11-K 1 d11k.htm ANNUAL REPORT Annual Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 11-K

 

 

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2004

 

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from              to             

 

Commission File Number 001-12510

 

 

AHOLD USA, INC. 401(K) SAVINGS PLAN

Ahold U.S.A., Inc.

1385 Hancock Street

Quincy, MA 02169

(Full title and address of plan)

 

 

KONINKLIJKE AHOLD N.V. (publ)

Albert Heijnweg 1

1507 EH Zaandam

The Netherlands

(Name of issuer of the securities held pursuant to the plan and the address of its principal executive office)

 

 

The Ahold USA, Inc. 401(k) Savings Plan (the “Plan”) is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Therefore, in lieu of Items 1-3 of Form 11-K, the statements of net assets available for benefits as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for each of the two years in the period ended December 31, 2004 and schedule, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto as Appendix 1 and incorporated herein by reference.

 

 

AHOLD USA, INC. 401(k) SAVINGS PLAN

 

TABLE OF CONTENTS

 

     Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

   1

FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003:

     

Statements of Net Assets Available for Benefits

    2

Statements of Changes in Net Assets Available for Benefits

    3

Notes to Financial Statements

    4-12

SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2004:

     

Form 5500, Schedule H, Part IV, Line 4i—Schedule of Assets (Held at End of Year)

   13

 

All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Plan Administrator and Participants

Ahold USA, Inc. 401(k) Savings Plan:

 

We have audited the accompanying statements of net assets available for benefits of Ahold USA, Inc. 401(k) Savings 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 auditing 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, such financial statements present fairly, in all material respects, 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.

 

As discussed in Note 7 to the financial statements, certain activities of the Plan’s sponsor, the Plan sponsor’s owner, and affiliates (and certain current and former directors, officers and employees) with respect to the Plan and its operations are the subject of ongoing investigations by various governmental and regulatory entities.

 

 

 

/s/ Deloitte & Touche LLP

 

July 5, 2005

Boston, Massachusetts

 

1

AHOLD USA, INC. 401(k) SAVINGS PLAN

 

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

DECEMBER 31, 2004 AND 2003

 

     2004
    2003

ASSETS

              

INVESTMENTS—At fair value:

              

Interest in Ahold USA, Inc. 401 (k) Savings Plan Master Trust

    $ 728,057,672    $ 646,084,404

Loans to participants

      20,108,147      18,979,935
    
  

Total investments

      748,165,819      665,064,339
    
  

CONTRIBUTION RECEIVABLE:

              

Employer

      14,931,014      14,116,374

Participants

      130,668      —  
    
  

Total assets

      763,227,501      679,180,713
    
  

LIABILITIES

              

ACCRUED EXPENSES

      15,170      3,533

EXCESS CONTRIBUTION PAYABLE

      1,560,042      506,942
    
  

Total liabilities

      1,575,212      510,475
    
  

NET ASSETS AVAILABLE FOR BENEFITS

    $ 761,652,289    $ 678,670,238
    
  

 

See notes to financial statements.

 

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AHOLD USA, INC. 401(k) SAVINGS PLAN

 

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

YEARS ENDED DECEMBER 31, 2004 AND 2003

 

     2004
     2003
  

CONTRIBUTIONS:

                 

Participant contributions

    $ 50,080,933     $ 48,293,660  

Employer contributions

      15,074,113       14,466,202  

Participant rollovers

      2,205,603       2,587,956  
    
 

Total contributions

      67,360,649       65,347,818  
    
 

INVESTMENT ACTIVITY:

                 

Interest on participant loans

      964,165       1,118,014  

Interest in Master Trust investment income

      70,136,522       102,896,977  
    
 

Total investment activity

      71,100,687       104,014,991  
    
 

Total additions

      138,461,336       169,362,809  
    
 

DEDUCTIONS:

                 

Benefit payments

      (55,104,726 )     (45,797,188 )

Administrative expenses

      (302,989 )     (195,433 )
    
 

Total deductions

      (55,407,715 )     (45,992,621 )
    
 

ASSETS TRANSFERRED FROM THE BRUNO’S SUPERMARKETS, INC. RETIREMENT SAVINGS PLAN

      —         31,398,599  

ASSETS TRANSFERRED TO OTHER PLANS—Net

      (71,570 )     (1,400,510 )
    
 

Total net transfers

      (71,570 )     29,998,089  
    
 

NET INCREASE

      82,982,051       153,368,277  

NET ASSETS AVAILABLE FOR BENEFITS:

                 

Beginning of year

      678,670,238       525,301,961  
    
 

End of year

    $ 761,652,289     $ 678,670,238  
    
 

 

See notes to financial statements.

