-----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, ET3fvaRLPO+9XnFYTHIvoyMNOvYR6BhE2pzzOXXno9YZJJ6xR2IMX7o0OHno+Vwo 1BvVO4bOdD2w/6aokgVZqw== 0000063416-05-000094.txt : 20050628 0000063416-05-000094.hdr.sgml : 20050628 20050628172151 ACCESSION NUMBER: 0000063416-05-000094 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050628 FILED AS OF DATE: 20050628 DATE AS OF CHANGE: 20050628 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: 05921869 BUSINESS ADDRESS: STREET 1: 611 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 BUSINESS PHONE: 3143426300 11-K 1 elevenk.txt 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, 2004 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, 2004 and 2003 4 Statements of Changes in Net Assets Available for Benefits- Years Ended December 31, 2004 and 2003 5 Notes to Financial Statements- Years Ended December 31, 2004 and 2003 6 Form 5500, Schedule H, Line 4i-Schedule of Assets (Held at End of Year)-December 31, 2004 14 Exhibits Exhibit 23-Consent of Independent Registered Public Accounting Firm 18 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 28, 2005 By: /s/ Thomas D. Fingleton Thomas D. Fingleton Executive Vice President and Chief Financial Officer -2- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the 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, 2004 and 2003, 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, 2004 and 2003, 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 2004 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. June 22, 2005 THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 2004 AND 2003 (In thousands) 2004 2003 ASSETS: Investments, at fair value: The May Department Stores Company: ESOP preference stock $ 416,610 $ 457,083 Common stock 354,184 365,075 Commingled equity index funds 361,759 273,326 Short-term investment fund 139,825 133,662 U.S. government securities 55,678 51,051 Fixed income investments 35,615 39,680 Loans to members - 1 Total investments 1,363,671 1,319,878 Other assets: Dividends and interest receivable 1,488 1,545 Receivable-withholdings of member contributions - 1,104 Total assets 1,365,159 1,322,527 LIABILITIES: Net amount payable for investment securities transactions and other 9,079 7,743 Accrued administrative expenses 841 666 Note payable - 90,860 Accrued interest payable - 1,285 Total liabilities 9,920 100,554 NET ASSETS AVAILABLE FOR BENEFITS $ 1,355,239 $ 1,221,973 See notes to financial statements. -4- THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 (In thousands) 2004 2003 ADDITIONS: Contributions: Member $ 106,948 $ 94,679 Employer ESOP contribution 80,980 53,805 Total contributions 187,928 148,484 Appreciation/(depreciation) in fair value of investments: The May Department Stores Company: ESOP preference stock 4,906 96,362 Common stock 5,579 77,264 Commingled equity index funds 37,901 58,175 U.S. government securities (1,489) (1,658) Fixed income investments (591) 322 Total appreciation in fair value of investments 46,306 230,465 Investment income: Dividends 28,434 31,003 Interest 7,007 7,243 Total investment income 35,441 38,246 Total additions 269,675 417,195 DEDUCTIONS: Benefits paid to members (128,410) (125,335) Administrative expenses (5,062) (4,873) Interest expense (2,571) (9,408) Cash dividend payments to members (366) (233) Total deductions (136,409) (139,849) INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 133,266 277,346 NET ASSETS AVAILABLE FOR BENEFITS-Beginning of year 1,221,973 944,627 NET ASSETS AVAILABLE FOR BENEFITS-End of year $ 1,355,239 $ 1,221,973 See notes to financial statements. -5- THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 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 dated January 1, 2004, 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 costs $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 Loan") (see Note 5). The ESOP Loan was recorded as a note payable on the statements of net assets available for benefits. The final payment on this note was due and made on April 30, 2004. The ESOP Loan was 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 were not allocated to members' company accounts served as collateral for the ESOP Loan. The ESOP Loan was guaranteed by May. ESOP Preference Shares were initially held by the Plan in an unallocated account. As the ESOP Loan was repaid, ESOP Preference Shares were released to a suspense account pending allocation to the members' ESOP Preference Fund accounts in satisfaction of the required dividend and annual employer allocation. The final allocation of ESOP Preference Shares was made on March 31, 2005. 