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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
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(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
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1934.
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FOR THE YEAR ENDED DECEMBER 31, 2002
OR
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|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
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OF 1934.
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FOR THE TRANSITION PERIOD FROM TO .
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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
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B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ANNTAYLOR STORES CORPORATION
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(Exact name of registrant as specified in its charter)
142 WEST 57TH STREET, NEW YORK, NY 10019
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(Address of principal executive offices) (Zip Code)
(212) 541-3300
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(Registrant's telephone number, including area code)
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ANNTAYLOR, INC. SAVINGS PLAN
TABLE OF CONTENTS
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PAGE
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INDEPENDENT AUDITORS' REPORT.......................................... 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits,
December 31, 2002 and 2001............................................ 2
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 2002 and 2001............... 3
Notes to Financial Statements......................................... 4
SUPPLEMENTAL SCHEDULE:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of
Assets (Held at End of Year)As of December 31, 2002................... 8
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.
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INDEPENDENT AUDITORS' REPORT
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AnnTaylor, Inc. Savings Plan:
We have audited the accompanying statements of net assets available for
benefits of the AnnTaylor, Inc. Savings Plan (the "Plan") as of December 31,
2002 and 2001, 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 auditing standards generally
accepted in the United States of America. 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, such financial statements present fairly, in all material
respects, information regarding the plans net assets available for benefits
of the Plan as of December 31, 2002 and 2001, 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 listed
in the table of contents 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 2002 financial statements and, in our
opinion, is fairly stated in all material respects when considered in
relation to the basic 2002 financial statements taken as a whole.
DELOITTE & TOUCHE LLP
New York, New York
June 20, 2003
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2
ANNTAYLOR, INC. SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE
FOR BENEFITS, DECEMBER 31, 2002 AND 2001
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2002 2001
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Investments at fair value:
Mutual funds ................................... $14,160,165 $14,561,387
Money market fund .............................. 4,570,344 3,710,894
AnnTaylor Stores Corporation Common Stock Fund . 999,012 1,141,175
Loans to participants .......................... 598,876 544,952
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Total investments .............................. 20,328,397 19,958,408
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Receivables:
Employer contributions ......................... 37,066 35,983
Employee contributions ......................... 173,089 207,612
Loans to participants .......................... 15,034 16,255
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Total receivables .............................. 225,189 259,850
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Cash ............................................... 24,938 23,459
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Net assets available for benefits .................. $20,578,524 $20,241,717
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See notes to financial statements.
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3
ANNTAYLOR, INC. SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS FOR THE YEARS
ENDED DECEMBER 31, 2002 AND 2001
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2002 2001
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ADDITIONS TO NET ASSETS ATTRIBUTED TO
INVESTMENT ACTIVITIES:
Dividend income .................................. $ 80,991 $ 80,799
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Total additions attributed to investment
activities .................................... 80,991 80,799
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ADDITIONS TO NET ASSETS ATTRIBUTED TO
CONTRIBUTION ACTIVITIES:
Employer contributions ........................... 1,002,614 914,649
Employee contributions ........................... 4,596,962 3,867,924
Rollover contributions ........................... 240,214 349,814
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Total additions attributed to
contribution activities ....................... 5,839,790 5,132,387
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Loan repayments - interest ....................... 42,148 46,508
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Total additions .................................. 5,962,929 5,259,694
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DEDUCTIONS FROM NET ASSETS:
Net depreciation in fair value of investments .... 3,356,772 1,936,217
Benefits paid to participants .................... 2,269,350 2,442,739
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Total deductions ................................. 5,626,122 4,378,956
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INCREASE IN NET ASSETS AVAILABLE
FOR BENEFITS ..................................... 336,807 880,738
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year ............................. 20,241,717 19,360,979
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End of year ................................... $20,578,524 $20,241,717
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See notes to financial statements.
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4
ANNTAYLOR, INC. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
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1. PLAN DESCRIPTION
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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") as of July 1, 1989. The Plan covers all
employees of the Company who have completed thirty consecutive days of
employment with the Company or its subsidiaries and affiliates consisting
of at least 30 hours of service per week. It 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 compensation.
