-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MxTtQ8TJo5BbgkGIg3cpO6bNX6GFtNBO0XFppH/EWOJ7TT1XBI0qppYyxXoWIz4L ypzMTUyvaAxd7CABhn9pNw== 0000063416-04-000093.txt : 20040625 0000063416-04-000093.hdr.sgml : 20040625 20040625153336 ACCESSION NUMBER: 0000063416-04-000093 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040625 FILED AS OF DATE: 20040625 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAY DEPARTMENT STORES CO CENTRAL INDEX KEY: 0000063416 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 431104396 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00079 FILM NUMBER: 04882104 BUSINESS ADDRESS: STREET 1: 611 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 BUSINESS PHONE: 3143426300 11-K 1 elevenk.txt FORM 11K DATED JUNE 25, 2004 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 Year Ended December 31, 2003, or [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-79 A. Full title of the plan if different from that of the issuer named below: THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN B. Name of issuer of securities held pursuant to the plan and the address of its principal executive office: THE MAY DEPARTMENT STORES COMPANY 611 Olive Street St. Louis, MO 63101 THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN FINANCIAL STATEMENTS AND EXHIBITS Listed below are all financial statements and exhibits filed as part of this annual report on Form 11-K: Page of this Financial Statements Form 11-K Report of Independent Registered Public Accounting Firm 3 Financial Statements of the Plan: Statements of Net Assets Available for Benefits - December 31, 2003 and 2002 4 Statements of Changes in Net Assets Available for Benefits - Years Ended December 31, 2003 and 2002 5 Notes to Financial Statements - Years Ended December 31, 2003 and 2002 6 Form 5500, Schedule H, Line 4i - Schedule of Assets (Held at End of Year)-December 31, 2003 15 Exhibits Exhibit 23 - Consent of Independent Registered Public Accounting Firm 20 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator of The May Department Stores Company Profit Sharing Plan has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN By: The May Department Stores Company Date: June 25, 2004 By: /s/ Thomas D. Fingleton Thomas D. Fingleton Executive Vice President and Chief Financial Officer -2- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Retirement Committee of the Board of Directors The May Department Stores Company We have audited the accompanying statements of net assets available for benefits of The May Department Stores Company Profit Sharing Plan (the "Plan") as of December 31, 2003 and 2002, 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. An audit 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, 2003 and 2002, and the changes in its 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 2003 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 St. Louis, Missouri June 16, 2004 -3- THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2003 AND 2002 (In thousands) 2003 2002 ASSETS: Investments, at fair value: The May Department Stores Company: ESOP preference stock $ 457,083 $ 409,395 Common stock 365,075 306,322 Commingled equity index funds 273,326 179,627 Short-term investment fund 133,662 122,365 U.S. government securities 51,051 54,515 Fixed income investments 39,680 32,459 Loans to members 1 4 Total investments 1,319,878 1,104,687 Other assets: Dividends and interest receivable 1,545 1,548 Receivable - withholdings of member contributions 1,104 1,157 Receivable - employer contribution for David's Bridal Plan - 488 Total assets 1,322,527 1,107,880 LIABILITIES: Note payable 90,860 151,647 Net amount payable for investment securities transactions and other 7,743 8,676 Accrued interest payable 1,285 2,146 Accrued administrative expenses 666 784 Total liabilities 100,554 163,253 NET ASSETS AVAILABLE FOR BENEFITS $1,221,973 $ 944,627 See notes to financial statements.
-4- THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEARS ENDED DECEMBER 31, 2003 AND 2002 (In thousands) 2003 2002 ADDITIONS: Contributions: Member $ 94,679 $ 99,290 Employer ESOP contribution 53,805 50,191 Transfers from merged plan - 7,439 Total contributions 148,484 156,920 Appreciation/(depreciation) in fair value of investments: The May Department Stores Company: ESOP preference stock 96,362 (259,866) Common stock 77,264 (198,621) Commingled equity index funds 58,175 (49,569) U.S. government securities (1,658) 1,884 Fixed income investments 322 1,100 Total appreciation/(depreciation) in fair value of investments 230,465 (505,072) Investment income: Dividends 31,003 34,106 Interest 7,243 6,777 Total investment income 38,246 40,883 Total additions, net of depreciation 417,195 (307,269) DEDUCTIONS: Benefits paid to members (125,335) (134,924) Interest expense (9,408) (14,354) Administrative expenses (4,873) (5,392) Cash dividend payments to members (233) (176) Total deductions (139,849) (154,846) INCREASE (DECREASE) IN NET ASSETS AVAILABLE FOR BENEFITS 277,346 (462,115) NET ASSETS AVAILABLE FOR BENEFITS - Beginning of year 944,627 1,406,742 NET ASSETS AVAILABLE FOR BENEFITS - End of year $1,221,973 $ 944,627 See notes to financial statements.