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. The Plan was further amended as of October 31, 2004, to allow members with accounts in the ESOP Preference Fund to elect to either reinvest ESOP Preference Shares dividends into their Plan accounts or to receive those dividends in cash semiannually. -6- Member 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. The Plan was amended in 2005 to raise the maximum member contribution rate from 25% to 50%, effective January 1, 2005. Employer Allocation The employer allocation is variable and discretionary. The employer allocations for the 2003 and 2004 Plan Years were determined by multiplying a base match 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 certain ESOP Preference Shares, as defined, and administrative expenses. The base match 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 match 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 match rate. The base match rate may be adjusted at any time for unusual events including discontinued operations, accounting changes, or items of extraordinary gain or loss. To fund the employer allocation, ESOP Preference Shares were allocated to members' 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. The market value of the employer allocation (including any supplemental contributions), divided by members' matchable contributions, is the match rate. The Plan's match rate was 94% and 91% for the 2004 and 2003 Plan Years, respectively. The 94% match rate was based on the December 31, 2004, May common stock price of $29.40 per share. 2004 is the last Plan Year for which the employer allocation was made in the form of ESOP Preference Shares. For 2005, the Plan's employer allocation will be determined according to the base match rate formula described above, subject to a minimum match rate of 33 1/3% and a maximum match rate of 100%. The allocation will be made in the form of cash or employer common stock. 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. 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. -7- 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. The employer allocations for 2004 and 2003 Plan Years were initially invested in the ESOP Preference Fund. These allocations were allocated to members' accounts in March 2005 and May 2004 in the form of 57,726 and 51,064 ESOP Preference Shares, respectively. The March 2005 allocation was the final allocation of all remaining ESOP Preference Shares. 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. 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, as well as ESOP Preference Fund dividends earned in their company accounts starting October 29, 2004. Plan members are vested in the remainder of their company accounts in accordance with the following schedule: 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 member account and the vested portion of a member's company account may be distributed upon retirement, death or termination of -8- employment. Distributions from the May Common Stock Fund and ESOP Preference Fund are made in shares of May common stock or cash. Members can elect to receive distributions 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, 2004 and 2003, the ESOP Preference Shares were valued at their conversion values of $993 and $982 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 Internal Revenue Service has determined and informed the company by a letter dated February 10, 2005, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). Although the Plan has been amended since receiving the determination letter, the Plan administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 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 are paid by the Plan. These expenses include an allocable portion of data processing services provided by May and salaries and benefits for May associates who provide services to the Plan. May allocated approximately $1,138,000 and $1,173,000 in administrative expenses to the Plan in 2004 and 2003, respectively. Valuation of the Trust The Plan provides for daily valuations of accounts. The value of the ESOP Preference Fund is determined based on the greater of the guaranteed minimum value or conversion value of the ESOP Preference Shares in the fund. 