SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15 (d) of the
Securities Exchange Act of 1934
For the Year Ended December 31, 2004
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
SAVINGS PLAN
(Full title of the Plan)
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
2 PARAGON DRIVE, MONTVALE, NEW JERSEY 07645
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(Name of issuer of the securities held
pursuant to the Plan and the address
of its principal executive office)
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this annual report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC.
Date: July 14, 2005 By /s/Brenda M. Galgano
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Brenda M. Galgano
Senior Vice President,Corporate Controller
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SAVINGS PLAN
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Financial Statements as of December 31, 2004 and 2003
and for the Year Ended December 31, 2004
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Prepared for filing as part of the Annual
Return/Report of Employee Benefit Plan
(Form 5500)
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SAVINGS PLAN
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TABLE OF CONTENTS
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Page
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.... 2
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003 .............................. 3
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2004..................... 4
NOTES TO FINANCIAL STATEMENTS.............................. 5
SUPPLEMENTAL SCHEDULES
SCHEDULE H, LINE 4a - SCHEDULE OF DELINQUENT
PARTICIPANT CONTRIBUTIONS ............................ 10
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS
(HELD AT END OF YEAR) ................................. 11
Note: Other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under ERISA have been
omitted because they are not applicable.
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Report of Independent Registered Public Accounting Firm
To the Participants and Administrator of
The Great Atlantic & Pacific Tea Company, Inc. Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of The Great Atlantic & Pacific Tea Company, Inc. Savings Plan (the "Plan") at
December 31, 2004 and 2003, and the changes in net assets available for benefits
for the year ended December 31, 2004 in conformity with accounting principles
generally accepted in the United States of America. 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 of these statements in accordance with the 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, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule H, Line 4a -
Schedule of Delinquent Participant Contributions and Schedule H, Line 4i -
Schedule of Assets (Held at End of Year) are presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but are 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. These supplemental schedules are the responsibility
of the Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
PricewaterhouseCoopers LLP
Florham Park, NJ
July 14, 2005
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THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003
2004 2003
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Assets:
Investments - at fair value (Note 3) $295,022,927 $276,388,108
Receivables:
Participant Contributions 46,481 176,993
Employer Contributions 19,122 61,150
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Total receivables 65,603 238,143
Total Assets 295,088,530 276,626,251
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Liabilities:
Accrued expenses - (500)
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Total Liabilities - (500)
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Net assets available for benefits $295,088,530 $276,625,751
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The accompanying notes are an
integral part of these
financial statements.
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THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2004
2004
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Additions:
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments (Note 3) $ 14,211,519
Interest income 4,718,934
Dividend income 2,405,674
Other income 1,563,107
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22,899,234
Contributions:
Participants 15,219,547
Employer 4,506,084
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19,725,631
Total additions 42,624,865
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Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 24,140,534
Administrative expenses 21,552
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Total deductions 24,162,086
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Net increase in net assets available for benefits 18,462,779
Net assets available for benefits:
Beginning of year 276,625,751
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End of year $295,088,530
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The accompanying notes are an
integral part of these
financial statements.
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THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SAVINGS PLAN
1. PLAN DESCRIPTION
The following description of The Great Atlantic & Pacific Tea Company,
Inc. ("Company") Savings Plan ("Savings Plan") provides only general
information. Participants should refer to the Savings Plan summary plan
description for a more complete description of the Savings Plan's
provisions.
General
The Savings Plan is a voluntary defined contribution plan of the Company.
The Savings Plan covers employees of the Company who are not covered by a
collective bargaining agreement (CBA), as well as employees covered by
the CBA where the CBA specifically provides for such coverage.
The Savings Plan was amended effective November 2000, resulting in changes
in the investment of contributions and changes in investment options.
Participants are permitted to change their contribution rates once per
month. In addition, they may change their investment options with regard
to future contributions and reallocate the way existing balances are
invested on any business day.
Prior to May 4, 2004, the Savings Plan covered employees of the Company
who completed at least one year of service (1,000 hours in a 12-month
period) if age 21 or older, or the earlier of five years of service if
under age 21, if under age 21 at the time of employment. Effective May
4, 2004 the Plan was amended to (a) allow employees to contribute to the
Plan the first of the month following their date of hire if age 21 or
older or the earlier of five years of service if under age 21, if under
age 21 at the time of employment, and (b) state that each participant
shall be 100% vested in the event of termination or partial termination
of the Plan (if Participant is affected by partial termination) or upon
retirement, disability or death.
