SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001,
OR
[ ] TRANSITIONAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _____.
Commission file number 0-02788
THE ELDER-BEERMAN STORES CORP. FINANCIAL PARTNERSHIP PLAN
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(Full title of the Plan)
THE ELDER-BEERMAN STORES CORP. 3155 EL-BEE ROAD, DAYTON, OHIO 45439
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(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
THE ELDER-BEERMAN STORES
CORP. FINANCIAL PARTNERSHIP
PLAN
Financial Statements as of December 31, 2001
and 2000 and for the Year Ended December 31,
2001 and Supplemental Schedule as of
December 31, 2001 and Independent Auditors'
Report
THE ELDER-BEERMAN STORES CORP.
FINANCIAL PARTNERSHIP PLAN
TABLE OF CONTENTS
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PAGE
Independent Auditors' Report 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2001 AND 2000 AND FOR
THE YEAR ENDED DECEMBER 31, 2001:
Statements of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 7
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2001 -
Schedule H, line 4i - Schedule of Assets Held at End of Year 8
INDEPENDENT AUDITORS' REPORT
To The Elder-Beerman Stores Corp. Financial Partnership
Plan Committee:
We have audited the accompanying statements of net assets available for benefits
of The Elder-Beerman Stores Corp. Financial Partnership Plan (the "Plan") as of
December 31, 2001 and 2000, and the related statement of changes in net assets
available for benefits for the year ended December 31, 2001. 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2001 and 2000, and the changes in net assets available for benefits
for the year ended December 31, 2001 in conformity with accounting principles
generally accepted in the United States of America.
Our audits were performed 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. The supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in our audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
Deloitte & Touche LLP
May 15, 2002
Dayton, Ohio
THE ELDER-BEERMAN STORES CORP.
FINANCIAL PARTNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 AND 2000
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2001 2000
INVESTMENTS, at fair value (Note C):
Elder-Beerman Stores Corp. Common Stock $ 987,870 $ 1,168,755
Mutual Funds:
American Century Income and Growth Fund 9,205,164 10,776,903
American Century Strategic Asset Allocation Fund:
Aggressive 2,488,283 2,792,828
Conservative 4,712,472 4,928,539
Moderate 9,851,207 11,168,927
American Century Value Fund 3,376,150 2,514,633
American Century Stable Asset Fund 4,557,855 4,432,358
American Century International Growth Fund 2,468,999 3,806,694
American Century Ultra Fund 9,658,627 12,781,714
Participant notes receivable 1,568,907 1,778,270
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Total investments 48,875,534 56,149,621
Receivables:
Employer contributions 1,383,430 1,148,203
Employee contributions 136,451 116,883
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Total receivables 1,519,881 1,265,086
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NET ASSETS AVAILABLE FOR BENEFITS $50,395,415 $57,414,707
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See notes to financial statements.
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THE ELDER-BEERMAN STORES CORP.
FINANCIAL PARTNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2001
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ADDITIONS (Note C):
Dividends and interest $ 1,011,000
Contributions:
Employer 1,291,183
Employee 3,403,285
Rollover 42,075
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Total contributions 4,736,543
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Total additions 5,747,543
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DEDUCTIONS:
Benefits paid to participants 7,905,530
Investment and administrative expenses 167,002
Net depreciation in fair value of investments 4,694,303
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Total deductions 12,766,835
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NET DECREASE 7,019,292
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 57,414,707
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End of year $50,395,415
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See notes to financial statements.
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THE ELDER-BEERMAN STORES CORP.
FINANCIAL PARTNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000
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A. DESCRIPTION OF PLAN
The following brief description of The Elder-Beerman Stores Corp.
Financial Partnership Plan (the "Plan") during the 2001 Plan Year is
provided for general information only. Participants should refer to the
Summary Plan Description for more complete information and to Footnote G
to the Plan's financial statements for recent Plan amendments.
GENERAL - The Plan is a defined-contribution plan covering all employees
of the Elder-Beerman Stores Corp. (the "Company") and its affiliates who
have been credited with 1,000 or more hours of service during a year and
are age 18 or older. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
CONTRIBUTIONS -All employees who make contributions into the Plan and are
active on the last day of the Plan year are eligible to receive a matching
contribution. The matching contribution is based on the first 6% of
compensation. The Company makes additional matching contributions based on
its level of profitability. For each plan year, the Company may make an
annual contribution not to exceed 1% of the employee's compensation while
they were a participant for the plan year. Each participant is eligible to
receive an annual contribution for the Plan year if they were an active
employee on the last day of the Plan year for which the annual
contribution is made, they completed at least 1,000 hours of service
during the Plan year, and the Company realizes a 1% profit.
