PLAN
B. | Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office: |
ANNTAYLOR STORES CORPORATION
(Exact name of registrant as specified in its charter)
7 Times Square, New York, NY | 10036 | |
(Address of principal executive offices) | (Zip Code) |
(212) 541-3300
(Registrant’s telephone number, including area code)
ANNTAYLOR, INC. SAVINGS PLAN
Page | ||
1 | ||
FINANCIAL STATEMENTS: | ||
Statements of Net Assets Available for Benefits as of December 31, 2005 and 2004 | 2 | |
3 | ||
Notes to Financial Statements as of and for the Years Ended December 31, 2005 and 2004 | 4 | |
SUPPLEMENTAL SCHEDULE: | ||
10 | ||
11 | ||
12 |
All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and Participants of
The AnnTaylor, Inc. Savings Plan
New York, NY
We have audited the accompanying statements of net assets available for benefits of AnnTaylor, Inc. Savings Plan (the “Plan”) as of December 31, 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 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. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2005 and 2004, and the changes in 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 supplemental schedule of assets (held at end of year) as of December 31, 2005, 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 schedule is the responsibility of the Plan’s management. Such schedule has been subjected to the auditing procedures applied in our audit of the basic 2005 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
/S/ DELOITTE & TOUCHE LLP
New York, NY
June 23, 2006
ANNTAYLOR, INC. SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2005 AND 2004
2005 | 2004 | |||||
Participant Directed Investments: | ||||||
Investments at fair value: | ||||||
AnnTaylor Stores Corporation Common Stock Fund | $ | 3,432,858 | $ | 2,063,276 | ||
Mutual Funds | 25,658,272 | 23,058,265 | ||||
Interest in Common/Collective | ||||||
Trusts (Pooled) Funds | 16,362,010 | 12,626,344 | ||||
Loans to Participants | 1,012,930 | 775,790 | ||||
Total investments | 46,466,070 | 38,523,675 | ||||
Receivables: | ||||||
Employer contributions | 57,243 | 44,571 | ||||
Employee contributions | 258,496 | 218,481 | ||||
Loan repayments | 26,207 | 18,548 | ||||
Total receivables | 341,946 | 281,600 | ||||
Cash | 901 | — | ||||
Total assets | 46,808,917 | 38,805,275 | ||||
Liabilities: | ||||||
Contributions refundable | 32,422 | 17,679 | ||||
Total liabilities | 32,422 | 17,679 | ||||
Net assets available for benefits | $ | 46,776,495 | $ | 38,787,596 | ||
See notes to financial statements.
-2-
ANNTAYLOR, INC. SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2005 AND 2004
2005 | 2004 | |||||
ADDITIONS: | ||||||
Investment income: | ||||||
Interest and dividend income | $ | 2,926,974 | $ | 404,491 | ||
Net appreciation in fair value of investments | 21,715 | 1,312,857 | ||||
Net investment income | 2,948,689 | 1,717,348 | ||||
Contributions: | ||||||
Employer contributions | 1,277,697 | 1,286,100 | ||||
Employee contributions | 7,001,567 | 6,163,813 | ||||
Rollover contributions | 1,861,547 | 1,127,151 | ||||
Total contributions | 10,140,811 | 8,577,064 | ||||
Total additions | 13,089,500 | 10,294,412 | ||||
DEDUCTIONS: | ||||||
Benefits paid to participants | 5,100,601 | 2,936,488 | ||||
Total deductions | 5,100,601 | 2,936,488 | ||||
NET INCREASE IN ASSETS AVAILABLE FOR BENEFITS | 7,988,899 | 7,357,924 | ||||
NET ASSETS AVAILABLE FOR BENEFITS: | ||||||
Beginning of year | 38,787,596 | 31,429,672 | ||||
End of year | $ | 46,776,495 | $ | 38,787,596 | ||
See notes to financial statements.
-3-
ANNTAYLOR, INC. SAVINGS PLAN
ASOFAND FORTHEYEARSENDED DECEMBER 31, 2005AND 2004
1. | PLAN DESCRIPTION |
The following description of the AnnTaylor, Inc. Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan Document, which is available from the Plan administrator, for a more complete description of the Plan’s provisions.