Contributions
Eligible employees have the option to contribute from 1% to 20% of their
base compensation to the Savings Plan. This can be any combination of pre
and post tax percentages, as long as the total of the percentages does not
exceed 20% of base compensation. The Internal Revenue Service limits the
maximum amount a participant may contribute, which was $13,000 for fiscal
2004. The Company matches 50% of employees' contributions up to 6% of
their compensation.
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Participants direct the investment of their contributions into the plan,
as discussed in Note 3, which includes various investment options offered
by the Savings Plan. Employee contributions may not be allocated to the
Employer Stock Fund.
Vesting
Participants are always 100% vested in their contributions and become
fully vested in the Company's matching contributions after five years, in
accordance with the following schedule:
Vesting Percentage
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Less than 2 years 0%
2 years but less than 3 years 25%
3 years but less than 4 years 50%
4 years but less than 5 years 75%
5 years or more 100%
Payment of Benefits
Participants receive the value of the vested portion of their account
balance when they leave the Company for any reason other than death, in
which case a beneficiary would receive the benefit. Participants may
generally withdraw unmatched after-tax contributions once during any 12
month period but may withdraw unmatched before-tax contributions only in
the case of "financial hardship" as defined in the Plan.
Forfeited Accounts
At December 31, 2004, and December 31, 2003, forfeited nonvested
accounts totaled $79,620 and $253,590, respectively. These accounts will
be used to decrease future employer contributions. Also, during the year
ended December 31, 2004, employer contributions were reduced by
$425,539 from forfeited nonvested accounts.
Participant Loans
Participants may borrow from their account balance a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or 50 percent of their vested
account balance. The loans are secured by the balance in the participant's
account and bear a fixed interest rate for the duration of the loan. The
rate equals Prime plus 1% as published in the Wall Street Journal 15 days
prior to the start of the calendar quarter. Principal and interest is paid
ratably through payroll deductions. During the year ended December 31,
2004, and December 31, 2003, the interest rates on participant loans
ranged from 5.75% to 10.50% and 5.00% to 10.50%, respectively.
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2. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Savings Plan are as
follows:
Basis of Accounting -
The accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of
America on the accrual basis of accounting.
Use of Estimates -
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of net assets available for benefits and changes therein. Actual
results could differ from those estimates.
Investment Valuation and Income Recognition -
The Plan's investments are presented at fair value. Shares of Company
Stock are valued at quoted market prices, investments in mutual funds
are valued at net asset value and the A&P Stable Value Investment is
based on book value of the contracts within the fund.
Purchases and sales of securities are recorded on a trade date basis.
Dividends are recorded on the ex-dividend date. Interest income is
recorded as earned.
Expenses -
Administrative expenses of the Plan are paid by either the Plan or the
Plan's sponsor, as provided in the Plan document.
Payment of Benefits -
Benefit payments to participants are recorded upon distribution.
Risks and Uncertainties -
The Plan provides for various investment options. The Plan's mutual funds
invest in various securities including U.S. government securities,
corporate debt instruments and corporate stocks. Investment securities, in
general, are exposed to various risks, such as interest rate, credit and
overall market volatility. Due to the level of risk associated with
certain investment securities, it is reasonably possible that changes in
the values of investment securities will occur in the near term and that
such changes could materially affect the amounts reported in the
statements of net assets available for Plan benefits.
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3. INVESTMENTS
The following table presents investments, all of which are publicly
traded, except for the A&P Stable Value Investment which is valued
based on book value of the contracts within the fund.
December 31, 2004 December 31, 2003
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Wells Fargo Stable Value Fund $ 5,710,874 $ 9,695,624
Galliard Managed Income Fund 34,187,437 33,185,195
AIG Financial Products Corp. 17,494,995 16,962,704
AIG Financial Products Corp. 40,695,991 40,958,231
Union Bank of Switzerland AG 7,214,869 5,840,038
Dryden Stock Index Fund I 63,852,389 62,314,583
PIMCO Total Return A 22,507,879 21,771,481
AIM Balanced A Fund - 20,333,156
John Hancock Small Cap Value A Fund 12,209,305 10,874,208
Amer Funds EuroPacific Growth A 12,646,747 9,503,774
MFS Massachusetts Investors Growth Stock A 17,906,095 15,313,588
Alliance Bern Growth & Income 20,060,517 16,142,770
Lord Abbett Mid Cap Value A Fund 11,198,390 5,951,391
A&P Stock 356,965 323,434
American Balanced Fund 24,719,855 2,825,596
Loan Fund 4,260,619 4,392,335
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$295,022,927 $276,388,108
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During 2004, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $14,211,519 as follows:
Net appreciation (depreciation) in fair value of investments:
Common stock $ 60,865
Mutual Funds 14,150,654
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Net appreciation $14,211,519
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4. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of a common collective trust and
mutual funds managed by Prudential Trust Company. Prudential Trust Company
is the trustee as defined by the Plan and, therefore, these transactions
qualify as party-in-interest transactions. The A&P Stock is
comprised of investments in Company stock that were made in prior years.