Participants may make pre-tax contributions in an amount not less than
1% or more than 10% of their compensation for each pay period through July
31, 2001. On or after August 1, 2001, participants (excluding "highly
compensated employees" as defined by the Internal Revenue Service and
employees subject to the laws of Puerto Rico) may contribute up to 20% of
their compensation in pre-tax contributions. Beginning July 1, 2002,
participants may contribute up to 50% of their compensation in pre-tax
contributions, so long as the sum of the amount of pre-tax and after-tax
contributions does not exceed 50% of participant's compensation.
Participants' aggregate pre-tax contributions may not exceed $11,000 in
2002 and $10,500 in 2001. 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
Participants direct the investment of their contributions into various
investment options offered by the Plan. The Plan currently offers thirteen
mutual funds, one money market fund and Ann Taylor Common Stock as
investment options for participants.
PARTICIPANT ACCOUNTS
Each participant's account is credited with (a) the participant's
contributions, (b) the Company's matching contributions, and (c) an
allocable share of Plan earnings. Allocations of Plan earnings are based
on participant account balances. A participant is entitled to the vested
balance in their account.
LOANS TO PARTICIPANTS
Participants may borrow from their fund accounts a minimum of $1,000 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's Administrative Committee based on the
prevailing Prime Rate at the time of the loan.
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5
ANNTAYLOR, INC. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
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1. PLAN DESCRIPTION (CONTINUED)
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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, death or disability.
Participants are fully vested at all times with respect to employee
contributions and earnings thereon.
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, death, disability or employment termination. All
distributions are lump sum payments. Participants whose account balances
are in excess of $5,000 may elect deferred payment.
FORFEITURES
During the years ended December 31, 2002 and 2001, forfeitures of
$61,009 and $93,850, respectively, were allocated to reduce Company
contributions. These accounts will be used to reduce future employer
contributions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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The significant accounting policies followed by the Plan are detailed
below:
BASIS OF ACCOUNTING
The accompanying financial statements of the Plan have been prepared on
the accrual basis of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments are reported at fair value which, for investments traded
publicly including mutual funds, is based on published market prices.
Interest on investments is recorded as earned. Dividend income is recorded
on ex-dividend dates. Security transactions are recorded as of the trade
date.
PAYMENT OF BENEFITS
Benefits paid to participants are recorded upon distribution.
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.
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6
ANNTAYLOR, INC. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the
Plan's administrator to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of additions and deductions during the
reported period. Actual results could differ from these estimates. Due to
the level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investments will occur in
the near term and that such changes could materially affect the amounts
reported in the statements of net assets available for Plan benefits.
3. INVESTMENTS
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American Express Trust, the Plan Trustee for the years ended December
31, 2002 and 2001, invested all employee and Company contributions, as well
as earnings thereon, pursuant to the terms of the Plan. The Plan Trustee
has custody of all assets in the funds.
The following represents investments that represent 5% or more of the
Plan's net assets.
December 31,
2002 2001
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Investments at fair value as determined by Quoted Market Prices:
Mutual funds:
AXP Mutual Fund (Y) .............................. $ 982,917 $1,453,955
AIM Constellation Fund ........................... 1,517,922 1,553,792
AXP Blue Chip Advantage Fund ..................... 2,410,027 2,504,832
AXP New Dimension Fund ........................... 5,906,324 7,080,865
Money Market fund:
American Express Trust Income Fund II ............ 4,570,344 3,710,894
AnnTaylor Stores Corporation Common Stock Fund ... 999,012 1,141,175
During 2002 and 2001 the Plan's investments, including investments bought
and sold, as well as held during each year, (depreciated)/appreciated in fair
value as follows:
2002 2001
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American Express Trust Income Fund II ..................... $ 196,645 $ 188,284
AXP Mutual Fund (Y) ....................................... (237,939) (268,683)
AIM Constellation Fund .................................... (429,850) (373,745)
AXP Blue Chip Advantage Fund .............................. (638,361) (437,353)