General
The Plan is a contributory, defined contribution plan established by AnnTaylor, Inc. (the “Company”), a subsidiary of AnnTaylor Stores Corporation, as of July 1, 1989. All full-time employees of the Company who have completed thirty consecutive days of employment (consisting of at least 30 hours of service per week) and all part-time employees that have attained a 1,000 hour and one year service requirement with the Company or its subsidiaries and affiliates are eligible to make pre-tax and after-tax salary reduction contributions. Employees must complete one year of service and attain 1,000 hours to be eligible for Company matching contributions. The Administrative Committee of the Company controls and manages the operation and administration of the Plan. Ameriprise Trust Company (the “Plan Trustee”) serves as the trustee of the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
Contributions
Historically, the Company has contributed to the Plan 50% of the participant’s pre-tax contributions, or after-tax contributions, or both, subject to an overall maximum Company matching contribution of 3% of the participant’s eligible compensation.
Prior to July 1, 2002, participants (excluding “highly compensated employees” as defined by the Internal Revenue Service) could generally contribute up to 20% of their compensation in pre-tax and after-tax contributions. Beginning July 1, 2002, participants (excluding “highly compensated employees”) have been allowed to contribute up to 50% of their eligible compensation in pre-tax and / or after-tax contributions, so long as the sum of the amount of pre-tax and after-tax contributions does not exceed 50% of the participant’s eligible compensation. “Highly compensated employees” can defer no more than 5% of their eligible compensation as pre-tax contributions and can defer no more than 1% of their eligible compensation as after-tax contributions. A participant’s aggregate pre-tax contributions may not exceed $14,000 in 2005 and $13,000 in 2004, except that participants who have attained age 50 or will attain age 50 during the Plan year are eligible to make certain “catch up” contributions permitted by federal pension laws. Total employee contributions are subject to limitations imposed by the Internal Revenue Service. All employee contributions are remitted to the trustee and invested together with Company contributions.
Investments
Plan participants are able to direct the investment of their Plan holdings (employer and employee) into various investment options offered under the Plan on a daily basis. The investment options consist of 14 funds comprised of mutual funds and common/collective trusts (pooled) funds, as well as AnnTaylor Stores Corporation Common Stock Fund, which had a fair market value of $26.46 and $22.54 at December 31, 2005 and 2004, respectively.
Participant Accounts
Each participant’s account is credited with (a) the participant’s contributions, (b) the Company’s matching contributions, and (c) earnings allocable to investments credited to each participant’s account. Participants are entitled to the vested balance in their account.
-4-
ANNTAYLOR, INC. SAVINGS PLAN
NOTESTO FINANCIAL STATEMENTS (continued)
1. | PLAN DESCRIPTION (CONTINUED) |
Loans to Participants
Participants may borrow from their fund accounts a minimum of $1,000 and up to a maximum of $50,000 or 50% of their vested account balance, whichever is less. Loan terms range from one to five years. The loans are secured by 50% of the balance in the participant’s account and bear interest at a rate as determined by the Plan Trustee and authorized by the Plan’s Administrative Committee based on the prevailing Prime Rate at the time of the loan plus 1%.
Vesting
The Plan provides that participants have no vested interest in Company contributions or Plan earnings thereon credited to their accounts until they have two years of service, at which time they are 25% vested. Vesting increases by 25% per year up to 100% after five years of service. The Plan provides 100% vesting of a participant’s account balance upon their retirement on or after age 65, death or total disability.
Participants are fully vested at all times with respect to employee contributions and earnings thereon.
Contributions Refundable
The Plan is required to return contributions received during the plan year in excess of the IRC limits.
Payment of Benefits
Participants or their beneficiaries are entitled to receive their entire account balance, in accordance with the vesting provisions of the Plan, upon retirement on or after age 65, death, total disability or employment termination. All distributions are lump sum payments. Prior to March 28, 2005, participants whose account balances were in excess of $5,000 may have elected deferred payment. On or after March 28, 2005, participants whose account balances are in excess of $1,000 may elect deferred payment.
Forfeitures
Forfeited nonvested contributions are used to reduce Company matching contributions. At December 31, 2005 and 2004, forfeited nonvested accounts totaled $87,876 and $35,536, respectively. During the years ended December 31, 2005 and 2004, forfeitures of $99,345 and $89,649, respectively, were utilized to reduce Company contributions.
2. | SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES |
The significant accounting policies followed by the Plan are detailed below:
Basis of Accounting
The accompanying financial statements of the Plan have been prepared in accordance with accounting principles generally accepted in the United States of America.
Investment Valuation and Income Recognition
The Plan’s investments in mutual funds and AnnTaylor Stores Corporation Common Stock are valued based on quoted market prices. The fair value of the investments in common/collective trusts (pooled) funds, except the RVST Income Fund II, is determined by each fund’s trustee based on the fair value of the underlying securities within that fund. The RVST Income Fund II is reported as the sum of the contract value (which represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses) for the fund’s investments in insurance contracts and fair value for the fund’s investments in externally managed affiliated collective investment funds and other investments (primarily debt obligations). Participant loans are valued at cost less principal repayments, which approximates fair value. Interest on investments is recorded on an accrual basis as earned. Dividend income is recorded on ex-dividend date. Security transactions are recorded as of the trade date.
-5-
ANNTAYLOR, INC. SAVINGS PLAN
NOTESTO FINANCIAL STATEMENTS (continued)
2. | SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
Payment of Benefits
Benefits paid to participants are recorded upon distribution. Amounts allocated to accounts of persons who have elected to withdraw from the Plan but have not yet been paid were $7,423 at December 31, 2005. There were no amounts allocated to participant accounts at December 31, 2004.
Administrative Costs
Professional and administrative fees and other expenses of the Plan are paid by the Company. Personnel and facilities of the Company are used by the Plan for its accounting and other activities at no charge to the Plan. The Company, at any time, may elect to have all such expenses paid by the Plan.
Reclassification
Certain prior year amounts were reclassified to conform to the current year presentation. Specifically, mutual funds and money market funds have been reclassified to segregate the fair value portion of the common/collective trusts on the Statements of Net Assets and loan repayments - interest has been reclassified to interest and dividend income on the Statements of Changes in Net Assets.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Plan management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates.
Risks and Uncertainties
The Plan makes available various investment options for participant directed investments, including mutual funds, common/collective trusts and AnnTaylor Stores Corporation Common Stock. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
3. | INVESTMENTS |
The Plan Trustee invests all employee and Company contributions, as well as earnings thereon, in accordance with participant direction and the terms of the Plan. The Plan Trustee has custody of all assets in the funds. Investments at fair value at December 31 were as follows:
2005 | 2004 | |||||||
Mutual funds: | ||||||||
RVS New Dimensions Fund (1) | $ | 12,889,445 | * | $ | 13,145,976 | * | ||
AIM Constellation Fund | 3,244,145 | * | 2,886,403 | * | ||||
Templeton Foreign Fund | 3,030,815 | * | 2,225,285 | * | ||||
Royce Low-Priced Stock Fund | 1,774,473 | 980,422 | ||||||
RS Emerging Growth Fund (1) | 1,684,314 | 1,859,252 |
-6-
ANNTAYLOR, INC. SAVINGS PLAN
NOTESTO FINANCIAL STATEMENTS (continued)
3. | INVESTMENTS (CONTINUED) |
PIMCO Total Return Fund | 1,160,677 | 600,658 | ||||