Employees may no longer select this investment option.
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Certain administrative functions are performed by the officers and
employees of the Company (who may be participants in the Plan) at no cost
to the Plan. These transactions are not deemed prohibited transactions
because they are covered by the statutory administrative exemption from
the Internal Revenue Code's and ERISA's rules on prohibited transactions.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company reserves
the right to terminate the Plan subject to the provisions of ERISA. If the
Plan is terminated, each participant would receive the value of his or her
interest in the trust funds attributable to both participant and employer
contributions for all years of participation.
6. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated April 19, 2004 that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (the
"Code"). The Plan has been amended (Refer to Note 1) since receiving the
determination letter. The Plan Administrator believes that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provision for
income taxes has been included in the Plan's financial statements.
7. DELIQUENT PARTICIPANT CONTRIBUTIONS
As reported on the supplemental schedule, certain employee contributions
were not remitted to the trust within the time frame specified by the
Department of Labor, therefore constituting nonexempt transactions
between the Plan and the Company for the year ended December 31, 2004.
The Company will remit earnings on the delinquent participant
contributions subsequent to year end.
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THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SAVINGS PLAN
SCHEDULE H, LINE 4a - SCHEDULE OF DELINQUENT PARTICIPANT CONTRIBUTIONS
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Participant Contributions Total that Constitute Nonexempt
Transferred Late to Plan Prohibited Transactions
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January 2004 $ 1,458 $ 1,458
February 2004 30,618 30,618
March 2004 3,611 3,611
April 2004 4,601 4,601
May 2004 8,690 8,690
June 2004 10,921 10,921
July 2004 23,651 23,651
August 2004 713 713
September 2004 2,390 2,390
October 2004 2,021 2,021
November 2004 5,572 5,572
December 2004 1,106 1,106
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Total $ 95,352 $ 95,352
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THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. SAVINGS PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
Description of Investment
including maturity date, rate of
Identity of Issue, Borrower, interest, collateral, par or
Lessor, or Similar Party maturity value Cost Current Value
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Wells Fargo Stable Value Fund Collective Trust Fund, $ 4,871,185 $ 5,710,874
Maturity 12/31/05, Rate of interest 4.35%
Galliard Managed Income Fund Collective Trust Fund 29,160,745 34,187,437
Maturity 12/26/08, Rate of interest 5.23%
AIG Financial Products Corp. Guaranteed Investment Contract 14,922,647 17,494,995
Maturity 8/25/08, Rate of interest 5.32%
AIG Financial Products Corp. Guaranteed Investment Contract 34,712,324 40,695,991
Maturity 9/27/08, Rate of interest 4.80%
Union Bank of Switzerland AG Guaranteed Investment Contract 6,154,043 7,214,869
Maturity 6/6/09, Rate of interst 5.20%
Dryden Stock Index Fund I (*) Mutual fund 65,970,217 63,852,389
American Balanced Fund Mutual fund 23,701,272 24,719,855
PIMCO Total Return A Mutual fund 22,545,006 22,507,879
MFS Massachusetts Investors Growth Mutual fund
Stock A 17,769,170 17,906,095
Alliance Growth and Income A Mutual fund 17,840,428 20,060,517
Amer Funds Euro Pacific Growth A Mutual fund 10,313,106 12,646,747
John Hancock Small Cap Value A Mutual fund 10,478,339 12,209,305
Lord Abbett Mid Cap Value A Fund Mutual fund 8,999,530 11,198,390
A&P Stock (*) A&P Stock 345,867 356,965
Participant loans Mature from 2005 to 2024,5.75% - 10.50% - 4,260,619
(*) Party-in-interest
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (Nos. 333-119045, 333-78805, and 033-54863) of The Great
Atlantic & Pacific Tea Company, Inc. of our report dated July 14, 2005 relating
to the financial statements of The Great Atlantic & Pacific Tea Company, Inc.
Savings Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
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PricewaterhouseCoopers LLP
Florham Park, NJ
July 14, 2005
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Exhibit 99.1
Certification Pursuant To 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of The Great Atlantic & Pacific Tea
Company, Inc. Savings Plan (the "Plan") on Form 11-K for the period ending
December 31, 2004 as filed with the Securities and Exchange Commission on the
date hereof (the "Report"), I, Jack Witt, Vice President of Labor Relations, of
The Great Atlantic & Pacific Tea Company, Inc., certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Plan.
July 14, 2005 /s/ Jack Witt
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Jack Witt
Vice President of Labor Relations
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