AXP New Dimension Fund .................................... (1,575,510) (1,251,543)
GMO Value Fund (Class M) .................................. (317) --
Royce Low-Priced Stock Fund ............................... 487 --
Templeton Foreign Fund .................................... (100,232) (86,231)
AnnTaylor Stores Corporation Common Stock Fund ............ (139,702) 346,582
American Express Trust Equity Index Fund II ............... (124,006) (8,240)
RS Emerging Growth Fund ................................... (228,548) (60,880)
PIMCO Total Return ........................................ (135) --
American Express Trust Short-Term Horizon (25:75) Fund..... (1,248) 507
American Express Trust Medium-Term Horizon (50:50) Fund.... (11,589) 2,766
American Express Trust Long-Term Horizon (65:35) Fund...... (66,467) 12,319
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Net (depreciation) in fair value of investments ........... $(3,356,772) $(1,936,217)
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7
ANNTAYLOR, INC. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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3. INVESTMENTS (CONTINUED)
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During 2002 and 2001, participants had the option to invest in the
American Express Trust Income Fund II. This fund invests in guaranteed
investment contracts, bank investment contracts, and synthetic investment
contracts. Plan assets invested in this fund are recorded at contract
value (which represents contributions made under the contract, plus
earnings, less withdrawals and administrative expenses) because they are
fully benefit responsive. The average yield was approximately 4.5% during
2002 and 6.0% during 2001. The crediting interest rate was approximately
4.9% and 5.9% at December 31, 2002 and 2001, respectively. Generally, the
fair value of Plan assets invested approximates contract value. The
contract value was $4,570,344 and $3,710,894 for the years ended December
31, 2002 and 2001, respectively.
4. PRIORITIES UPON TERMINATION OF THE PLAN
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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. In the event of termination, participants
will become 100% vested in their accounts.
5. TAX STATUS
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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 tax counsel believe
that the Plan is currently designed and operated in compliance with the
applicable requirements to 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.
6. PARTY-IN-INTEREST TRANSACTIONS
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During the years ended December 31, 2002 and 2001, there were
transactions involving the investment of plan assets in investment funds
maintained by American Express Trust, the Plan Trustee, a party-in-interest
as defined in section 3(14) of ERISA.
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ANNTAYLOR, INC. SAVINGS PLAN
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FORM 5500, SCHEDULE H, PART IV , LINE 4i - SCHEDULE OF ASSETS (HELD AT END
OF YEAR)
DECEMBER 31, 2002
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Party in
Interest (c)Description of (e) Current
(a) (b) Identity of Party Investment Value
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Yes American Express Trust 196,912 shares $4,570,344
Income Fund II
Yes AXP Mutual Fund (Y) 126,339 shares 982,917
No AIM Constellation Fund 89,960 shares 1,517,922
Yes AXP Blue Chip Advantage Fund 383,906 shares 2,410,027
Yes AXP New Dimension Fund 303,912 shares 5,906,324
No GMO Value Fund (Class M) 5,161 shares 35,057
No Royce Low-Priced Stock Fund 6,562 shares 65,158
No Templeton Foreign Fund 112,724 shares 948,446
Yes AnnTaylor Stores Corporation 48,360 units 999,012
Common Stock
No RS Emerging Growth Fund 26,459 shares 517,410
Yes American Express Trust Equity 25,841 shares 654,847
Index Fund II
No PIMCO Total Return 6,272 shares 71,516
Yes American Express Trust Short-Term 4,687 shares 85,037
Horizon (25:75) Fund
Yes American Express Trust Medium-Term 10,700 shares 219,078
Horizon (50:50) Fund
Yes American Express Trust Long-Term 74,645 shares 746,437
Horizon (65:35) Fund
Yes Loans to Participants 180 loans bearing
interest at rates
between 5.75% and
10.50% and matur-
ing between 2003
and 2008 598,876
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$20,328,408
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Employer Identification Number: 51-0297083
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Plan Number: 001
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9
SIGNATURES
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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 27, 2003 By: /s/ James M. Smith
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James M. Smith
Senior Vice President - Chief
Financial Officer and Treasurer,
AnnTaylor, Inc.
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10
EXHIBIT INDEX
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EXHIBIT NO. PAGE NO.
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23 Consent of Deloitte & Touche LLP 11
99 Certification Pursant to Section 906 of the 12
Sarbanes-Oxley Act of 2002
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