RVS Balanced Fund (Class Y) (1) | 811,832 | 1,024,587 | ||||
GMO U.S. Value Fund (Class M) | 593,657 | 335,682 | ||||
Artisan Small Cap Fund | 468,914 | — | ||||
Interests in Common/Collective Trusts (Pooled) Funds: | ||||||
RVST Income Fund II (1) | 8,690,640 | * | 7,030,492 | * | ||
RVST Equity Index Fund II (1) | 3,121,374 | * | 2,257,459 | * | ||
RVST Long-Term Horizon Fund (65:35) (1) | 2,997,654 | * | 2,291,057 | * | ||
RVST Medium-Term Horizon Fund (50:50) (1) | 1,101,400 | 655,156 | ||||
RVST Short-Term Horizon Fund (25:75) (1) | 450,942 | 320,210 | ||||
RVST Money Market I (1) | — | 71,970 | ||||
Employer Securities: | ||||||
AnnTaylor Store Corporation Common Stock (1) | 3,432,858 | * | 2,063,276 | * |
(1) | Party-in-interest |
* | Represents 5% or more of the Plan’s net assets. |
For 2005 and 2004 the Plan’s investments, including investments bought and sold, as well as held during each year, appreciated/(depreciated) in fair value as follows:
2005 | 2004 | |||||||
AnnTaylor Stores Corporation Common Stock Fund | $ | 1,315,629 | $ | (403,543 | ) | |||
RVST Income Fund II | 284,775 | 202,919 | ||||||
AIM Constellation Fund | 250,511 | 166,784 | ||||||
RVST Long-Term Horizon Fund (65:35) | 196,333 | 180,578 | ||||||
RVST Equity Index Fund II | 138,734 | 197,927 | ||||||
Templeton Foreign Fund | 84,807 | 283,089 | ||||||
RVST Medium-Term Horizon Fund (50:50) | 57,585 | 43,811 | ||||||
Royce Low-Priced Stock Fund | 32,701 | 55,689 | ||||||
RVST Short-Term Horizon Fund (25:75) | 17,728 | 14,851 | ||||||
GMO U.S. Value Fund (Class M) | 8,350 | 24,195 | ||||||
RVS Balanced Fund (Class Y) | 7,990 | 68,924 | ||||||
Artisan Small Cap Fund | 7,112 | — | ||||||
AXP Blue Chip Advantage Fund | — | 24,342 | ||||||
RS Emerging Growth Fund | (3,017 | ) | 228,311 | |||||
PIMCO Total Return Fund | (18,891 | ) | (5,922 | ) | ||||
RVS New Dimensions Fund | (2,358,632 | ) | 230,902 | |||||
Net appreciation in fair value of investments | $ | 21,715 | $ | 1,312,857 | ||||
4. | PRIORITIES UPON TERMINATIONOFTHE PLAN |
The Company intends to continue the Plan indefinitely, but reserves the right under the Plan to discontinue its contributions at any time and to amend or terminate the Plan subject to the provisions set forth in ERISA. In the event of termination, participants will become 100% vested in their accounts.
5. | INCOME TAX STATUS |
The Internal Revenue Service has determined and informed the Company, by letter dated September 18, 2002, that the Plan and related trust were designed in accordance with applicable regulations of the Internal Revenue Code (“IRC”). The Plan has been amended since receiving the determination letter; however, the Plan Administrator and the Plan’s benefits counsel believe that no amendment adversely impacted the Plan’s compliance with the applicable requirements of the IRC and the Plan and related trust continue to be tax exempt. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
-7-
ANNTAYLOR, INC. SAVINGS PLAN
NOTESTO FINANCIAL STATEMENTS (continued)
6. | PARTY-IN-INTEREST TRANSACTIONS |
During the years ended December 31, 2005 and 2004, there were transactions involving the investment of Plan assets in investment funds maintained by Ameriprise Trust Company, the Plan Trustee, a party-in-interest as defined in section 3(14) of ERISA. These transactions qualify as exempt party-in-interest transactions.
The Plan invests in the AnnTaylor Stores Corporation Common Stock Fund. At December 31, 2005 and 2004, the Fund held 96,595 and 96,670 shares, respectively, of common stock of AnnTaylor Stores Corporation, the parent company of Ann Taylor, Inc., with a cost basis of $2,665,239 and $2,498,557 respectively.