 

- 3 -

AHOLD USA, INC. 401(k) SAVINGS PLAN

 

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2004 AND 2003

 

1. DESCRIPTION OF THE PLAN

 

The following description of the Ahold USA, Inc. 401(k) Savings Plan (the “Plan”) is provided for general information purposes only. Participants should refer to the Plan Document for more complete information.

 

General—The Plan is a defined contribution plan that was adopted by Ahold USA, Inc. (the “Company”), effective July 1, 1997, to provide tax-deferred savings to the Company and its subsidiaries’ eligible salaried employees. The Company is a subsidiary of Koninklijke Ahold (the “Parent Company”). Effective January 1, 2003, employees of Bruno’s Supermarkets, Inc. were added to the Plan. As a result, approximately 3,000 new participants entered the Plan, and approximately $38.3 million in assets were transferred to the Plan from Bruno’s Supermarkets, Inc. Retirement Savings Plan. The transfer was effected in two tranches. In December 2002, $6,915,150 was transferred and on January 2, 2003 $31,398,599 was transferred to the Plan.

 

An employee is eligible to participate in the Plan after completing one hour of service commencing at the employee’s start date and attainment of age 21. The Plan is a defined contribution Plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

 

Plan Amendments—The Ahold USA Pension Committee (the “Committee”) approved a Plan amendment in 2004 to permit participants with outstanding loans to continue to make repayments following termination of employment or during unpaid leave of absence. The Committee also approved an amendment effective December 2003 that prohibits participants to direct contributions into the Ahold Stock Fund.

 

Contributions—A participant may elect to make pretax contributions to the Plan in an amount ranging from 1% to 18% (25% for nonhighly compensated participants) of the participant’s compensation, as defined, subject to certain Internal Revenue Code (“IRC”) limitations. The Company matches 50% of a participant’s contribution, such that the participant’s contributions do not exceed 6% of eligible compensation. Individual companies may make additional matching contributions on behalf of their eligible participants. Participants are eligible for matching contributions when he/she has completed 1,000 hours of service in the twelve month period commencing on his/her employment date and is employed on the last day of the Plan year.

 

Investments—Participants direct the investment of their contributions and Company contributions into various investment options offered by the Plan, including various mutual funds, common collective trust and a pooled separate account.

 

Participant Accounts—Each participant’s account is credited with the participant’s contribution and allocations of (a) the Company’s contribution, (b) Plan earnings (losses), (c) forfeitures of participants’ nonvested accounts, and (d) an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. 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 contributions plus actual earnings thereon. A participant vests in the Company contribution at a rate of 20% for each year a participant works at least 1000 hours. Employee contributions are fully vested. Forfeited balances of terminated participants are used to reduce future contributions by the Company.

 

- 4 -

Participant Loans—A participant is eligible to borrow from the Plan after participating in the Plan for at least one year. The minimum loan amount is $1,000 and may not exceed the lower of $50,000 or 50% of the participant’s vested account balance. Each loan is secured by the participant’s account and bears interest at prime (5.25% at December 31, 2004). Loans are repaid through payroll withholdings over terms of 6 months to 15 years.

 

Payment of Benefits—A participant’s account may be withdrawn upon attainment of age 59½, retirement, death, or termination of employment. At such time, the participant is entitled to receive the entire value of his or her account either as a lump-sum amount or annual installments over a ten-year period. If the participants balance is less than $5,000, the entire account will be distributed as a lump-sum payment.

 

Forfeited Accounts—At December 31, 2004 and 2003, forfeited nonvested accounts totaled $144,133 and $96,947, respectively. These accounts will be used to reduce future employer contributions. During the years ended December 31, 2004 and 2003, employer contributions were reduced by $328,349 and $431,190 from forfeited accounts.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Accounting—The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

 

Investment Valuation and Income Recognition— The Plan’s investment in the Ahold USA, Inc. 401(k) Savings Plan Master Trust (“Master Trust”) is stated at fair value which has been determined based on the fair value of the underlying investments in the Master Trust. Shares of mutual funds held by the Master Trust are valued at quoted market prices, which represent the net asset value of shares held by the Master Trust. Fair value of investments held by the master trust that do not have readily ascertainable market values (such as a common/collective trust or a pooled separate account) have been estimated by the trustee on the underlying publicly traded assets of the portfolio.