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) -9- 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 are invested in the chosen investment funds on each paycheck date. 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. 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, 2004 and 2003, are as follows (fair value in thousands): December 31, 2004 December 31, 2003 Number of Number of Shares or Fair Shares or Fair Description of Investments Principal Amount Value Principal Amount Value ESOP Preference Stock: Unallocated (nonparticipant- directed) 57,726 $ 57,342 121,728 $ 119,561 Allocated 361,672 359,268 343,638 337,522 Total 419,398 $ 416,610 465,366 $ 457,083 The May Department Stores Company Common Stock 12,047,082 $ 354,184 12,558,479 $ 365,075 Northern Trust Collective Daily Stock Index Fund 86,469 $ 273,200 81,798 $ 232,987 The Bank of New York Collective Short-Term Investment Fund- Master Notes $139,824,721 $ 139,825 $133,662,406 $ 133,662 At December 31, 2004 and 2003, the Plan beneficially owned May's Common Stock and May's ESOP Preference Shares, representing 8.6% and 9.3%, respectively, of the voting power of May. -10- 4. NONPARTICIPANT-DIRECTED NET ASSETS Investments in the ESOP Preference Fund (unallocated account) are nonparticipant-directed. 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, 2004 2003 Investments: ESOP Preference Stock (unallocated account) $ 57,342 $119,561 Short-term investments 1,099 5,170 Interest receivable 2 - Total investments 58,443 124,731 Note payable - (90,860) Employer allocation (58,443) (50,156) Accrued interest payable - (1,285) Other - 3 Net assets $ - $(17,567) Year Ended December 31, 2004 2003 Changes in net assets: Employer ESOP contribution $ 22,538 $ 3,649 Net (depreciation) appreciation in fair value of investments (5,757) 17,997 Interest and dividends 3,357 6,054 Interest expense (2,571) (9,408) Increase in net assets $ 17,567 $ 18,292 5. NOTE PAYABLE Note payable as of December 31 consisted of the following (dollars in thousands): 2004 2003 ESOP note payable-Series B, 8.49%, due April 30, 2004 $ - $90,860 The last scheduled principal payment for the Series B ESOP note payable was made on April 30, 2004, for $90,860,000. As of December 31, 2003, the estimated fair value of the ESOP note payable was approximately $94,430,000. 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 $593,000 and $487,000 in administrative expenses, principally trustee fees, in 2004 and 2003, respectively. -11- 7. RECONCILIATION TO FORM 5500 As of December 31, 2004 and 2003, the Plan had approximately $11,587,000 and $13,287,000, respectively, of pending distributions to members. 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, 2004 and 2003 (dollars in thousands): 2004 Benefits Benefits Net Assets Payable to Paid to Available Members Members for Benefits Per 2004 financial statements $ - $ 128,410 $ 1,355,239 Pending benefit distributions- December 31, 2004 11,587 11,587 (11,587) Pending benefit distributions- December 31, 2003 - (13,287) - Per 2004 Form 5500 $ 11,587 $ 126,710 $ 1,343,652 2003 Benefits Benefits Net Assets Payable to Paid to Available Members Members 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 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. -12- 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. 