PARTICIPANTS' ACCOUNTS - Individual accounts are maintained for each Plan
participant. Each participant's account is credited with the participant's
contribution and his/her proportionate share of the Company's
contribution, actual earnings and charged with an allocation of
administrative expenses. Allocations are based on each participant's
compensation, as provided in the Plan document. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
VESTING - Participants are immediately vested in their pre-tax
contributions to the Plan, plus actual earnings thereon. Vesting in any of
the Company's contribution, plus actual earnings thereon, is based on
years of credited service. A participant is non-vested in Company
contributions until reaching five credited years of service, thereafter,
they are fully vested. Forfeited balances of terminated participants are
used to reduce future Company contributions and/or pay plan expenses.
INVESTMENT OPTIONS - Upon enrollment in the Plan, a participant may direct
investment of his/her 401(k) deferrals or any existing account balance in
any of nine investment options. Participants may change their investment
options or redirect existing balances at any time during the plan year.
PAYMENT OF BENEFITS - On termination of service for any reason, a
participant may elect to receive either a single lump-sum distribution or
a rollover distribution payment into an eligible retirement account.
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PARTICIPANT LOANS - The Plan allows participants to apply for and obtain
loans in an amount (not less than $500 and not more than the lesser of 50%
of the participant's account balance or $50,000) from the balance of the
participant's account. All loans must be repaid within five years. Plan
loans are secured by the balance in the participant's account and bear
interest at a rate determined by the Company from time to time. Payments
of principal and interest are generally made by payroll deduction and are
credited to the participant's account.
B. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared
using the accrual method of accounting.
USE OF ESTIMATES - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires 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. The Plan
utilizes various investment instruments. 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
statements of net assets available for benefits.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at fair value. Shares of mutual funds are valued at the net asset
value of shares held by the Plan at year end. The Company stock is valued
at its quoted market price. Participant notes receivable are valued at
cost, which approximates fair value.
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.
ADMINISTRATIVE EXPENSES - Certain administrative functions are performed
by officers or employees of the Company. No such officer or employee
receives compensation from the Plan. A significant amount of the Plan's
administrative and legal expenses are paid and/or reimbursed by the Plan
Sponsor. Administrative expenses for the trustees and other fees are paid
directly by the Plan.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
C. INVESTMENTS
The Plan's investments that represent five percent or more of the Plan's
net assets available for benefits as of December 31, 2001 and 2000, are as
follows.
2001 2000
American Century Income and Growth Fund $ 9,205,164 $10,776,903
American Century Strategic Allocation Fund:
Conservative 4,712,472 4,928,539
Moderate 9,851,207 11,168,927
American Century Stable Asset Fund 4,557,855 4,432,358
American Century Ultra Fund 9,658,627 12,781,714
American Century Value Fund 3,376,150
American Century International Growth Fund 3,806,694
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During 2001, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated
in value by $4,694,303 as follows:
Mutual funds $(4,718,462)
Common stock 24,159
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Total $(4,694,303)
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D. INCOME TAX STATUS
The Internal Revenue Service ("IRS") issued a favorable determination
letter dated November 4, 1996, stating that the Plan, as then amended, was
in compliance with the applicable requirements of the Internal Revenue
Code. The Plan filed a request with the IRS on February 21, 2002, for a
determination letter on the restated Plan adopted June 30, 1998, and as
subsequently amended on May 28, 1999, August 15, 2001 and February 8,
2002. Plan management believes that the restated Plan is currently
designed and being operated in compliance with the applicable requirements
of the Internal Revenue Code and, therefore, the Plan is qualified and
tax-exempt as of the financial statement date.
E. 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, all benefits will become vested and will be distributed
to participants and beneficiaries.
F. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds which were managed by
American Century during 2001. American Century was the trustee during 2001
as defined by the Plan and, therefore, these transactions qualify as
party-in-interest transactions.