 

Purchases and sales of securities are recorded on a trade date basis. Interest income is recorded on the accrual basis. Management fees and operating expenses charged to the Master Trust for investments in mutual funds are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments. Participant loans are recorded at cost, which approximates fair value.

 

Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Plan management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates.

 

Risks and Uncertainties—The Plan utilizes various investment instruments including mutual funds, Company stock, common collective trusts, and pooled separate accounts. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.

 

- 5 -

Administrative Expenses—Administrative expenses of the Plan are paid by the Plan, except for the costs of Company employees responsible for Plan administration, which are paid by the Company as provided for in the plan document.

 

Payment of Benefits—Benefit payments to participants are recorded upon distribution.

 

Transfers—The Company also sponsors a 401(k) plan for union employees and a 401(k) plan for hourly employees. If participants change their status during the year, their account balances are transferred into the corresponding plan. For the years ended December 31, 2004 and 2003 transfers out to other Company-sponsored plans were $2,777,146 and $6,705,780, respectively. For the years ended December 31, 2004 and 2003 transfers in from other Company-sponsored plans, excluding merged plans, were $2,705,576 and $5,305,270, respectively.

 

Excess Contributions Payable—The Plan is required to return contributions received during the plan year in excess of the IRC limits.

 

Reclassifications—Certain 2003 amounts have been reclassified to conform to the 2004 presentation.

 

3. MASTER TRUST

 

Effective July 1, 1997, the Master Trust was established to serve as the funding mechanism for the Plan. Fidelity Management Trust Company (the “Trustee”) was appointed by the Company to hold, administer, and invest the assets of the Master Trust. The Master Trust is also the funding mechanism for other Company-sponsored employee benefit plans. Each of the plans participating in the Master Trust has a proportionate and undivided ownership interest in the Master Trust assets. The undivided interest therein of each such plan shall be debited and credited (as the case may be) for the entire amount of every contribution received on behalf of such Plan, every benefit payment, or other expense attributable solely to such Plan, and every other transaction relating only to such Plan; for its proportionate share of every item of collected or accrued income, gain or loss, and general expense; and of any other transactions attributable to the Trust or that investment option as a whole.

 

Although assets of the Plan and other Company-sponsored plans are commingled in the Master Trust, the Trustee maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the participating plans. The net investment income of the investment assets is allocated by the Trustee to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans. The Plan’s interest in the assets of the Master Trust is included in the accompanying statements of net assets available for benefits.

 

- 6 -

A summary of the assets of the Master Trust investments as of December 31, 2004 and 2003 is as follows:

 

     2004
    2003

Ahold Company Stock Fund

    $ 9,262,534    $ 11,793,738

Fidelity Diversified International Stock Fund

      29,344,322      17,739,116

Fidelity Equity Income Fund

      62,503,078      33,483,194

Fidelity Freedom Income Fund

      3,067,046      2,374,963

Fidelity Freedom 2000 Fund

      2,911,491      2,606,219

Fidelity Freedom 2010 Fund

      10,416,743      7,869,893

Fidelity Freedom 2020 Fund

      13,415,543      8,632,747

Fidelity Freedom 2030 Fund

      10,956,732      7,523,177

Fidelity Freedom 2040 Fund

      2,820,787      1,553,760

Fidelity Growth & Income Fund

      121,785,668      112,230,199

Fidelity Low-Priced Stock Fund

      87,480,114      64,584,218

Fidelity Magellan Fund

      88,330,928      69,278,214

Fidelity Managed Bond Fund

      58,351,255      57,021,925

Fidelity Managed Income Portfolio II Class 3 Fund (common collective trust)

      239,405,138      224,797,206

Fidelity Puritan Fund

      97,423,910      72,725,131

Lord Abbett Developing Growth Fund Class A

      15,111,941      16,432,004

Tamarack Mid-Cap Equity I Fund

      5,198,291      4,031,794

Fidelity Blue Chip Growth Fund

      32,074,237      3,199,494

Mutual Discovery Z Fund

      72,522,408      55,640,162

Hotchkiss and Wiley Mid-Cap Value Fund

      37,620,955      16,460,626

Spartan U.S. Equity Index Fund

      52,390,962      44,326,332

Janus Adviser Forty Fund

      54,272,056      45,542,534

MFS Value Fund A

      10,041,956      7,134,807
    
  
     $ 1,116,708,095    $ 886,981,453
    
  