-5- THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2003 AND 2002 1. DESCRIPTION OF THE PLAN The following description of The May Department Stores Company Profit Sharing Plan (the "Plan") is provided for financial statement purposes only. Members should refer to the Plan document and Summary Plan Description dated November 2002 for more complete information. General The Plan is a defined contribution profit sharing plan. The Plan covers eligible associates of The May Department Stores Company ("May"), a Delaware corporation and its subsidiaries or affiliates who elect to participate in the Plan. An associate's membership in the Plan is voluntary. Eligible Associates An associate is eligible to join the Plan upon becoming a member of The May Department Stores Company Retirement Plan ("May Retirement Plan"). In general, associates employed by May or any of its subsidiaries or affiliates (excluding associates of After Hours Formalwear, Inc., foreign national associates working in foreign countries and certain members of collective bargaining units) become members of the May Retirement Plan upon attaining age 21 and working for at least one year in which they are paid for 1,000 hours or more. ESOP Feature In 1989, the Plan was amended and restated to add an Employee Stock Ownership Plan ("ESOP") feature and acquired 788,955 shares of convertible preferred stock of May (the "ESOP Preference Shares"). Each ESOP Preference Share cost $507, has a guaranteed minimum value of $507, receives a fixed annual dividend of $38.03 and is convertible into 33.78747 shares of May common stock. The acquisition of the ESOP Preference Shares was financed with the proceeds of a private placement to a group of institutional investors for an aggregate principal amount of $400 million (the "ESOP Loans") (see Note 5). The ESOP Loans are repaid by the Plan from the following sources in the following order: (a) dividends from May on ESOP Preference Shares previously allocated to members; (b) dividends from May on unallocated ESOP Preference Shares; and (c) contributions by May. During the term of the ESOP Loans, the ESOP Preference Shares which have not been allocated to members' company accounts serve as collateral for the ESOP Loans. The ESOP Loans are guaranteed by May. ESOP Preference Shares are initially held by the Plan in an Unallocated account. As ESOP Loans are repaid, ESOP Preference Shares are released to a suspense account pending allocation to the members' ESOP Preference Fund accounts in satisfaction of the required dividend and employer allocation. In November 2001, the Plan was amended to provide that the May Common Stock Fund is an ESOP under Section 4975(e)(7) of the Internal Revenue Code. This feature allows members with accounts in the May Common Stock Fund to elect to either reinvest May common stock dividends into their Plan accounts or to receive these dividends in cash each quarter. Contributions Plan members may contribute 1% to 25% (1% to 15% for "highly compensated associates") of their pay as defined by the Plan. Contributions may be made prior to federal and certain other income taxes pursuant to Section 401(k) of the Internal Revenue Code. -6- The employer allocation is variable and discretionary. Generally, the employer allocation for each Plan year is determined by multiplying a base matching rate times members' basic contributions (generally, contributions up to 5% of pay each paycheck), reduced by forfeitures, one-third of annual dividends with respect to the ESOP Preference Shares, as defined, administrative expenses and excess ESOP allocations from prior Plan years (to the extent such amounts have not been previously used to reduce employer allocations for earlier Plan years). The base matching rate is determined as follows: In the event May has diluted earnings per share ("EPS") of its common stock for its most recent fiscal year ("current year") resulting in a 6.0% increase over the EPS for the fiscal year immediately preceding the current year, the base matching rate will be 50%. For each percentage point increase over 6.0% or decrease below 6.0%, there is a 1.25 percentage point increase in or decrease from the 50% base matching rate. ESOP Preference Shares are allocated to associates' accounts at their original cost to the Plan of $507 per share ($15.01 per common share equivalent). Because the ESOP Preference Shares are convertible into May common stock, the ESOP Preference Shares are worth more than original cost when the market value of May common stock is higher than $15.01 per share. This market value of the employer allocation (including any supplemental contributions), divided by associates' matchable contributions, is the effective matching rate. The Plan's effective matching rate was 91% and 46% for the 2003 and 2002 Plan years, respectively. If the effective matching rate for a Plan year exceeds 100%, only ESOP Preference Shares are used for the employer allocation and no May common shares are contributed as a supplemental contribution. The effective matching rate is also limited to 2.0 times the base matching rate. The base matching rate formula may be adjusted at any time for unusual events including discontinued operations, accounting changes, or items of extraordinary gain or loss. If the guaranteed minimum value of the ESOP Preference Shares allocated to members' Company accounts as a result of the ESOP Loan payments (principal and interest) for a year is less than the employer allocation, then May makes supplemental contributions to the Plan for the difference. Supplemental contributions can be made either in shares of May common stock or cash. If the guaranteed minimum value of the ESOP Preference Shares released for allocation to members' Company accounts as a result of the ESOP Loan payments is greater than the required employer allocation, any "excess" would be applied (in accordance with applicable law) to satisfy required employer allocations in future Plan years. Investments Members' contributions may be invested in any of seven participant-directed investment funds: Money Market Fund - Invests in the Bank of New York Collective Short-Term Investment Fund which invests in short-term (less than one year) obligations of high-quality issuers including banks, corporations, municipalities, the U.S. Treasury and other federal agencies. Bond Index Fund - Invests primarily in corporate, U.S. Government, federal agency and certain foreign obligations that make up the Lehman Intermediate Government/Credit Bond Index. The Lehman Intermediate Government/Credit Bond Index represents the combined overall performance of intermediate- term, fixed income securities that have maturities ranging from one to 10 years, with an average maturity of four years. -7- Balanced Equity/Bond Fund - Invests in the S&P 500 Equity Index Fund and the Bond Index Fund, with a current targeted investment allocation of approximately 60% to the S&P 500 Equity Index Fund and 40% to the Bond Index Fund. The fund is rebalanced by the Plan's Trustee at the end of each calendar quarter. S&P 500 Equity Index Fund - Invests primarily in the Northern Trust Collective Daily Stock Index Fund, a collective trust which invests in the common stock of corporations that make up the Standard & Poor's 500 Composite Stock Price Index. This index represents the composite performance of 500 major stocks in the United States. Investment mix is determined based on the relative market size of the 500 corporations, with larger corporations making up a higher proportion than smaller corporations. Russell 2000 Equity Index Fund - Invests primarily in the Northern Trust Daily Russell 2000 Equity Index Fund, a collective trust which invests in the common stock of corporations that make up the Russell 2000 Index. This Index is commonly used to represent the small market capitalization (small company) segment of the U.S. equity market. Investment mix is determined based on the relative market size of 2,000 corporations, with larger corporations in this group making up a higher proportion than smaller corporations. International Equity Index Fund - Invests primarily in the Northern Trust Daily EAFE Equity Index Fund, a collective trust which invests in the common stock of corporations that make up the Morgan Stanley Capital International Europe, Australasia and Far East Index. Investment mix is determined based on the relative country weights within the Index, with securities issued in countries having larger economies making up a higher proportion than countries with smaller economies. May Common Stock Fund - Invests primarily in May common stock. Employer allocations and supplemental contributions are initially invested in the ESOP Preference Fund and the May Common Stock Fund, respectively. The employer allocations to the Plan for the years ended December 31, 2003 and 2002, were made in May 2004 and 2003 in the form of 51,064 and 34,043 ESOP Preference Shares, respectively. The investments are exposed to various risks such as interest rate, credit, overall market volatility, political, currency and regulatory risks. Further, due to the level of risk associated with certain investments, it is reasonably possible that changes in the value of investments will occur in the near term and such changes could materially affect the amounts reported in the Statements of Net Assets Available for Benefits. -8- Vesting The method of calculating vesting service is the elapsed time method. Elapsed time is measured by calculating the time which has elapsed between the member's hire date and retirement date/termination date (excluding certain break-in-service periods). Plan members are 100% vested in May common stock dividends earned in their Company accounts after January 1, 2002. Plan members are vested in the remainder of their Company accounts in accordance with the following schedule (effective January 2002): Years of Vesting Service Vesting Percentage Less than 2 years 0 % 2 years 20 % 3 years 40 % 4 years 60 % 5 years 80 % 6 years 100 % Plan members are always fully vested in the value of their member accounts. Payment of Benefits Amounts in a member's account and the vested portion of a member's Company account may be distributed upon retirement, death or termination of employment. Distributions from the May Common Stock Fund and ESOP Preference Fund are made in shares of May common stock or cash. All other distributions are made in cash. Administration of the Plan The Plan is administered by a committee consisting of at least five persons appointed by May. An administrative subcommittee has the general responsibility for administration of the Plan and an investment subcommittee establishes and monitors investment policies and activities. The assets of the Plan are held in a trust for which The Bank of New York is the Trustee. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investments The Plan's investments in common stock, U.S. government securities and fixed income securities are stated at fair value based on publicly reported price information. Investments in commingled equity index funds are stated at fair value as determined by the investment manager. Short-term investments are recorded at cost, which approximates fair value. Each ESOP Preference Share is valued at the greater of (a) the guaranteed minimum value (original cost) of $507 per share (plus accrued dividends) or (b) a conversion value equal to the market price of May common stock multiplied by the conversion rate for each ESOP Preference Share. As of December 31, 2003 and 2002, the ESOP Preference Shares were valued at their conversion values of $982 and $776 per share, respectively. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex- dividend date. Realized gains and losses are recorded using the average cost method. Federal Income Taxes The Trust established under the Plan to hold the Plan's assets is tax exempt under 501(a) as the Plan is qualified pursuant to Sections 401(a), 401(k) and 4975(e)(7) of the Internal Revenue Code and accordingly, the Trust's net investment income is exempt from income taxes. The Plan has received a favorable tax determination letter dated October 9, 2002. The Plan has been amended since receiving the determination letter. The Plan administrators believe that the amendments do not affect the tax-exempt status of the Plan. The Plan requested an updated tax determination letter from the Internal Revenue Service on January 23, 2004. -9- Employer allocations and contributions, member before-tax contributions and any cumulative investment returns on member accounts are not taxable to the members until distributions are made. Administrative Expenses All administrative expenses (including the allocable portion of expenses for data processing services, and salaries and benefits for associates providing services to the Plan) are paid by the Plan. May allocated approximately $1,173,000 and $1,300,000 in administrative expenses to the Plan in 2003 and 2002, respectively. Valuation of the Trust Effective November 7, 2002, the Plan was amended to provide for daily valuations of participant accounts. Previously, accounts were valued as of each calendar month-end. The value of the ESOP Preference Fund is determined based on the greater of the guaranteed minimum value (plus accrued dividends) or conversion value. The unit values of the other investment funds are determined by dividing the market value of the particular investment fund by the total number of units outstanding in all member accounts in such investment fund. As of each succeeding valuation date, the value of each fund is redetermined and account balances in each fund are adjusted as follows: (a) All payments made from an account (except for the ESOP Preference Fund) are valued based on the unit value as of the distribution date. Payments from the ESOP Preference Fund are valued based on the greater of the guaranteed minimum value (plus accrued dividends) or conversion value, as of the distribution date. (b) Member contributions during a calendar month are invested initially in the Plan in a short-term investment fund, and are credited to the chosen investment funds with accrued interest on the 21st of the following calendar month. An equivalent number of additional units are credited to the appropriate accounts in such investment fund based on the unit value on the 21st. Employer allocations of ESOP Preference Shares are valued at the greater of the guaranteed minimum value (plus accrued dividends) or conversion value, as of the allocation date. (c) In the event that a member's employment is terminated and a portion of such member's Company account has been forfeited, the forfeited units or ESOP Preference Shares shall be cancelled as of the last day of the Plan year. The dollar amount of such forfeited units or ESOP Preference Shares is reallocated among the remaining members of the Plan as of the last day of the Plan year in the same manner as the employer allocation for such year. 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 the reported amounts of additions to and deductions from net assets available for benefits during the year. Actual results could differ from those estimates. Transfers from Merged Plan On July 31, 2002, the David's Bridal 401(k) Plan ("David's Bridal Plan") was merged with the Plan. All assets in the David's Bridal Plan were liquidated and transferred to the Plan from July 31, 2002, through the period ending August 29, 2002. The 2002 employer allocation attributable to David's Bridal Plan member contributions through the merger date was $488,000, and was contributed to the Plan in May 2003. -10- 3. INVESTMENTS The fair value of the Plan's investments that represent 5% or more of the Plan's net assets available for benefits as of December 31, 2003 and 2002, are as follows (fair value in thousands): December 31, 2003 December 31, 2002 Number of Shares Fair Number of Shares Fair Description of Investments or Principal Amount Value or Principal Amount Value ESOP Preference Stock: Unallocated (nonparticipant- directed) 121,728 $ 119,561 181,078 $ 140,596 Member allocated (non- participant-directed through November 6, 2002) 343,638 337,522 346,195 268,799 Total 465,366 $ 457,083 527,273 $ 409,395 The May Department Stores Company Common Stock 12,558,479 $ 365,075 13,329,909 $ 306,322 Northern Trust Collective Daily Stock Index Fund 81,798 $ 232,987 7,669,613 $ 175,635 The Bank of New York Collective Short-Term Investment Fund-Master Notes $ 133,662,406 $ 133,662 $ 122,364,848 $ 122,365 At December 31, 2003 and 2002, the Plan beneficially owned May's Common Stock and May's ESOP Preference Shares, representing 9% and 10%, respectively, of the voting power of the Company.
-11- 4. NONPARTICIPANT-DIRECTED NET ASSETS Effective November 7, 2002, the Plan was amended to allow all investments in the May Common Stock Fund and ESOP Preference Fund (allocated account) to be participant-directed. Previously, only investments in these funds allocated to participants over the age of 55 were eligible to be transferred to other funds. The change in net assets below includes all activity in these funds through December 31, 2003. Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments is as follows (dollars in thousands): December 31, 2003 2002 Investments: ESOP Preference Stock (unallocated account) $ 119,561 $ 140,596 Short-term investments 5,170 3,765 Total investments 124,731 144,361 Note payable (90,860) (151,647) Employer allocation (50,156) (26,432) Accrued interest payable (1,285) (2,146) Other 3 5 Net assets $ (17,567) $ (35,859) Year Ended December 31, 2003 2002 Changes in net assets: Employer ESOP contribution $ 3,649 $ 50,191 Net appreciation (depreciation) in fair value of investments 17,997 (316,078) Dividends 6,054 23,844 Interest income - 46 Benefits paid to participants - (43,222) Interest expense (9,408) (14,354) Administrative expenses - (848) Transfers to participant-directed investments - (361,451) $ 18,292 $ (661,872)
5. NOTE PAYABLE Note payable as of December 31 consisted of the following (dollars in thousands): 2003 2002 ESOP note payable-Series B, 8.49%, due April 30, 2004 $ 90,860 $ 151,647
The last scheduled principal payment for the Series B ESOP note payable is due on April 30, 2004, for $90,860,000. As of December 31, 2003 and 2002, the estimated fair value of the ESOP note payable was approximately $94,430,000 and $163,102,000, respectively. -12- 6. RELATED PARTIES Certain Plan investments are shares of The Bank of New York Collective Short- Term Investment Fund. The Bank of New York is the Trustee of the Plan and, therefore, these transactions qualify as party-in-interest. In addition, the Plan paid the Trustee approximately $487,000 and $732,000 in administrative expenses, principally trustee fees, in 2003 and 2002, respectively. 7. RECONCILIATION TO FORM 5500 As of December 31, 2003 and 2002, the Plan had approximately $13,287,000 and $6,783,000, respectively, of pending distributions to participants. These amounts are included in net assets available for benefits. For reporting on the Plan's Form 5500, these amounts will be classified as benefit claims payable with a corresponding reduction in net assets available for benefits. The following table reconciles the financial statements to the Form 5500 which will be filed by the Plan for the Plan years ended December 31, 2003 and 2002 (dollars in thousands): 2003 Benefits Net Assets Payable to Benefits Available Participants Paid for Benefits Per 2003 financial statements $ - $ 125,335 $ 1,221,973 Pending benefit distributions - December 31, 2003 13,287 13,287 (13,287) Pending benefit distributions - December 31, 2002 - (6,783) - Per 2003 Form 5500 $ 13,287 $ 131,839 $ 1,208,686 2002 Benefits Net Assets Payable to Benefits Available Participants Paid for Benefits Per 2002 financial statements $ - $ 134,924 $ 944,627 Pending benefit distributions - December 31, 2002 6,783 6,783 (6,783) Pending benefit distributions - December 31, 2001 - (10,364) - Per 2002 Form 5500 $ 6,783 $ 131,343 $ 937,844
8. DISTRIBUTION OF ASSETS UPON TERMINATION OF THE PLAN May reserves the right to terminate the Plan, in whole or in part, at any time. If an employer shall cease to be a participating employer in the Plan, the accounts of the members of the withdrawing employer shall be revalued as if such withdrawal date were a valuation date. The Plan Committee is then to direct the Trustee either to distribute the accounts of the members of the withdrawing employer as of the date of such withdrawal on the same basis as if the Plan had been terminated, or to deposit in a trust established by the withdrawing employer, pursuant to a plan substantially similar to the Plan, assets equal in value to the assets allocable to the accounts of the members of the withdrawing employer. If the Plan is terminated at any time or contributions are completely discontinued and May determines that the Trust shall be terminated, the members' Company accounts shall become fully vested and nonforfeitable, all accounts shall be revalued as if the termination date were a valuation date and such accounts shall be distributed to members. -13- If the Plan is terminated or contributions completely discontinued but May determines that the Trust shall be continued pursuant to the terms of the Trust agreement, no further contributions shall be made by members or the employer and the members' Company accounts shall become fully vested, but the Trust shall be administered as though the Plan were otherwise in effect. -14- THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN FORM 5500, SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2003 (Cost and Fair Value in Thousands) Employer #: 43-1104396 Plan #: 003 (c) Number of Shares or (e) (b) Principal (d) Fair (a) Identity of issue Amount Cost Value * THE MAY DEPARTMENT STORES COMPANY ESOP PREFERENCE STOCK: Unallocated 121,728 $ 61,716 $ 119,561 Allocated 343,638 174,819 337,522 The May Department Stores Company ESOP Preference Stock Total 465,366 236,535 457,083 * THE MAY DEPARTMENT STORES COMPANY COMMON STOCK 12,558,479 274,515 365,075 COMMINGLED EQUITY INDEX FUNDS: Northern Trust Collective Daily Stock Index Fund 81,798 243,280 232,987 Northern Trust Daily Russell 2000 Fund 47,808 25,186 30,126 Northern Trust Daily EAFE Equity Index Fund 43,394 8,392 10,213 Commingled Equity Index Funds Total 276,858 273,326 SHORT-TERM INVESTMENT FUND: * The Bank of New York Collective Short-Term Investment Fund - Master Notes $133,662,406 133,662 133,662 U.S GOVERNMENT SECURITIES: U.S. Treasury Notes: 5.25%, due 5/15/04 $ 1,850,000 1,878 1,879 13.75%, due 8/15/04 $ 525,000 810 566 5.75%, due 11/15/05 $ 5,400,000 5,919 5,798 6.875%, due 5/15/06 $ 2,645,000 2,964 2,940 6.5%, due 10/15/06 $ 4,550,000 5,171 5,068 6.625%, due 5/15/07 $ 4,135,000 4,516 4,680 5.625%, due 5/15/08 $ 550,000 580 609 5.75%, due 8/15/10 $ 1,405,000 1,565 1,575 5.0%, due 8/15/11 $ 975,000 1,080 1,044 4.25%, due 8/15/13 $ 5,900,000 5,841 5,907 Total U.S. Treasury Notes 30,324 30,066 * Also a party-in-interest. (Continued)
-15- (c) (e) (b) Principal (d) Fair (a) Identity of issue Amount Cost Value U.S. GOVERNMENT SECURITIES (Continued): U.S. Government Agency Securities: Federal National Mortgage Association: 7.0%, due 7/15/05 $ 6,785,000 $ 7,303 $ 7,330 5.5%, due 2/15/06 $ 1,750,000 1,909 1,874 6.0%, due 5/15/08 $ 800,000 829 887 Federal Home Loan Mortgage Corp.: 6.25%, due 7/15/04 $ 2,000,000 2,132 2,054 5.25%, due 1/15/06 $ 875,000 946 931 5.75%, due 4/15/08 $ 3,500,000 3,899 3,843 6.625%, due 9/15/09 $ 750,000 883 858 6.0%, due 6/15/11 $ 2,495,000 2,816 2,769 Interamerican Development Bank - 5.75%, due 2/26/08 $ 400,000 398 439 Total U.S. government agency securities 21,115 20,985 U.S. Government Securities Total 51,439 51,051 FIXED INCOME INVESTMENTS: Bank Corporate Bonds: Bank America Corp., 7.125%, due 9/15/06 $ 600,000 669 670 Bank One Corp., 5.25%, due 1/30/13 $ 650,000 666 667 Bayerische Landesbank, 5.875%, due 12/01/08 $ 450,000 450 493 Morgan JP & Co., Inc., 5.75%, due 2/25/04 $ 300,000 310 302 Morgan JP & Co., Inc., 6.7%, due 11/1/07 $ 150,000 161 167 National Australia, 8.6%, due 5/19/10 $ 450,000 449 557 Wachovia, 6.25%, due 8/4/08 $ 800,000 885 883 Wells Fargo & Co., 7.25%, due 8/24/05 $ 200,000 219 217 Total bank corporate bonds 3,809 3,956 Finance and Insurance Corporate Bonds: Aegon N V, 4.75%, due 6/1/13 $ 400,000 404 390 American Gen Fin Corp., 5.375%, due 9/1/09 $ 130,000 138 139 Bank One N.A., Chicago, 5.5%, due 3/26/07 $ 250,000 277 270 Capital One Bank, 6.875%, due 2/1/06 $ 400,000 423 433 Citigroup Inc., 7.375%, due 4/2/07 $ 325,000 336 367 Citigroup Inc., 7.25%, due 10/1/10 $ 410,000 469 478 Citigroup Inc., 4.875%, due 5/7/15 $ 505,000 504 493 Countrywide Home Loans Inc., 3.25%, due 5/21/08 $ 250,000 250 246 Credit Suisse First Boston USA, 6.125%, due 11/15/11 $ 300,000 297 327 Deutsche Telekom International, 8.5%, due 6/5/10 $ 810,000 921 979 Ford Motor Credit Co., 7.375%, due 10/28/09 $ 1,200,000 1,223 1,318 General Electric Cap., 5.125%, due 2/15/07 $ 800,000 834 850 General Electric Cap., 6.5%, due 12/10/07 $ 500,000 569 559 General Electric Cap., 3.5%, due 5/1/08 $ 500,000 500 501 General Electric Cap., 5.875%, due 2/15/12 $ 750,000 801 806 General Motors Accep., 6.75%, due 1/15/06 $ 600,000 616 644 (Continued)
-16- (c) (e) (b) Principal (d) Fair (a) Identity of issue Amount Cost Value FIXED INCOME INVESTMENTS (Continued): Finance and Insurance Corporate Bonds (Continued): Goldman Sachs Group, Inc., 6.875%, due 1/15/11 $ 250,000 255 284 Goldman Sachs Group, Inc., 6.875%, due 1/15/11 $ 250,000 181 175 Household Finance Corp., 6.5%, due 1/24/06 $ 450,000 455 487 Household Finance Corp., 5.75%, due 1/30/07 $ 500,000 497 541 Kellogg Co., 6.6%, due 4/1/11 $ 300,000 339 336 Lehman Brothers Hldg., 6.25%, due 5/15/06 $ 350,000 368 380 Lehman Brothers Hldg., 7.0%, due 2/1/08 $ 75,000 84 85 Lehman Brothers Hldg., 3.5%, due 8/7/08 $ 450,000 448 447 Marsh & McLennan Cos., Inc., 6.625%, due 6/15/04 $ 400,000 398 409 MBNA Corp., 6.125%, due 3/1/13 $ 100,000 100 107 Mellon Finl Co., 6.0%, due 3/1/04 $ 400,000 390 403 Merrill Lynch & Co., 6.15%, due 1/26/06 $ 275,000 298 296 Morgan Stanley Dean Witter, 6.1%, due 4/15/06 $ 400,000 400 433 Morgan Stanley, 5.3%, due 3/1/13 $ 300,000 299 306 Pfizer, Inc., 3.625%, due 11/1/04 $ 500,000 504 509 St. Paul COS Inc., 8.125%, due 4/15/10 $ 580,000 715 694 Simon Debartolo Group, 6.875%, due 11/15/06 $ 500,000 498 557 SLM Corp., 3.625%, due 3/17/08 $ 500,000 498 498 Toyota Motor Corp., 5.5%, due 12/15/08 $ 450,000 449 492 Unilever Cap., 7.125%, due 11/1/10 $ 125,000 136 145 Union Pac. Corp., 6.125% due 1/15/12 $ 250,000 273 271 Verizon Global, 7.25%, due 12/1/10 $ 650,000 705 748 Wells Fargo & Co., 5.125%, due 9/1/12 $ 250,000 260 255 Total finance and insurance corporate bonds 17,112 17,658 Industrial Corporate Bonds: Alcoa, Inc., 5.875%, due 6/1/06 $ 100,000 100 108 AOL Time Warner, Inc., 6.125%, due 4/15/06 $ 300,000 318 323 Atlantic Richfield Co., 5.9%, due 4/15/09 $ 450,000 448 498 Bristol Myers Squibb, 4.75%, due 10/1/06 $ 125,000 125 132 Burlington Northern, 7.125%, due 12/15/10 $ 100,000 100 116 Comcast Cable, 6.375%, due 1/30/06 $ 100,000 96 108 Comcast Cable, 6.875%, due 6/15/09 $ 200,000 199 225 Comcast Cable, 6.75%, due 1/30/11 $ 700,000 729 779 Cox Communications, 7.75%, due 11/1/10 $ 160,000 175 191 Duke Energy Field Svcs, LLC., 7.5%, due 8/16/05 $ 630,000 689 677 Duke Energy Field Svcs, LLC., 7.875%, due 8/16/10 $ 350,000 426 410 General Motors Corp., 7.1%, due 3/15/06 $ 300,000 303 324 International Business Machine, 5.375%, due 2/1/09 $ 400,000 399 431 International Paper, 8.125%, due 7/8/05 $ 100,000 111 109 Johnson & Johnson, 3.8%, due 5/15/13 $ 500,000 500 472 Kellogg Co., 6.0%, due 4/1/06 $ 400,000 399 429 Morgan Stanley, 5.8%, due 4/1/07 $ 300,000 327 326 National Rural Utils., 7.25%, due 3/1/12 $ 900,000 973 1,049 Raytheon Co., 6.75%, due 8/15/07 $ 100,000 108 111 SBC Comm., 5.75%, due 5/2/06 $ 100,000 108 107 (Continued)
-17- (c) (e) (b) Principal (d) Fair (a) Identity of issue Amount Cost Value FIXED INCOME INVESTMENTS (Continued): Industrial Corporate Bonds (Continued): Viacom, Inc., 7.70%, due 7/30/10 $ 150,000 $ 161 $ 179 Wal-Mart Stores, 6.55%, due 8/10/04 $ 650,000 665 671 Weyerhaeuser Co., 6.75%, due 3/15/12 $ 500,000 526 545 Weyerhaeuser Co., 6.125%, due 3/15/12 $ 200,000 215 217 Total industrial corporate bonds 8,200 8,537 Oil Corporate Bonds - Phillips Pete Co., 8.75%, due 5/15/10 $ 1,060,000 1,279 1,324 Telephone Corporate Bonds: AT&T Wireless Sves, Inc., 7.875%, due 3/1/11 $ 150,000 160 174 Bellsouth Corp., 5.0%, due 10/15/06 $ 100,000 100 106 British Telecom Plc., 7.875%, due 12/15/05 $ 175,000 209 213 Sprint Capital Corp., 7.625%, due 1/30/11 $ 620,000 670 695 France Telecom, 7.7%, due 3/1/06 $ 185,000 193 207 Royal KPN., 8.0%, due 10/1/10 $ 200,000 213 239 Verizon Global FDG Corp., 7.375%, due 9/1/12 $ 350,000 403 406 Verizon Wireless Cap. LLC, 5.375%, due 12/15/06 $ 100,000 104 107 Total telephone corporate bonds 2,052 2,147 Transportation Corporate Bonds: CXC Corp., 6.25%, due 10/15/08 $ 100,000 100 110 Fedex Corp., 6.875%, due 2/15/06 $ 500,000 504 539 Union Pac., 6.5%, due 4/15/12 $ 700,000 734 777 Total transportation corporate bonds 1,338 1,426 Utility Corporate Bonds: American Electric Power Inc., 5.375%, due 3/15/10 $ 280,000 281 293 Ohio Power Co., 5.5%, due 2/15/13 $ 450,000 458 465 PSEG Pwr., 7.75%, due 4/15/11 $ 590,000 676 694 Total utility corporate bonds 1,415 1,452 Foreign Obligations: British Columbia Prov. Canada, 5.375%, due 10/29/08 $ 450,000 448 487 Finland Rep NF, 7.875%, due 7/28/04 $ 225,000 230 233 Pemex Project FDG Master, 8.0%, due 11/15/11 $ 360,000 409 402 Republic of Italy, 7.25%, due 2/7/05 $ 400,000 409 424 United Mexican STS S/T/N, 8.375%, due 1/14/11 $ 1,075,000 1,187 1,277 Total foreign obligations 2,683 2,823 Miscellaneous - ERAC USA Fin. Co., 8.0%, due 1/15/11 $ 300,000 300 357 Fixed Income Investments Total 38,188 9,680 (Continued)
-18- (c) (e) (b) Principal (d) Fair (a) Identity of issue Amount Cost Value * LOANS TO MEMBERS (Interest rates range from 9.75% to 10.5%) $ 1,000 $ 1 $ 1 TOTAL ASSETS HELD AT DECEMBER 31, 2003 $ 1,011,198 $ 1,319,878 * Also a party-in-interest. (Concluded)
-19- Exhibit 23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statements Nos. 333-00957 and 333-76227 of The May Department Stores Company on Form S-8 of our report dated June 16, 2004, appearing in this Annual Report on Form 11-K of The May Department Stores Company Profit Sharing Plan for the year ended December 31, 2003. /s/ DELOITTE & TOUCHE LLP St. Louis, Missouri June 24, 2004 -20- -----END PRIVACY-ENHANCED MESSAGE-----