7. | RECONCILIATIONOF FINANCIAL STATEMENTSTO FORM 5500 |
The following is a reconciliation of total investments per the financial statements at December 31, 2005 to Form 5500:
Total investments per the financial statements | $ | 46,466,070 | ||
Due to participants | 33,341 | |||
Deemed distributed loans | (26,898 | ) | ||
Total investments per Form 5500 | $ | 46,472,513 | ||
The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 2005 to Form 5500:
2005 | ||||
Benefits paid per the financial statements | $ | 5,100,601 | ||
Deemed distributed loans offset by total distributions (principal) | (5,102 | ) | ||
Corrective distributions | (48,921 | ) | ||
Benefits payable | 7,423 | |||
Benefits paid per Form 5500 | $ | 5,054,001 | ||
-8-
ANNTAYLOR, INC. SAVINGS PLAN
NOTESTO FINANCIAL STATEMENTS (continued)
7. | RECONCILIATIONOF FINANCIAL STATEMENTSTO FORM 5500 (CONTINUED) |
The following is a reconciliation of total additions per the financial statements for the year ended December 31, 2005 to total income per Form 5500:
2005 | |||
Total additions per the financial statements | $ | 13,089,500 | |
Interest income on deemed distributed loans | 571 | ||
Total income per Form 5500 | $ | 13,090,071 | |
The following is a reconciliation of certain deemed distributions of participant loans per the financial statements for the year ended December 31, 2005 to Form 5500:
2005 | |||
Certain deemed distributions of participant loans per the financial statements | $ | — | |
Deemed distributed loans | 32,571 | ||
Certain deemed distributions of participant loans per Form 5500 | $ | 32,571 | |
The following is a reconciliation of liabilities per the financial statements for the year ended December 31, 2005 to Form 5500:
2005 | |||
Total liabilities per the financial statements | $ | 32,422 | |
Benefits payable | 40,764 | ||
Total liabilities per Form 5500 | $ | 73,186 | |
The following is a reconciliation of corrective distributions per the financial statements for the year ended December 31, 2005 to Form 5500:
2005 | |||
Corrective distributions per financial statements | $ | — | |
Corrective distributions | 48,921 | ||
Corrective distributions per Form 5500 | $ | 48,921 | |
-9-
FORM 5500, SCHEDULE H, PART IV , LINE 4i – SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2005
Party-in-Interest (a) | (b) Identity of Issue, Borrower Lessor, or Similar Party | (c) Description of Investment | (d) Cost | (e) Current Value | ||||||
Yes | AnnTaylor Stores Corporation | Common Stock Fund, employer securities | * | * | $ | 3,432,858 | ||||
Yes | Ameriprise Trust Company | RVST Income Fund II, collective fund | * | * | 8,723,981 | |||||
No | Artisan Partners LLP | Artisan Small Cap Fund, mutual fund | * | * | 468,914 | |||||
Yes | Ameriprise Trust Company | RVS Balanced Fund (Class Y), mutual fund | * | * | 811,832 | |||||
No | AIM Investments | AIM Constellation Fund, mutual fund | * | * | 3,244,145 | |||||
Yes | Ameriprise Trust Company | RVS New Dimensions Fund, mutual fund | * | * | 12,889,445 | |||||
No | Grantham Mayo Van Otterloo & Co LLC | GMO U.S. Value Fund (Class M), mutual fund | * | * | 593,657 | |||||
No | Royce & Associates | Royce Low-Priced Stock Fund, mutual fund | * | * | 1,774,473 | |||||
No | Franklin Templeton Investments | Templeton Foreign Fund, mutual fund | * | * | 3,030,815 | |||||
Yes | Ameriprise Trust Company | RS Emerging Growth Fund, mutual fund | * | * | 1,684,314 | |||||
Yes | Ameriprise Trust Company | RVST Equity Index Fund II, collective fund | * | * | 3,121,374 | |||||
No | PIMCO | PIMCO Total Return Fund, mutual fund | * | * | 1,160,677 | |||||
Yes | Ameriprise Trust Company | RVST Short-Term Horizon Fund (25:75), collective fund | * | * | 450,942 | |||||
Yes | Ameriprise Trust Company | RVST Medium-Term Horizon Fund (50:50), collective fund | * | * | 1,101,400 | |||||
Yes | Ameriprise Trust Company | RVST Long-Term Horizon Fund (65:35), collective fund | * | * | 2,997,654 | |||||
Yes | Loans to Participants | 214 loans bearing interest at rates between 5.00% and 10.50% and maturing between 2006 and 2011 | 986,032 | |||||||
$ | 46,472,513 | |||||||||
Employer Identification Number: 51-0297083
Plan Number: 001
** | Cost information has been omitted for participant-directed investments |
-10-
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee has duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized.
AnnTaylor, Inc. Savings Plan | ||||||
June 23, 2006 | By: | /s/ James M. Smith | ||||
James M. Smith | ||||||
Executive Vice President, Chief Financial Officer and Treasurer, | ||||||
AnnTaylor, Inc. |
-11-
Exhibit No. | ||
23 | Consent of Deloitte & Touche LLP |
-12-