 

The Fidelity Managed Bond Fund represents a pooled separate account which comprises the following investments as of December 31, 2004 and 2003:

 

     2004
    2003

Fidelity Intermediate Bond Fund

    $ 26,481,164    $ 26,085,965

Hartford Life Guaranteed Investment Contract at fair value

      3,077,720      2,891,383

Morgan Stanley Institutional Fixed Income Fund

      26,666,241      25,876,689

Fidelity Institutional Money Market: Money Market Portfolio Class I

      2,126,130      2,167,888
    
  

Total

    $ 58,351,255    $ 57,021,925
    
  

 

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Allocations of assets of the Master Trust to participating plans as of December 31, 2004 and 2003 are as follows:

 

     Amount
    Percent
  

2004

              

Ahold USA, Inc. 401(k) Savings Plan

    $ 728,057,672    65 %

Ahold USA, Inc. 401(k) Savings Plan for Hourly Associates

      188,379,991    17  

Ahold USA, Inc. 401(k) Savings Plan for Union Associates

      200,270,432    18  
    
  
     $ 1,116,708,095    100 %
    
  

2003

              

Ahold USA, Inc. 401(k) Savings Plan

    $ 646,084,404    73 %

Ahold USA, Inc. 401(k) Savings Plan for Hourly Associates

      175,869,734    20  

Ahold USA, Inc. 401(k) Savings Plan for Union Associates

      65,027,315    7  
    
  
     $ 886,981,453    100 %
    
  

 

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Net investment income (loss) of the Master Trust for the years ended December 31, 2004 and 2003 is as follows:

 

     2004
  
     Interest and
Dividends
    Net Appreciation
(Depreciation) in
Fair Value of
Investments
   

Net

Investment
Income (Loss)

  

Ahold Company Stock Fund

    $ —      $ (28,082 )   $ (28,082 )

Fidelity Diversified International Stock Fund

      205,755      4,141,072       4,346,827  

Fidelity Equity Income Fund

      2,434,945      3,208,359       5,643,304  

Fidelity Freedom Income Fund

      65,060      43,935       108,995  

Fidelity Freedom 2000 Fund

      54,280      69,604       123,884  

Fidelity Freedom 2010 Fund

      241,917      410,562       652,479  

Fidelity Freedom 2020 Fund

      258,799      780,010       1,038,809  

Fidelity Freedom 2030 Fund

      165,375      816,369       981,744  

Fidelity Freedom 2040 Fund

      43,674      214,529       258,203  

Fidelity Growth & Income Fund

      2,812,210      8,194,950       11,007,160  

Fidelity Low-Priced Stock Fund

      4,565,511      11,002,443       15,567,954  

Fidelity Magellan Fund

      1,070,865      4,974,787       6,045,652  

Fidelity Managed Bond Fund

      —        2,198,779       2,198,779  

Fidelity Managed Income Portfolio II Class 3 Fund (common collective trust)

      9,167,195      —         9,167,195  

Fidelity Puritan Fund

      5,560,731      2,307,850       7,868,581  

Lord Abbett Developing Growth Fund Class A

      —        912,523       912,523  

Tamarack Mid-Cap Equity I Fund

      630,546      (320,774 )     309,772  

Fidelity Blue Chip Growth Fund

      295,730      897,390       1,193,120  

Mutual Discovery Z Fund

      1,562,297      9,870,419       11,432,716  

Hotchkiss and Wiley Mid-Cap Value Fund

      1,146,996      4,850,225       5,997,221  

Spartan U.S. Equity Index Fund

      881,756      4,095,569       4,977,325  

Janus Adviser Forty Fund

      —        8,146,376       8,146,376  

MFS Value Fund A

      96,806      1,131,883       1,228,689  
    
  
 

Total

    $ 31,260,448      $67,918,778     $ 99,179,226  
    
  
 

 

- 9 -

     2003
     Interest and
Dividends
    Net Appreciation
(Depreciation) in
Fair Value of
Investments
  

Net

Investment
Income (Loss)