G. SUBSEQUENT EVENTS
The Plan was amended, effective January 1, 2002, to provide the following:
Matching contribution, retirement security contributions and annual
company contributions vest in accordance with a five year graded vesting
schedule. (20% after 1 year of service, 40% after 2 years of service, 60%
after 3 years of service, 80% after 4 years of service and, 100% after 5
years of service).
A participant may generally elect to receive a distribution of his entire
Vested Interest under the Plan in installments over a period not to exceed
five years.
In the event of a Plan conversion, the Plan Administrator may suspend
certain provisions of the Plan for a defined period of time. Typically,
loans, hardship withdrawals and distributions from the Plan would be
suspended. Additionally, participants would be prohibited from changing
their investment elections or deferral percentages during the period of
the suspension.
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The Plan was also revised to comply with Section 132(f) of the IRS Code of
1986. This means that compensation for purposes of the Plan will not be
reduced by any pre-tax contributions that a participant makes to a
qualified transportation fringe benefit plan sponsored by The
Elder-Beerman Stores Corp. or any member of The Elder-Beerman Stores
Corp.'s controlled group. Under a qualified transportation fringe benefit
plan, an employee can pay for parking and expenses of commuting to work on
a pre-tax basis through payroll deductions. While The Elder-Beerman Stores
Corp. does not currently sponsor such a qualified transportation fringe
benefit plan, the amendment is required by law.
Through plan year 2001 Company contributions were based on enrollment in
the Plan and length of service (The Matching Contribution), enrollment in
the Plan and profitability of the Company (Additional Matching
Contribution), and profitability of the Company and hours of service
requirement (Annual Contribution). Effective January 1, 2002 the structure
of the Company contributions in The Financial Partnership Plan was amended
to continue the Matching Contribution as established, to discontinue the
Annual Contribution, and to enhance the percentages and profit levels in
the Additional Matching Contribution. For more detailed information refer
to the Summary Plan Description (SPD).
Eligible Participants may take hardship distributions from their entire
vested account balance (other than earnings credited to per-tax
contributions after December 31, 1988).
The Plan was also amended to terminate American Century as record keeper
of the plan and ADP Retirement Services was named successor record keeper
of the Plan effective January 1, 2002.
Effective January 2, 2002, the Plan was amended to remove UMB Bank, N.A.
as the Plan's trustee, and appoint Chase Manhattan Bank as successor
trustee of the Plan. As a result of this amendment, the Plan assets were
transferred from UMB Bank, N.A. to Chase Manhattan Bank as of January 2,
2002.
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THE ELDER-BEERMAN STORES CORP.
FINANCIAL PARTNERSHIP PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF INVESTMENTS HELD AT END OF YEAR
DECEMBER 31, 2001
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(b) (c)
IDENTITY OF ISSUER, DESCRIPTION OF INVESTMENT INCLUDING (e)
BORROWER, LESSOR OR MATURITY DATE, RATE OF INTEREST, FAIR
(a) SIMILAR PARTY COLLATERAL, PAR OR MATURITY DATE VALUE
MUTUAL FUNDS:
* American Century Income and Growth Fund, 336,569 shares $ 9,205,164
* American Century Strategic Asset Allocation Fund: Aggressive, 383,994 sh 2,488,283
* American Century Strategic Asset Allocation Fund: Conservative, 901,046 4,712,472
* American Century Strategic Asset Allocation Fund: Moderate, 1,666,871 shares 9,851,207
* American Century Value Fund, 482,307 shares 3,376,150
* American Century International Growth Fund, 309,787 shares 2,468,999
* American Century Ultra Fund, 349,443 shares 9,658,627
SEI Trust American Century Stable Asset Fund, 4,557,855 shares 4,557,855
Participant notes receivable Collateralized by participant's account (6% - 10.5%) 1,568,907
* Elder-Beerman Stores Corp. Common Stock, 335,489 shares 987,870
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TOTAL INVESTMENTS $48,875,534
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* Party-in-interest.
Column (d) has been omitted because it is not applicable.
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SIGNATURES
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.
THE ELDER-BEERMAN STORES CORP.
FINANCIAL PARTNERSHIP PLAN
Date: June 28, 2002 By: /s/ Steven D. Lipton
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Steven D. Lipton
Senior Vice President --Controller
FORM 11-K
INDEX TO EXHIBITS
EXHIBIT NO.
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23 Consent of Independent Auditors