9. SUBSEQUENT EVENT On February 28, 2005, May and Federated Department Stores, Inc. ("Federated") announced that they have entered into a merger agreement. Pursuant to the agreement, each share of ESOP Preference Stock will convert into 33.78747 shares of May common stock, and each share of May common stock in the May Common Stock Fund and the ESOP Preference Fund will convert into the right to receive $17.75 in cash and .3115 shares of Federated common stock for each share of May common stock. Completion of the merger is contingent on regulatory review and approval by the shareowners of both companies. The transaction is expected to close in the third quarter of 2005. ****** -13- THE MAY DEPARTMENT STORES COMPANY PROFIT SHARING PLAN FORM 5500, SCHEDULE H, LINE 4i- SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2004 (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 57,726 $ 29,267 $ 57,342 Allocated 361,672 184,695 359,268 Total The May Department Stores Company ESOP Preference Stock 419,398 213,962 416,610 * THE MAY DEPARTMENT STORES COMPANY COMMON STOCK 12,047,082 276,085 354,184 COMMINGLED EQUITY INDEX FUNDS: Northern Trust Collective Daily Stock Index Fund 86,469 256,897 273,200 Northern Trust Daily Russell 2000 Fund 80,787 48,929 60,209 Northern Trust Daily EAFE Equity Index Fund 100,006 23,521 28,350 Total Commingled Equity Index Funds 329,347 361,759 SHORT-TERM INVESTMENT FUND: * The Bank of New York Collective Short-Term Investment Fund-Master Notes $139,824,721 139,825 139,825 U.S. GOVERNMENT SECURITIES: U.S. Treasury Notes: 5.75%, due 11/15/05 $ 5,400,000 5,919 5,538 6.875%, due 5/15/06 $ 2,645,000 2,965 2,785 6.5%, due 10/15/06 $ 4,550,000 5,171 4,823 6.625%, due 5/15/07 $ 4,135,000 4,516 4,461 5.625%, due 5/15/08 $ 1,550,000 1,706 1,663 5.75%, due 8/15/10 $ 2,005,000 2,245 2,207 5.0%, due 8/15/11 $ 1,375,000 1,502 1,464 4.25%, due 8/15/13 $ 7,020,000 7,019 7,075 4.25%, due 8/15/14 $ 4,075,000 4,081 4,084 Total U.S. Treasury Notes 35,124 34,100 * Also a party-in-interest. (Continued) -14- (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: 3.125%, due 7/15/06 $ 1,750,000 $ 1,755 $ 1,749 4.375%, due 3/15/13 $ 2,050,000 2,024 2,044 5.25%, due 4/15/07 $ 2,500,000 2,638 2,605 6.0%, due 5/15/08 $ 4,300,000 4,746 4,627 Federal Home Loan Mortgage Corp.: 5.5%, due 7/15/06 $ 875,000 918 906 5.75%, due 4/15/08 $ 3,500,000 3,899 3,737 6.625%, due 9/15/09 $ 1,950,000 2,243 2,181 6.0%, due 6/15/11 $ 2,995,000 3,346 3,302 Interamerican Development Bank-5.75%, due 2/26/08 $ 400,000 398 427 Total U.S. government agency securities 21,967 21,578 Total U.S. Government Securities 57,091 55,678 FIXED INCOME INVESTMENTS: Bank Corporate Bonds: Bank America Corp., 7.125%, due 9/15/06 $ 600,000 669 637 Bank America Corp., 7.4%, due 1/15/11 $ 900,000 1,050 1,043 Bayerische Landesbank, 5.875%, due 12/01/08 $ 450,000 449 482 Morgan JP & Co., Inc., 6.75%, due 2/1/11 $ 750,000 861 843 Morgan JP & Co., Inc., 6.7%, due 11/1/07 $ 150,000 161 162 National Australia, 8.6%, due 5/19/10 $ 450,000 449 534 Wachovia, 6.25%, due 8/4/08 $ 620,000 686 668 Wells Fargo & Co., 7.25%, due 8/24/05 $ 200,000 219 205 Total bank corporate bonds 4,544 4,574 Finance and Insurance Corporate Bonds: American Gen Fin Corp., 5.375%, due 9/1/09 $ 130,000 138 136 Bank One N.A., Chicago, 5.5%, due 3/26/07 $ 250,000 277 260 Capital One Bank, 6.5%, due 6/13/13 $ 600,000 645 656 Citigroup Inc., 7.375%, due 4/2/07 $ 325,000 336 351 Citigroup Inc., 7.25%, due 10/1/10 $ 410,000 469 472 Countrywide Home Loans Inc., 4.125%, due 9/15/09 $ 600,000 599 597 Countrywide Home Loans Inc., 3.25%, due 5/21/08 $ 250,000 250 244 Credit Suisse First Boston USA, 6.125%, due 11/15/11 $ 300,000 297 327 Deutsche Telekom International, 8.5%, due 6/5/10 $ 810,000 921 965 Ford Motor Credit Co., 7.375%, due 10/28/09 $ 1,100,000 1,121 1,187 General Electric Cap., 5.875%, due 2/15/12 $ 750,000 801 811 General Electric Cap, 6.5%, due 12/10/07 $ 500,000 569 539 General Electric Cap., 3.5%, due 5/1/08 $ 500,000 499 496 (Continued) -15- (c) (e) (b) Principal (d) Fair (a) Identity of issue Amount Cost Value FIXED INCOME INVESTMENTS (Continued): Finance and Insurance Corporate Bonds (Continued): General Mills, Inc., 5.125%, due 2/15/07 $ 250,000 $ 260 $ 257 General Motors Corp., 6.75%, due 1/15/06 $ 200,000 205 205 General Motors Corp., 6.875%, due 9/15/11 $ 300,000 305 307 Goldman Sachs Group, Inc., 6.875%, due 1/15/11 $ 250,000 255 282 Goldman Sachs Group, Inc., 4.75%, due 7/15/13 $ 180,000 181 178 Household Finance Corp., 6.5%, due 1/24/06 $ 450,000 454 465 Household Finance Corp., 4.75%, due 5/15/09 $ 500,000 514 513 Household Finance Corp., 6.45%, due 2/1/09 $ 250,000 282 272 International Paper Co., 5.5%, due 1/15/14 $ 750,000 773 775 Lehman Brothers Hldg., 3.5%, due 8/7/08 $ 450,000 448 445 MBNA Corp., 6.125%, due 3/1/13 $ 100,000 100 107 Merrill Lynch & Co., 3.0%, due 4/30/07 $ 275,000 270 272 Morgan Stanley, 5.8%, due 4/1/07 $ 700,000 748 734 Morgan Stanley, 5.3%, due 3/1/13 $ 300,000 299 309 Simon Debartolo Group, 6.875%, due 11/15/06 $ 500,000 498 529 Toyota Motor Corp., 5.5%, due 12/15/08 $ 450,000 449 477 Unilever Cap., 7.125%, due 11/1/10 $ 125,000 136 144 Verizon Global, 7.25%, due 12/1/10 $ 650,000 705 745 Wells Fargo & Co., 5.125%, due 9/1/12 $ 250,000 260 258 Total finance and insurance corporate bonds 14,064 14,315 Industrial Corporate Bonds: AOL Time Warner, Inc., 6.125%, due 4/15/06 $ 300,000 318 311 Time Warner, Inc., 6.875%, due 5/1/12 $ 160,000 180 182 Atlantic Richfield Co., 5.9%, due 4/15/09 $ 450,000 448 485 Bristol Myers Squibb, 4.75%, due 10/1/06 $ 125,000 125 128 Citigroup Inc., 3.5%, due 2/1/08 $ 500,000 507 498 Comcast Cable, 6.875%, due 6/15/09 $ 200,000 199 222 Comcast Cable, 6.75%, due 1/30/11 $ 350,000 365 393 Daimler Chrysler N. America, 4.05%, due 6/4/08 $ 400,000 397 399 Duke Energy Field Svcs, LLC., 7.5%, due 8/16/05 $ 630,000 689 647 Duke Energy Field Svcs, LLC., 7.875%, due 8/16/10 $ 350,000 425 408 General Motors Corp., 7.1%, due 3/15/06 $ 300,000 303 308 International Business Machine, 5.375%, due 2/1/09 $ 150,000 150 159 Kellogg Co., 6.0%, due 4/1/06 $ 400,000 399 412 News Amer Hldgs., 9.25%, due 2/1/13 $ 400,000 511 515 Pacific Gas & Electric, 4.8%, due 3/1/14 $ 700,000 679 698 Raytheon Co., 6.75%, due 8/15/07 $ 58,000 62 62 SBC Comm., 5.75%, due 5/2/06 $ 100,000 108 103 Viacom, Inc., 7.70%, due 7/30/10 $ 150,000 161 176 Weyerhaeuser Co., 6.125%, due 3/15/07 $ 88,000 95 93 Total industrial corporate bonds 6,121 6,199 (Continued) -16- (c) (e) (b) Principal (d) Fair (a) Identity of issue Amount Cost Value FIXED INCOME INVESTMENTS (Continued): Oil & Coal Corporate Bonds: Pemex Proj Fdg Master, 7.375%, due 12/15/14 $ 360,000 $ 398 $ 400 Phillips Pete Co., 8.75%, due 5/25/10 $ 1,060,000 1,279 1,294 Valero Energy Corp New, 6.875%, due 4/15/12 $ 625,000 702 709 XTO Energy Inc., 4.9%, due 2/1/14 $ 480,000 466 479 Total oil & coal corporate bonds 2,845 2,882 Telephone Corporate Bonds: AT&T Wireless Sves, Inc., 7.875%, due 3/1/11 $ 150,000 160 177 Bellsouth Corp., 5.0%, due 10/15/06 $ 100,000 100 103 Bellsouth Corp., 4.2%, due 9/15/09 $ 500,000 501 501 British Telecom Plc., 8.375%, due 12/15/10 $ 100,000 119 120 Sprint Capital Corp., 7.625%, due 1/30/11 $ 220,000 238 256 France Telecom, 8.2%, due 3/1/06 $ 185,000 193 194 Royal KPN., 8.0%, due 10/1/10 $ 400,000 473 472 SBC Communications., 5.1%, due 9/15/14 $ 550,000 550 555 Verizon Global FDG Corp., 7.375%, due 9/1/12 $ 350,000 403 412 Total telephone corporate bonds 2,737 2,790 Transportation Corporate Bonds: CXC Corp., 6.25%, due 10/15/08 $ 100,000 100 108 CXC Corp., 6.75%, due 3/15/11 $ 435,000 474 487 Fedex Corp., 6.875%, due 2/15/06 $ 500,000 504 518 Total transportation corporate bonds 1,078 1,113 Utility Corporate Bonds: Ohio Power Co., 5.5%, due 2/15/13 $ 730,000 749 763 TXU Energy Co. LLC, 7.0%, due 3/15/13 $ 400,000 447 447 Total utility corporate bonds 1,196 1,210 Foreign Obligations: British Columbia Prov. Canada, 5.375%, due 10/29/08 $ 450,000 448 476 South Africa Rep, 6.5%, due 6/2/14 $ 250,000 249 274 Telecom Italia Cap, 5.25%, due 11/15/13 $ 250,000 254 252 Republic of Italy, 7.25%, due 2/7/05 $ 400,000 409 402 United Mexican STS S/T/N, 8.375%, due 1/14/11 $ 660,000 728 775 Total foreign obligations 2,088 2,179 Miscellaneous-ERAC USA Fin. Co., 8.0%, due 1/15/11 $ 300,000 300 353 Total Fixed Income Investments 34,973 35,615 TOTAL ASSETS HELD AT DECEMBER 31, 2004 $1,051,283 $1,363,671 * Also a party-in-interest. (Concluded) -17-
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statements Nos. 333-103352 and 333-76227 of The May Department Stores Company on Form S-8 of our report dated June 22, 2005, appearing in this Annual Report on Form 11-K of The May Department Stores Company Profit Sharing Plan for the year ended December 31, 2004. St. Louis, Missouri June 27, 2005 -----END PRIVACY-ENHANCED MESSAGE-----