Ahold Company Stock Fund

    $ 910,117    $ 226,034    $ 1,136,151

Fidelity Diversified International Stock Fund

      214,548      4,725,508      4,940,056

Fidelity Equity Income Fund

      1,065,059      6,610,200      7,675,259

Fidelity Freedom Income Fund

      55,782      98,076      153,858

Fidelity Freedom 2000 Fund

      52,336      172,762      225,098

Fidelity Freedom 2010 Fund

      215,952      873,219      1,089,171

Fidelity Freedom 2020 Fund

      165,124      1,479,275      1,644,399

Fidelity Freedom 2030 Fund

      105,478      1,431,348      1,536,826

Fidelity Freedom 2040 Fund

      21,986      256,273      278,259

Fidelity Growth & Income Fund

      1,261,039      16,981,544      18,242,583

Fidelity Low-Priced Stock Fund

      835,357      17,065,753      17,901,110

Fidelity Magellan Fund

      529,657      13,148,014      13,677,671

Fidelity Managed Bond Fund

      —        2,914,573      2,914,573

Fidelity Managed Income Portfolio II Class 3 Fund (common collective trust)

      10,018,311      —        10,018,311

Fidelity Puritan Fund

      2,881,175      10,514,847      13,396,022

Janus Twenty Fund

      —        3,762,293      3,762,293

Janus Worldwide Fund

      —        2,010,129      2,010,129

Lord Abbett Developing Growth Fund Class A

      —        4,393,867      4,393,867

Tamarack Mid-Cap Equity I Fund

      —        819,898      819,898

Fidelity Blue Chip Growth Fund

      15,069      394,432      409,501

Morgan Stanley Institutional Fund Trust Value Advisor

      —        642,145      642,145

Mutual Discovery Z Fund

      902,511      8,792,035      9,694,546

Hotchkiss and Wiley Mid-Cap Value Fund

      271,687      3,316,958      3,588,645

Spartan U.S. Equity Index Fund

      582,342      9,183,804      9,766,146

Janus Adviser Forty Fund

      —        4,956,997      4,956,997

MFS Value Fund A

      77,229      1,313,717      1,390,946
    
  
  

Total

    $ 20,180,759    $ 116,083,701    $ 136,264,460
    
  
  

 

Allocations of net investment income (loss) of the Master Trust to the participating plans for the years ended December 31, 2004 and 2003 are as follows:

 

     2004
    2003

Ahold USA, Inc. 401(k) Savings Plan

    $ 70,136,522    $ 102,896,977

Ahold USA, Inc. 401(k) Savings Plan for Hourly Associates

      15,725,782      23,324,266

Ahold USA, Inc. 401(k) Savings Plan for Union Associates

      13,316,922      10,043,217
    
  

Total

    $ 99,179,226    $ 136,264,460
    
  

 

- 10 -

4. PLAN TERMINATION

 

The Company has the right under the Plan, although it has not expressed any intent to do so, to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA. In the event of Plan termination, all participants’ accounts will become fully vested.

 

5. RELATED-PARTY TRANSACTIONS

 

Certain Plan investments of the Master Trust are shares of mutual funds managed by affiliates of Fidelity Management Trust Company, the trustee as defined by the Plan. Therefore, these transactions qualify as party-in-interest transactions. Fees paid by the Plan for the investment management services were included as a reduction on the return of each fund. Fees paid to the trustee for recordkeeping and custodian services amounted to $131,817 for 2004 and $139,205 for 2003.

 

At December 31, 2004 and 2003, the Master Trust held on behalf of the Plan 2,594,052 and 3,445,647 shares, respectively, of common stock of Ahold American Depository Receipts Fund. This fund holds primarily stock of the Parent Company of the sponsoring employer, with a cost basis of $6,848,298 and $9,062,051, respectively.

 

6. FEDERAL INCOME TAX STATUS

 

The Internal Revenue Service has determined and informed the Plan by a letter dated May 22, 2002 that the Plan and related trust were designed in accordance with applicable regulations of the IRC. The Plan has been amended since receiving the determination letter; however, the plan administrator and the Plan’s tax counsel believe that the Plan is currently designed and operated in compliance with the applicable requirements of the IRC and the Plan and related trust continue to be tax-exempt. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

 

7. LITIGATION AND GOVERNMENTAL/REGULATORY INVESTIGATIONS

 

On February 24, 2003, the Company’s parent announced, among other things, that it would be restating its earnings for the fiscal year 2001 and the first three quarters of the fiscal year 2002, because of certain accounting irregularities at one of its operating subsidiaries, U.S. Foodservice, Inc. (“U.S. Foodservice”), and that the historical financial statements of Ahold would have to be restated because certain other subsidiaries had been improperly consolidated (the “February 24 Announcement”). Following the February 24 Announcement, the United States Attorney for the Southern District of New York (the “U.S. Attorney”) commenced a grand jury criminal investigation relating to possible wrongdoing, and the United States Securities and Exchange Commission (“SEC”) commenced a civil investigation relating to possible violations of U.S. securities laws by Ahold, its subsidiaries, including the Company, and certain of their respective current and former officers, directors, and employees in connection with the events leading to the February 24 Announcement and other accounting-related matters.

 

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With respect to the SEC civil investigation, the SEC announced on October 13, 2004, as part of an overall settlement agreement, that it would not seek a penalty from Ahold because of, among other reasons, the Company’s extensive cooperation with the Commission’s investigation. In addition, following the February 24 Announcement, the United States Department of Labor (“DOL”) opened both civil and criminal investigations into whether any violations of ERISA were committed by Ahold and certain of its current and former officers, directors, and employees in connection with the 401(k) retirement savings plan of Ahold USA, Inc. In the course of the DOL criminal investigation, which is also being coordinated with the U.S. Attorney’s investigation, a letter request, dated July 9, 2003, was issued by the DOL relating to the Plan. With respect to the DOL civil investigation, Ahold received a letter closing the case on June 18, 2004. The DOL did not issue a fine to Ahold. The DOL noted that Ahold needed to improve processes with respect to the production of the Form 5500 and Plan expenses. With respect to the DOL criminal investigation, the Company is fully cooperating with the investigation and has reached an agreement with the DOL regarding the production of documents in response to the letter request. Additionally, the Company’s legal counsels are involved in ongoing discussions with the staff of the DOL in order to fully ascertain the staff’s position in these matters. In view of the nature and stage of those discussions, the Company cannot at this point predict when the investigation will be completed, whether the Company will actually be charged with or convicted of any violation of law or whether any fines will be imposed upon the Company or what the final amount of such fines would be or what actions, if any, the Company will be required to take with respect to the Plan.

 

Following the February 24 Announcement, numerous putative class actions claiming violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act (collectively, the “Securities Action”) were filed on behalf of Ahold’s stockholders. Additionally, two class actions were also filed on behalf of participants in the 401(k) retirement savings plan of Ahold USA, Inc. against Ahold, Ahold USA, Inc., and certain of Ahold’s and its subsidiaries’ respective current and former officers, directors, and employees, and one on behalf of the participants in the 401(k) retirement savings plan of U.S. Foodservice against U.S. Foodservice and certain of its current and former officers, directors, and employees alleging violations of ERISA (collectively, the “ERISA Actions”). Due to the early stages of this litigation, the Company is unable to predict whether this litigation will ultimately involve the Company or the merits of the claims relating to the Plan or whether the likelihood of an adverse judgment against the Company is either probable or remote. Further, in the event of an adverse judgment, the Company is unable to predict the amount of damages the Company would face as a result of such a judgment.

 

******

 

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AHOLD USA, INC. 401(k) SAVINGS PLAN

 

SCHEDULE H, PART IV, LINE 4i—SCHEDULE OF ASSETS (HELD AT END OF YEAR)

DECEMBER 31, 2004

 

(a)

   

(b) Identity of

Issuer, Borrower,

Lessor, or Similar Party

   

(c) Description of Investment

Including Maturity Date, Rate of

Interest, Collateral, Par,

or Maturity Value

    (d) Cost
   (e) Current
Value

*

    Interest in Master Trust         **   $ 728,057,672

*

    Loans to participants    Various loans, bearing interest at prime (and prime plus 1% for loans issued prior to July 1, 2000), maturities through 2019    **     20,108,147
     Total             $ 748,165,819
                  
* Party-in-interest
** Cost information is not required for participant directed investments and therefore has not been included.

 

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SIGNATURES

 

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.

 

AHOLD USA, INC. 401(k) SAVINGS PLAN
By:   AHOLD U.S.A., INC.
    As Plan Administrator
By:  

/s/ Ward Kraemer

Name:   Ward Kraemer
Title:   Vice President, Retirement Plans and Executive Compensation
Date:   July 6, 2005

 

EXHIBIT INDEX

 

Exhibit Number
   

Description of Documents

Exhibit 23.1    CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM